Business Report: Frameworks, Finance, Sectors, and HR Policies

This report delves into the core aspects of business operations within the UK economy, analyzing various business frameworks and legal statuses, evaluating different sources of finance available for start-ups, and examining three key sectors operating within the UK economy, alongside their contributions. The report further identifies and discusses the significance of two essential HR policies in the modern workplace. The analysis covers the strengths and weaknesses of different business types, pros and cons of various funding options, and the distinctions and value of primary, secondary, and tertiary sectors within the UK. The report emphasizes the importance of sound financial planning, the impact of sector dynamics on the economy, and the role of effective HR policies in fostering a productive work environment. The report concludes by summarizing the key findings and insights related to these crucial business elements.

Of Business

Contents
INTRODUCTION.......................................................................................................................................3
QUESTION 1..............................................................................................................................................3
Types of frameworks or legal statuses of the business together with its strength and weakness..............3
Evaluation of various sources of finance that is available for business start- up together with its pros
and cons...................................................................................................................................................9
QUESTION 2............................................................................................................................................10
Three different types of sectors which operate within the UK economy and the difference between all.
Comment on their value in UK economy..............................................................................................10
QUESTION 3............................................................................................................................................12
Identify two HR policies and its importance in modern workplace.......................................................12
CONCLUSION.........................................................................................................................................15
REFERENCES..........................................................................................................................................16

INTRODUCTION
The business is regarded as an activity which contributes in making the living of the
individual or making the money by trading or manufacturing the goods or services. It is the
activity which is undertaken with the aim to generate maximum profitability. The business
operates in the environment which influences its working and decision making. It is divided into
two main categories which includes the internal environment that involves those factors which
are within the organization such as employees, resources, vision, mission, etc. while other is
external environment which involves that factors which are beyond the control of the
organization and have major influence on functioning of the companies (Edokpolor and Chukwu,
2017). This report is split into three parts of which first shall cover the types of businesses and
sources of funds, second is types of sectors that affect UK economy and third part shall deal with
human resource policies.
QUESTION 1
Types of frameworks or legal statuses of the business together with its strength and weakness.
The business is usually undertaking such activities which can help the organization to
achieve its objectives. There are various types of businesses which are formed with the particular
momentum that is based on the perceived demand for the offering. Each of the types of business
organizations has different aims but their intention is to grow rapidly by providing such goods or
services to the people which can address the particular gap in the market (Spencer, 2020). There
are various kinds of businesses which are initiated as start-ups that are narrated thereunder-
Types of businesses Legal statuses of
businesses
Strength Weakness
Public
organizations:
These are those
businesses which
are owned and
There are mainly three
types of public
organizations which
includes the following-
 Central: These are
 The main
advantage of
this it has
autonomy
where it
 The
weakness of
these
businesses is
that there is

controlled by the
government with a
sole motive of
doing welfare of the
society. Their
purpose is not to
generate profits
rather they only
works to do welfare
for the society by
fulfilling the
demand of the
people.
owned managed
and controlled by
the central
government and its
working is spread
in whole of the
country.
 State: These are
also owned and
managed by the
central government
but its functioning
is in a particular
state.
 Local: These are
those organizations
which are managed,
controlled and
owned by the local
authorities of
government and its
working is only in
particular local area
of the state
(Plotnikov and
Plotnikova, 2019).
enjoys
flexibility
and
independence
in the
operations.
 The public
organizations
can
formulate
such policies
which
promotes the
welfare of
people as
these are
subject to
parliamentar
y scrutiny.
high level of
political
interference
and has to act
in accordance
with the
political
masters.
 There are
many
instances
when the
interest of
consumers is
ignored by
these
corporations
as they
operate in
monopolies
and absence
of
competition
can result in
lethargic
functioning
which can
reduce the
focus on
consumers,
thereby

resulting in
ignoring
customer
interest.
Private
organizations:
These are such
businesses which
are owned and
managed by the
private individuals
and have a sole aim
of generating
maximum
profitability.
Sole proprietorship: These
are those organizations
which are owned by single
individual and the owner
has only all responsibilities
and powers to run the
business.
 The major
strength of
this
organization
is that there
is sole
control and
management
of the owner
and no
interference
of third
person.
 The sole
trader is
liable only to
pay the
personal
income tax
on profits
which is
earned by
firm.
 The biggest
weakness of
this business
venture is
that there is
personal
liability of
the owner for
any debt or
liability of
owner.
 This business
usually gets
ended by the
departure or
death of
owner as the
business is
not separate
legal entity.
Partnership: It is that
business which is owned
and managed by two or
more persons who are
 There is
ahring of
responsibility
and decision
 Each partner
is liable for
the liability
and debt of

known as partners. They
mutually share all
responsibility, profits,
capital and losses.
making
among the
partners as
per their
knowledge
and
expertise.
 There is split
of income
which helps
in getting
advantage of
tax savings
(Ninosheva,
2020).
all partners
and firm as
there is joint
liability of
all.
 There is
unlimited
personal
liability of all
the partners
for the firm.
Limited liability
partnership: This is the
extended version of
partnership but there is
limited liability of the
partners. It is the separate
legal entity distinct from
partners.
 There is
limited
liability of
partners only
to the extent
of their
capital
contribution
and the
personal
asset of
partners is
given
protection
from
liability.
 In this, one
partner may
get more
rights so
there is no
one vote per
one share
system.
 There are
high
penalties for
non-
compliance
as compared
to private
companies

 It is easier to
run as
compared to
private
companies
and has easy
procedure to
wind up.
Companies: These are the
separate entities distinct
from owners and are
known as artificial
personalities where they
have power to sue and be
sued by anyone. It is
mainly of two types, public
company is when it is
owned by general public
by way of initiating share
capital by subscription of
shares where shareholders
are owners. Second is
private company that is
owned by private
individuals (Miglietta and
et. al., 2018).
 There is
limited
liability of
owners to the
extent of
their share in
the business
only and no
personal
liability
arises.
 The company
has perpetual
succession
which means
that owner
may come
and go but
company
shall go on
forever.
 There is lack
of secrecy in
the business
as their
working is
subject to
public
disclosure.
 There is
several legal
requirements
which are
required to
be fulfilled
which
consumers
more effort
and time.
Voluntary
organizations:
These are mainly of two
types which includes the
 There is
public trust
 There is
more time

These are non-profit
organizations which
are managed by the
staff called as
volunteers. They
only get the
expenses which
incurred while
working.
following-
 Associations:
These are governed
by the legal
document, known
as Constitution
which provides its
objectives,
structure,
memberships and
powers.
 Trust: It is
governed by the
trust deed which
provides objectives
of it together with
trustee’s names.
and
recognition
which helps
in carrying
on social
cause in easy
manner.
 They are
given relief
from the
taxes also.
commitment
while
working in
this.
 The aim of
this
organization
is only to do
social work
and not
generating
profits so it
lacks
economies of
scale
(Uzuegbuna
m and et. al.,
2017).
Charitable
organizations:
These are also non-
profit ventures
which must be
registered in order
to claim the
charitable status
from government.
These work for
specific interest and
has paid staff.
 Unincorporated
associations: It is
the membership
association where
members choose
which activity they
want to carry on. It
is aimed to do work
for public benefit.
 Charitable trust:
These are run by
small group who
are called trustees
 It is aimed
for the social
cause which
gets public
trust in
return.
 They cannot
use the
assets for
other
purpose can
only use for
charitable
 They are
dependent on
charities for
their funds
in order to
carry out its
activities.
 They are
required to
comply with
many
regulatory
requirements

and they are
appointed rather
than elected and is
not incorporated.
objectives. which
include
accounts and
returns
preparation.
Evaluation of various sources of finance that is available for business start- up together with its
pros and cons.
There are many sources of funds which can help the new start-ups in UK to work. These
are discussed below-
 Venture capital: It is that mechanism where the investors are aimed to support the
entrepreneurial talent by providing the business skills and finance so that they can obtain
capital gains in long run by exploitation of market opportunities (Schmidt, Bendig and
Brettel, 2018).
Strength
It provides the opportunity to business to grow
and expand as the investors are ready to take
risk as they are firm believers of company’s
success.
Weakness
As the venture capitalist provides huge funds
for start-up, they take the equity of company in
return so when the business flourishes, the
profits are divided. They become the part of
Board
 Bank loans: This is the foremost option for the entrepreneurs when starting up the firm
as the banks are active in market and seeks the businesses in order to lend them money.
These are the fixed term loans which require regular payments and are provided at the
fixed interest rate.
Strength
The best thing of raising finance from bank
loan is that it does not provide any set of rules
which dictates the terms to spend the money.
The entrepreneur is free to spend the money in
Weakness
This not flexible as the entrepreneur is required
to pay the interest on the amount which it is
not using and in case, there is any issue in cash
flow during initial days, the banks still require

business as per its own wish. their monthly installments.
 Angel investors: These are the high worth individuals which have the extensive
experience in business. They provide the early capital in business and in exchange of it,
they require equity in business. They may act as mentors as they share their connections
and experience to propel start-up growth (Huang, Rust and Maksimovic, 2019).
Strength
The angle investor not only provides funds to
start-ups but also hare their experience and
guide the entrepreneurs towards growth. They
usually take part in decision making.
Weakness
Although, there is necessary guidance being
provided by angel investors, but it may lead to
more control of angel investor in business at
excessive amount. This may affect the
relationship between entrepreneur and investor
due to too much involvement.
QUESTION 2
Three different types of sectors which operate within the UK economy and the difference
between all. Comment on their value in UK economy.
The economy of the business is usually divided into various sectors and the businesses
exist in these in order to provide the product or service. The businesses are engaged in having
outputs and inputs and it must add value to it at the time of production. In the United Kingdom
economy, there are three types of sectors wherein the venture operates. They all form the chain
of production that provides the customers with the final goods and services. These are narrated
thereunder-
 Primary sector- It is also called as extraction sector as it involves the raw materials.
These may include two kinds of resources such as renewable which involve the wool,
fish or wind power and the non- renewable resources like mining for coals, oil extraction,
etc. It generally includes acquiring raw materials. Earlier, there were millions of people
employed in this sector in UK but the advancement in technology declined this sector.

For example, the businesses which operate in this sector includes farming, fishing,
mining or oil.
 Secondary sector- This is involves in manufacturing of the products and distributing the
finished goods. It usually takes the raw materials and convert them into the high valued
1finished offering. At initial level, this sector was based on the labour intensive working
but with the development of technology, the work of man- made shifted to machinery
work. This provided ample amount of benefit to the economy as the cost of production
reduced and the productivity of workers enhanced. For example, Jaguar works in this
sector as it is involved in manufacturing or any building or food production business
(Wang, Ang and Su, 2017).
 Tertiary sector- It is also known as the service sector as it involves in intangible aspect of
the offering to the customers and businesses. It includes the retail, leisure, finance,
hospitality, transportation, communication and many other services. This sector has seen
the growth when the labour productivity increased in UK by upcoming technologies
which resulted in high disposable income. This enabled high purchasing and spending
power of people where they were able spend on luxury services like tourism and
hospitality. For example, Hilton Hotel, Tesco Plc, Barclays Banks, etc. are all examples
of this sector.
Basis Primary Secondary Tertiary
Meaning It involves extracting
raw materials.
It involves converting
raw materials into
finished goods.
It involves the
services such as
leisure, hospitality,
financial, etc.
Working It uses traditional
techniques of working
and is unorganized.
It uses the more
reliable production
methods and is the
organized sector.
It uses the method of
modern day logistics
in order to execute its
functions and is
organized fully.
Employment rates The minimum or low
proportion of
population is engaged
This has average
amount of
employment as its
The major percentage
of population in UK is
involved in this sector

in this sector as
machineries have
taken jobs from this
sector.
employment rate
tends to declined due
to coming of
technologies in
manufacturing units.
as it has high growth
opportunities
(FARSTAD, 2019)
Value in UK economy:
UK is considered as the sixth largest economy in the world as the quality of life in this
sector is high and the economy is also diversified. The main sectors which contribute to the UK
economy are service, construction, manufacturing and the tourism. The tertiary sector contributes
majorly to the GDP of UK which consists of various industries like retail, finance, entertainment
and many others. As per the UK Office for National Statistics, the tertiary sector of UK is the
largest one which accounts for more than three quarters in UK. The secondary sector contributes
mainly less than 17.41% while the primary sector contributes only 0.61% (Statista, 2021).
As in 2020, the distribution of workforce in UK across the sectors was approximately
81.34% in service sector, 17.66% in manufacturing sector while only 1.01% in primary sector
(Statista, 2021). This shows that the service sector in UK contributes to its economy majorly and
adds value to its GDP.
QUESTION 3
Identify two HR policies and its importance in modern workplace.
The Human resource management is an essential part of the workplace as it helps in
managing the employees in an effective manner. The policies of HR are the written description
of the rights and responsibilities of both employee and employer. There are many HR policies
which are required by the law to be made at the workforce so that their rights are protected. This
must be communicated to each employees and the expectation of employers must be clarified to
the workforce so that there is smooth functioning. Two HR policies are illustrated below-

 Equality and Diversity policies- It is very important for the businesses to have such
policy so that it can manage the employees which come from different perspectives,
cultures and backgorunds.it is very important for the employer to be inclusive and diverse
so that ut can fulfil its responsibility to make the difference for the people. the Equality
Act of 2010 provides that there must not be any kinds of discrimination or ill-treatment at
the workplace and every individual must be given equal and fair chance or opportunity to
work. In order to adhere with this legislation, it is important for the organizations to have
this policy so that the employees get fair and equal working environment to work in. this
policy helps in preventing the discrimination from workplace and is aimed to bring
equality and fairness so that the employees can feel valued and happy while working in
the organization (Kaul, 2020). By drawing this HR policy, the organization can seek to
remove the unnecessary barriers which may come while seeking any opportunity by
promotion, training and development and the career planning. Hence, it can be said that
each organization must have the equality and diversity policy in its working so that the
employees are managed by HR in an efficient manner and this will contribute in
enhancing the performance and productivity of the workforce.
 Health and safety- This policy is required to be written down by every organization who
have more than five number of workforce. It is aimed to protect the people associated
with the business such as employers, employees, visitors and the customers. The Health
and Safety at Workplace Act, 1974 places the overriding duties on both employer and
employee where the employer is required to take necessary steps in order to protect the
safety and wellbeing of the employees while the workforce is required to take measures
which can protect itself from any harm or danger. It sets out the general approach relating
to health and safety and explain the ways in which the employer must manage the H%S
of the employees. This policy helps in explaining the duties of both employer and
employee in managing the safety of all at workplace. This is the legal requirement for
every organization and not the matter of choice. The main reason for this policy is to
clarify and reinforce the standards which are expected by the employees it demonstrates
how the companies can operate appropriately and efficiently. It helps in ensuring
consistency in the decision making (Moussiopoulos, 2017). It is the legal as well as moral
requirement for workplaces at this modern time to have the workplace health and safety

policy in their organization so that prior risk and hazardous activities are identified and
measures are taken to eliminate or reduce them. This also helps in making the employees
feel safe which ultimately contributes in reduced staff turnover and retaining of the loyal
employees.

CONCLUSION
It is concluded from this report that the business organizations are aimed to work with
only two purposes which includes to generate maximum profits and do something for the welfare
of the society. The businesses only helps in generating revenues but also helps in uplifting the
economy as it contributes in providing employment to the people and also raise the standard of
living of the people. There are various types of business organizations such as private, public,
charitable and voluntary which has their own legal statuses. These have their own strength and
weaknesses and before starting up the enterprise, the entrepreneur must look into its strength and
weakness. Moreover, there are many sources of finances for businesses which include angel
investor, bank loans and venture capitals. Further, it is added that there are three types of sectors
which contribute to the economy that includes primary, secondary and tertiary and put of all, the
service sector contributes majorly to the GDP of the UK. The HR policies must be present in
every organization such as equality and diversity, Health and safety so that the workforce is
managed effectively and they feel valued and happy while working.

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Statista, 2021 [Online] Available Through
<https://www.statista.com/statistics/270382/distribution-of-the-workforce-across-
economic-sectors-in-the-united-kingdom/>
Statista, 2021 [Online] Available Through
<https://www.statista.com/statistics/270372/distribution-of-gdp-across-economic-sectors-
in-the-united-kingdom/>