Business Structures, Finance, Sectors, HR Policies in UK Economy

This report examines various business structures, including public, private, and voluntary organizations, detailing their strengths and weaknesses. It evaluates different sources of finance available for business start-ups, such as crowdfunding, 'love money,' and bank loans, along with their pros and cons. The report further analyzes three distinct sectors within the UK economy, highlighting their differences and contributions. Additionally, it identifies and discusses the importance of two key HR policies in a modern workplace. The report provides a comprehensive overview of these critical aspects of business operations and the UK economic landscape.

Structure of
Business

Contents
INTRODUCTION...........................................................................................................................1
QUESTION 1...................................................................................................................................1
Types of frameworks or legal statuses of the business together with its strength and weakness.
................................................................................................................................................1
Evaluation of various sources of finance that is available for business start- up together with
its pros and cons.....................................................................................................................7
QUESTION 2...................................................................................................................................8
Three different types of sectors which operate within the UK economy and the difference
between all. Comment on their value in UK economy.........................................................8
QUESTION 3.................................................................................................................................10
Identify two HR policies and its importance in modern workplace.....................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Doing business is an economic activity as it include all those activities of which are
undertaken only with the purpose of maximization of a profit so that owner can leave the life in a
good and proper manner by doing trading or manufacturing of goods and services. Small startups
are playing an important role in the economy of United Kingdom. Below mentioned report is
totally based on the various structures of a business. It is divided into three questions. First
question highlight the various frameworks for legal status of the business along with their pros
and cons. Along with this, this part also include the various financial resources which are
available for a business startup with their merits and demerits. Second part of report is going to
state about the various types of sectors operating within the economy of United Kingdom. Along
with this it is also going to identifying the differences between the various factors along with
their value. Third part of this report is showing various HR policies along with their importance
in the modern workplace.
QUESTION 1
Types of frameworks or legal statuses of the business together with its strength and weakness.
On the basis of several factors, a business has been classified in different types. Each and every
type of business organisation have a particular momentum which is decided on the basis of a
prescribed demand for the offering. It is well known that every organisation work only for the
purpose of maximizing the profit. They provide several services and products to the people of
their target market. Below mentioned table is showing about the various types of Business and
startup along with their legal status and strength & weakness. This table help the student to know
about all the forms of Business and startup
Legal statuses of
businesses
Strength Weakness
Public
organizations:
These are those
businesses which
are owned and
There are mainly three
types of public
organizations which
includes the following-
 Central: These are
 The main
advantage of
this it has
autonomy
where it
 The
weakness of
these
businesses is
that there is
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controlled by the
government with a
sole motive of
doing welfare of
the society. Their
purpose is not to
generate profits
rather they only
works to do welfare
for the society by
fulfilling the
demand of the
people.
owned managed
and controlled by
the central
government and its
working is spread
in whole of the
country.
 State: These are
also owned and
managed by the
central government
but its functioning
is in a particular
state.
 Local: These are
those organizations
which are managed,
controlled and
owned by the local
authorities of
government and its
working is only in
particular local area
of the state
(Plotnikov and
Plotnikova, 2019).
enjoys
flexibility and
independence
in the
operations.
 The public
organizations
can formulate
such policies
which
promotes the
welfare of
peopleas these
are subject to
parliamentary
scrutiny.
high level of
political
interference
and has to
act in
accordance
with the
political
masters.
 There are
many
instances
when the
interest of
consumers is
ignored by
these
corporations
as they
operate in
monopolies
and absence
of
competition
can result in
lethargic
functioning
which can
reduce the
focus on
consumers,
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thereby
resulting in
ignoring
customer
interest.
Private
organizations:
These are such
businesses which
are owned and
managed by the
private individuals
and have a sole aim
of generating
maximum
profitability.
Sole proprietorship: These
are those organizations
which are owned by single
individual and the owner
has only all responsibilities
and powers to run the
business.
 The major
strength of
this
organization
is that there is
sole control
and
management
of the owner
and no
interference
of third
person.
 The sole
trader is liable
only to pay
the personal
income tax on
profits which
is earned by
firm.
 The biggest
weakness of
this business
venture is
that there is
personal
liability of
the owner for
any debt or
liability of
owner.
 This business
usually gets
ended by the
departure or
death of
owner as the
business is
not separate
legal entity.
Partnership: It is that
business which is owned
and managed by two or
more persons who are
known as partners. They
 There is
ahring of
responsibility
and decision
making
 Each partner
is liable for
the liability
and debt of
all
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mutually share all
responsibility, profits,
capital and losses.
among the
partners as
per their
knowledge
and expertise.
 There is split
of income
which helps
in getting
advantage of
tax savings
(Ninosheva,
2020).
partnersand
firm as there
is joint
liability of
all.
 There is
unlimited
personal
liability of
all the
partners for
the firm.
Limited liability
partnership: This is the
extended version of
partnership butthere is
limited liability of the
partners. It is the separate
legal entity distinct from
partners.
 There is
limited
liabilityof
partners only
to the extent
of their
capital
contribution
and the
personal asset
of partners is
given
protection
from liability.
 It is easier to
runas
compared to
private
 In this, one
partner may
get more
rightsso
there is no
one vote per
one share
system.
 There are
high
penalties for
non-
compliance
as compared
to private
companies
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companies
and has easy
procedure to
wind up.
Companies: These are the
separate entities distinct
from owners and are
known as artificial
personalities where they
have power to sue and be
sued by anyone. It is
mainly of two types, public
company is when it is
owned by general public
by way of initiating share
capital by subscription of
shares where shareholders
are owners. Second is
private company that is
owned by private
individuals (Migliettaand
et. al., 2018).
 There is
limited
liability of
owners to the
extent of their
share in the
business only
and no
personal
liability
arises.
 The company
has perpetual
succession
which means
that owner
may come
and go but
company shall
go on forever.
 There is lack
of secrecyin
the business
as their
working is
subject to
public
disclosure.
 There is
several legal
requirement
s which are
required to
be fulfilled
which
consumers
more effort
and time.
Voluntary
organizations:
These are non-
profit organizations
which are managed
by the staff called
as volunteers. They
These are mainly of two
types which includes the
following-
 Associations:
These are governed
by the legal
document, known
 There is
public trust
and
recognition
which helps
in carrying on
social cause
 There is
more time
commitment
while
working in
this.
 The aim of
5

only get the
expenses which
incurred while
working.
as Constitution
which provides its
objectives,
structure,
memberships and
powers.
 Trust: It is
governed by the
trust deed which
provides objectives
of it together with
trustee’s names.
in easy
manner.
 They are
given relief
from the
taxes also.
this
organization
is only to do
social work
and not
generating
profits so it
lacks
economies of
scale
(Uzuegbuna
m and et. al.,
2017).
Charitable
organizations:
These are also non-
profit ventures
which must be
registered in order
to claim the
charitable status
from government.
These work for
specific interest and
has paid staff.
 Unincorporated
associations: It is
the membership
association where
members choose
which activity they
want to carry on. It
is aimed to do work
for public benefit.
 Charitable trust:
These are run by
small group who
are called trustees
and they are
appointed rather
than elected and is
not incorporated.
 It is aimed for
the social
cause which
gets public
trust in return.
 They cannot
use the assets
for other
purpose can
only use for
charitable
objectives.
 They are
dependent
on charities
for their
funds in
order to
carry out its
activities.
 They are
required to
comply with
many
regulatory
requirement
s which
include
accounts and
returns
6

preparation.
Evaluation of various sources of finance that is available for business start- up together with its
pros and cons.
Below mention the various sources of funds which are very helpful for the new startups in the
United Kingdom to work:
 Crowd funding for Startup: First source of funding can be considered as the crowd funding.
It can be added that it is the the fastest and safest way to get the capital. Because the crowd
of people is not going to ask about the return of money. They are required to provide the
service and products as per the required quality. It has been found that there are various
startup who get success by using crowdfunding technique.
Strength Weakness
The most effective strength of crowd
funding is a that the organisation is not
required to pay back the money. Also they
do not have to pay any interest on the
money. They can use it as per their needs
and requirements.
If the business organisation have used
crowdfunding and they are not able to
provide the product and services as per
their promise. They are required to pay
back the amount which they get from
crowd. Otherwise they can also file case
against the organisation.
 Love money: It can be defined as the money which the owner of organisation borrow from
their friends, families and their loved ones. It is a very easy source from an owner of
organisation can source of the fund.
Strength Weakness
Banks and other sources a charger high rate
of interest to compensate for their risk. A
family member do trust on the entrepreneur
and they will not charge or charge less
interest rate as compared to the other
sources.
When the entrepreneur is in the debt to a
family member they lost the freedom to
exert more control over their life. It may
result in the criticise the lifestyle choice
and spending habits.
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 Bank loan: Borrowing money from Financial institute or Bank is the another source of
funding for startup. Government has started various policies under feature and a new startup
can get easily fund from Bank. In the exchange of money the entrepreneur have to pay
interest on the amount which they borrow from Bank.
Strength Weakness
They can pay the Bank loan by paying a
small amount of investment every month. It
may not create the stress over the
entrepreneur.
The business owner have to pay installment
every month in any case along with the
high rate of interest.
QUESTION 2
Three different types of sectors which operate within the UK economy and the difference
between all. Comment on their value in UK economy.
All the business has been divided into three factors which include Primary secondary and
territory sactor. All the business organisation exist in any for single factor for the purpose of
providing products and services. All the business are busy in doing production by giving some
input and oh value of time to it. Below mentioned are the various factors in which the business
operate within the economy of United Kingdom along with their differences:
 Primary sector: It include the extension of raw materials as it include to resources such as
renewable which include the wool, fish or wind power as it can be used again and again. It
has been found that a large number of people are employed under the sea sector in the
economy of United Kingdom but the advancement of Technology is resulting in the the
reduction of employed people in the same sector. Example of a business is operating in this
sector are pharming fishing Mining or oil.
 Secondary Sector: This sector include the production or manufacturing of products. The
process of converting raw material into finished goods in order to satisfy the needs and
requirements of customers has been undertaken in this sector. This is actor include high
amount of labour as the manufacturing has been done by the the workforce. But the
8

innovation of Advanced new technologies in the economy remove the labour and shifted the
organisation to machinery work. All the manufacturing organisations comes under this
sector as they are converting the raw material into finished goods so that the product can
fulfill the needs and requirements of customers.
 Territory sector: The third sector of economy of United Kingdom is territory sector as it
include the services which are used for the purpose of satisfying the needs and requirements
of customers. Transportation finance hospitality communication are the various examples of
tertiary sector. Such services has been undertaken by the people who are able to spend on
luxury services like tourism and Hospitality. Pasco Hilton Hotel banks are the various
examples of organisations in the territory sector.
Basis Primary Secondary Tertiary
Meaning It involves extracting
raw materials.
It involves converting
raw materials into
finished goods.
It involves the
services such as
leisure, hospitality,
financial, etc.
Working It uses traditional
techniques of working
and is unorganized.
It uses the more
reliable production
methods and is the
organized sector.
It uses the method of
modern day logistics
in order to execute its
functions and is
organized fully.
Employment rates The minimum or low
proportion of
population is engaged
in this sector as
machineries have
taken jobs from this
sector.
This has average
amount of
employment as its
employment rate
tends to declined due
to coming of
technologies in
manufacturing units.
The major percentage
of population in UK is
involved in this sector
as it has high growth
opportunities
(FARSTAD, 2019)
9

QUESTION 3
Identify two HR policies and its importance in modern workplace.
Human resource management is responsible for making and developing the various policies and
strategies in an organisation as they leads the employees. Below mentioned are the HR policies
in an organisation:
 Equality and Diversity policies: it refers to the policies through which the the employer
make the environment of organisation familiar with every employee as all the employees are
from different background perspectives and cultures. They are not comfortable with working
with each other as they are totally different. The organisation have to make such policies a
so that they can create positivity in the working environment which leads to the the
achievement of organisational goals and objectives in an effective and efficient manner. The
equality act of 2010 state that there must not be any kind of discrimination or ill treatment at
workplace and it is necessary for employer to provide equal and fair chance of opportunities
and growth to work. By designing this policy in the organisation the management can also
remove the barriers which are coming in the way of opportunities.
Health and safety: the another responsibility of employer is it to make sure that all the
employees work in health and Save environment. This policy is made for the purpose of
protecting the people associated with the business such as visitors customers employers and
employees. The health and safety at workplace act 1974 is made for the purpose of overriding
duties of employer and employee both and for the purpose of stating employee to take the
required and necessary steps for the same. The main aim of this policy is to making clear the
standard expected by the employees at workplace. Also helps employees in retaining in the same
organisation for long term which leads to the reduction of employees training and recruitment or
staff turnover. The policy is related to the health and safety of employees generate a feeling of
safe in the heart of employees which leads to the increase in efficiency of work performance.
Along with this employees want to grow in their career which is only possible with the
development of personal and professional skills. It is found at the policies for as legal and moral
requirement at workplace in the modern time. Employees only wants to work with the
organisation having a good and safe and Secure environment of working.
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CONCLUSION
It is concluded from the above report that all the economic activities are undertaken only
with the purpose of maximization of profit. There are various types of business on the basis of
various factors. It has been founded at all of business are different from another business. It has
been seen through the table which is given in the report. Along with this it is also found that the
business organisation comes under A sector of economy. There are three sectors in the economy
of United Kingdom which include Primary secondary and territory sector. It is depend on the
nature of business organisation, under which sector the organisation is lying. Startup of any
business is Duster the conversion of ideas and plans of entrepreneur in a physical form. Startup is
a starting stage of for business hence it is difficult for entrepreneur to arrange the capital to start
the operations. But it is also found that the government of United Kingdom has the introduced
various policies under which they are providing sufficient to finance to the start observer so that
they can increase the economy of United Kingdom. There are various sources through which the
startup can arrange the capital which are explained in this report along with their pros and cons.
Human Resource Department has been found as an important function in an organisation as it
leads to the development of various Strategies and policies at workplace related to the human
beings.
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REFERENCES
Books and journal
Online
Statista, 2021 [Online] Available
Through<https://www.statista.com/statistics/270382/distribution-of-the-workforce-
across-economic-sectors-in-the-united-kingdom/>
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Statista, 2021 [Online] Available
Through<https://www.statista.com/statistics/270372/distribution-of-gdp-across-
economic-sectors-in-the-united-kingdom/>
13