Business Law Assignment: Analyzing Company Formation Options (BCO125)

This report provides a comprehensive analysis of business law, specifically focusing on company formation options. It begins by advising Jim on the implications of unincorporated businesses, detailing their advantages (ease of setup, privacy, lower compliance costs) and disadvantages (lack of limited liability, no statutory liquidation). The report then explores incorporated businesses, highlighting the establishment of a separate legal entity with limited liability for owners, and the associated advantages (distinct legal entity, limited liability for shareholders) and disadvantages (higher administrative costs). A discussion of Limited Liability Partnerships (LLPs) follows, covering the regulations in the United Kingdom and the duties of partners. The report then shifts to financing options for new companies, including business credit cards, loans, and crowdfunding. Mergers and acquisitions are defined and analyzed, including the steps involved in mergers and the key considerations. Strategic alliances and joint ventures are also examined, comparing their characteristics, advantages, and disadvantages. The report concludes by providing references to support the analysis, including discussions on the popularity and significance of mergers and acquisitions in attaining profit objectives and corporate development.

Running head : BUSINESS LAW
BUSINESS LAW
Name of the student
Name of the university
Author note

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Question 1
Unincorporated business are generally partnership or sole proprietor companies.
An unincorporated business has some elasticity when dealing with taxes. An
unincorporated association is the institution that is set up by an arrangement between
the groups of individual who comes together for the cause other than to make profit.
There is no obligation to make registration if an unincorporated association (Miller
2016). The individual members are accountable personally in respect of contractual
obligation and debt. Unincorporated business claimed by the individual termed as
proprietor. The manager do not have distinct legal status from the trade irrespective of
the probability that the commerce enrolled under substitute name than that of proprietor.
The advantages of the unincorporated association are as follows:
 They are easier to set up, founded by the arrangement between the members ,
no further action such as registration are necessary
 In the context of privacy the unincorporated association does not require to file
accounts and other statements registrar of friendly societies or companies house.
 Lower cost of compliance
The disadvantage of an unincorporated business are as follows:

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 The business does not have limited liability.
 It is not body corporate in addition to that does not have distinct legal entity
from that of individual members
 No statutory liquidation process exist as well as unincorporated business
cannot wound up under Insolvency Act, 1986.
Incorporation of the company in United Kingdom, the owner will be attained from
limited liability. This implies that the owner will be protected to extent from the
liabilities and cost of the company (Triponel and Agapitova 2017). Incorporating a
business establishes new legal entity which is designated as legal personality that
implies the business will be held responsible for its actions can enter into
arrangement and can hire workers amongst other things. The advantages involve
the company is the distinct legal entity and as such legal action or the creditors are
against the company and their assets. The shareholders of the company have
limited liability. The owners of the corporation are not party and as such they are not
accountable directly. The disadvantages involve administrative expense are more
costly with a company than with sole proprietorship or partnership. The
administrative expense involves annual financial information, incorporation cost as
well as annual corporate income tax return.
The limited liability partnership in United Kingdom is regulated by The Limited
Liability Act, 2000. It is the amalgamation of an exclusive partnership with the limited
liability company generally establish by a written LLP arrangement which
particulates how it will be operational and formed. The partners owe duties to act in
good faith and not to make personal profit from the confidence positioned in them.

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The partners should not positioned themselves in place where their own interest
conflict with their obligation. The partners are also account to partnership for the
advantages that is obtained without consent of others partners from any business
which engages partnership or application by partners of the properties owned by the
partnership business name or the business connection (Cho 2016). Furthermore to
account for as well as pay to the organization any profit that is made to the
transaction that competes with the commerce of partnership without the assent of
partnership. In addition to that not to position themselves in circumstances where
another interest may or would contradict with the obligation that is owed to
partnership business or others partners. There are several methods to finance new
company involves business credit cards, business lending, business overdrafts,
crowd funding, government grants, angel investors (Siegel 2016).
Question 2
A merger is described as the amalgamation of the liabilities and assets of two or
more corporation into a sole legal organization. in the perspective of business
amalgamation, the coming together of two or more corporation for conjoint parting of
rewards and risks of the joint organization, where two groups of shareholders are in
place to endure their shareholdings as prior however on the joint basis. The steps of
merger involves firstly signing of letter of intent that start off the negotiation.
Secondly appointment of advisors who functioned the character of consultants
assessing strength and weakness, the opportunities as well as risk of merger.
Thirdly, detailing the timetable, conditions and category of transactions. Fourthly
expert report regarding the steadiness of share exchange ratio for all the

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corporations involved. The three categories of professionals who have expertise on
joint ventures, restructuring, equity capital market can be consulted to assist with
merger. The key issues that are required to consider in merger includes the following
 The structure of the organization
 The objectives of joint venture
 The method of management
 How it will be financed and what happen in case additional funding require in
future
 What assets involving intellectual property contribute by each partner
 Who will operate for the new venture
 How the profit of the organization will be shared
 Who will own the intellectual property that is created by joint venture
 How any conflict between the partners engaged in joint venture will be settled.
 What exit way will be obtainable if one of them intent to realize investment in
joint venture.
Question 3
When one of the corporation decides to take over another one, it is
designated as an acquisition. The acquiring enterprise will do the same by buying
wither entirely or majority of the proprietorship stake of the corporation that is
being taken over. There are two categories of acquisition one is friendly and
another is hostile. The hostile takeover is the word for when a corporation is
purchased by another without its assent generally when the buying corporation
purchases significant quantum of shares to get dominion stake. On the contrary

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when both of the corporation approve to the condition of acquisition they are
termed as friendly takeover. Acquisition is considered as fundamental for the
expansion of the corporation in the shorter period just by acquiring competitor’s
company or merging own organization with the better one. There are several
method of acquiring Competitors Company which involves horizontal, vertical,
congeneric and conglomerate (Chaffey, Hemphill and Edmundson-Bird 2019).
The popularity and significance. The popularity and significance of merger as the
method of attaining profit objectives as well as corporate development is well
established. The significance of acquiring competitor company involves in
enhance of market share of the company and also help to attain competitive
edge in market place.
Question 4
Strategic alliance is the arrangement made between two or more parties to
follow a series of approved upon objectives required while remaining
autonomous organization. The strategic alliance will generally fall short of legal
partnership body, corporate alliance relationship or agency. Typically two
corporation establish strategic alliance when each holds one or more assets of
business or having expertise that will cater the other by improving their
businesses. It has three main characteristic that involves firstly two or more firm
partnering they remain autonomous to the establishment of alliance. Secondly
the alliance conduct the characteristic of ongoing conjoint interdependence by
which one party is exposed to other. Thirdly as the partners of strategic alliance
remain autonomous there remains uncertainty as what one party anticipates the

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other party to conduct. The advantages of strategic alliance involves coordination
with the foreign corporation to attain local favor. The disadvantages involves
uneven alliance that is one corporation may have more authority in comparison
to other.
Joint venture are generally establish where two or more individuals or
corporation arrive together to implement a specific business project or
proposition in a corporate or contractual arrangement. Nevertheless two person
whether corporate or natural who coming together to execute a business can
constitute partnership that is governed by Partnership Act, 1890 (Ward and Cook
2017). The key characteristic of joint venture is that it has no direct legal
framework, no distinct legal personality that of the parties to joint venture,
unlimited liabilities for the parties, greater elasticity in connection to the structure
as well as little publicity. The advantages involves
 access to the novel market and distribution networks,
 enhanced capacity, sharing of cost and risk,
 access to expertise and new knowledge,
 Access to the greater resources.
The disadvantages involves
 the objectives are vague
 Communication between the parties is not significant
 the parties anticipates diverse matters from joint venture.

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References
Chaffey, D., Hemphill, T. and Edmundson-Bird, D., 2019. Digital business and e-
commerce management. Pearson UK.
Cho, M., 2016. Benefit corporations in the United States and community interest
companies in the United Kingdom: Does social enterprise actually work. Nw. J. Int'l L. &
Bus., 37, p.149.
Miller, R.L., 2016. Business Law Today, Comprehensive. Cengage learning.
Siegel, A., 2016. Practical business statistics. Academic Press.
Triponel, A. and Agapitova, N., 2017. Legal Framework for Social Enterprise: Lessons
from a Comparative Study of Italy, Malaysia, South Korea, United Kingdom, and United
States. World Bank.

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Ward, K. and Cook, I., 2017. Business improvement districts in the United Kingdom:
Territorialising a ‘global’model?. In Territorial Policy and Governance (pp. 149-168).
Routledge.s