Analysis of Business Legal Status, Finance Sources, and UK Sectors

This report provides a comprehensive overview of business legal statuses, including public and private organizations, and their respective strengths and weaknesses. It then evaluates various sources of finance, such as bank loans, venture capital, and angel investors, comparing their advantages and disadvantages for business owners. Finally, the report identifies and differentiates between the primary, secondary, and tertiary sectors operating within the UK economy, highlighting their individual contributions and value. The report covers legal statuses, finance and various sectors of the UK economy.

Report

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
QUESTION 1...................................................................................................................................1
Various legal statuses of businesses and their strength & weakness .....................................1
Evaluate different finance source with their strength & weakness........................................5
QUESTION 2...................................................................................................................................7
Different types of sector operate in UK economy with their differences and provide their
value in UK economy.............................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
A business is refers as an organisation or enterprise entity engage in commercial,
professional or industrial activities, business can be related to profit or non-profit organisation. It
is also an economic activity that involves in exchanging, sale, production of good & service or
purchase with a motive behind to earn profit and also to satisfy needs of customers.In this report
there will be a discussion about various types of business legal statuses for company to adapt
with their strength and weakness. (Al-Ajlouny and Nawafleh, 2018) There will be a brief about
three sources of finance with their evaluation of strength and weakness of each source. At last
there will be identifying three sectors within UK economy with difference between those sectors.
MAIN BODY
QUESTION 1
Various legal statuses of businesses and their strength & weakness
Legal statuses of business refers to legal identity through which any entity, association or
company is recognized and also has a sufficient capacity for carrying out and taking on
obligations of activities that has a legal responsibility in regard to third party. (Arshi and et. al.,
2020)
TYPES OF
BUSINESSES
LEGAL STATUES STRENGTH WEAKNESS
Public organisations-
It includes business
that are managed,
owned and controlled
by government.
Enterprise, businesses
and entity comes
under control by
government and
provides public
services to society.
There are three kinds
of public organisation
which government has
formed such as,
 State- the
businesses in
State are
owned,
managed and
controlled by
state
 Public
organisation
promotes
welfare of
society and
decisions of
business were
made
according to
society needs.
 These
 In public sector
the losses due
to any factor
will be bear by
government.
 Because public
sector are
owned by
government the
interference
will be high.
1

(Rossetto and et. al.,
2018) Public sector
organisation focus on
providing service to
public, welfare, the
legal system, natural
resources, health
services and includes
education.
government,
but it is limited
to particular
state.
 Central- the
businesses that
are controlled,
managed and
owned by
central
government
and operates in
whole nation.
 Local- the
business that
are managed,
owned and
controlled by
local
authorities and
the operation is
restricted to
particular local
area of state.
organisations
provides a
essential
facilities to
people with
less profit
margin and at
low costs.
Private organisations-
The businesses that are
owned, controlled and
managed (Sarja,
Onkila and Mäkelä,
2021)by private
individuals and have a
Sole proprietorship-
the business are owned
by single individual
and has full control
power company, but
the operation is
restricted to small
 The owners of
private
organisation
has limited
liability.
 Business in
private
 Private
organisations
requires
various legal
formalities.
 For making
any decision
2

sole purpose to
generate profits
scale as because
function of business
has less people
engagement.
organisation
has a separate
legal entity
from
shareholders
and directors.
 Companies in
private
organisation
has a
professional
image which
helps in
attracting new
customers or
investors and
establish a
longevity of
such
businesses.
regarding
business
minimum two
shareholder
presence is
required.
Companies- the
business that has a
separate legal entity
from owner and has a
complex structure with
high administration
costs because it needs
extra report
requirement and has a
high level of
obligations.
Partnerships- their
business that is owned,
controlled and
managed by multiple
individuals,
(Subrahmanya and
Krishna, 2021) as all
owners share loss,
profits, capital and
responsibility.
Limited liability
partnership-
The business is a
extended version of
partnership with slight
3

difference that there
are limited liability of
of partners in these
business.
Charitable
organisations- these
businesses which are
non-profit bas3ed
companies and formed
for charity to public
from government.
 Charitable
trust- the
business are
formed and run
by small group
of people and
known as
trustees.
 Unincorporate
d associations-
the business in
this have a
membership
and members
have right to
choose
operation
activities in
regard to
provide
benefits to
public.
 The assets in
such
organisation
can not be used
for any other
purpose rather
than serving
public.
 The main
purpose of
these
organisation is
providing
social cause
which is in
regarding to
gain trust of
public in
return.
 These
businesses are
generally
dependent on
charities and of
raising funds
from public in
order to carry
activities of
companies.
 Charity
organisation
businesses are
always
required to
regulate the
compliance
requirements
that involves
accounts and
return
preparation.
Voluntary
organisations-
The business that are
formed for non-profit,
 Trust- the
business that
are regulated
and governed
 The businesses
in this
organisation
has a relief
 These
businesses
required more
time
4

non-santutory and run
by individuals without
getting paid in order to
run organisations.
These business are
managed, controlled
and owned by various
staff as volunteers.
by trustees in
order to
provide social
cause to public.
 Associations-
the business
are formed,
controlled and
owned through
government by
legal document
and has a
structure
objectives in
order to
provide a
membership
and powers in
firm to make
decisions.
(Wyrwich,
2019)
from taxes.
 These business
have public
recognition and
trust.
commitment as
there main
purpose is
serve social
work to
public .
 In such
business there
is lack of scale
of economy as
such
companies are
based on non-
profit
organisations.
Evaluate different finance source with their strength & weakness
There are various types sources from which business can raise their finance in UK such
as,
Bank loans-
Banks loans are most common source of finance for small and medium-sized
business, since all banks offers different advantages such as customized repayment, personalized
service. (Cosenz and Noto, 2018) A bank loan is a long term source, it includes a fixed amount
5

of money given to business through bank that has to be repaid over time with certain amount of
interest, usually through monthly instalments. It is an amount of money borrowed for specific
period of time with an agreement of repayment schedule, the amount of repayment is depended
on size and duration of loan with rate of interest.
Strength- bank loans is best way to raise finance for business, as there is lack of set rule
that depicts terms for business in order to spend money for activities related to business,
entrepreneurs are free for spending bank money according to their needs. It is easy to apply for
bank loan for new start-up business owner, as there are less rules and policy related to business
loans.
Weakness- bank loans is not flexible method for raising finance as entrepreneurs are
required to pay interest on amount that is not being used by them and in such circumstances
when there is issue related to cash flow at time of setting up business, it is not easy to manage the
amount to pay monthly instalments to bank. (Deighton, 2018) As business is new it takes time
for setting properly and giving actual profit to entrepreneurs.
Venture capital-
It is a source of finance where the investors support new entrepreneur in order to
start their new business and showcase their talent through offering financial state and skills for
capital gain to obtain in long run process. Venture capital takes a equity position in company that
helps in carrying a promising higher risk project. It involves business giving up small amount of
their ownership in business to external party.
Strength- venture capital as source of finance aimed on providing an opportunity to
entrepreneurs for expansion and growth, as venture investor are always ready to take risk
because they have a positive approach towards business success.
Weakness- venture capital offers high funds in start-up business with that venture investor
have a equity in business so if organisation flourish profit earned from business will be divided
between investor and entrepreneur. (Harris, 2018) With this venture investor also have a
authority in becoming a part of board.
Angle investor-
Angel investor are high worth individual those have a quite experience in
businesses, these investor provide starting capital to entrepreneurs for their start-up in return
investor expect equity in business. Investors act as a mentor for individual business owner and
6

share their experience , connections with entrepreneur that will helps them in improving and
developing growth of new start-up for success. These investor works as a angel to new
entrepreneur to establish their business.
Strength- angels investor offers various aspects in terms of new entrepreneur, investor
offers funds and also share their personal experience and guidance that will helps in establishing
business with growth and further success in market.(Hillemane, Satyanarayana and
Chandrashekar, 2019) Angel investor also have a right to be in part of decision making process.
Weakness- angel investor provide guidance to investor which mean they also have a
control over business operation which will led to create a conflict and affect relation between
investor and entrepreneur because of high level of involvement in business by investor.
QUESTION 2
Different types of sector operate in UK economy with their differences and provide their value in
UK economy
Business sector is area of economy in which business share business activities, product or
service according to organisation operation, these sectors represent a large group of companies
with similar business activities. (Khan and Khan, 2019)The business economy variant in
different sectors with different business exists so enterprise can offer their product or service in
market. There are different types of business sector available to operate in UK economy, that will
helps in establishing business according to products and service company offers in market such
as,
Primary sector- the primary sector of industry is related to activity of extraction of
natural resources or raw material from land, it includes businesses that grows goods or extracts
materials from land comes under primary sector business. It also involve activities that are
dependent upon environment for companies operation it also refers to utilisation of resources of
earth such as, water, vegetation, building material, land and minerals. Business related to
operating with such material includes in primary sector. Also includes activities for extraction as
hunting, pastoral activities, fishing, agricultural, mining, quarrying and gathering. People who
are engaged in primary activities are known as red-collar worker because of outdoor nature of
work involves in this activity. Primary sector deals in extraction and harvesting of natural
resources as agricultural and mining.
7

Secondary sector- the secondary sector sector of industry involves activity of
manufacturing, it includes taking raw material from primary sector and covert them into new
products. The activity adds value to natural resources through transforming raw material into
something more valuable products, these activity are concerned with construction, manufacturing
and processing industries. People are who are engaged in secondary sector are know as a blue-
collar workers due to nature of business activity involves in this sector. Secondary sector refers
to industries related to production level of of company in activities involving of creating final
products into raw materials. The secondary industry sector involves activities such as, auto-
mobile, steel production, telecommunication and production, this sector has a potential of
changing world economies. Industrial sector and business related to activities related to anything
production and manufacturing comes under the secondary sector of operation.
Tertiary sector- the tertiary sector industry refers to activities that provide a service to
customers. This sector includes activities that business operation those offers service to their
clients. Tertiary activities has both exchange and production, it includes a provision of service
that consume, it also includes trading, communication and transport facilities used to overcome
the distance between customers and business. Tertiary sector is known as white-collar workers
because of the nature of business activities involvement. This sector involves in retailers,
financial companies and entertainment, as companies those provide a service to customers in
market comes under tertiary sector for business operation. The tertiary industry sector have a vast
major opportunity for employment with only focus on providing services to customers and also
to other companies, it also provides various services to primary and secondary sectors.
Basis Primary Secondary Tertiary
Meaning This sector includes
extraction of raw
material from land.
This sector includes
transformation of raw
material from primary
sector into final good
and products.
This sector includes
providing services to
other sector and also to
customers.
Working This sector is
unorganized that
includes usage of
This sector is more of
organized and it use
reliable method of
This sector use
modern logistics for
operating and
8

traditional technique
of working.
techniques in
production level
functioning of
organisation.
Value of these sector in UK economy
 Primary sector- In economy of UK there is around 3% of labour force that are engaged in
in agricultural production level of business, (Kolk, Rivera-Santos and Rufín, 2018) also
it contributes around 0.58 % in economy of United Kingdom.
 Secondary sector- In economy of UK the secondary sector business contributes around
8.6% from production level of business.
 Tertiary sector- In economy of UK serves around 80% to UK's GDP. Also it contributes
around 8.6% of countries economy.
Hence, it is clearly analysed that the tertiary sector has a domination over UK economy with over
81% and this sector is important for growth of the country.
CONCLUSION
From the above report that there are different types of business organisation available for
new entrepreneur to choose from with their own legal statuses and different business has their
own motive behind starting company. Also different types business organisations such as,
private, public, voluntary and charitable that has their own strengths and weakness which helps
understanding them better for entrepreneurs. There is a discussion regarding different types of
finance source which helps new business in getting initial monetary support to start, which
includes bank loans, venture capital and angel investor. Lastly there is a brief about different
types of business sector in UK economy that includes, primary, secondary and tertiary and from
above discussion it concluded that in tertiary the service sector has a major contribution to
economy of UK.
9

REFERENCES
Books and Journals
Al-Ajlouny, M.I. and Nawafleh, S.A., 2018. The impact of job security on organisational
productivity: a field study in public and private organisations. Dynamics of Public
Administration, 35(1), pp.97-107.
Arshi, T.A. and et. al., 2020. SECURE–a new business model framework for measuring start-up
performance. Journal of Entrepreneurship in Emerging Economies.
Cosenz, F. and Noto, G., 2018. Fostering entrepreneurial learning processes through Dynamic
Start-up business model simulators. The International Journal of Management
Education, 16(3), pp.468-482.
Deighton, C., 2018. Effective information exploitation: A challenge for military and business
organisations. In Contemporary Ergonomics 2007 (pp. 99-104). Taylor & Francis.
Harris, T., 2018. Start-up: a practical guide to starting and running a new business. Springer.
Hillemane, B.S.M., Satyanarayana, K. and Chandrashekar, D., 2019. Technology business
incubation for start-up generation: A literature review toward a conceptual
framework. International Journal of Entrepreneurial Behavior & Research.
Khan, N.A. and Khan, A.N., 2019. What followers are saying about transformational leaders
fostering employee innovation via organisational learning, knowledge sharing and
social media use in public organisations?. Government Information Quarterly, 36(4),
p.101391.
Kolk, A., Rivera-Santos, M. and Rufín, C., 2018. Multinationals, international business, and
poverty: A cross-disciplinary research overview and conceptual framework. Journal of
International Business Policy, 1(1), pp.92-115.
Rossetto, D.E. and et. al., 2018. Structure and evolution of innovation research in the last 60
years: Review and future trends in the field of business through the citations and co-
citations analysis. Scientometrics, 115(3), pp.1329-1363.
Sarja, M., Onkila, T. and Mäkelä, M., 2021. A systematic literature review of the transition to the
circular economy in business organizations: Obstacles, catalysts and
ambivalences. Journal of Cleaner Production, 286, p.125492.
Subrahmanya, M.B. and Krishna, H.S., 2021. Technology business incubators in India:
Structure, role and performance (Vol. 2). Walter de Gruyter GmbH & Co KG.
Wyrwich, M., 2019. New KIBS on the bloc: the role of local manufacturing for start-up activity
in knowledge-intensive business services. Regional Studies, 53(3), pp.320-329.
10