Legal Structures of UK Companies and Recommendations for IOM Solutions

This article discusses the legal structures of UK companies, including sole trader, general partnership, limited liability partnership, and limited liability company. It also provides recommendations for IOM Solutions, suggesting they choose a limited liability company for expansion. The article emphasizes the importance of business law in the UK and the need for effective management in any business.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
The legal structures of UKs companys............................................................................................5
Sole Trader:.................................................................................................................................5
General partnership: ...................................................................................................................6
Limited Liability Partnership:.....................................................................................................6
Limited Liability Company:........................................................................................................6
Recommendations for IOM Solutions:............................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
A business entity is the kind of a company which established by the owner with the aim
of generating revenue and making profits by manufacturing and selling goods and services to the
people. The person who holds the ownership of the business wants their business to be
recognized in their respective market between all their rival companies so that their businesses
can working properly. Everyday in the marketplaces new business has been created and when the
businesses grows it leads to growth in their respective sectors. This assist the economy by doing
the exchange of businesses and funds in the market between the people. Rising businessman
consider start-up as an great chance to make more money. The owners of the company created
their businesses in regards to their funds and investment available with them and after that
according to their funds they decide what kind of business they want to create and what scale the
businesses should be operate. So the business law of the United Kingdom helps the owners to
understand the legal structures which they must follow in regard to operate their businesses.
This paper is discussing about the various structures of the businesses, merits and demerits of the
structures and in last recommendation for Sam, which type of business is suitable for the
expansion of their business of IOM solutions.
MAIN BODY
In the United Kingdom, all the activities of the business and the management are to be
done in accordance with the Companies act 2006. The act provides all the details of the related
provisions that is related for the functioning of the business and their operations effectively.
Employees is considered as the prime assets of the organization as they are the ones who is
responsible for the smooth functioning of the operations of the businesses. So the behaviour of
the employees and their conduct must be in accordance with the several employment legislations
which describe details about the code and conduct of the of the employees. But for the
organisation they must abide all the laws of the companies act for not getting into any legal
consequences for not fulfilling the obligations which they must abide(Bambara and et, al.,
2018). The businesses who is enter into the markets have posses identity of the legal professional
organization with several components with it. Those components have the continuous existence,
distinct properties, common seal on the name of the businesses and mentioned the rights and the

obligations when they sued or suing someone for not compiling with the laws. At time of the
creation of the different agreements that must be ended by their names so that they can start their
businesses. Those are mentioned under several heads and clauses which will create difference
among them such as agreements of sale, purchase of commodity etc. The misconduct of the
employees and the operations of the business is not in the accordance with the law can attract
various liabilities. One out of many liabilities can be arises in the business is the vicarious
liabilities which arises in those businesses who are operating on a huge scale. Those liabilities
happens in an organisation when in the entity the employees action or their behaviour is
dishonest or they commits wrongful acts during they are the part of the organisation then in that
situation the employer is liable for the actions of the employees because they will be liable for
their employers actions. An organisation can also suffer if any of their employees or staff
members is being dishonest or negligence while performing their task. Director is the individual
who is the head of the organisation and they have to perform several roles and duties. They must
perform their role with the full honesty to ensure the smooth functioning of the businesses. In
case when the director didn't perform their obligation than they will attract the legal
consequences(Beatty, Samuelson and Abril, 2021). The director is the person to whom all the
members of the organisation expect that they will take proper decision regarding the company. It
is their responsibilities to ensure that the conflicts cannot be arises among the employees of the
organisation, and if they arises then it is the director obligation to resolve the conflict and prevail
harmony among the employees. The unethical behaviour of the director make them responsible
to face legal consequences because it is expected that the organisation should not suffer because
the head of the entity. The director may be asked by the others to pay compensatory damages to
the entity. The contract of the employment of the director can be terminated and in case the of
grave breach they can be liable under criminal offence. Every possession which the the
individual has as a director, they have to return it to the organisation.
The partnership act 1890 defines that the agreements of partnerships by providing various
provisions in which all the provisions related to how the organisation is created and operated and
how partnership can be terminated in the event of malpractices(Simbolon, 2019). Memorandum
of Association and the Article of Associations helps the managements to operate the business
effectively. MOA is a legal document which assist the individuals in incorporation of the
organisation but it can only come in affect after the signed by the directors of the organization.

Although the AOA is a written documents in which all the rules and the regulations related to the
companies are defined and all the members of the organisation must abide by them. Hence, it can
only be implemented by the consent of the directors, shareholders and the owners of the
organizations.
The legal structures of UKs companys
Sole trader can also be termed as the sole proprietorship refereed as the business structure
of IOM solutions which is run by Sam. He has been associated with the business for eight years
and in previous two years he has expanded his businesses. Sole trader is only offering the profit
to Sam when business makes profit. Sam as the sole manager, he has to bear all the
responsibilities and the liabilities of the business. He is planning to grow his business that is why
he is searching for a best business structure that help him to expand his businesses and help him
to earn more profits. The several legal businesses structure are as follows:
Sole Trader:
In this business structure the business is managed by sole person in his capability. This
structure of business is considered as cost friendly because in this structure the business is easy
to open, operate and run. It is one of the most famous form of doing businesses in youngsters and
the rising entrepreneurs who has created their business at a small scale(Gibson and Osborne,
2019). It can be done because they have limited funds with them. Generally, this structure is
picked by sole individual who wants to be the owner of the business in form of start ups. All the
revenues and the profit generated by the business is solely utilised by the sole person. All the
decisions regarding the businesses can be taken by him without any interruption or
delays(Bowie, 2020). It also attract new pool of individuals because of the sole ownership of the
business. On the other hand, it has also have demerits such as all be losses and the liabilities of
the businesses have to be bear by the sole person because it is managed by the one person, the
confidentiality regarding the businesses plan is the strongest. In this type of business structure it
is difficult to get time for the family and friends. Both the income and the corporate taxes has to
be paid by the owner and for that they have to maintain all data regarding their transactions and
they also protect their customers data in regard to comply with the General Data Protection
Regulations.

General partnership:
In the partnership businesses structure, it involve two or more than two people who
involved in the business with the partnership agreement. All the partners who involved in the
business are sharing all the duties and the responsibilities which is involves in the running the
business. They have to bear all the losses and the profit equally while performing the business
activity on an timely basis in an equal proportion(Halbert and Ingulli, 2020). The partnership
contract act mentioned that the all the partners who is in the partnership will equally contribute
the cost of establishment, the risk related to the financial and debts also all the benefits which
incurred out of the business. In accordance with the agreement they all get involved in the
operations of the business and partners must have to bear the liabilities in regard of the risk and
management of all the action taken by them. So they have to bear limitless private liabilities. But
compare to sole proprietorship it is considered as more reliable because in this structure
investment in the business can be easy. Further, because of the different partners skills they can
take a creative decision for the business which help the entity to improve their productivity. But
in case of wrongdoing by any partners, they may be all be punished for the action of partners
because they are in the joint liabilities. It is governed by partnership act, in that the creation and
the dissolving of the businesses has been mentioned in case of the death of the partners or the
bankruptcy.
Limited Liability Partnership:
Under this partnership fewer numbers of liabilities in respect to the general partnership.
In this partnership there is the limitation in regards of spending funds by every partners in the
business entity(Wevers, 2021). Organisation is created by two or more partners and all of them is
going to be responsible for all the decisions taken in the business but they don't have any
collective or joint liabilities. There should be a registered office in this partnership in accordance
with the government regulations. All the limited liabilities partnership is govern by the limited
partnership act 1907 which protects the interest of the partners.
Limited Liability Company:
It is also called as a private limited organization and their administration is governed by
the companies act 2006 which contains all the provisions regarding the limited liability company.

In that act, all the provisions related creation of the organisation and how they should operate,
what are the requirement that has to be full fill for the creation of the private company and how
the company can be dissolved(Marson and Ferris, 2018). Further, it also created the legal
obligation of the superior level individuals and the associate of the organisation to abide by the
constitution of the organisation. The head of the organisation is director and they are responsible
for running the company. The shareholders has ownership of the organization. They posses the
distinctive corporate identity. Owners under the limited liability company enjoys the minimum
personal liabilities.
Recommendations for IOM Solutions:
It required expansion on time when the business is growing and developing for acquiring
the present opportunities in the market. Further it assist the business to get adaptive in the
changing dynamics of the market. So, Sam should pick the limited liability company for
expanding their business of IOM solutions. The legal structures offers various benefits and also it
also share the responsibilities among the management. In addition, it helps in retaining the more
profits and offers better tax planning. More entrepreneur attracted towards this structure because
it is reliable and helpful in formation of the capital.
CONCLUSION
From the above report, it can be concluded that better management of the organisation is
important for effectively functioning of the business. Business law of United Kingdom governs
the activities and the code of conduct of the businesses. The primary aim of the business is toa
make profit for the longer-term. All the structure of the business differ in type and size and
owners of the organisation choose their types according to their choice. In this report, it is
recommended to the Sam to choose the Limited liability company in order to expand their
business.

REFERENCES
Books and Journals
Bambara, J.J., and et, al., 2018. Blockchain: A practical guide to developing
business, law, and technology solutions. McGraw Hill Professional.
Beatty, J.F., Samuelson, S.S. and Abril, P., 2021. Essentials of Business Law.
Cengage Learning.
Bowie, N.E., 2020. Business Ethics. In New Directions in Ethics (pp. 158-172).
Routledge.
Gibson, A. and Osborne, S., 2019. Business Law. P. Ed Australia.
Halbert, T. and Ingulli, E., 2020. Law and ethics in the business environment.
Cengage Learning.
Marson, J. and Ferris, K., 2018. Business law. Oxford University Press.
Simbolon, A., 2019. Prevention of monopolistic practices and unfair Business
Competition through business Competition Supervision. Journal of Legal, Ethical
and Regulatory Issues, 22(1), pp.1-7.
Wevers, H., 2021. A Basic Guide to International Business Law. Routledge.