BUS0005NFBNM: Structure of Business - End of Module Project Report

This report examines the structure of businesses, focusing on the legal frameworks, finance options, and HR policies relevant to business start-ups. It begins with an introduction to business concepts and then constructs a table comparing various legal statuses or business frameworks, such as PLC, LTD, and CIC, highlighting their implications for a hypothetical online retail business, Sylvan Carpet Fashion. The report then analyzes the strengths and weaknesses of the LTD structure, followed by an identification of finance sources available for start-ups, including angel investors, business loans, and family and friends. Furthermore, the report identifies and differentiates three key business sectors in the UK: private, public, and joint sectors, outlining their characteristics and contributions to the economy. Finally, the report discusses two essential HR policies and their importance in the modern workplace, concluding with a summary of the key findings and a list of references.

Structure of Business

Table of Contents
INTRODUCTION...........................................................................................................................1
QUESTION ONE............................................................................................................................1
Constructing a table for showing various legal statuses or business frameworks.......................1
Strengths and weaknesses that are required to consider while planning to establish the business
.....................................................................................................................................................3
Identification of three sources of finance available for business start-ups..................................4
QUESTION TWO...........................................................................................................................6
Identification of three sectors in UK wherein business can operate............................................6
QUESTION THREE.......................................................................................................................8
Identification of two HR policies and their importance to modern workplace...........................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business is defined to a commercial activity wherein continuous production or buying and
selling commodities are undertaken by an individual with the aim of earning livelihood along
with acquiring wealth via satisfying human needs. Murphy (2017)says that while establishing a
new business, there are various objectives in mind of an entrepreneur including earning profit,
gaining customers, making contributing to society, creating employment opportunities etc.
structure of business states who owns the entity, ways in which profits are distributed, who is
accountable to whom and many other things. To enhance knowledge about structure of business,
Sylvan Carpet Fashion is selected which is one of viable business start-up in online retail
industry of UK. The start-up business is a retailer of beds as well as floor covering products. The
business idea is a effective option available with entrepreneur having minimal investment capital
and potentials for meeting demand among customers for decorating the floors of houses, offices
etc. The report covers various business sectors which contribute in economy, various legal
frameworks in context to business start-ups and finance generating alternatives. It also identifies
importance of human resource policies in the modern business.
QUESTION ONE
Constructing a table for showing various legal statuses or business frameworks
It is said by Storey (2016) that business is an entrepreneurial idea for producing and selling
products for profit making purpose. It is also crucial to determine legal structure or framework of
business for adhering requirements related to registration, obtain licence etc. It is seen that online
retail industry in UK is among faster growing segment addition to provide exciting opportunities
to talented young entrepreneurs for starting their business. Along with this, entrepreneurs are
also aware about existing opportunities that are created via rapid technological developments.
To start an online retail business such as Sylvan Carpet Fashion is effective decision of the
entrepreneur. Sylvan Carpet Fashion is an online retailer of floor and bed covering products. Its
commitment is to deliver excellent services to customer and makes things easier for them to
transforms their places. Its product range includes carpets for vinyl flooring, wood flooring etc.
Moreover, it also have stock list of headboards, beds addition to mattresses with wide design
variety as per budgets and styles of customers. Following is the table that shows variants of
business frameworks or legal statuses that can be adopted by Sylvan Carpet Fashion:
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Frameworks of
businesses
PLC LTD CIC Registered
Charity
Meaning PLC is public
limited company
whose shares are
publicly traded
through stock
exchanges and
there liability is
limited (Roberts,
2018).
LTD is Limited
company whose
shareholder’s
liability is
limited for the
originally
invested capital.
The businesses
which features
limited liability
are type of LTD.
CIC is
Community
Interest Company
which exist for
benefiting society
with the view of
initiating social
purposes despite
of making profits.
The businesses
which establish
and operate
activities for
charitable purposes
are said to
registered charity.
Objectives Businesses that
adopt PLC
framework have
objective of
raising
maximum
capital through
shares.
The businesses
that adopts LTD
framework have
objective of
generating
profits from the
operations of
business.
The objective of
business that
adopts CIC
structure is to use
profit and
services to benefit
the community
and using them
for public
commodities.
The objectives of
registered charity
business are for
philanthropy along
with social well
being (Graddy-
Reed, 2018).
Commencemen
t of business
In PLC,
business has to
obtain
Certificate of
commencement
of business
along with
Certificate of
In LTD,
business only
has to obtain
Certificate of
Incorporation
with the hope of
commencing
business in real
Businesses that
are planning to
adopt CIC
structure have to
obtain
Certification of
registration and
certification of
Business planning
to commence
business under
Registered
charitable
framework is
required to obtain
Certificate of
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Incorporate for
commencing
business.
world
(Wiśniewski
and Ligęza,
2018).
Incorporation for
commencing
business.
charitable
incorporation and
many more.
From the table, it can be said that Sylvan Carpet Fashion may adopt LTD company
structure. With the business framework, start-up online retailer may achieve professional status,
separate legal identity, investment as well as lending opportunities, maximising tax free gains,
generating huge income, protecting company name and minimising personal liability. Moreover,
setting a business as limited company is one of well known way to start own business in UK’s
retail sector (Ayadi, R. and Et. Al., 2016).
Strengths and weaknesses that are required to consider while planning to establish the business
Start-up business is same as new born baby which needs more care and emphasis in
development stages. When entrepreneur of Sylvan Carpet Fashion are planning to establish it in
UK’s online retail sector, they are required to consider following strengths and weaknesses of
LTD legal structure:
Strengths of LTD structure:
Tax efficient: It is well known that entities that adopt Limited Company structure are
likely to become tax efficient. While establishing Sylvan Carpet Fashion, the entrepreneur must
consider the strength as it will help in making large money which is not being taxes in an
accounting year.
Limited liability: LTD framework offers limited liability to entrepreneurs or owners of
start-up business (Ward, 2016). When entrepreneurs of Sylvan Carpet Fashion will have limited
liability then they are able to protect their personal assets along with finances in eyes of law.
Maximises tax free profits: It is strength of LTD company that it enhances tax free
income through having their loving ones as shareholders (Advantages and disadvantages of
Limited Company, 2020). It is necessary for entrepreneur of Sylvan Carpet Fashion top consider
the strength while making decision to establish the business.
Agility: While start up business are likely to adapt market conditions along with
customer needs quickly. Through LTD company structure, entrepreneurs of Sylvan Carpet
Fashion can make quick adjustments as they do not have to dependent on other for implementing
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decisions. This adaptability position also makes innovations addition to seize opportunities fro
development.
Weakness of LTD structure:
Scarcity and choices: Limited Company structure gives scarcity and choices for
obtaining finance (Kemp, 2018). In context to Sylvan Carpet Fashion, the entrepreneur is
required to consider the weakness of structure prior to making decision for business
establishment in market as it can impact on its decision and business practices.
Accountancy costs: It is important for start up business opting for LTD structure to hire
accountant for dealing with taxes. Various tasks which accountant are required to perform
includes paying corporation tax, organisational tax returns and VAT returns. It states that the
entrepreneur of Sylvan Carpet Fashion will be required to pay higher accountancy fee that can be
relatively steep.
It is important for entrepreneur of Sylvan Carpet Fashion to make full consideration
towards mentioned strength and weakness of the legal structure prior to establishing the business.
Identification of three sources of finance available for business start-ups
For a business start up, one of hardest part is to raise money for get going (Sources for
business finance, 2020). In case with Sylvan Carpet Fashion, the entrepreneur can took towards
following finance generation alternatives or sources for the business idea:
Angel investors: These are high net worth sources that have extensive experience in
business field and raise capital especially for early business life against portion of equity. Sylvan
Carpet Fashion can raise funds from angel investors after consider following strengths and
weakness of the source:
Strength: Angel investors provides great help to entrepreneurs that are talented but fails to
start business because of limited availability of funds. With this funding sources, Sylvan Carpet
Fashion entrepreneur can gain support for starting idea. Angel investors takes investment
decision quickly, charges no repayment interest and mentors in all business practices.
Weakness: Angel investors provide finance against some proportion of business share that
can reduce profit margins of Sylvan Carpet Fashion. It also provides less structural supports as
compared with other investors.
Business loans: Banks as well as other financial institutions have set schemes to offer
various business loans to start up company (Shahriar, Schwarz and Newman, 2016). In case with
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Sylvan Carpet Fashion, entrepreneur can source funds from business loans. Following are
strength and weakness of business loans:
Strengths: Business loans are flexible in nature as they can be used for wide variety. In
context to Sylvan Carpet Fashion, business loans are life savers as they provide money as per the
fixed proportion as quickly as possible.
Weaknesses: Business loans are long term debts which are required to be paid by
entrepreneurs for long durations. In case when entrepreneur of Sylvan Carpet Fashion will fail in
paying loan then it may harm its assured assets.
Friends and family: A start-up business can also source funds from its close one including
relatives and friends to start the business quickly (Burns, 2017). In context to Sylvan Carpet
Fashion, entrepreneur can contact its relatives and friends for some money. The strengths and
weaknesses of the funding source are below:
Strengths: Friends and family are aware about the entrepreneur and their ideas. The strength
of the source for Sylvan Carpet Fashion is that lower or no interest payments are to be made in
future while repaying money and more flexible to convince friends and family to lend some
money.
Weaknesses: The funding source have weaknesses that it can strain relationships among
friends, family and entrepreneur of Sylvan Carpet Fashion when they are not conformable with
ongoing situations. It can also change power dynamics (Bhimani, 2017).
It is necessary for the entrepreneur of business start-up that is Sylvan Carpet Fashion to
consider strength and weakness of all available sources of funds before making decision to
source required money.
QUESTION TWO
Identification of three sectors in UK wherein business can operate
Govindan and Al-Ansari (2019) says that business sectors are defined to subset of domestic
economy which excludes workings of general government, non profit organisations, private
households etc (Govindan and Al-Ansari, 2019, p. 659). In UK, the three identified sectors
wherein a business can operate effectively are as follows;
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 Private sector: The sector that involves large number of private companies is said to
private sector. In case with Sylvan Carpet Fashion, it can operate in private sector in UK
as it is a business that is managed by an individual person.
 Public sector: The sector in which major decisions are created and implemented by
government is said to public sector.
 Joint sector: The sector that involves activities that works as private company and
follows decision making of government is said to joint sector (Kandachar and Halme,
2017).
These sectors plays crucial role in contribution values to economy of UK. The differences in
these business sectors are as follows:
Basis of
differentiation
Private sector Public sector Joint sector
Meaning Private sector is
defined as section of
economy that is
owned, controlled and
managed by private
individuals and
organisations.
Public sector is that
section that is
completely under
control of political
system of nations
whether central, state
and local.
Joint sector is said to
section which is
combination of
private along with
public companies to
serve the nation via
different aspects.
Objective In organisation which
operates in private
sector has objective of
making large profits,
meeting customer
needs and establishing
sustainable position.
Business operating in
public sector works
with objective of
meeting social
obligations or serving
citizens of nation
(Sethi, Martell and
Demir, 2016).
Organisation which
operates in joint
sector aims to attain
objective of profit
making together with
meting social, cultural
etc obligations.
Serving areas Private sector services
areas related to
Construction, retail,
telecommunication,
The key areas that are
served by organisation
in public sector are
mining, police, health,
The major areas that
are served by
businesses within
joint sector includes
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Finance,
Pharmaceuticals,
information
technology etc.
insurance, banking,
transport, education,
agriculture, army,
manufacturing etc.
airline, housing, petro
chemical, transport,
infrastructure and
energy.
Raises money from The main sources of
business operating in
private sector to raise
money are issuing
shares, attracting
venture capitalist,
taking loans and
debentures
(McRobbie, 2018).
Companies operating
within public sector
raises monetary
resources from public
revenues like penalty,
tax and duty, issuing
shares to public etc.
The sources for
raising money
available with entities
in joint sector are
businesses loans,
customers, vendors,
tax incrementing
financing etc.
From the identified and differentiated business sectors, Sylvan Carpet Fashion operates in
private sector. The start up will contribute its values through employing people and sharing
innovations in UK’s online retail industry which improve economic situation of the nation.
Private sector plays crucial role in valuing UK’s economy as it majorly contributes towards
national income as well as is principal job creator in the economy. The sector delivers critical
commodities and services, makes tax revenues along with efficient capital flow (Brook, O’Brien
and Taylor, 2020). It has been increasingly assisting in leveraging opportunities, mitigating
challenges with the hope of valuing economy.
Public sector in UK has been performing significant roles in generating income within
the economy. Along with this, the sector has made huge investments in infrastructural facilities
that has resulted in developing the economy as maximum as possible. Investments in
transportation, communication, education, technical training etc has paved path for industrial
together with agricultural development of the nation valuing towards entire economic
development as whole (Lang, Ammann and Girod, 2016). Moreover, public sector has
successfully build strong industrial base in UK which has strengthened development of various
fields including heavy engineering, chemical, iron and steel, natural gas etc.
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In UK economy, joint sector has huge values as it develops addition to maintain
infrastructural services for the citizens. Furthermore, the sector addresses inefficiencies in
regional and local economy along with promote community development through helping small
businesses to expand and meet population demands for specific products (France, 2016). The
sector also attracts huge investment in the nation’s economy.
QUESTION THREE
Identification of two HR policies and their importance to modern workplace
Human resource policies refer to set of practices along with processes which are adopted for
managing interactions among superiors and subordinates. It is important for all businesses to
have human resources policies as they are required by law. Operation a company with human
resource policies creates favourable environment for employees to work in modern workplace. In
context to Sylvan Carpet Fashion, HR policies are important for protecting the business against
liabilities including claims related to unfair employment practices and many more. It also
prohibits any discrimination in modern workplace between employees on the basis of race,
gender, caste and other non working factors. According to Cheese and Hills (2016) it has been
identified that HR policies are significant in modern workplace for improving job satisfaction
among employees and building confidence within them to perform any type of workings.
Following are some identified HR policies that entrepreneur of Sylvan Carpet Fashion focuses
on to implement in the modern workplace:
Health and safety policy: One of HR policy which assist organisation to take all rational
practicable steps for ensuring heath, safety together with well being for employees at workplace.
it is paramount for well being of all staff members and protect them against hazards, incidents
and dangerous activities. In modern workplace of Sylvan Carpet Fashion, the important of health
and safety policy is to prevent illness addition to injury to any person while performing
organisational practices. The procedures and safety regimes defined in the policy helps managers
and employees to understand about potential risks and hazards in working environment and
report immediately to superiors. Moreover, the policy is also important as it helps in eliminating
serious consequences through following guidelines in modern work environment (Ricci and Et.
Al., 2016). It is also identified that the policy reduces number of occurrences of potential hazards
that can occur due to improper equipment handling, use of dangerous gases and so on which can
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lead to dangerous revelation at work premise. Training to employees about usage of tools,
managing situations and updating managers for unsafe conditions are key of the policy which
greatly influences activities towards improving efficiency, productivity, profitability etc among
employees while implementing it properly.
Equality and diversity policy: Equality and diversity at modern workplaces means huge
things. Its all about respecting manpower for individual race, cultural background, skills, beliefs,
gender, age, sexual orientation and so forth. With equality and diversity policy, entrepreneur of
Sylvan Carpet Fashion hire people from different background which widens thinking capabilities
and ranges at work place. When there are bunch of people in company them the ideas of each are
stimulated through allowing them to share unique ideas for particular situation. In modern
workplace of company, equality and diversity policy is important for encouraging equality and
creating an environment in which understanding are promoted and reasonable adjustments are
defined. As per statements of Klein (2016) it has been perceived that the policy helps business to
develop with innovate ideas and unique thinking capabilities, changing face of it, reaching more
number of customers, attracting talents and empowering the existing workforce (Klein, 2016, p.
150). Moreover, having diversified people at workplace is important for business to sell
commodities internationally along with provides increased customer support.
With HR policies like Health and safety policy and Equality and diversity policy,
entrepreneur of Sylvan Carpet Fashion can gain confidence of its workforce and make the brand
a diversified one that has people from different background, experiences, culture and so on. In
modern workplace, these both policies are crucially important for retaining employees and
making the business to achieve sustainable competitive advantages.
CONCLUSION
The above report concludes that business begins with an idea or concept and as per its
nature, extensive research is required for determining that turning the concept or idea into
business will be feasible as well as deliver expected values to customers. The legal structures
which can be adopted by a start up business includes CIC, PLC, Registerd Charity and LTD.
Raising finance requires careful planning in which entrepreneur of small business needs to
decide proportion of finance required, source of finance, etc. Sources of finance that are
available with business start-ups are angel investors, business loans and family and friends. The
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three sectors in which a business can successfully operate are public, private as well as joint
sector.
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