Analysis of Business Organizations for IOM Solutions (BMP4002)

This report provides a comprehensive analysis of different business organization structures applicable to IOM Solutions, a sole trader business, considering Sam's desire to expand. It explores the characteristics, advantages, and disadvantages of various organizational forms, including sole proprietorships, partnerships, private companies, and public companies. The report delves into the legal consequences associated with each option, such as liability, registration requirements, funding sources, and management structures. Furthermore, the report offers a comparative evaluation of these business structures and makes a recommendation for the most suitable organization for IOM Solutions, considering factors like ease of establishment, liability, and potential for growth. The report concludes with a summary of the key findings and a recommendation for Sam's business expansion strategy.

Business Organizations

INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Explain to Sam, what types of business organizations are potentially available in terms of
reorganizing IOM Solutions, and the legal consequences for each option..................................4
 Easy to get started: In these partners is required to be agreed over making create
partnership which is verbally or in written form. In this need of not making registration with
Companies house which makes registering of business partnership for making taxation in
relation of HMRC is simple. In this partners makes registration which makes registration
over assessment that can be done through online portal also. Forming an organization is
very simple and easy to be formed. Larger resources are been arranged as lot of partners is
involved within it.....................................................................................................................6
CONCLUSION................................................................................................................................8
REFRENCES...................................................................................................................................9

INTRODUCTION
Business organizations are that kinds of organization which has been formed over
operating activities related to business. Such organization is based over those activities which
have been formed in over making business done in more effective manner. Business
organizations is been operated in relation over business law which make proper establishment of
business possible. In these kinds of organization all kinds of activities related to business is
handled by persons holding business. In these business organization all kinds of elements is been
handled in more effective manner. Under the case law of tort of negligence, vicarious liability
with various business organization with rights of employers, employee is covered. These laws
are based upon basic nature of civil and company law. employment law deals with employees
rights. In the end business organizations been explained.
MAIN BODY
Case Study: Sam has been operating as sole trade (IOM Solutions) which makes selling of
electric parts over local garage. Sam is in the business for last eight years. Since last two years
Sam has found that business is grown in relation over demand of employees. It has pressurized
sam and has given him opportunity to expand. On October 2018 Sam decided for making
expansion of ownership. Sam is not sure about the business ownership for IOM solutions.
Explain to Sam, what types of business organizations are potentially available in terms of
reorganizing IOM Solutions, and the legal consequences for each option.
Business organization is based over that organization which is operating in relation over
various kinds of ideas which is present within market. Business organization is based upon ideas
of business which made business divided into two parts that is corporate and unincorporated.
Further they have been explained as follows:
Unincorporated businesses: These organizations have been formed through very easy
procedure also these kinds of organizations are very much common to be formed in order to start
business. (Pletsch and da Silva Zonatto, 2018)The organization provides various benefits to its
owners also and they are explained as follows:

Sole Proprietorship: These organization has been developed only by single owner and is
been operated by him in more organized manner. Under such kind of organization one owner
exists known as sole proprietor. A sole proprietorship (also known as individual
entrepreneurship, sole trader, or simply proprietorship) is a type of an unincorporated entity that
is owned by one individual only. It is the simplest legal form of a business entity. In this
registration is been done of an organization by getting HMRC number and name is required only
to conduct the business. In this name is been kept of the business only in carrying business
activities or identifying it (Nikolaeva, 2018).
Partnership: These are agreement based organization which has been formed over
agreement talking place between two parties. In this motive of organization is to earn profit and
revenue. Partners holds liability in relation over aspect of business. It is been registered through
HMRC Number and partnership agreement is been created by partners only when legal
agreement is formed within parties that is related to licensing and any other legal work.
Incorporated organization: Such organization is been formed with the help of lengthy
process and also the process used is time consuming. These organizations are of complex nature
and are been explained as follows:
Private Company: The organization is based over working in private manner and also complex
process is involved within its establishment. Registration is done with the help of collecting
important documents and submitting it to the companies’ house. Management is been done by
directors that has been appointed in order to make working within an organization done in
effective manner. These organization is separate form its directors which makes it separate entity
(Morozko, Morozko and Didenko, 2018).
Public Company: This organization is based upon making shares developed to be sold in public.
Under these organization shares is been sold in public. The owners of public organization
having responsibility towards these organizations working in more effective manner. They are
having all responsibility of it. Management of these organization is been done by shareholders
and people buying shares. Registration is lengthy and involves various kinds of documents
submitted before forming such organization.
Sole proprietorship: Funds is been arranged by the owners himself and also through
personal contacts. In this family, friends and relatives makes funds arrangement done.

Advantages of sole proprietorship:
 . Easy and inexpensive process: The establishment of a sole proprietorship is generally
an easy and inexpensive process. Certainly, the process varies depending on the country,
state, or province of residence. However, in all cases, the process requires minimum or
no fees, as well as very little paperwork. The process of formation is not at all complied
in nature.
 Few government regulations: Sole proprietorships adhere to a few regulatory
requirements. Unlike corporations, the entities do not need to spend time and resources
on various government requirements such as financial information reporting to the
general public. Finance requirement is low within such organization.
 Tax advantages: Unlike the shareholders of corporations, the owner of a sole
proprietorship is taxed only once. The sole proprietor pays only the personal income tax
on the profits earned by the entity. The entity itself does not have to pay income tax
(Mathews, 2018)
Disadvantages of sole proprietor:
 Unlimited liability of the owner: Sole proprietors make separate legal entity formed
which makes owners face various kinds of liability in relation over debts that has been
formed. In other words it can be concluded that various kinds of financial obligation is
been created and creditors requires in order to make repayment done upon entity of
owner. In this case all payment is done with the help of personal assets owned by owner.
This makes it clear that liability lies to owner in relation over debt paid by owner.
 Limitations on capital rising: In this various all kinds of funds is been arranged through
making an organization. Under it all kinds of mode of arranging fund is of private terms
and only through private sources. These make arrangements of funds don in limited
which cam makes fund shortage created at times. Also tax is paid only in the form of
self employment from
Partnership: Under it funding is been done with the help of partners and management is
in the hands of partners. This done in the form of limited liability which is been invested by the
partners.
Advantages:

 Less formal with fewer legal obligations: In this main advantage of partnership is that
business lacks formality and makes comparison over managing limited company. The
accounting process is been based making things which is similar in nature that is limited
over companies. In this partnership business does not require over completion of taxation
in more effective manner. It makes records over making expenses in relation of income
with expense created. Then under it partnership tax return is required over submitting to
HMRC and each partners. Under it details over making profit in the form of partnership
is based upon its types. Forming of an organization is simple and easy that has been
formed (Di Virgilio, 2018).
 Easy to get started: In these partners is required to be agreed over making create
partnership which is verbally or in written form. In this need of not making registration
with Companies house which makes registering of business partnership for making
taxation in relation of HMRC is simple. In this partners makes registration which makes
registration over assessment that can be done through online portal also. Forming an
organization is very simple and easy to be formed. Larger resources are been arranged as
lot of partners is involved within it.
Disadvantages of partnership
 Unlimited liability: In this business is not required over developing separate legal entity
and all partners which is personally liable in relation over all kinds of debts and losses.
So, business run and conflict arises then it becomes risk for business to be carried. This
makes unlimited liability formed. Partner’s makes limited liability formed.
 Perceived lack of prestige: Like a sole trader, the partnership business model often
appears to lack the sense of prestige more associated with a limited company. Especially
given their lack of independent existence aside from the partners themselves, partnerships
can appear to be temporary enterprises, although many partnerships are in fact very long-
lasting. In these conflicts leads over making the organization collapsed and partnership
come to an end Bakanauskienė, I., (Bendaravičienė and Barkauskė, 2017)
Private Company: They are those organizations which makes funds to be arranged from
trustable source through banks and equity.

Advantages of Private Company are:
 In this Private Limited Company that has been formed in legal manner which makes
limited liability or legal protection for its shareholders and places in restriction of
ownership. In this spate legal entity is formed which makes owner separate from its
business.
 Limited Liability this is another advantage which makes financial distress to be created
which makes personal assets protected of the owner. In this the liability is of company
to pay all kinds of debts. This is because of the rule of perpetual succession within
which an organization is considered as separate legal entity(Andrews and et. al.., 2019).
Disadvantages of Private Company
 In this registration takes time and is lengthy also.
 Lot of complexity of procedure helps in making establishment possible in more
effective manner.
 In private company limited number of shareholders are there and cannot exceed
more than 50 members.
 Also difficult to quote stock exchanged.
Public Company: Such organization funds is been arranged only through selling of shares and
taking loan from financial organizations or government organizations
Advantages of Public Company
 Share is sold within public and shareholders owner.
 Finances can be arranged in easy manner.
Disadvantages of Public Company
 Shareholders and directors has their own aims with expectation.
 Various owners should be there and make difficult for controlling it.
Since in the above scenario it can be understood that already sole proprietor business
exists which is been owned by a single owner and has been earning lot of profit from it. In this
kind of business all liability is on owner related to business. So, in eagerness to expand the
business best kind of business is the partnership. Since, it is easy to establish and burden of

funding is been reduced. Also in this employees problems can be solved with the help of partners
solution for it.
CONCLUSION
From the above discussion it can be concluded that business organizations are those
kinds of organization which makes commencement of business done in more effective manner
and helps in maintaining legality of business also. Further the file has covered bout various kinds
of business organization. Then cover about their functioning and registration process. In the end
advantages and disadvantages is explained.

REFRENCES
Books and Journals
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causes, conditions, consequences and treatment. Asia Pacific Business Review, 25(4),
pp.459-469.
Bakanauskienė, I., Bendaravičienė, R. and Barkauskė, L., 2019. Features of Employer
Attractiveness on Lithuanian Business Organizations: Employees’ Perceptions.
Management of Organizations: Systematic Research, 77(1), pp.7-23.
Di Virgilio, F., 2017. Exploring determinants of knowledge sharing and the role of social media
in business organizations: Overview and new direction. Social media for knowledge
management applications in modern Organizations, pp.1-30.
Mathews, J., 2021. Implementing Green Management in Business Organizations. IUP Journal of
Business Strategy, 15(2).
Morozko, N., Morozko, N. and Didenko, V., 2020. Rationale for the development strategy of
small business organizations using the real options method. Academy of Strategic
Management Journal, 17(2), pp.1-11.
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