Structure of Business: Legal Statuses, Sources of Finance, and Sectors in UK Economy

The structure of
business

Contents
INTRODUCTION...........................................................................................................................3
Question One:..................................................................................................................................3
Construct a table to show the various legal statuses of businesses and identify the relative
strengths and weaknesses of these legal statuses.........................................................................3
Identify and evaluate the strengths and weaknesses of THREE sources of finance....................6
Question Two:.................................................................................................................................8
Identify three sectors within the UK economy in which a business can operates.......................8
Question Three:.............................................................................................................................10
Identify at least two HR policies and comment on their importance to the modern workplace10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business is defined as an entity which is engaged in various industrial, commercial as well
as professional activities. Businesses are established for many purposes such as gaining profit or
for fulfilling the charitable missions and social cause. Basically, business is referred as the
organisation which is involved in producing various products and services in order to gain
profits. Structure of business make the organisation legal that influenced the day-to-day
operations of organisation. There are various tyle of business structure such as sole-
proprietorship, partnership, corporation and limited liability company that are chosen according
to organisation activities and operations. After the pandemic of covid-19, it becomes very
challenging for an individual to start business in the economy of UK. UK government has
supported to businesses and start-ups through starting various scheme of providing finance. The
following report covers the new business idea of opening a new restaurant in which variety of
food is being served. It is London based restaurant, that offer all cuisine food and concentrate on
biodegradable packaging that differentiates the organisation from others. In this report various
legal status of business, source of finance and HR policies are covered in this project report.
Question One:
Construct a table to show the various legal statuses of businesses and identify the relative
strengths and weaknesses of these legal statuses
In businesses are run under various legal structure that affect the business operations and
activities. Business owner analyse all legal structure of business then adopt the suitable structure
according to business functions and strategies that help to attain all defined goals and objectives
properly (Alotaibi and Liu, 2017). Some of legal statuses are mentioned below:
Types of legal
structure
Meaning Strengths Weakness
Sole-
proprietorship
Sole proprietorship or sole
tradership is defined as the entity
which as owned as well as run by
the single owner who is
responsible for business
operations. There are number of
It requires
minimum
investment or cost
to establish
business and there
are no need of
The sole-
proprietorship has
unlimited
liabilities, the
whole business is
managed by an

employees are included in this
legal status but there is no legal
relation between business and
owner. Owner of business get all
profits earned by business and
responsible for debts as well.
accounting and
business audit. It
contains easy
process start-up
as well as easy to
change
organisational
structure.
single individual
so, it becomes
difficult to take
breaks. It faces
difficulties to raise
fund for business
expansion and all
decisions are taken
by owner that may
be inappropriate.
Partnership Partnership is defined as the legal
or formal agreement between two
or more people who are equally
liable for business operations and
debts. All partners are come
together to run business and
agreed to share profits on the
basis of capital ratio (Franco,
2019). All partners are share risk,
benefits, responsibility and costs
of organisation on pre-determined
ratio which is mentioned in
partnership deed.
It contains less
formal and fewer
obligations to
establish
business.
It brings
knowledge,
experience, skills
and contacts at a
place and share
burden among all
partners.
The business
contains unlimited
liability,
Slower decision-
making process
and limited
business
development.
Private limited
company (LTD)
Private limited company is
managed and owned by the
shareholders and run by the
organisational directors. The
company has its own legal rights
and obligations and it has
separated existence from its
It is separated
legal entity that
contains limited
liability.
Easy transfer of
organisational
share and able to
In this business
structure shares are
not treated through
stock exchange.
Share are not
offered to public
and there are