The Structure of Business: Legal Statuses, Sources of Finances, and UK Economy Sectors

This document discusses the structure of business, including the legal statuses of businesses and the strengths and weaknesses of different sources of finances. It also explores the agricultural, manufacturing, and construction sectors of the UK economy and highlights their differences.

The Structure of
Business

Contents
INTRODUCTION...........................................................................................................................3
Question 1........................................................................................................................................3
Various legal statuses of businesses and identification of strength and weaknesses of these
legal statuses................................................................................................................................3
Evaluate strength and weakness of sources of finances..............................................................6
Question 2........................................................................................................................................8
Identification of three sector of UK economy and what is the differences between these three
sectors..........................................................................................................................................8
Question 3........................................................................................................................................9
Identify HR policies and comment on their importance in modern workplace...........................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business structure are of various types. They are being defined as the organisational
frameworks for carrying out various commercial activities performs in the business for long
time. After this covid pandemic, it becomes difficult for the individual to start their business in
UK economy. But government of UK has decided to support businesses in their start-ups and
they are spending more on starting up of the business (Ahmad, and et.al., 2021). They’re
providing various loans schemes to the entrepreneurs so that they could effectively raise their
business. There are various types of legal structures which a business can adopt by using their
function. Each and every legal statuses is having their own strength and weakness and they
perform their own functions as well. Then to start a business, sources of finances are to be find
out in order to carry out all the activities in most effective manner. There are various HR policies
that can be used in the organisation to secure their workforce. In this given report there is a
discussion of different types of legal structures and their strength and weakness too. Then it
consists of various source of finances and the identification of sector in which there is a growth
in UK economy. Then there is an importance of HR policies are mentioned here.
Question 1
Various legal statuses of businesses and identification of strength and weaknesses of these legal
statuses.
Types of legal
statuses
Meaning Strength Weaknesses
Sole trader It requires minimal set
up or the administration.
In this the registration at
companies house should
not be required (Alkhan,
and Hassan, 2021). And
also, the owner of a
business should not have
to be notify to the
HMRC. In this owner of
Strength of sole trader is
that it is easily and cheap
to establish by an
entrepreneur. The owner
of a company is having
proper right over the
business and is liable for
or debt and liabilities.
And the profit is being
earn by himself only.
The weakness of sole
trader is that the
proprietor has unlimited
personal exposure of
risk as he himself liable
for all debts and risk that
is been obtained by
business. In this investor
would not be able to
invest in business

a business is having
their own rights and they
are own responsible for
profits and loss received.
This type of business is
not a legal entity and
business owner is
having unlimited
liability to all the debts
and legal actions taken.
There is not any other
division of the profits.
because it is a sole
proprietorship business.
Public limited
company
(plc.)
Public ltd company is
just parallel to private
limited company
(Babaeian Jelodar,
Hemant Raut, and
Saghatforoush, 2021).
Public limited company
exist as legal entities in
their own rights. In
addition, the members in
public limited company
have in a liability which
is limited to their
investment. and the
value of the shares. In
contrast with private
limited company, the
shares of public limited
can be traded in the
market of public and can
be used for raising a
Strength of public
limited company is that it
can raise capital through
public shares particularly
where the companies
listed on a recognised
exchange. also, they can
sale their share to the
public and anyone can
invest in their business.
There is a growth and
expansion opportunities
for a public limited
company. as they can
pursue new projects, new
products in a new
market. they can raise
fund from research and
development and grow
originally. Further, they
can make any of the
Some of the
disadvantages of public
limited company is that
it has more regulatory
requirements as a
trading certificate must
be obtained from
Companies house before
they can start a company
operation. They must
have two directors
(Banks, Fancourt, and
Xu, 2021). Also, there
must be highly
transparency among
their accounts and it
must be produced within
six months. There can
be ownership and
control issues among the
shareholders ensures

finance. It is called
however working
expense of running as
PLC seem to be higher
than privately owned
businesses and their
design is bigger fit to
bigger organizations.
There can be least of
£50,000 offers can be
given before an
organization is enlisted
under PLC and there
could be in any event
two chiefs ought to be
named.
acquisitions and mergers.
Then they could widen
the shareholder base and
spread the risk among
themselves (Bateman,
and et.al., 2021).
that they support a
vision and plans of a
business. there can be
short termism and there
is more vulnerable to
takeover if majority of
shareholders agree to be
bid.
Private
limited
company
(ltd.)
The private limited
company is the company
which is having legal
entity in their own
rights. This is related to
the major benefit which
is operating as a limited
company and the
shareholders are limited
to their investments and
to the shares which are
unpaid and shares, they
own. In this the personal
assets of the
shareholders are to be
Some of the advantages
of private limited
company is that it is
called as limited
company because it is
independently taxed and
accountable business
entity. then it is called as
separate entity and
having capacity on their
own property and enter
into any legal contract.
The members of
company cannot be liable
for them and to its
Disadvantages of private
limited company as it
requires many of the
formalities and need
when assistance from
professionals (Browne,
and et.al., 2021). as
company should be
incorporated in Article
of association so there is
a need of professional
knowledge for preparing
it. There is a
requirement of two
directors.

not exposed if limited
liability is dissolved. In
this private limited
company, there should
be at least one director.
And the companies
should be registered
under office in UK
(Fredheim, 2021). Then
the company must be
complying with
regulations of
government. Then in
this one share must be
issued at the time of
corporations.
creditors. Another
advantage is that it is
legally assessed and
there is a scope of
expansion. It can easily
be done by receiving
funds from members and
from directors only. Now
a days banks are giving
high value to private
companies so the
entrepreneur should go
for private company and
sanction loan
accordingly.
Evaluate strength and weakness of sources of finances.
Finances for business are the funds that is required by an individual to operate business
activities and functions to expense their future or to start their business. funds can be required for
purchasing for various items like furniture, machinery, buildings, factories etc. so, in this given
question it is discussed about the sources of finances which can be get by entrepreneur to start a
business. finance is the essential for operations of business and to expand the business. finance
can be available through internal and external sources both. These are discussed below:
Personal savings: Personal saving is the amount which a person bring by himself. it can
be owner, partner or shareholder of a business. This can be in any amount. when a business seeks
to borrow money from partner's, owners and the shareholders of a business to operate day-to-day
operations and to start their business (Frolova, and et.al., 2021). it is known as personal savings.
 Strength: Some of the advantages of personal savings that the owner would not want
collateral to lend their money in the business. There can be no paper work required. And

the money need not to be pay back to the owner on time. it can be interest free or very
low rate of interest.
 Weaknesses: The major disadvantage of personal savings is that it is not an option where
large amount of funds can be acquired to carry day-to-day operations. Because it is an
informal agreement, the owner of a company should may demand money back in the
short notice and this can cause problem of cash flow for the business.
Financial institutions: It is the biggest source of funds which is being used by many of the
business man in order to start their business and to expand their business n any other country. It
can be the best way of meeting the expenses. It is to apply for a loan in a bank. But for that the
owner needs to simply made the eligibility criteria that is some of the documents that are
acquired by the bank (I Asuquo, and et.al., 2021). Money can be borrowing for long-term
business projects or for the expansion of the business. there are some of the strength and
weakness of this financial institutions.
 Strength: Strength of the loans is that a businessman can borrow large amount finance
from banks. it can be suitable for long term investment as well. the lender has to no say
on how the money is to be spent. In this interest rates are lower for bank overdraft and
setting in advance. Also, it need not to be paid back for a fixed time and also Bank do not
withdrawal at short notice.
 Weaknesses: The weakness is that collateral is needed in loans and the amount borrowed
has to be repaid at the agreed date. the interest is to be charged by the bank and also loans
can affect the company's gearing ratio.
Crowd funding’s: Crowdfunding is biggest financial solution that is becoming popular
nowadays to start a new business and to get funds for that. if entrepreneur should have exciting
business idea that can become a history, then crowd funding provides them choice of getting
funds. For that, all they must do is signing up with their website and share their projects and
promote well to encourage their donations. This form of business finance can help owner in
executing bigger project and not for day to day everyday expenses of business.
 Strength: Most of the biggest advantage of this financial solution is that owner can get
access to funds even if they have low credit score (Kerlin, and et.al., 2021). Next
advantage is that it can be speed and accessibility also it does not need any special

qualification to start a crowd funding campaign. It just needs marketing of crowdfunding
campaign to build the interest in your brand.
 Weaknesses: The disadvantage of this is that there can be scrutiny and rejection because
its owner doesn't meet the requirements of the crowdfunding then the campaign might
never be seen again. there can be competition more because nowadays crowd funding is
popular so many of other projects and businessman are looking for investing from crowd
funding so they can attract by them from their projects. There can be fees- most of the
crowdfunding platforms take some of the percentage of the contribution you raise.
Question 2
Identification of three sector of UK economy and what is the differences between these three
sectors.
The sector which are becoming popular and growing now a days in UK economy is
manufacturing, agricultural and Construction sector. Let discuss about these sectors in detail:
Agricultural sector: Farming industry is probably the most seasoned area of business as it
comprises of developed land, reproducing animals and plants to create food and endurance of the
things (Kim, Lee, and Lee, 2021). It very well may be the essential piece of each nation
economy. in case of UK economy, it is the biggest sector which is growing and identifying
opportunities. there is modernization in agriculture industry which is coming in late twentieth
century which is called as "Green revolution". Farming industry is developing dramatically. It's
anything but a significant industry of UK and Africa and different nations which is having
acceptable biological system. This industry incorporates giving selling, delivering and sending
out of farming merchandise and items. additionally, this is giving work to researcher,
biotechnicians, scientist, ranch works and improvement experts. then chemical like pesticides
fertilizers, modified plants are increasing production nowadays. The biggest company which is
Cargill, a Minneapolis the one of reowned companies in agriculture sector.
Manufacturing sector: Manufacturing is the next sector in which business can operate. It
is the procedure of changing raw material into finished goods in order to sell it in market for
public consumption (Koleva, and et.al., 2021). It very well may be in numerous classes for
instance petrol industry, food industry, paper industry, calfskin industry, transportation gear
industry, wood industry, electrical hardware industry and so on in these products are being set up

in plant industrial facilities and furthermore, they are being set up by hands to sell it on the
lookout. They are giving enormous measure of work to taught just as work individual of a
country. in context of UK economy, there are about 12 billion people who are being working in
manufacturing industry. This is different from agriculture industry. This is an industry in which
quality of products is to be maintained in order to sell it in market and to make customer satisfied
and for that high amount of investment is needed.
Construction industry: Construction is another biggest sector in which business can lead to
success. It consists of designing, building, maintaining and constructing of the infrastructure. It
can be subdivided into three categories like general construction, heavy construction, specialised
construction. Substantial development comprises of development of extensions and streets.
general development comprises of making of private spots and genuine States. and last
specialised construction includes building of electric and wood things. these days modernization
is a method of developing structure and houses (Mujtaba, and Shahzad, 2021). Development is
currently getting benefits of innovation. it has given high rises that give spot to everybody. as per
the exploration, as of late one innovation called as Building information modelling (BIM) has
been engaged with the development business. In this different worker and many individuals
includes in a solitary undertaking however it becomes trouble to associate with everybody and
impart their thoughts for that BIM diminishes that this issue and assembles a stage to cooperate
and share their thoughts this sector also requires high amount of investment for the purchasing of
various technologies.
Question 3
Identify HR policies and comment on their importance in modern workplace.
In today's modern workplaces the policies need to reflect the shift there upcoming. There is
latest trend with the updating of the employee policies and their manuals to prevent
misunderstanding in the workplace and to protect their business. Implementation of strong HR
policy could help the organisation in both internal and external environment that can meet their
requirement of diversity, training and ethics which is required in today's modern workplaces.
policies set various applications, standards of behaviour and provide disciplinary procedure.
Some of the HR policies are:

Health and safety policy: Health and safety policy is one of the important HR policies
that is being used in every organisation. It outlines procedure emergency, contact information,
workplace condition and other special requirements (Němec, and et.al., 2021). it is needed to
protect employees also at the time of covid-19 safety protocols. it helps employees in being
productive. Require certain base principles to secure the prosperity of representatives. The
savagery of work environment is straightforwardly connected to the representatives' wellbeing,
security, security however it is ordinarily having its own different strategy.
Equality and Diversity policy: Another is diversity and equity policy as it is gender
equality it has never been greater. In most of the recent research, it is a study that most of the job
seekers want to know about the prospectus of employers about equity, diversity and inclusion.
According to PWC, about 85% of global businesses say that diversity and inclusion is the
organisational priority. In this employee are being protected against from racism and movements.
this can be through movements like Black Lives Matter. Nowadays launching of a new product
is designed to help creating more equitable workplaces (Sun, and et.al., 2021). They think that
creating a comprehensive policy and program and making the difference when there hiring any
top talent. this policy supports the most senior level of leadership. it is called as equality for all
policy that is being available on the website describing all the values and beliefs in equal rights,
equal education, equal pay and equal opportunity to all men’s and women’s working in an
organisation.
CONCLUSION
From the above it is been concluded that there are various types of business legal statuses
that can be adopted by any business. they are having their strength and weakness and ability to
perform their functions in effective manner. the most of the preferable company which can be
suggested as private limited company to the entrepreneur. then there are various sources of
finance which can help the entrepreneur in purchasing of their various assets and starting of their
business. now a days various sectors are growing and leading to success out of these the most
important sector is manufacturing sector as it is most important because it is providing
employment to many of the people and also customer get attracted with the quality of product,
they are providing to them. there are various other policies that are being used in organisation to
protect employees from being exploit in the company.

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