Types of Business Organizations and Their Legal Consequences in UK

Law

TABLE OF CONTENT
INTRODUCTION...............................................................................................................................3
MAIN BODY.......................................................................................................................................3
Kinds of business organisation.........................................................................................................3
Partnership.......................................................................................................................................3
Limited Liability Partners.................................................................................................................4
Limited company...............................................................................................................................5
Recommendation..............................................................................................................................6
CONCLUSION....................................................................................................................................7
REFERENCES....................................................................................................................................7

INTRODUCTION
Business is an important enterprise which helps out to manage and undertakes all the
activities in a commercial manner through which profit can be generated in revenue can be
created in the company. In order to manage the activities in business there are certain laws
relates to the working nature of the enterprise with their liabilities, rights and duties which
can be managed. Business used to ambit an expanded legislation which considers data
protection, company law, employment law, contract law and many more. There is being seen
two important types of laws in UK they are statutory which includes all the law-making
power and the supreme law authorities named as Parliament and the other one is common law
where the laws are being made by the judges. It includes judicial precedents (Frecka, Griffin,
and Stevens, 2018). In this report there will be analyzation of IOM solutions which used to
deal with electrical parts in the local garages. The business structure followed by them is of
sole trader and they are implicating to see organise it. This report will provide types of
business organisations with their general legal consequences.
MAIN BODY
Kinds of business organisation
For starting up a business and also for reorganising and restructuring any company or
organisation there is being involved scrutinization of different legal solutions and
consequences through which organisation can manage their business practises. For reorganise
IOM solution it can be seen that different variable options are available which will help in
further expansion. The major sources and the areas that are being considered in the
implicating factors of business are degree of personal liability, tax amount, administrative
work, finance, accountability and many more. Other than sole traders some of the options
which IOM solutions can take for reorganisation of business practice are mentioned there
under:
Partnership
All those business organisations which involves two or more individuals to agree on
mutually sharing profit and loss of firm. The partners considered a greater involvement in
benefits, sharing risk, cost sharing and all the important responsibilities and liabilities lie in
the business. This can be treated as an unincorporated entity where partners mutually engaged
and are self-employed (Knight, Holder, and Knight, 2017). They are being liable for all the
laws and the debts for the business activities, any kind of misconduct or negligence in the

Business Law

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Kinds of business organisations.............................................................................................3
Recommendation....................................................................................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
The business is an entity which can be defined as the one which undertakes commercial
activity so that the profit and revenue can be generated by the firm. The laws relating to the
business is aimed to regulate the working of enterprises so that their rights, liabilities, duties can
be governed. It is a broad ambit which covers various legislation under it which includes
company law, data protection, employment law, contract Act, etc. There are mainly two types of
laws in UK which includes the statutory that is made by the supreme law making authority that is
called the Parliament while the other is common law which is made by the judges through
judicial precedents (Willcocks, 2018). This report is based on IOM Solutions which deals in
selling electrical parts to the local garages. Its business structure is sole trader and is planning to
reorganize it. This report will cover various types of business organisations and legal
consequences of each.
MAIN BODY
Kinds of business organisations
Initiating a start up or restructuring or reorganizing the organization involves scrutinizing
every legal consequence of the organization so that the best can be chosen out of all. In order to
reorganize IOM Solutions, there are different options available to it which can help in expanding
the business. The structure which is chosen by the owner have significant implication on many
factors such as tax amount, degree of personal liability, amount of the administrative work and
also ability to extract finances from various sources (Vecherskaya, 2019). Apart from sole
traders, the options available for IOM Solutions for reorganization is illustrated below-
Partnership:
This business organisation includes two or more of the people which agree on sharing the
loss and profits of the firm. The partners are involved in sharing risk, benefits, cost and the
responsibilities of the business. It is the unincorporated entity as the partners engaged in it are
self employed. All are personally liable for the debts and losses of the business which is
undertaken and unlimited liability arises in case of loss or debt. The partners are also responsible
for the misconduct or negligence of the firm. Its formation requires the registration at HMRC and
a partnership agreement which is an optional part for the legal formation of the company.