Business Structure, Finance, and HR Policies Report - BUS0005NFBNM

This report delves into the intricacies of business structure, focusing on the legal statuses businesses can adopt, including sole proprietorship, partnership, and limited company structures, while also highlighting their respective strengths and weaknesses. It evaluates various sources of finance available to business start-ups, such as personal investment, bank loans, and crowd-sourced funding, assessing the advantages and disadvantages of each. Furthermore, the report identifies and differentiates the three key sectors of the UK economy: primary, secondary, and tertiary, and their relevance to start-up operations. Finally, the report examines the importance of HR policies within a modern workplace, providing insights into their significance for organizational success.

The structure of
business
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Construct a table show the various legal statuses of business that business will adopt. Identify
strength and weakness of these legal statuses........................................................................3
Considering the business idea, identify and evaluate the strength and weakness of three
sources of finance available to business start-up....................................................................6
Identify the three sectors of the UK economy in which the business can operate. What are the
differences between the three sectors.....................................................................................8
Identify at least two HR policies and comment on their importance to modern workplace. .9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
Business structure is defined as the legal structure within an organisation which is examined in
their provided jurisdiction. The organisation structure is regarded as a key determinant in which
different activities are executed by them which is helpful in accumulation of capital, executing
different obligation of the business and paying differential amount of taxes in order to perform
regular working (AJAGBE and et. al., 2016). Before making choice to decide legal structure of
the business the owners are required to decide goals and objectives of the business and its
structure as well. Besides this there are four types of major business structure such as sole
proprietorship, partnership, LLP and LLC. The current report is accumulation of various
concepts related with business structure and gaining opportunities within business. The report is
prepared in the context of an entrepreneur who is recently willing to start their own venture
within UK which is of retail organisation named The Night Jar and in order to get proficiency in
decision they are trying to get knowledge regarding differential structure possessed so that they
can initiate their own venture. This is going to provide knowledge in respect of legal structures
so that strengths and weaknesses can also be examined along with such HR policies.
MAIN BODY
Construct a table show the various legal statuses of business that business will adopt. Identify
strength and weakness of these legal statuses
The legal structure of a company is dependent on different aspect such as scale of the business
and tax implications as well. On the basis of business structure tax calculation is performed by
the organisation. On the other hand if some organisation is having the motive of serving the
society then objectives are set for initiating a social enterprise so that overall business
development can be seen (Sund and et. al., 2016). With the help of following table legal structure
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of businesses can be identified so that this could be easier for any venture to adopt the most
suitable structure. Besides this strengths and weaknesses of each system is also enumerated so
that decision regarding adherence can be taken.
Legal statuses forms About statuses Strength Weakness
Sole proprietorship The word sole is
defined as single that
means these are the
businesses which are
owned and managed
by a single person.
The concept of sole
proprietorship is years
old and used in a very
vital manner. Sole
proprietors are
associated with
managing small
business and very
limited operations as
they have only single
personnel to handle
all the workings. This
type of business
structure is flexible
and feasible in nature
so most of the
entrepreneur adopts
this in their initial
days in order to avoid
complications.
Besides this
When business is
arranged under sole
proprietorship then
this may lead the
same to cover various
strengths such as they
have freedom to work
within business and
have their own rules
of functions and
taking various
decisions. On the
other once in a year
taxes are required to
pay out of profits.
Besides this it is easy
to set up sole
proprietorship as
licencing and
government working
is easy to adhere. The
sole proprietorship is
one of the easiest
forms of business as
there are no
complications that are
involved in setting up
This structure is
having various
disadvantage as well
such as they do not
have multi-
dimensional sources
of finance as their
only source of finance
is working capital of
the organisation.
Moreover the
availability of cash
within the business is
also limited due to
lesser functional
areas. Similarly these
types of businesses
are having limited
number of resources
due to which process
of decision making
becomes harder.
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proprietorship is
unsuccessful at some
level due to minimal
number of operations
but at the same time
this could be
successful as people
are using this to chase
their dreams.
of business (Bozer,
Levin and Santora,
2017). Most of the
start-ups are using this
structure as these
ventures do not have
such space to hire
employees.
The partnership The partnership
business is defined
when two or more
people jointly hold
ownership of the
business in terms of
capital, resources,
profits, losses and
many other
constraints.
Partnership is
associated with
partners and partners
are of various types
such as active partner
and sleeping partner.
Active partner takes
whole interest in
decision making and
overall functioning of
the business whereas
The major strength of
partnership as
business structure is
that collaborative
efforts in decision
making can be seen
due to which
complexities can be
avoided. When more
than one people are
involved within
business then new and
innovative ideas can
be emerged and may
lead the business to
touch higher growth
opportunities which is
an idea to make
money out of it.
On the contrary when
more than one people
is associated with
decision making then
this may lead into
developing conflicts.
On the other hand
liabilities can covert
discussion into
developing of
disagreement.
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sleeping partners are
not actively enrolled
within working of the
business.
Limited liability
company or
partnership
The federal
government allows an
additional form of
business which is
termed as LLC and
LLP. Under this
liabilities of members
or partners are limited
to the amount which
is decided during
establishment of the
deed and venture.
Besides this amount
of investment is also
limited to some pre
decided ratio and after
every point of time
deeds can be renewed
as accordance with
the need of the
business (Chapple and
et. al, 2020).
This structure is
having ability to raise
capital but this is
having limited
liability as well. On
the other hand this
structure provides
differentiated
ownership to the
management and
associated parties
without any
interference.
The major weakness
of this type of
business structure is
that these are
composite in nature
and rigid at some
point of functions.
Besides this the
process of decision
making under these
ventures are lengthy
and complex as well.
At last huge amount
of taxes are required
to be paid by these
businesses as these
hold a separate entity
of legality.
Considering the business idea, identify and evaluate the strength and weakness of three sources
of finance available to business start-up
There are various sources which can be used within business so that to start venture. Some
of these are elaborated as under:
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Personal investment: In order to start a business they are focused on to gaining investment
(Stott, Stone and Fae, 2016). The owner of the business will try to get investment in form of cash
or collateral assets. This is going to provide long term commitment so that owners prove to be
gaining edge within business. The company which is gaining personal investment is already
facing risk and in this manner advantage and disadvantage are as under:
Advantages
Using of own cash within business means that
there is no such complexities arising within
business and in this manner no interest cost
will be seen. There is no such repayment
schedule so that cash cannot be used someone
else other hand business. This is regarded as
the fastest mode of gaining funds and termed
as secured as well.
Disadvantages
By using own money the major investment
made within business may lead into coming
with financial risk and in this manner owner
may lose their own savings. In this manner the
owners may get difficulties in mitigating their
risk.
Funds from investors and bank: The venture capital is associated with wealthy people those
provide their money in order to support such businesses in order to provide them long term
support. These are regarded as well-defined investors so that funding and financial needs of
businesses and in this manner overall development opportunities is inhaled. These businesses are
providing financial help so that newly opened business can be established and used. So the
business gets on to the track and acquires such competencies as well. Besides this investors are
giving higher efforts to the business along with major commitments so that fresh start to the
business can be given (Harris, 2019). This is being considered that for initiating a new business
higher efforts are required along with needed capital and this will be helpful in business
expansion and gaining growth opportunities as well. This could be helpful in gaining such
acceptance from investors that they can decide upon using their money over those businesses.
Besides this bank loan are also considered as a conventional mode of financing in which
business may get their funding’s. This is easy for the business to get bank orders and discuss
regarding loans so that capital and venture can be used for gaining higher succession
opportunities. Interest is considered as one of the prominent aspect on which decision of taking
loan is dependent and a business is required to pay interest and principal money within stipulated
time frame in order to avoid any amount of penalty.
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Advantages Disadvantages
Bank loan and funds from various investments
are regarded as traditional sources of funding
in which businesses may get assistance to meet
venture requirements in most effective manner
in order to execute functions in systematic
manner.
The process of getting bank loan or
investments from investment is very tough as
this is associated with analysing of financial
information of the company and in some cases
application of loan may get rejected.
Crowd-sourced funding: This is regarded as a new method of gaining funds by a venture in
which various small investors are accumulated in order to provide funding opportunities to the
business. Small contribution is taken from each investor and as the numbers of investors are high
then this will lead into gaining higher investments (Grebenkova, 2020). The crowd-souring
financing is associated with providing appropriate idea regarding the venture so that appropriate
information can be given to investors in order to enhance their inclination for investment. In the
context of new investors influencing is the major aspect that is required to be provided so that
reliability business.
Advantage Disadvantages
This is the easiest and quick way of getting
investment as every investor is giving their
own contribution in order to accumulate large
sum of money. This method is helpful for start-
ups in order to get faster and quicker access
over funds.
Investors are with the urge of gaining quick
returns from the business, but in initial stage
this is not possible to deliver them the same.
On the other hand as this method is for start-
ups so chances of failure is existed in high
manner.
Identify the three sectors of the UK economy in which the business can operate. What are the
differences between the three sectors
There are three sectors existed within UK which can be used by start-ups in order to
operate their business which is elaborated as under:
Primary sector: This sector is advantageous for every business as under this with the help of
raw material supportive elements are being delivered to new business in order to provide them
support. This sector is covering a very small population which is residing in UK so that only a
small population is covered by them (Leuciuc, 2017). There are various shifts within primary
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sector as advancement in technology is being seen within the business and this is the reason for
which this sector is known. This sector is accountable to serve a very small percentage of the
country and overall GDP as well. This is also known as extraction sector because this is wholly
associated with making of such renewable resources by which many people may get
employment. Besides this under primary sector decline in resources has been seen which has
become as reason for their minimised growth. This sector could be advantageous for The Night
Jar to gain appropriate improvements in the business along with gaining market prominence.
Secondary sector: This sector is associated with distributing of finished products such as
aluminium products to the people, construction of home and building or goods related to
electricity and many more. The secondary manufacturing industry is having immense role within
retail organisation so that to render high value to the customers by providing them finished
goods. On the other hand right after invention of several technologies such as spinning machines
and many more growth within this industry has expanded as larger customers can be catered in
minimal time. This industry is having vast role in gaining economies to scale so that production
cost can be eliminated and at the same time productivity of labour can be enhanced.
Tertiary sector: The tertiary sector is the most feasible for The Night Jar as this is regarded as
the sector for service industry in which intangible products and services can be offered to the
customers and business as well (Bondarenko and et. al., 2017). This sector is also associated with
retailing of manufactured products so that higher customers can be catered. The example of
businesses under this sector is insurance, banking and many other service providers. Under
twentieth century this sector has got higher prominence in which productivity of labour has
increased and due to this reason disposable income of individual has increased. When disposable
income of individual gets increased then they will spend more on luxurious item due to which
overall economy can be increased.
The changes in the importance of different sectors;
The economy based on primary sector is originally based on people and its employed
workforce so that within the sector of agriculture and food industry growth can be said. The
economy is associated with using such advanced technology and in this manner chances of
development to the economy can be seen. Primary sector leads the labour to grow their standard
and earn money for their family. Primary sector is regarded as the major part of the economy in
which top level decisions are taken. This sector is also linked with the government as several
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legislations are made in order to develop the country and to provide needed product and services
to the people.
Identify at least two HR policies and comment on their importance to modern workplace
Here are some HR policies which are essential for the business to modernise their
workplace in order to render overall benefits to their employees:
Equality and diversity policy: This policy is linked with the concern of developing such
measures within business in order to provide opportunities of equality and diversity to employees
so that employee may feel valued and give their fullest contribution. This policy is providing
safeguard to specifically women employees and employees with some disabilities. This policy
states that equitable opportunities of growth and involvement should be given to each and every
working employee irrespective of their gender, age, religion and many other dimensions. This
policy is helpful in gaining trust of employees and their higher contribution as well so that they
can acquire their tasks in most effective manner and through this market image can also be
enhanced (Klein, 2016). This could be an essential measure to develop understanding regarding
the policies within employees so that any coming negativity within the business can be avoided.
This is the process which eliminates practices of discrimination and rendering any privilege to
employees based on some personal aspects. With the help of this policy The Night Jar may
provide level of satisfaction to their employees so that they can render full and effective efforts
within business in order to gain overall business objectives.
Safety and health policy: The government has identified that safety and health of individual is
associated with gaining of positive attitude of individual in terms of their contribution and
productivity. This could be helpful for overall development of the business along with providing
benefits to economy and society as well. This could be effective also in developing such
preventive measures which are helpful in developing economic and safety measures within
workplace so that to get higher employee engagement and satisfaction as well. Managing safety
and health standards within workplace is mandatory in order to enhance performance of the
organisation and to gain vital impact as well (Wing, Simon and Bello-Gomez, 2018). The
responsibility of maintaining this culture is associated with employer and in this manner various
efforts related to improving environment and other aspect can be seen. This plan is describing the
manner in which health and safety measures can be executed within workplace so that preventive
measures can be seen in order to protect employees against any injury and illness. This could be
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helpful in managing the small business in such a way that risk can be minimised and in the same
manner employees can be treated in better manner. The aspects related with successful health
and safety measures are explained as under:
 The manage is required to organise several work programs
 Employees are required to be included in those programs
 Such systems are required to be included which are helpful in defining such controlling
measures for hazards.
 Trainings to employees should be given related to examining safety measures.
 The mutual respect is required to be maintained so that communication gap can be
bridged.
 The policy should be made in relation to gaining importance related to workplace safety
and health policy.
 This could be helpful in providing health and safety participation to employee.
 Practices of using such policies are required to be adhered with laws in order to mitigate
such aspects of mis-management.
CONCLUSION
From the above report this can be summarised that there are various structure related with
business and its formation so that these can be selected by a venture in order to execute their
business function as according to the need of the business and market demand. The
organisational structure is providing significant advantages to the business in order to gain
benefits related to growth, sustainability and market prominence. Besides this financial resources
within business are used for gaining business benefits and to attain acknowledgement as in terms
of providing significant productivity within employees and overall business as well.
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REFERENCES
Book and journals
Adámiková and et. al., 2018. Value of Company and Choice of Valuation Method for
Forwarding Company.
AJAGBE and et. al., 2016. HOW ORGANIZATIONAL STRUCTURE AIDS BUSINESS
PERFORMANCE. CLEAR International Journal of Research in Commerce &
Management, 7(8).
Bondarenko and et. al., 2017. Optimization of the company strategic management system in the
context of economic instability.
Bozer, G., Levin, L. and Santora, J.C., 2017. Succession in family business: multi-source
perspectives. Journal of Small Business and Enterprise Development.
Chapple and et. al., 2020. Company Law: An Interactive Approach. John Wiley & Sons.
Grebenkova, D., 2020. Corporate Banking: Analysis, Valuation and Financing Structure of the
Company. Review of Business and Economics Studies, 8(1), pp.41-66.
Harris, T., 2019. What is a company?. In Start-up (pp. 39-51). Springer, Cham.
Klein, U., 2016, January. Gender equality and diversity politics in higher education: Conflicts,
challenges and requirements for collaboration. In Women's Studies International
Forum (Vol. 54, pp. 147-156). Pergamon.
Leuciuc, E.G., 2017. The company–type of legal person. Professional in the view of the new
civil code. European Journal of Law and Public Administration, 4(2), pp.58-67.
Stott, R.N., Stone, M. and Fae, J., 2016. Business models in the business-to-business and
business-to-consumer worlds–what can each world learn from the other?. Journal of
Business & Industrial Marketing.
Sund and et. al., 2016. Managing tensions between new and existing business models. MIT Sloan
Management Review, 57(4), p.8.
Wing, C., Simon, K. and Bello-Gomez, R.A., 2018. Designing difference in difference studies:
best practices for public health policy research. Annual review of public health, 39.
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