Business Structure and Finance: Report on Legal Framework and HR

This report delves into the structure of businesses, examining various legal statuses such as PLC, LTD, and registered charities, highlighting their strengths and weaknesses. It analyzes three key sources of finance, including bank loans, crowd funding, and angel investors, evaluating their respective advantages and disadvantages for a business start-up. The report also identifies and differentiates between three sectors within the UK economy—primary, secondary, and tertiary—commenting on their significance. Furthermore, it explores the importance of human resource policies in the modern workplace, providing a comprehensive overview of essential business components. The report uses Marshfield Bakery Ltd. as a case study throughout the analysis.

THE STRUCTURE
OF BUSINESS
1

Table of Contents
INTRODUCTION ..........................................................................................................................3
QUESTION 1...................................................................................................................................3
a) Construct a table to show the various legal statuses of businesses (such as PLC, LTD,
Registered Charity etc) that your business may adopt. Identify the relative strengths and
weaknesses of these legal statuses..............................................................................................3
Considering your business idea, identify and evaluate the strengths and weaknesses...............6
of THREE sources of finance available to your business start-up.............................................6
QUESTION 2...................................................................................................................................8
Identify three sectors within the UK economy in which a business can operate. What are the
differences between the three sectors? Comment on their value to the UK economy................8
QUESTION 3.................................................................................................................................11
Identify at least two HR policies and comment on their importance to the modern workplace
...................................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
2

INTRODUCTION
The structure of business refers to a blueprint or an idea upon which a business company
will function its operations, business is any activity that involves generation of revenue,
employment, utilization of available resources as well as sale of goods and services within a
market. There are different forms of businesses which are structured within an economy such as
partnership, sole trader, LLC, and various others which are broadly categorized into three main
sectors such as primary, secondary and tertiary sector. Any business who operates within an
economy whether small, medium or large enterprise is require to have some monetary funds
without which no company can function its business as this is called as the life blood of any
organization (Agyapong and Mordi, 2020). There are various sources of finance such as crowd
funding, personal finance, retained earnings, angel investors, bank loans as well as others. Any
company which is in existence is being functioned by some employees safety and interest of
whose is an important role the company plays and for this there are some policies which are
either made by the company itself or by government following which is an necessary call for the
business. The present report involves a discussion of various forms of companies along with
their legal structure, different sources of funds, types of sectors within which a business operates
and lastly it includes the policies of human resource which Marshfield Bakery Ltd. is required to
apply and follow in its organisation.
QUESTION 1
a) Construct a table to show the various legal statuses of businesses (such as PLC, LTD,
Registered Charity etc) that your business may adopt. Identify the relative strengths and
weaknesses of these legal statuses.
Business organizations are one of the most important part of business which makes
various kinds of activities related to business been covered in more organized manner. These
business organizations is been divided in to two parts incorporates and unincorporated that has
been discussed as follows:
Unincorporated business
organization
Sole proprietorship Partnership organization
3

These are those organizations
which has been formed
without using any kind of
complex process that makes no
legal structure involved within
it.
These are those kinds of
business organizations that
includes one person who is the
owner of the business. These
individuals are known as sole
proprietor (Bourdoncle, 2020).
These are those organizations
which has been formed within
the help of agreement formed
between two parties come
together with common motive
over earning profit.
Incorporate business
organization
Private organization Government organization
These are those organizations
that has been used in order to
make sure that an organization
has been formed by following
complex process and can take
part in contract formation.
 These are those
business organizations
which has been formed
by following complex
process. In this shares
is not been sold to
public.
 Such organizations
uses Private Ltd in its
name.
 Such organizations has
been formed through
various kinds of
stakeholders and
owners.
 These organization
sells its shares in
public.
Business Organization Legal Structure of
formation,
Management and funding
Sole proprietorship  these organizations is
been formed with less
complex process and
does not provide ant
kind of documentation
submission.
 Management is done
by the owner.
4

 In this only HMRC
number is required to
be attained.
 Funding is done
through personal
finance.
Strength of business
organizations
 Remutation form tax in
relation to
organization.
 Less time consuming
and complexity is also
not there.
Weaknesses of business
organizations
 Funding is not arranged
at times .
 Difficulty in managing
as all work is done by
one person.
Business Organization Legal Structure of
formation,
Management and funding
Partnership Organization  Is been formed by
agreement only when
an legal licensing is
involved within it.
 Management is done
by partners.
 Funding is been
handled by partners.
Strength of business
organizations
 No issues related to
formation is involved .
 Also funding is been
arranged easily.
Weaknesses of business
organizations
 Conflict results in
losing partnership or its
dissolution.
 In such organization
partners may not agree
to particular point.
Business Organization Legal Structure of Management and funding
5

formation,
Private company  Such organization
formed by submitting
all documents to
Companies House that
is complex process.
 Management is done
by directors
 Funding is done
through banks.
Strength of business
organizations
 It is separate legal
entity from its owners.
 Rights of perpetual
succession.
Weakness of business
organizations
 Involves lengthy
process which makes
formation complex.
 Things may become
complex.
Business Organization Legal Structure of
formation,
Management and funding
Public company  these organizations are
formed through
following complex
process which involves
digital signature and
name of the owners.
 Funding is done by all
shareholders.
 Management is done
shareholders or owners
(Bunyasiri and
Chatanavin, 2021) .
Strength of business
organizations
 Various owners which
makes management of
funds easy.
 Framework is strong
that leads functioning
ease down.
Weakness of business  Time taking process in  Rigidity in working of
6

organizations its formation. such organizations.
Considering your business idea, identify and evaluate the strengths and weaknesses
of THREE sources of finance available to your business start-up
The three sources of finance with their strengths and weaknesses are mentioned below: Bank Loan: The bank loan refers to acquiring funds for some time from a financial
institution which is known as bank in against of some collateral security which is kept by
a borrower to the bank. The bank provides funds for the fixed period of time at some rate
of interest that needs to be at or prior to the time of loan completion period (Chen, 2020).
The security that is being provided by Marshfield Bakery Ltd. in a form of collateral is
generally in a form of personal guarantee. Getting funds form bank is much easier and
conventional source for the business finance. The bank for the entrepreneurs before
providing the loan looks at their financial position or various financial statements so to
know their loan repayment capacity and based upon which the bank sanctions the loan to
Marshfield Bakery Ltd.
Strength Weakness
Acquiring funds from bank loan is much easier
and is quick to access, through which an
enterprise could have relevant amount of funds
at one moment.
The business of Marshfield Bakery Ltd. is
required to pay sum extra amount of money
that is called interest rate upon the amount of
loan taken by them. It is also difficult for the
start-ups to get loan from bank as they do not
have strong past financial data due to which
mostly the bank denies to provide loan to them
(Dwyer, 2020).
 Crowd Funding: This source of funding is categorized as the most recent form of
funding especially for start-up enterprises. This involves acquiring of funds from huge
amount of investors in small sum of amount. The platform through which an enterprise
7

can acquire crowd funding is through social media or online mode as well as websites.
There are various types of crowd funding adopting any of which a Marshfield Bakery
Ltd. can generate its funds which are Equity based, reward based or even donation based
(Kumpulainen, Seppänen and Breite, 2020).
Strength Weakness
Raising of funds through crowd funding is the
fastest way of acquiring funds for the business
along with a wider reach tot he market across
globe through raising of funds via social
media and online platform that can on the other
hand business to conduct its digital marketing
with minimal expenses.
Due to the huge competition within market it
sometimes becomes difficult for the Marshfield
Bakery Ltd. to generate adequate funding, also
due to its easy accessibility mostly the
companies go for crowd funding due to which
highlighting to the company's project becomes
tough. Angel Investors: These includes some institutions or individuals having high net wroth
that provides monetary funding to the small and medium enterprises acting as a private
investors to the firm. The angel investors provides funding in against of getting position
in company's board or equal opportunities to ownership. They along with providing
funding also provides direction to the business Marshfield Bakery Ltd. related to the
concerned matter (Maziotis and et. al., 2021). The main motive of angel investors is to
inject the business with their ongoing activities and support them to continue with their
business. Sometimes this source of funding acts as a primary source for small, medium
enterprises as well as for the business start-ups such as Marshfield Bakery Ltd.
Strength Weakness
The angel investors does not takes much time
to provide funding and does not demands for
past financial statements form the enterprise.
The enterprise through angel investors has a
high potential in raising their funds with large
amount of money along with a professional
direction and guidance for their business.
The major weaknesses of angel investors is
that the enterprise is require to share their
position of ownership with them into board as
well as in major decisions of the business. Also
there are the changes of clashes during the
meeting or having decision as Marshfield
Bakery Ltd. and the investors may not agree
8

upon same perspective and can have different
thoughts for the same issue.
QUESTION 2
Identify three sectors within the UK economy in which a business can operate. What are the
differences between the three sectors? Comment on their value to the UK economy
The sectors of economy comprises of the area within which various industries are
classified broadly that differentiates one from each other. On the basis of industry or business
sector the economy is being classified into three sectors namely primary sector, secondary sector
and the last is tertiary sector. Discussion upon each sector is conducted below: The Primary sector: This sector is categorized as the foundation of all businesses. The
sector gives production to the raw material and then supply to all other sectors or
businesses. The primary sector involves major part of the whole economy which includes
businesses from mining, fishing, agriculture, farming, forestry, and others which gives
rise to raw materials (Mińska-Struzik and et. al., 2020).
 The Secondary sector: The secondary sector involves transformation of the activities or
items of primary sector into different products or services. It comprises of manufacturing
sector covering an important portion within the economy. The main role in this sector is
being played by the technology as production of goods includes use of high technology at
each stage. This also involves assembly of various activities into the manufacturing one.
The sector generally involves conversion of raw materials into the produced articles
(Nadalin and Smith, 2020). The Tertiary sector: Under this sector various kinds of services are being generated and
are being offered to the general public say through hotels, sales, restaurants,
transportation and retail industry. The sector includes a transformation of secondary
sector's activities intro tertiary sector (Pavliuk, Verytelnyk and Pryimuk, 2021). Any sort
of commercial activity presents within an economy comes under the category of tertiary
sector like advertising, warehousing, transportation, etc.
Differentiation between Primary, Secondary and Tertiary Sector
Primary Sector Secondary Sector Tertiary Sector
9

The allied and agricultural
services comes under the
category of primary sector
It includes the zone of
manufacturing sector within it.
The tertiary sector is backed
by the services and
transportation.
To the primary sector the raw
materials for services or goods
are being furnished
The sector converts the items
of primary sector into another
form through extracting and
adding something to primary
sector outcomes.
The sector is responsible for
providing services to both rest
sectors that is primary as well
as secondary sector.
This is categorized as an
unorganized sector which is
generally uses traditional
technology in its workings.
The activities of secondary
sector is organized and in-
builds such methods which are
highly reliable in
manufacturing.
The tertiary sector involves
latest technologies as well as
logistics in its methods so to
implement its functions in well
proper manner with an
indulgence of highly organized
activities.
It includes forestry, mining
and agricultural activities.
This covers activities of small,
medium and large units which
are involves in production
process.
This comprises of services
such as communication,
banking, insurance and
transportation.
Value of industrial sectors into the UK economy
With the development in the service sectors of an economy the major role is being played
by the tertiary sector as with the development in the demands for services the GDP of UK is
strengthened by tertiary sector. According to the statistics of year 2017 UK, approximately 214
billion pounds were seen as the contribution from service industry through tourism and travel.
Also, near to 10.3 billion pounds in the contribution of overall GDP was injected by the primary
sector covering main participation from agriculture area. Although, it seems difficult to evaluate
the upcoming trend which for the valuation of contribution made by tertiary sector with reference
10

to tourism and travel industry, after the happening of Brexit it become little tough to exactly
analyse the value of sectors to the economy as this incident has brought numerous fluctuation to
the economy and to its development. The secondary sector has boosted up with the initiation of
local manufacturings as after the Brexit numerous businesses were experienced to be shut and
due to which the secondary sector has opened a door for regional manufacturers in the economy
who eventually enhances the scope of employment as well as livelihood of the local people.
(Statista, 2021) [Online]
QUESTION 3
Identify at least two HR policies and comment on their importance to the modern workplace
The term human resource refers to the procedure of maintaining, retaining and training all
the working human staff of the organization by keeping in mind their as well as organizational
values, ethics and emotions. It is highly essential for the company and its human resource
department to develop some policies and follow certain regulation which are being made by the
related government with an aim to protect the interest of all the employees working within an
organisation (Purkayastha and Sarkar, 2021). The two HR policies along with their importance
are mentioned below:
Health and safety policy:
The policy is concerned with the safety and proper health of company's employees within
an organization where they are working throughout the day and bringing success to the business.
This includes description of emergency as well as safety procedures at workplace & is needed
that the staff of a company must report to their management or superiors if they found any issue
or injury related to the workplace. It is compulsory for every business to follow all the safety and
health regulations which are prescribed by the competent authority in their organisation so that
no employee can be harmed or left untreated when meeting any sort of accident. For instance, if
there is a presence of some chemicals or risky equipments at Marshfield Bakery Ltd., then the
business must have a specific program for risk communication or some persons should be
appointed who will take care for their safety while working at such place (SARASU and et. al.,
2021).
Diversity and Equality policy
11

This involves providing and treating each employee of an organization with equal respect
and harmony with all aspect no mater female or male, or any other aspect. Each employee should
be furnished with diversity as well as equal status while working at organization. For instance, in
Marshfield Bakery Ltd. there are huge number of employees working at different position and
are treated equal when comes to a common aspect or given equal opportunity at the time of their
appraisal, leave, promotion, etc. according to their hard work contributed for the success of the
company. It is the responsibility of company's human resource department to look for this aspect
and maintain equality within the organization (Sutisna and Saudi, 2020).
CONCLUSION
From the above report it can be concluded that in a industry there are various kinds of
companies operating in a market and doing their business effectively. In order to be a successful
business there is a requirement of adequate funds which should be acquired from proper source
as this depends upon the image as well as sustainability of any business. There are various
sources from where a company can generate funds such as bank loan, angel investors, crowd
funding, etc. In an economy where the companies are operating with their businesses they are
broadly classified into three sectors that is primary, secondary and the tertiary sector which are
considered as foundation business that involves raw materials, secondary sector is classified as
manufacturing sector and tertiary sector is classified as the service provider within an economy.
All such sectors plays a very important role in the value as well as development of economy.
There are certain policies which are either drafted by company HR department or the
government abidance to which becomes mandatory for every business as well as each employee
working in it.
12