The Structure of Business: Legal Statuses, Sources of Finance, Business Sectors, and Human Resource Policies

This report from Desklib covers the legal statuses, sources of finance, business sectors, and human resource policies of Street Fashion, an online clothing store based in London. It discusses the strengths and weaknesses of public limited companies, private limited companies, and registered charities, as well as the benefits and drawbacks of long-term, medium-term, and short-term sources of finance. The report also explains the differences between the primary, secondary, and tertiary sectors of the UK economy, and the importance of health and safety policies and equality and diversity policies in the workplace.

Business with Foundation year
The Structure of Business
The Structure of Business

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
State different legal statuses of businesses that your business in UK with strengths and
weaknesses of these legal statuses...............................................................................................3
Establish the strengths and weaknesses of THREE sources of finance available to the chosen
business start-up...........................................................................................................................5
Evaluate the three sectors in the UK economy in which a business can operate and state the
differences between the three sectors?........................................................................................8
State the human resource policies and their importance in the workplace..................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Starting up new business involves different processes and algorithms such as collecting
resources and integrating with on innovative ideas. Apart from collection of resources and
integration of business idea, businesses also require legal documentation to ethically run its
operations. An entrepreneur should know how to optimally utilize different resources to gain the
maximum output with the minimum cost. In order to start off with a new business startup an
entrepreneur also needs to have a fuller knowledge of utilizing the utilities in the best appropriate
manner. The chosen start a business covered in this report is Street Fashion which is a start a
business based out of London, the startup business focusses on delivering quality ranges of
clothes. The business focusses on delivering the comfortable and organic fabric for all reason
purpose at affordable ranges to the customers in order to gain brand identity in the market place.
With the primary objective of conducting the business by delivering value to the customers at
affordable prices. This report covers different legal status with the strength and weaknesses of
the business, the different sources of finance with its strength and weaknesses, different business
sectors in the economy of UK and the human resource policies with its importance in the
workplace (AJAGBE and et.al., 2016).
MAIN BODY
State different legal statuses of businesses that your business in UK with strengths and
weaknesses of these legal statuses.
Public Limited Company Private Limited Company Registered Charity
Public limited companies are
the businesses which are
listed under the London stock
exchange. There are many
businesses in UK that are
listed as public limited
company as these businesses
delivers many benefits with
Private Limited company are
the businesses that are not
listed under the London Stock
exchange. These businesses
cannot raise capital or other
business finances Through
public deposit, the business
finances and transactions as
Registered charity other
businesses that operated for
the purpose of identifying the
social issues and delivering
desirable solution to deal
with. These businesses
acquire different set of
benefits that is there is the

the renowned brand name and
legal identity as a authorise
public figure. The set of
benefits that public limited
company enjoys is that there
is ease in availing this natural
resources wherein these
businesses can avail financial
resources from the public by
offering shares to the public
which is also known as public
deposits, the business have a
separate legal identity from
the owners, in case if the
business fails or becomes
unable to make profit the
existence of the business
never fails it continues for
long even after business class
perpetual legal existence,
ease in raising capital. The
drawbacks of the public
limited company or that the
business owner is liable for
delivering shareholders the
dividends and other utilities.
Apart from that the large
number of shareholders in
public limited company
causes The loss of control to
the business owner (Berger,
separate from the personal
transactions of the owner of
the private limited company,
the organisation have a
separate legal entity. The
profit earned by the business
is divided among the
shareholders which is also
called as dividends. The
business owner can withdraw
money with the sole purpose
of carrying the business
functioning. There are set of
benefits to such private
limited company such as
there are different
shareholders which helps to
reduce the financial burden
and divide the business
expenses and losses among
the shareholders, the private
limited company or
conducted with the major
objective of acquiring
profitability goals of the
business. Apart from the
benefits there are also
different set of drawbacks to
such businesses these are the
government put certain
restrictions over availing the
ease of availing finances,
these businesses enjoy relief
and taxes, these businesses
earn brand identity in the
marketplace.
Apart from the set of benefits,
there are different set of
drawbacks as well such as
These businesses have to
comply with all the
restrictions imposed by the
government of UK, these
businesses are always
dependent upon the private
and public investors to
finance the business activities
& restrictions to raise capital
through equity (Chauhan,
Dey and Jha, 2016).

Cerqueiro and Penas, 2015) financial resources where in
the business have to show
oral business proposal and
financial statements, the
owner of the business is
always held liable in case of
insolvency or any other
business Failure, the owner of
the business is also liable to
carry the business functions
stated as per the business
laws framed by the
government of UK For the
private limited company, The
business owner is also
accountable in case of any
unethical and illegal activities
of the business (Drobetz,
Schilling and Schröder,
2015).
Establish the strengths and weaknesses of THREE sources of finance available to the chosen
business start-up.
There are different sources of finance pertaining to the cost, time period of the financial
resources. There are set of financial resources divided as per the time period involved. These
financial sources are discussed below in brief:
Long-term source of finances
Loan from financial institutions

Street Fashion takes support from financial institutions in order to carry the business functioning.
The long-term finances help the business in order to meet the financial requirements where in the
business is liable to repay the loan after a certain period of time (Horner and et.al., 2015).
Strengths: these financial resources can be availed without security; it helps to meet the financial
requirements of the business.
Weaknesses: the business is always held liable, in case if the business fails to pay the interest or
repay the loan back the financial institutions can sue to repay the loan.
Government grants
Government grants financial and non-financial solution delivered by the government to the
businesses. UK government offers favourable policies in order to support small medium
businesses. These favourable policies not only helps the businesses in UK but also attracts
foreign businesses to operate in UK. Street Fashion cakes financial help from the Government
grants.
Strengths: These are the most reliable sources for availing the finances.
Weaknesses: it requires detailed business proposal International statements to win the finances
which is a very difficult time taking process (Khan, Rasli and Qureshi, 2017).
Retained Earnings
Retained earnings are a part of profit which is not distributed to the shareholders. Street Fashion
always maintains reserves for eating evenings in order to meet the Financial requirements of the
business.
Strengths: These are the most convenient sources of finance as it does not include any extra
charges and dependency for availing the business finances, business can meet the flexible
changes Of the business.
Weaknesses: It reduces the profitability of the business.
Medium-term sources of finances
Borrowings from banks

This involves taking loans from the banks in order to meet the medium term financial
requirements of the business. These loans are granted for a specific period of time and a fixed
amount of interest is charged till the expiry of the loan (Lionais, 2016). There are different
merchant banks especially for delivering business finances for a time been 3 to 7 years. Street
Fashion Takes financial help from such banks in UK.
Strengths: it helps to meet financial requirements of the business.
Weaknesses: it incurs expensive business cost and liability.
Lease financing
Lease financing is one of the forces of meeting the financial requirements of the business
wherein the owner of the business leases or rents to acquire fixed assets of the This is the most
useful financial sources for meeting the fixed asset requirement and saves huge business cost for
the purchase in fixed assets such as land, building et cetera. Lease financing are for a particular
period of time for which after that the owner have to repay the amount which fixed monthly
charges (Masanja, 2018).
Strengths: It is an effective Measure of meeting the financial requirements by availing the fix
assets of the business.
Weaknesses: the ownership in the least financing is not transferred.
Short-term sources of finance
Bank credit
Bank credit short-term financial source That meets the business requirements by offering loans
for a short period of time specifically for a year. These are the cheapest sources and also the
reliable won the different businesses acquires to meet the working capital requirement of the
business. Street Fashion acquires credit from bank for the short-term period of time and repaid
within a year.
Strengths: Reliable sources of meeting the current business finances.
Weaknesses: It increases the financial liability of the business (Olson and et.al., 2018).

Loan from director
Loan from director is determined when director of the business grants short-term business
finances so that the business is capable of meeting urgent requirements and helps to meet the
flexible changes in the business. The director of Street Fashion adds his own finances to the
business for meeting the short-term requirements, there are also called as the internal sources of
finances.
Strengths: to meet the short-term business requirements and saves the cost incurred for acquiring
external sources of finances.
Weaknesses: increases the short term business liability.
Evaluate the three sectors in the UK economy in which a business can operate and state the
differences between the three sectors?
There are different business sectors in the U.K.’s economy and the sectors earns certain
revenue that helps for economic development in UK, it benefits the economy in different ways
be it employment generation, increasing the exports and imports that further improves our GDP
and so on. There are mainly three different sectors in the economy of UK these are primary
sector, secondary sector and tertiary sector. Where in primary sector is mainly involved in
acquiring raw materials, secondary sector is purpose for Manufacturing activities and tertiary
sector Offer services to the end customers. These business sectors are discussed below in brief:
Primary sector: these businesses carry activities in order to obtain raw materials such as food
grains, coal and others. These raw materials are crucial for caring for the manufacturing
activities, thus, these primary sector businesses and revenue by supplying these raw materials to
the manufacturers. Primary sector businesses mix up a big portion for developing economy. In
economically developed countries such as UK the extraction and production of raw materials has
become more and once by using advanced technology which brings productivity and higher
efficiencies in the primary sector (Sund and et.al., 2016). Primary sector businesses involved in
drawing and extracting raw materials. The examples of primary sector businesses are farmers,
mining businesses and others.
Secondary businesses: secondary businesses are such businesses that transfers the input into
output. Another way these businesses acquires or obtains from materials from the primary sector

businesses and convert it into final products. Secondary sector businesses assemble raw material
is from different parts and integrate it into make a final output secondary sector businesses helps
economy in different ways for generating employment and delivering utilities in the economy
(Tyson, 2017). The secondary sector businesses involved in manufacturing and also an exporter
import of the finished product. It is an important activity as it contributes to the national
economy of the country. It adds value to the economy and faster growth and development by
transferring the raw materials into finished goods that creates huge profitability margin. One
such an example of secondary sector businesses is Jaguar. It is One of the biggest car
manufacturers and a multinational brand that manufactures luxury vehicles. The business was
founded in the year 1935 by Swallow Sidecar Company and headquartered in Coventry,
England.
Tertiary sector businesses include such businesses that carry business activity for the sole
purpose of delivering services to the customers. These businesses earn revenue by delivering
services. There are various number of services delivered by the tertiary sector. Tertiary sector
businesses help in delivering final output to the target consumers. The services offered by the
higher the services offered by the tertiary sector businesses helps in enhancing the quality of life
and standard living of the people. These economic sector conducts businesses for producing of
intangible services and delivering it to the customers. One such example of tertiary business
sector is Marks & Spencer which is a giant worldwide retailer that delivers variety of services
such as food services, bank services, clothing, home improvement tool, beauty products. Marks
& Spencer was founded by Michael Marks and Thomas Spencer in the year 1884 in Leeds, UK.
This company is headquartered in London, UK
Street Fashion falls in the segment of tertiary sector wherein it delivers high profile fashion
statement clothes to its customers in UK. The main motive of the business is to earn revenue by
delivering value to the customers. The business uses organic cotton which are comfortable which
can be worn at all season. The business also reflects the idea of sustainable clothing’s ranges.
The USP of the business is to deliver quality products at affordable ranges. The prices of the
products are as per different varieties of clothes such as dresses, top, jeans, jeggings, trousers,
swimwear and so on (Waldner and et.al., 2015).

State the human resource policies and their importance in the workplace
Human resource policies are defined by all the strategies and measures formulated by the
human resource manager of an organisation in order to manage and monitor the business
performance. It is important to set human resource policies as per the legal framework to reflect
the ethical business identity in the market place. Street Fashion business develops human
resource policies in a way that satisfies the business, employees and as well the governmental
framework. The two important human resource policies covered in the discussion is health and
safety policies and equality and diversity policies wherein it becomes utmost crucial factor to
rightly acknowledge these practices and policies in the workplace in order to accomplish positive
working environment. These human resource policies implemented by the association are
discussed below:
Health and safety policies: it is important to have Certain standards for protecting them ploys
from physical and mental threats. As per the guidelines and the legal framework developed by
the Authorities and the government of UK it becomes very crucial to have proper health and
safety measures in the workplace. The health and safety formulated by the human resource
manager of the Association says to promote all such measures that brings positive working
environment in the workplace. It starts right from delivering equal wages and salaries to all the
employees irrespective of gender or any other cultural segment. Apart from that the business also
have certain Insurance policies so that an employee can claim compensation against any physical
harm caused to the employee in workplace. Health and safety is important to both business and
employs in order to practice healthy working styles so that employees feels comfortable and
focuses only on productivity at work association also delivers job security to the employees so
that employees feel loyal and retains longer with the Organisation. Health and safety policies
formulated by the human resource manager also includes for taking stringent actions against any
employee who causes harm to other in the work place, he/she can also be fired from the work
(Walther, 2015).
Health and safety at work etc. act 1974: the law was developed by the government of UK and
passed under the Parliament of UK. The law says practice all such safety and health measures in
the work place to protect the Working staff from any physical and mental harms. The law also
states to render equality to all the employees and avoid any discrimination or unfair means to the

working staff. Thus, employers in UK must adhere to this law to deliver for the well-being of the
employees. Street Fashion have deployed some disabled working staff in the workplace, the HR
manager in the association guides and trains employs about the health and safety measures to to
give respect and equality to all the working staff respective if they are disabled, irrespective of
their gender, age, cultural factors or any such factors.
Equality and diversity policies: human resource manager in street fashion company formulate
equality and diversity policy in order to give equal recognition and respect to all the employees
irrespective of what their cultural background, gender or any other factor. Employees in the
workplace belongs to different backgrounds and culture So it becomes very crucial to understand
and respect everybody’s culture and background in the workplace. The human resource manager
in the association delivers proper training and engagement sessions to highlight the importance
of practicing equality in the workplace. The HR manager delivers fair remuneration to all them
ploys in a workplace as per the job performed by them. Apart from equal wages and salaries the
human resource manager also delivers incentives and compensation for over time job and
exceptional job performed by the employee in the workplace it helps to give recognition and
motivates them ploy to work better. The HR manager in the association delivers leaves such as
paternity Leaves and maternity leaves, leaves if the employee has caused any physical damage
and other important leaves. Equality and diversity also acts like a motivation for the employee
where they feel comfortable and satisfied by working in the organisation. These are also
important approaches for retaining the employs and reducing employee attrition. The HR
manager in street fashion Company deliver benefits such as accommodation, food, cleanliness
and healthy working environment. Adhering to the legal framework of the government of UK in
order to render same recognition to both men and women, reasons of cultural differences or any
other factor to practice equality in order to conduct business in the most ethical and legal manner
(Zhu and et.al., 2015).
CONCLUSION
In a nutshell, the above report clearly briefed about the structure of businesses. Right
from legal statuses of the businesses that how it benefits or drawbacks to both business and its
stakeholders, the report also delivers different business sectors and how beneficial it turns to the
economy of UK, the financial sources available for the businesses defines the most profitable

with minimum cost incurred financial sources available for the business. To the end human
resource policies are determined by such policies that manages the human capital and monitors
the business performance. The human resource manager has to implement certain policies in
order to maintain equality and compliance with the legal proceedings in order to manage and
conduct the business functioning in the most ethical manner.

REFERENCES
Books and Journals