BMP4002 - Business Law: Analyzing the Legal Context for UK Businesses

This report provides an overview of the legal context for business organizations in the UK, focusing on key sources of law. It discusses various types of laws, including contract law, company law, and employment law, and their relevance to business operations. The report also examines different legal business structures in the UK, such as sole proprietorships, general partnerships, limited liability partnerships, and limited liability companies, highlighting their advantages and disadvantages. It further provides recommendations for IOM Solutions, suggesting that a partnership business structure would be most relevant due to the combined skills, experience, and financial resources it offers. The report concludes that adhering to business law is crucial for organizations to operate effectively and systematically, avoiding unlawful actions.

BSc (Hons) Business Management
BMP4002 Business Law
Assessment 2
Report describing the key sources of laws
as the legal context for business
organizations in the UK
Submitted by:
Name:
ID:
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Contents
Table of Contents
Introduction ...............................................................................................................................3
Businesses & Organizations in the UK........................................................................................3
The legal business structure of UK companies..........................................................................5
Recommendations for IOM Solutions........................................................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8
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Introduction
Law is defined as a term which comprise several rules and regulations which has been
developed for the individuals and institutions to perform all the functions in a systematic
manner. Business law is a term which describes the rules and regulations related to the
practices in a business organization. It makes some outlines and rules for business
organization which are found as necessary for the organizations to follow the rules while
performing operations. These set of regulations have been made by the government of
specific country which build the outlines for running, selling or dissolving the business. It
help the businesses in avoiding the illegal practices and completing all the tasks in lawful
manner. In simple words, it can be said that the business law state how to form and run a
business. It is necessary for all businesses to follow the rules under business law. It is also
known as commercial law or corporate law. It has been found that business law deals with
both private as well as public law (Tomilina and Donchenko 2018). Hence, it can be consider
as the branch of civil law. The chosen organization for this report is IOM solution which is
providing the electrical parts to the local garages. This report shall cover the concept of
business and organizations in UK, legal business structure of companies of United Kingdom.
In addition to this, it also provide the recommendation to IOM solution for best legal business
structure.
Businesses & Organizations in the UK
Business is defined as an organization, enterprise entity which are involved in any
professional, commercial or any industrial activity for the purpose of earning money. Law is a
wide term which include several of laws and it has been found that all these laws are
interrelated with each other as all of them are working for fulfilling the specified necessity of
business organization (Steffen and Boßelmann 2018). A business organization have been
managed by various legislation which are described as under:
Different types of laws: Contract Law: It refers to the law which set some rules and regulations related to the
written or verbal agreements among the two parties. It is defined as a legal agreement
which describes the procedure of exchanging the products and services, money or
property among the parties.
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 Company Law: It is also known as corporate law as it involve regulations related to
the people, business firm, behavior and relationship. Basically, it deals with the legal
profession related to the business.
 Employment law: It is defined as the area of law that regulate the relationship of
employee and employer. If, more than one employee is working in a business
organization, the management is using employment law. It's main objective is to
protect the right of workers at work place. It works for preventing discrimination,
promote healthy and safety, building a minimum required level for economic support
and many more.
Business transaction management of company: It is defined as the business
transaction which includes the activities related to managing the information technology form
the view of institution. Several of tools have been provided to the business organizations in
order to track the move of transaction.
Vicarious liability: It is described as a condition under which one party is held to
wholly liable for any unlawful activity of a third party. Their own share of liability has been
carried by the third party. It may arise in the situations where one party is expected to be
answerable for a third party and a delinquent has been observed in performing the
responsibility and putting several efforts to control (Smirnov, Arenkov and Yaburova 2018).
Basically, it is a legal term which describes the legal responsibilities that a supervisory party
(employer) bears for the activity performed by an associate or subordinate (employee).
Business liability in negligence: Negligence is defined as the breach of duty or
responsibility. At work place, any professional person is not able to perform the assigned task
as per the required standard, it result in breach of duty of care. A business organization may
face several of of financial issues or losses because of the behavior of professional people
working in the organization. Sometimes, their bad behavior also leads to the bodily damage
or injury. A tort is defined as a civil law which origin by the unlawful activity done by an
individual. That unlawful practice may result in any harm or any financial losses to the
individuals who are working in the organization. Sometimes, crimes are also consider as the
torts because of harm caused by negligence. It means the negligence result in cause of harm
which do not comes under crime (Vecherskaya, S.E., 2019).
Termination of Partnership: It is not necessary to complete any specific formalities
while starting any general partnership. The termination of partnership can be take place only
in the case of termination of interest. When all partners want to wind up the business, they
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have permission to do so. There is no any legal formality is require to terminate it. The
Partnership Act of UK has develop some articles for dissolving the partnership business.
The legal business structure of UK companies
Sole Trader
It is defined as the business entity under which all the business operations are being
managed and performed by a single individual. This business perform the functions on a
small scale as it serve it's goods or services to a specific location or area. Hence, it require
small amount of capital (Meyer von Wolff and et. al., 2021). There is no involvement of any
high complicated legal formalities, while starting such kind of business. Sole proprietorship
business can be registered with companies house. There is no any separate legal identity of
business organization. All the roles and responsibilities have been performed by the owner
itself. Due to the unlimited liability, owner is liable to pay all the debts of organization. In the
case of bankruptcy and death of owner, sole trade can be dissolved. Less requirement of
capital and easy to operate the operations are consider as the advantages of this business. The
owner of sole trade have lack of managerial skills and experience which act as barrier in
making decisions, it is consider as the huge disadvantage of this business structure.
General Partnership
It is defined as a kind of partnership under which the partners are accountable for the
practices of partnership. Partners having the unlimited liability are consider as the owner of
partnership. Along with this, they are also the general partners of partnership business. In
simple words, it can be defined as a business in which two or more than two partners act as
owner and share all the responsibilities of performing the business operations (McMillan, C.,
2017). Day to day business operations are being managed and operated by the partners.
Several legal formalities are not require to fulfill while starting the partnership business.
While incorporating the general partnership, the partners decided a specific ratio in which
they will share profit and losses. The responsibility of lawsuit and debts have been lied on the
partners of general partnership. Easy distribution of rights and responsibilities among the
partners is consider as the advantage of this business structure. Along with this, it is not a
difficult task to start the general partnership business. On the other hand, there is lack of
involvement of any transformation interest which state that the dissolution of general
partnership is very simple. The dissolution of partnership can be done when all the partners
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decide to leave the business. This act is consider as the disadvantage of general partnership
legal business.
Partnership
It is defined as the business organization which include two or more than two people
who decide top share the profits and losses of the organization in a decided ratio. The risk,
cost, benefits and responsibilities are shared among all the partners. It is consider as the
unincorporated entity because the partners involve in the partnership are self employed. All
the partners are personally liable for their debts and losses of the business. In case of any
negligence or misconduct in the organization, partners are responsible for the same. It is
found as necessary to make partnership agreement and get register at HMRC. Partnership
deed is a legal document which state all the rules and regulations, profit sharing ratio, details
of partners and many more. There are several consequences of not having a written
partnership deed or agreement such as lack of clarity of profit & loss sharing ratio and
responsibilities of partners (Willcocks, L.P., 2018). Hence, it is necessary for the partnership
organization to register them under the partnership Act as this law deals with the issues, rules
and regulations related to a partnership firm. Availability of several sources of capital is
consider as the advantage of partnership whereas the unlimited liability of partners are the
disadvantage of partnership business structure.
Limited Liability
It is also a legal business structure in United Kingdom under which the liability of an
individual is limited to a specified amount. It is equal to the amount of investment made by a
person in the business. Liability of person is limited only in the case of partnership and
company (Hongal and Kinange 2020). It is a situation under which the partner or owner of the
business organization is liable only to pay the liability up to the limit its share. The members
of limited liability company are liable to pay the income tax and self employment taxon the
income which they earned from LLC.
Recommendations for IOM Solutions
From the above evaluation of different legal business structure, it has been observed
that the partnership business is the most relevant business as it involve more than one
individual in business operations which leads to bringing effectiveness in the operations. All
the partners have different skills and experience and partnership bring all the skills and
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experiences together and improve the working performance of entire organization. Due to the
presence of several partners, it bring various financial resources to the organization. Entry of
any new partner in the existing partnership business leads to the introduction of capital (Gök,
Hacioglu and Peker 2018). Along with this, while taking any decision at work place, the
management can get various suggestions as the point of view of all partners are different.
Conclusion
It has been concluded from the above report that business law is a wide term as it
comprise of several laws which are necessary for the business organization to follow for the
purpose of performing business operations in an effective and systematic manner. While
performing the day to day operations in organization, it is necessary to follow the laws as it
avoid the unlawful actions to be done in the organization. There are several legal business
structures in United Kingdom, which are described above in details. All of these structures
follow relevant laws to perform in a better manner. Furthermore, it is recommended to IOM
solution that more appropriate business structure is sole trader.
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References
Gök, O., Hacioglu, G. and Peker, S., 2018. Decision influence of the marketing department in
the organization: An emerging country perspective. JEEMS Journal of East
European Management Studies. 23(1). pp.30-54.
Hongal, P. and Kinange, U., 2020. A study on talent management and its impact on
organization performance-an empirical review. International Journal of Engineering
and Management Research. 10.
McMillan, C., 2017. Exploring the strategic business processes senior leadership use to
enable successful ethical practice within their organization (Doctoral dissertation,
Colorado Technical University).
Meyer von Wolff and et. al., 2021. Hey Spot, Can You Help Me with my Business Travel
Organization?-Design of a Process-based Chatbot Artifact.
Smirnov, S., Arenkov, I. and Yaburova, D., 2018, January. On the way to the organization of
the future: Practice, patterns, and prospects. In Proceedings of the 32nd International
Business Information Management Association Conference, IBIMA 2018-Vision
2020: Sustainable Economic Development and Application of Innovation
Management from Regional expansion to Global Growth (pp. 2928-2936). IBIMA.
Steffen, B. and Boßelmann, S., 2018, November. GOLD: global organization alignment and
decision-towards the hierarchical integration of heterogeneous business models.
In International Symposium on Leveraging Applications of Formal Methods (pp.
504-527). Springer, Cham.
Tomilina, E.P. and Donchenko, T.S., 2018. PECULIARITIES OF ORGANIZATION OF
BUSINESS PROCESSES OF THE INSURANCE COMPANY. In Актуальные
вопросы и достижения современной науки (pp. 236-239).
Vecherskaya, S.E., 2019. IT effect assessment for non-profit organization. International
Journal of Recent Technology and Engineering. 8(4). pp.8854-8858.
Willcocks, L.P., 2018. Global business management foundations. SB Publishing.
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