Corporate Law and Organizational Structures in the UK

This study explores the corporate laws and organizational structures in the UK and how they impact businesses. It discusses the advantages and disadvantages of different legal structures, such as sole proprietorships, partnerships, and limited liability corporations. The study also provides recommendations for expanding a business, such as utilizing partnerships as a legal structure. The importance of contract law and business operations management are also discussed.

Business

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Associations and Companies in the Great Britain.......................................................................1
Taxation and Businesses..............................................................................................................2
Statutory corporation framework of British businesses...............................................................4
RECOMMENDATIONS.................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Corporate spaces are in great need due to the demands of the labour and the industry
nowadays (Aithal, 2016). One of the essential components required to establish, manage, and
grow a business while maintaining its comparative advantage is corporate law. "Management of
corporation techniques" and "management of business units" are the two aspects of corporation
governance which govern everything which occurs in a firm. The following piece of this study is
an instance study of Sam, a solo owner whom have run his business for the past 8 years and who
now wants to expand it utilising the perfect business structure. This publication analyses
numerous laws, organisational systems, a firm's character, and management. Recommendations
are given after looking at the instance study that is supplied.
MAIN BODY
Associations and Companies in the Great Britain
The "United Kingdom corporate entity law," created by the "Entrepreneurship Ordinance
2006," and also the "United Kingdom Corporate entity Compliance Benchmark, Insolvency Acts
1986, and European Union Rules," manage corporate entity institutions in the United Kingdom.
Characterize the foundation and management of a company in aspects of various judicial
processes. Business governance and corporation finance law may be distinct. In the UK, business
administration oversees the standards that apply to both shareholders and employees (Asongu
and Odhiambo, 2019).
The Employment Ethics Law 1996, the Equality Amendment 2010, the Trading Associations
and Employment Freedom (Conglomerate) Act 1992, and the Medical and Safety at
Employment Policy 1974 are the main pieces of law that regulate dealings between workers and
employers in Great Britain enterprises. The preceding is a summary of key changes to British
employment law:
 Remuneration improvement: The Government Basic Salary and the Global Minimum
Payment Rates were formed in 2019, and they have had a big impact on small and
medium-sized firms because they require them to come up with ways to offer relatively
low wages.
 Gender compensation scope: Starting in March 2018, companies with more than 200
workers must submit data on their company's compensation variation between men and

women in accordance with the "Equality Act 2010 (Gender Compensation Differential
Data) Regulations 2017."
Taxation and Businesses
Dismissal remuneration: "Dismissal activities" can be carried out without the employee
or the employer having to pay any income taxation or nationalistic insurance responsibilities.
Beginning in April 2020, any additional funds above "GBP 30000" will be transferred to the
financial firms' NIC payments. The surplus will be treated as taxed income.
IR35: In 2021, modifications were made to the "off-payroll employee" legislation in IR35
which had an impact on large and medium-sized industrial enterprises. If they have agreements
with specific categories of intermediaries as of 2021, bigger and medium industrial firms would
require to implement adjustments to their taxed income and NICs.
Investing from abroad: Under the Commercial Act of 2002, all stockholders-local and
foreign—are required to adhere to a comparable "Great Britain purchase management structure."
Data protection: In the United Kingdom, the "Data Protection Act 1998" governs the
preservation of personal information, and businesses must be informed of their responsibilities
under it (Coman, Popica and Rezeanu, 2019).
Business operations management of a corporate entity: "Commerce activity
management" of an institution refers to the management of analytics techniques and helps the
company monitor, identify, change, and address any unanticipated changes in the technical
environment. Corporate activity can be divided into a variety of areas, including internal,
external, fiscal, and money processes. Instances of "Corporation Activities Management"
applications include the management of operational effectiveness, output planning, interruptions
avoidance, networking effectiveness, challenge separating, web administrator, and change
management.
Vicarious Commitments: The employer might well be deemed vicarious liable for the
unexpected activities committed by the employees whenever there is a demonstrable connection
between the illegal conduct and the employees' responsibilities. Companies can easily plead the
defensive system that they exercised all reasonable steps to decrease the "actions of
discrimination" for which they are lawfully liable in discrimination charges based on supervision
accountability. Instances of "institutional vicarious obligation" include inflexible obligation,
outsourced, and detecting limit. Vicarious obligation is mainly driven by two factors: financial

risk and the significance of a firm's examination of its workers' working conditions. In general,
vicariously responsibility is related to employment laws, especially when there are instances of
discriminating acts. To reduce vicariously liability, businesses may focus on a range of
precautions, like as providing education and maintaining stringent rules. If businesses implement
the proper protections, they may be able to minimize vicarious responsibility by proving that
they have taken all required precautions to stop misconduct (Cramer and Krueger, 2016)(De
Zuani, 2017).
Corporation misbehaviour accountability: A team's corporation duty of negligence
determines their liability for harm. The legal action wherein people or businesses are listed as
"suspected people" and suspected of inflicting financial or other losses because of a lack of
attention or concerned is referred to as a "medical negligence complaint." According to tort
doctrine, the negligence case must demonstrate that the plaintiff's negligence was the real reason
the complaint suffered damages. Despite the fact that a firm's negligence might also have a wide-
ranging impact, government has continuously attempted to restrict the tort of neglect's extent in
an attempt to preserve the system overall.
Tasks, duties, and liabilities of administrators: The "Companies Laws 2006" explains
the exact duties, liabilities, and duties of top management of enterprises with British
incorporation. As per the "Companies Law 2006," a supervisor should obey administrative
decision, improve the firm's benefits, consider taking sensible decisions, showcase admirable
characteristics and carefulness, navigate evident of or handle confrontational situations, and obey
institutional regulations. The committee seems to have the accountability of supervising all
business operations since they should make strategic and theoretical decisions and make sure the
business could indeed satisfy "its legal provisions."
Termination of the Partnership: Termination of operations is referred to as "abolishment
of the Partnership." This describes a process by which the relationship between the business
owners is severed and all of the rights, possessions, debts, and money are regulated and
addressed. Genuine separation and legally cancelling are the 2 sorts of "deciding to end of firms"
which are connected to taxation. The actual shutdown took place after all business owners quit
managing each part of the organisation. Theoretically, the partnership will always be in place
with 50% of the total ownership; the profits are switched within a year (Gielnik, Zacher and
Schmitt, 2017). The concept of "disintegration of companies" encompasses the selling of the

corporation's assets, the allocation of money, and the settlement of any remaining debts due to
the corporation's owners.
Memorandum of Association: A firm's MOA contains its rules. It is a legal
documentation that is created during the creation and registration of a business and it lists the
firm's clients and corporate objectives. Shareholders and creditors interacting with the business
can understand the fundamental statutory obligations of the business according to the MOA. This
also demonstrates the shareholders' capability to make intelligent investing decisions.
Articles of Association: An organization's AOA serve as its governing document. A
legislative document that outlines an organization's goals and specifies the rules governing its
activities. The section outlines the corporation's internal operations, including how executives
will be selected and how fiscal reporting will be handled (Giessmann and Legner, 2016).
Statutory corporation framework of British businesses
Micro companies are frequently contrasted to sole proprietorships because, in most cases,
they are run by a single individual who is responsible for every aspect of the company and must
provide close consideration to every aspect. The "Self-Assessment Taxable Earnings" is being
utilized to determine the amount of sociocultural safety and taxes that the business owner is
required to pay. Almost 60% of company based in The United Kingdom are sole proprietorships,
as per Hm revenue & customs. The owner of a sole proprietorship is responsible for contributing
profits taxation following exceeding their personal tax exemption (currently £12,500 annually).
The rate of taxes for sole proprietors in the Great Britain is "20% up to £37500, 40% from
£37500 to £150000, and 45 % above £150,000."
Advantages
 The revenue is paid to the owner, and privacy is upheld.
 There is just one sort of taxes that applies to income.
Disadvantages
 Everything incorrect with the business is the owner's responsibility.
 The business lacks legal powers.
The term "generic partnership" refers to an unorganized business whereby two or more
individuals share administration responsibilities. In this case, all parties involved should agree to
accept personal accountability for any debts or legal requirements. Agreements can be lawfully
signed, claims can be defended, property can be managed, "federal and municipal taxes" can be

paid, and banks can lend money to corporations. In comprehensive partnerships, all participants
are accountable for the business, including all expenditures and judgments (Nadarajah and Kadir,
2016).
Advantages
 This company structure needs less paperwork, is straightforward to operate, and is
typically less costly.
 The generic partnerships can be ended quickly and easily at any time.
Disadvantages
 This corporate layout is not useful for obtaining funding from investors.
 The investors are immediately impacted by the decisions made by the numerous owners.
Due to the fact that the participants are free workers, the association is seen as an
unregistered enterprise. Each participant is personally liable for any expenses and obligations
incurred by the firm. Whenever two or more people agreed to divide the firm's earnings and
losses, a collaboration is formed. Each participant would've been assessed fees based on their
respective revenue shares in accordance with the "profitability ratio." They accept the risks,
expenses, advantages, and obligations that come with being a business entrepreneur.
Advantages
 The company is set up in a fairly simple manner.
 Comparatively stated, there are fewer legal restrictions with this setup.
Disadvantages
 The company lacked a legal, independent status under the law.
 Every business owner is responsible for the misbehaviour of others.
Limited Liability means that the entire business is managed by a limited liability corporation
with at least two investors. It is necessary to create this legal structure with HMRC at Companies
Council. According to the limited liability agreement that outlines each individual's duties and
income, each member is obliged to file a specific "Self-Assessment Taxes Structure" each year to
pay income taxes in compliance with their income share and also "National Insurance to
HMRC."
Advantages
 The owners are accountable for all obligations.
 It is liable for taxes in the identical way as a sole proprietor would.

Disadvantages
 Limited liability company formation is more expensive than other corporate structures.
 Personal taxation obligations
Sam manages IOM Services in line with the Single Operators corporate architecture, as
shown by the research supplied. It has been demonstrated that Sam is responsible for all business
dangers and losses provided the viewpoint (Pal and Gander, 2018).
RECOMMENDATIONS
As per a review of the corporate laws and organisational structures in the UK firm, Sam can
utilize partnerships as the legal structure of its business to expand its activities successfully
across expanding regions. Sam, a sole entrepreneur operating IOM Systems for 8 years, had
observed how the market has evolved in terms of what customers and employees desire.
Although not understanding how to execute the proper legal structure, he has found a variety of
options. Sam is successful in establishing partnerships since they are flexible, "autonomous from
governmental restrictions," and merely call for the barest minimum of legal criteria. This
administrative design could be advantageous to Sam's business because it reduces uncertainty
and offers shareholders the opportunity to take informed decisions.
CONCLUSION
The UK industry is increasing rapidly due to customer demands and the uptake of current
technologies. The owners of a business has to be aware of and implement the proper legal
structure as well as other key elements into action for it to be more profitable and well-liked in
the industry. The analysis makes an effort to emphasise the critical components of the sector in
the context of United Kingdom. The importance of contract law, "business operations
management," and the many business legal requirements in the UK are only a few of the
essential topics that are discussed. Possible recommendations from the IOM system which can
help the company expand its business are also completed.

REFERENCES
Books and journals
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operating concepts & business systems. International Journal in Management and
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Asongu, S.A. and Odhiambo, N.M., 2019. Challenges of doing business in Africa: A systematic
review. Journal of African Business, 20(2), pp.259-268.
Coman, C., Popica, M.M. and Rezeanu, C.I., 2019, October. The Adoption of Digital Marketing
by SMEs Entrepreneurs. In The 2018 International Conference on Digital Science (pp.
431-441). Springer, Cham.
Cramer, J. and Krueger, A.B., 2016. Disruptive change in the taxi business: The case of Uber.
American Economic Review, 106(5), pp.177-82.
De Zuani, A., 2017. Digital Marketing in China: An analysis of the social media strategy of
Tod's Group (Bachelor's thesis, Università Ca'Foscari Venezia).
Gielnik, M.M., Zacher, H. and Schmitt, A., 2017. How small business managers’ age and focus
on opportunities affect business growth: a mediated moderation growth model. Journal
of Small Business Management, 55(3), pp.460-483.
Giessmann, A. and Legner, C., 2016. Designing business models for cloud platforms.
Information Systems Journal, 26(5), pp.551-579.
Nadarajah, D. and Kadir, S.L.S.A., 2016. Measuring Business Process Management using
business process orientation and process improvement initiatives. Business process
management journal.
Pal, R. and Gander, J., 2018. Modelling environmental value: An examination of sustainable
business models within the fashion industry. Journal of Cleaner Production, 184,
pp.251-263.