BUS0005NFBNM - Structure of Business: Report on Legal, Finance, and HR

This report analyzes the structure of a business, focusing on various legal statuses, sources of finance, and human resource policies. It begins with an introduction highlighting the importance of resources and innovation in business startups, then identifies and explains different legal structures like public limited companies, private limited companies, and registered charities, along with their respective strengths and weaknesses. The report then delves into three key sources of finance, namely, short-term, medium-term, and long-term, for a nail salon startup, detailing the strengths and weaknesses of each source such as bank credit, trade credit, borrowing from banks, lease financing, loans from financial institutions, and government grants. Finally, the report identifies the significance of HR policies in the workplace. The report provides a comprehensive overview of the subject matter, covering various aspects of business structure, finance, and human resources, with a focus on their practical application within the context of a nail salon business.

Structure of Business

Contents
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
Question 1..................................................................................................................................3
A- Various legal statuses of business with its strength and weakness.............................3
B- Three sources of finance with strength and weakness.................................................5
Question Two.............................................................................................................................8
Identify three sectors within the UK economy in which a business can operate...................8
Question 3..................................................................................................................................9
HR Policies and importance...................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................11

INTRODUCTION
Innovation and the resources are the technique by which the startup business idea
comes in the mind of the entrepreneur the turn into foremost new business startup. Related to
the corporate startup it needs to be e analysing the resources that must be involved in defining
legal business structure different human resource and various source of finance(Lee, 2019).
The entrepreneurs in the business is the one who is having the integrated set of skills and
abilities in order to form a new business start up. Monetary funding is the basic need of all
the business and side maintain their legal structure and evaluating the satisfactory policies
and demands so that they can identify the specific marketplace. This report will provide the
information on various business legal structure that are operated in the UK and their strength
and weakness adopted by the various business, related to the different monetary sources and
their source which is being used by the new business start up with their strength and
weakness. This is also identify the different human resource policies and their significance in
the workplace. NAIL SALON is the chosen business start up for this report that is offering
various services like nail beauty manicure pedicure to their customer. There are different
option in the nail salon which is been provided are silk or fiberglass wraps, acrylics, polish,
manicures and pedicures by which they can enhance the beauty of their customers.
MAIN BODY
Question 1
A- Various legal statuses of business with its strength and weakness
There are different legal structure which is being refused by the new startups business and
they are mainly divided into public limited company, limited company or registered charity.
These all business structure are explained as follows:
Public limited company Private Limited company Registered Charity
It is defined as the business
in which car company is
offering their service to the
general public within the
minimum share capital of
Limited liability company is
a combination of private
limited company and the
PLC. N private limited
company there is a
When a person or
association of persons is
proposed to be registered as
a limited company under
this act for charitable objects

€50,000 by which 95% of
the the private companies
are are public limited
company in the
UK(Morgeson, Brannick
and Levine, 2019).
The strength of such
organisations, raising fund
can be easy approch. Public
limited company is a
separate legal entity from
there owner and the
shareholders of the business.
The capital can be collected
from the acquisition of
various theories that
considered to be the
opportunities of the business
expansion and also by the
public deposits.
The weakness for the public
limited company is that
owner have no control over
the different businesses and
in consideration to
protecting their share
holders, the regulatory and
legal requirement can be
high and the requirement for
or financial resources is
higher in public limited
company that is 25% is paid
up.
minimum paid up share
capital that is being
prescribed and it just take
the rights to the transfer and
having limited number of
shareholders that would be
up to 200 where is the
shareholders do not have the
full control over their
business. The company e
profits are divided and
shared between their
shareholders in the form of
dividend.
The strength of the private
limited company that it is
the separate legal entity that
do not require minimum
capital. The fund can be e
raised from the different
investors and Ventures and
there is not so much
financial burden due to their
unlimited shareholders and
liability is been divided into
them as well.
The weakness of the private
limited company that they
cannot transfer their share
and cannot be issued to the
public. The shares cannot be
quoted in the stock exchange
and the owner of the
business is liable for their
and registered in the limited
company if central
government is satisfied with
the objects and intentions.
After that license is issued to
the person. The registered
company will be known as
charitable company.
The strength of the
charitable organization gets
huge relief from the taxes
and have public recognition
by earning the trust of the
society. The funding of the
capital is raised from
different sources having
charitable status.
The weakness of the
charitable organization is it
faces the restrictions to carry
out various activities and
required to comply with
regulatory requirements
framed by the UK
government. The capital
cannot be raised from equity
investments. The payment to
the trustee is for the supply
of the professional service is
prohibited unless the
constitution of charity and
charity commission
authorizes to pay with this
requires detail explanation

insolvency of the business.
An individual or the
association is proposed to be
in the registered business as
a limited company under the
act of doing some charitable
objects and the registered in
the limited company when
the central government it is
satisfied with their intention
and the objectives. The
licence is been issued to the
person and the company
which is being registered
will be known as the
charitable company or trust.
The strength of charitable
trust that they are providing
use relief from the taxes that
is been imposed by the
government and the funding
of the capital is reduced
from the different sources by
having charitable status.
The weakness of the
charitable organisation that
they face various restrictions
to carry out their operations
and required to comply
various legal requirements
that is been imposed by the
government of UK. The
capital cannot be raised from
equity investments. All the
(Bukair, A.A.A., 2019).

payment which is being
made by the trustee for the
supply of various services is
restricted until the charity
commissioner need the
detailed explanation of their
venture.
B- Three sources of finance with strength and weakness
. Nail salon is the new startup company which is offering the various nail beauty
services in the United Kingdom and they are having variety of services like pedicure,
manicure and other nail beauty services to their customers so that they can build good brand
image in the market.
There are different sources of finance which is there in the business environment and
there is a different time period which is being in obtaining the reserves. The different types of
sources contain the internal and external sources of fund. Sources of finance is being divided
into three segments that are short term sources of finance medium term source of finance and
long term sources of finance all are based on their time periods. In context to nail salon, the
various sources of finance are explained as follows:
Short term sources of finance
It is the financing facility which is being given by the business for less than 1 year and
includes operating expenditure for day to day operations and also shape the gap among short-
term income and expenses.
 Bank credit- what is the most common source of financing for the nail salon by which
they can get the effective financial support from different institutions. Banks are offering
loan to the individuals (Song, Yu and Xu, 2020).
Strengths: it is the source of funding that is informal to acquire the loan and credit is not
repayable on the the demand providing fix rate of interest. It is also so easy to make the
short term deposit requirements of any business venture.
Weakness: incurred a liability that requires the certain terms and conditions to be
fulfilled in order to acquire the loan and it create suffering to the cash flow issues.

 Trade credit- it is the type of financing for the nail salon so that they can acquire the
products from their supplier in the exchange of cash. It is the account payable on the
purchase of of various goods made by the customers and it is an informal arrangement
granted to open different account basis.
Strengths: the resources can be easily available for the form that providing flexibility and
helping the business for their further growth.
Weakness: the risk is being faced by the buyer and the supplier in terms of the quality or
transportation. It includes the various complications in order to understand the terms and
conditions.
Medium term sources of finance
It is the credit financing facilities which is given for the business upto 3 to 5 years
when the the long term capital is available and deferred revenue expenditure can be easily
made and the various source of finance are-
 Borrowing from banks- the borrowing from the bank help in meeting the various
financial problem to the business for short term and medium term source of finance.
As nail salon give the the monetary funding from their various financial institution
upto 3-7 years that is considered as a loan or demand loan (Hamouche and Marchand,
2021). The financial institution in UK carries the financial support which is being
offer the loan to the business without any security.
Strengths: the interest on debt is given after deducting the tax that are paid interest
amount and principal. It is the way business can meet their financial requirements.
Weaknesses: the firm has to pay the fixed interest and principal amount that can leads to
insolvency of the business. It also increases the financial leverage which leads to increase
the cost of the equity to the firm. It is considered as expense in method to get a loan for an
business.
 Lease financing- it is the significant method which help in meeting the financial
requirements of the nail salon business which operates the The other fix requirements
assets on leaves why compensating the monthly rent for a specific period of time. As the
nail salon is a startup company therefore, opening the valuable fix assets of the business
can be help in reducing the financial load to them and they can easily meet various
business requirements.

Strengths: it is considered as a fix rate funding which provide probable tax based on the
way the lease is organised. This helps in meeting the various business requirements and also
decrease the charges of obtaining fixed assets.
Weaknesses: please can't be terminated before the original term is completed and the
lease financing cannot be transferred to their owner that is responsible to maintain the
property and equipment as per the terms and conditions of the lease.
Long term sources of finance
What is the important part in the financial management of the business that explain
the credit facility which is being provided for more than 5 years. The source of finance is
obligation to fulfill the long-term liabilities that consists of fixed capital requirement for the
business and the various sources are explained as follows:
 Loan from financial institution- the government has set up a various financial institution
in order to have the business development. The loan from the financial institutions
support the business in order to meet the the financial requirements for long period of
time with sufficient amount. The business can get on affordable rates from their various
financial institutions. The nail salon taking the financial help in the UK so that they can
set the financial need of the business.
Strengths: the interest rate can be detectable and the companies having full control and
support the business to to meet their long term financial requirements. It also enables the
Goodwill of the company in the capital market.
Weaknesses: the burden can be increased as they are giving higher interest rates for the
loan taker and the loan taking requirement is very time consuming as it comes under
government control which follow some sort of rules in order to grant the loan.
 Government grants-the government UK kept the financial and non-financial funding
companies and encourage in the economic development of the business (Fesharaki and
Sehhat, 2018). Nail salon is taking the support from the government in order to meet the
commercial benefit and bringing growth solutions in order to meet the various challenges
which is faced by the company for getting financial support by the government of United
Kingdom.
Strengths: the core benefit of the government is to grant easy and convenient financial
requirements of the business as there is no obligation to pay back and provide large range
of funding.

Weaknesses: the criteria of the government in grant in various funds are stricted which
has become difficult in order to acquire the convincing and solid business proposal.
Grands is being of word on the attached policies and the money is used to make the initial
plans with the integration of rules and regulations.
Question Two
Identify three sectors within the UK economy in which a business can operate.
The economic development and the profitability are gain by the different business sector
in the economy of UK. These are primary, secondary and territories that are containing a
different corporate activity in order to boost the economic development of the country
(Brewster and Hegewisch, 2017). The difference between receptors scaring input and output
so that they can add more value in the economy. Three sectors in the economy explained as
follows:
The primary sector is also called as the expression sector as it gives the raw material
which can be renewable sources such as wood wind power wool etc. The resource can be non
renewable like oil. The raw material can be acquired from the coals, metal and framed food
etc. It also includes the business that carried out the minning activities and revenue which is
being earned by the selling of the other business aspects.
Secondary business sector is concerned with the production and manufacturing
business activities. The manufacturing industries get the raw material from the primary sector
and then combine them in order to get the high value added finish goods (Bouaziz and
Hachicha, 2018). The transferring of raw material help the business in earning revenue by
offering finished products to their wholesaler and retailer. When the companies producing
The coastal protection it help in increasing the productivity of their employees and add more
value to the natural resources by creating valuable products.
Territory business sector is concerned to the those business activities which brings
commercial services that includes insurance transportation and other tangible both to their
potential customers. The business generate income on the source of facilities accessible by
the companies in the marketplace. For example, nail salon is in the territory sector which is
offering commercial services by various beauty services to their customers across the UK.
Values of these sectors:

An economy is running on the different aspects of the business and with the
effective follow up of the three sector which are primary sector, secondary and territory
sectors that are giving value to the country so that they can run in an appropriate
manner with the effective use of their resources as primary sector is concern for the
extraction of the raw material so that they develop the new product to their potential
customer in the target market. Secondary sector is based on the production and the
manufacturing of their goods and services so that they can use the innovative technique
and methods in order to get the quality products to their potential customers. Last the
tertiary sector which is related to the insurance and the transportation of products and
services o that thy can deliver the effective products to their potential customers. The
main focus of the economy’s various task shift from the primary, through secondary
and finally to the tertiary sector.
Difference between primary, secondary and tertiary sector are:
Primary Secondary Tertiary
Agricultural services and
allied services are called as
the primary sector.
Production and
manufacturing sector is
called as secondary sector.
Service sector comes under
tertiary sector.
For this sector, raw material
is required for goods and
services.
It changes the particular
item into another by making
more from them.
This provides services for
both the sectors.
This sector used the
traditional method and they
are unorganized in nature.
It used to more reliable
method of production and
they are organized in nature.
They are using the modern
method, logistics method in
order to execute their
functions and they are
appropriately organized.
Question 3
HR Policies and importance
Human resource policies are the guidelines that is adopted by the organisation in order to
overseas their workforce. It represent the specific guidelines to the human resource manager
on the several subjects related to the recruitment selection compensation promotion and
training of the individual (Bastida, Marimon and Carreras, 2018). In context to nail salon, the

HR policies is been formulated by the human resource manager in order to maintain the
positive working environment and satisfy government compliances.
Importance of HR policies
The HR policies helps in conducting the business in an ethical manner why measuring
the various business activities and handle the certain challenges. It serves the the highest
standard of performance where actual results is being compared to the policy that how well
the business member is giving to their set objectives. HR policies helps in motivating the
employee and loyalty establishing a fair principles and the approaches for their growth. HR
policies also helps in reducing the conflicts among the employees and clarify the
management thinking in order to take better decisions. It also helps the uniformity and
consistent treatment to all the employees within the organisation in order to eliminate the
discrimination and favoritism.
Two HR policies are-
Health and safety policies: it includes the job security to the individual and having positive
work environment so that the employee can feel comfortable at the workplace. The health
measure comprises of various leaves of the workers such as for accidents, maternity leaves
and paternity leaves. In contacts to nail salon, the human resource manager to not organised
any physical infrastructure which can vitamin H for the employees and emerging health and
safety policies help the commercial to get extra method employed in the business
organisation.
Equality and diversity policies: it is the policy which is related to the fairness and correct
administrations to the human capital within the organisation. In context to nail salon, there
must be no discrimination on the basis of colour caste gender and religion so that
effectiveness can be generated (Andalib, Darun and Azizan, 2019). Moreover, the nail salon
policies are directive to support their employees and all the employees feel relaxed and that
equal employment opportunity. Moreover, policies helps in installation equality in the office
by giving equal opportunities to their employees at the workplace being it female or male in
the organisation.
Conclusion
It is concluded from the above report that there are different legal structure which is
being framed by the government in order to comply and understand the legal proceedings

with the consideration of opening new startups business. It also reflect the business planning
of the starters by having effective innovative policies and strategies. The clear explanation of
the several lawful assembly is followed in the United Kingdom where as commercial
businesses the obligation and money which is significant in framing the various business
strategies. The reputation of the human resources strategies is base on the various job
management and working environment of the company by which they can create effective
results and optimum use of their available resources.

References
Books and Journals
Andalib, T.W., Darun, M.R. and Azizan, N.A., 2019. East Asian trends of human resource
management: theories and practices. International Journal of Human Resources
Development and Management, 19(2), pp.135-149.
Bastida, R., Marimon, F. and Carreras, L., 2018. Human resource management practices and
employee job satisfaction in nonprofit organizations. Annals of Public and
Cooperative Economics, 89(2), pp.323-338.
Bouaziz, F. and Hachicha, Z.S., 2018. Strategic human resource management practices and
organizational resilience. Journal of Management Development.
Brewster, C. and Hegewisch, A. eds., 2017. Policy and practice in european human resource
management: The Price Waterhouse Cranfield survey. Taylor & Francis.
Fesharaki, F. and Sehhat, S., 2018. Islamic human resource management (iHRM) enhancing
organizational justice and employees’ commitment: Case of a Qard al-Hasan bank in
Iran. Journal of Islamic Marketing.
Hamouche, S. and Marchand, A., 2021. Occupational identity, work, and burnout among
managers: Do high performance human resource management practices play a
moderator role?. Journal of Workplace Behavioral Health, 36(1), pp.24-47.
Lee, H.W., 2019. How does sustainability-oriented human resource management work?:
Examining mediators on organizational performance. International Journal of Public
Administration, 42(11), pp.974-984.
Morgeson, F.P., Brannick, M.T. and Levine, E.L., 2019. Job and work analysis: Methods,
research, and applications for human resource management. Sage Publications.
Song, W., Yu, H. and Xu, H., 2020. Effects of green human resource management and
managerial environmental concern on green innovation. European Journal of
Innovation Management.