Nature Formation and Management of Business Organizations in the UK

This report describes the key sources of laws as the legal context for business organizations in the UK. It covers different types of business structures, their merits and demerits, and recommends IOM Solutions for choosing the best-fitted type of business. The report also discusses the legal obligations of directors and partners, and the liabilities that arise from the actions of employees. The subject is Business Law, course code BMP4002, for students studying in college or university.

BMP4002
Business Law
Assessment 2
Report describing the key sources of
laws as the legal context for business
organisations in the UK
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Contents
Table of Contents
Introduction ...............................................................................................................................3
Businesses & Organisations in the UK........................................................................................3
The legal business structure of UK companies..........................................................................5
Sole Trader.............................................................................................................................5
General Partnership...............................................................................................................5
Partnership............................................................................................................................6
Limited Liability......................................................................................................................6
Recommendations for IOM Solutions........................................................................................6
Conclusion..................................................................................................................................7
References:.................................................................................................................................8
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Introduction
The business term is being explained as a act from which there is exchange of
services and goods in lieu of consideration. Mostly the business is done for earning
more and more profit for business enterprise through selling services and goods
which is being manufactured by an enterprise. There are legislation which deals with
controlling and directing the functioning of business. The corporate law consists of
health and safety law, law of employment, protection law and many more, these laws
are applicable on in each business organisation which runs in a country. These law
are termed as business law(Thomson, 2022). However, the business enterprise have
to be registered as according to the law of nation. But this have different kind of
business which need not be registered as like sole proprietorship. This report
explains about many types of business. This also mentions for their merits and
demerits. This report also recommend IOM Solution for choosing best fitted type of
business in the last of the report after discussing all type of business.
Businesses & Organisations in the UK
In United Kingdom, the business as with its management is done as
according to the Companies Act of 2006. This act explains formation of a company
with their procedure. The functions of business orgainsation with the assistance of
workers. So, work done by employer and employees do have ethics for smooth
functioning of a company. Their conduct is mentioned in the written policy of the
enterprise. The law provides that no employer can do unfair dismissal in favor of
workers(Obiri-Korang, 2021). The enterprise have different features such as
perpetual succession. The perpetual succession describes that an enterprise would
continue to exist even after the death or dismissal of any member of shareholder or
board. The company do also have separate legal entity. With this a company have
right to sue and can be sue by any one.
The workers unprofessional behavior and lack of responsibilities in carrying
out business, the operations make emergence to different liabilities in an enterprise.
One of these liabilities in this case is vicarious liability which arises within business
concern and operates at larger scale. The liability start when a worker behaves or
acts deceitful or committed in any unlawful act even when being a part of
administration as their workers, then liability comes on employer as this is held
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responsible and liable for the actions of employee and thus this have to act within
time in order to solve any of the problem faced through the workers of the company.
In the addition, a business enterprise also suffer many problems as referred to
negligent behavior of their associate or any other employee at time of carrying out
their obligations and roles. Director is a person who have the place as head in the
organisation and do have various kind of roles and duties which is being given for
the post which they need to perform with caution and honesty for ensuring that there
is business carried out on their part(Lonardo, 2018). Furthermore, when duties were
not operated in good manner by the director then legal possession will raise on the
management because of non consummation of legal obligations through the director
of a company.
The director have to perform good with the authority through having
knowledge that proper decision were being taken on their part in behalf of the
institutions. The management have duty for ensuring that no fight will arise within
worker in the enterprise, if this arise then the director will resolve them through
promoting harmony between them. Furthermore, the bad behavior through the
manager make this liable for breach of duties. The other directors can hold a director
liable for misleading behavior with the workers. This is because it is expected that
company do not suffer because of the mistake of their leader. The director were
asked for providing cure to the company through giving for compensatory damages.
However, the contract is also be completed if there is any happening of serious
breach of duty(Januarita, 2021). In addition, this can change the director at time of
holding him with any criminal offense or any other practice of illegal malpractice
conducted by them. However, the possession of institution property with the director
can also be taken through them after completion of a contract.
The Partnership Act of 1890 govern partnership statement through giving
provisions which lay down for how a company is formed and how this is being
operated and partnership expiration can also happen because of malpractice done
by management of a company. The effective business management can be happen
with the assistance of Articles of Association and Memorandum of Association. The
MOA is a legal document which assists for manage the arrangement of an enterprise
at the time of their incorporation but this only be enforced when this get signed
through the shareholder and guarantors. In comparison of this, the AOA is an written
document which defines the regulation and rules for the institutions which should
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follow through them by working in an institution. Furthermore, this need the consent
of owner and director before the enforcement in the company.
The legal business structure of UK companies
Sole Trader
The Sole trader runs business as an individual and a self employed person
who makes all the profit for himself and invest in the company. The sole trader is
personally responsible for all of the losses they get in the business. There is no need
to register the company in United Kingdom's tax payment custom authority which is
known as HMRC and they do not includes Ltd, LLP, or PLC in the name of their
company(Irani, and Karnik, 2022). However, this is more useful for peoples who give
the services to the individual and run their business independently. This is a self
employed type of business structure which is managed through a single person in
their capacity. The organisation of business offer profit in respect to organisation
which is cost amiable. Therefore, this is very casual for open, run and function. This
is really popular form of an enterprise in the young entrepreneur who establish and
develop the business in very small scale. They do this because of accessibility of low
finances and capital with them. This is mostly preferred through an single person
who want to act as proprietor from starting their own business in the form of small
start ups. However, single individual is a wage earner for their net revenue and
income which is being collected in business enterprise. The decisions were taken
independently without any problem for involvement of a person. The control of
ownership is given with the type which attract new people in business.
General Partnership
The ordinary partnership of general partnership is the most common
partnership of business after sole trader in United Kingdom. This provide two or more
person for owning a business together and sharing profit and loss equally depends
as according to the agreement(Gokani, and et. al., 2022). This is more useful for the
professionals such as accountants, doctors and lawyers who wants to carry their
business in partnership which provides them security and sharing of responsibilities
in the business enterprise so they can focus on their personal aspects and each of
the partner have a common duty of law for the performance of their business task in
a faithful manner.
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This business type includes two or more, who are involved as general partner as the
agreement of partnership. However, these partner carry out business jointly doing
roles and duties which is involved in the business enterprise. The partner have to
share losses and profit in a punctual basis with a balanced proportion at time of
managing business enterprise. The contract of partnership state that a partner will
share cost of establishment, debt, fiscal risk and benefits which are obtained in the
business. However, because of the agreement this get collective participation for
business operation in an enterprise and have joint liability with respect of
administration risks and ability to answer for all action taken through this in an
organisation. Though this get connected with obligation of unlimited personal.
Partnership
The partnership offers less liabilities as compared to general business
concern. This is different with the reference of the obligations which were created
where this restricts the amount of money which is to be spent through the partners in
an business concern. However, a business is incorporated through two or more
partners which is personally able for all actions taken in a business enterprise. But
this do not have joint or collective obligations(Calabrese, Cowling, and Liu, 2022). But
in this, the office which is registered is essential and this have to be as according to
the order of government. The Limited Partnership Act 1907 governs LLP through
saving interest of partners. This has created written agreement which assists in
effectual functioning of business enterprise.
Limited Liability
The Limited Liability Partnership have separate legal entity form their member and
have and every partner have unlimited legal capacity of the is jointly liable to the business
they are commonly sharing so they will share the debts and loss of the enterprise together
after the death of another partner of the business. Any wrongful omission or act through any
person who is not related to form, then a firm is being liable for the same extent as the partner
of a company. This do not have directors or shareholders or director as this believe in dual
responsibilities for the owners and requirement of Article of Association is nor mandatory in
this partnership.
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Recommendations for IOM Solutions
As being a sole trader Sam do have started business on small level and now when this
enterprise starts to grow as a best option he do have to expand his business in market is:
ADDING A PARTNER :
The plus point for adding a partner in his business is he gets an additional
capital for the expansion of business which assists him financially. The area of
management is being distributed between his partner and him and this leads his
business in the direction of effective management and in last sharing of risk in an
enterprise for profit and loss, a partner shares equal amount of profit and losses
which will distribute there financial burden of an enterprise(Barrett, 2019). So, one of
the best option for Sam is adding a partner in his business which assists adding
more value in his company and maintain the business in an reliable way, through this
he will not only get benefit for other partner for his business but also he will be able
for invest more in a company for expanding his business enterprise in most
appropriate way.
Conclusion
In the above report this is been concluded that the proper social control of
business enterprise is important, so this can have purpose effectively. The regulation
of business law for conduct and operations of business. The businesses run with the
aim for earning profits and jurisdiction in a longer run. This vary in the size and type
and proprietor chooses type of reported for their will. Sam is recommended for opting
Limited Liability Company for expansion of business. This will assists him in carry out
his professional and personal life with ease at time of acquiring large investment
which assists him to earn more.
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References:
Barrett, C., 2019. Are the EU GDPR and the California CCPA becoming the de facto global
standards for data privacy and protection?. Scitech Lawyer, 15(3), pp.24-29.
Calabrese, R., Cowling, M. and Liu, W., 2022. Understanding the dynamics of UK Covid‐19
SME financing. British Journal of Management, 33(2), pp.657-677.
Gokani, N., and et. al., 2022. UK Nutrition Research Partnership ‘Hot Topic’workshop
report: A ‘game changer’for dietary health–addressing the implications of sport
sponsorship by food businesses through an innovative interdisciplinary
collaboration.
Irani, K. and Karnik, E., 2022. One Person Company: An All-Encompassing View. Issue 1
Int'l JL Mgmt. & Human., 5, p.2248.
Januarita, R., 2021. The Newly Sole Proprietorship as Limited Liability Company in Recent
Indonesian Company Law. MIMBAR: Jurnal Sosial dan Pembangunan, 37(1),
pp.221-231.
Lonardo, L., 2018. EU common foreign and security policy after Brexit: A security and
defence treaty for the ‘deep and special partnership’. Lonardo, Luigi, EU Common
Foreign and Security Policy after Brexit: A Security and Defence Treaty for the
‘Deep and Special Partnership’(April 27, 2018). DCU Brexit Institute-Working
paper, (4-2018).
Obiri-Korang, P., 2021. The Law of Business Associations in Zambia: An Introduction by
Mumba Malali and Chanda Chungu. Journal of South African Law, 2021(4).
Thomson, L.W., 2022. Is Decommissioning Liability Creating a Barrier to Deal Activity on
the United Kingdom Continental Shelf?. Aberdeen Student L. Rev., 11, p.68.
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