Business Structure, Finance and Sectors for Car Rental Business

This report outlines a business plan for a car rental service, 'Car on Rent,' designed to thrive in the UK post-COVID-19. It begins with an introduction to the business idea, emphasizing its relevance in the current pandemic context and the UK government's economic support. The main body delves into the legal statuses of businesses (private limited company, limited company, registered charity), evaluating their strengths and weaknesses in the context of the car rental business. It then explores various financial sources, including government-backed schemes, savings, friends, and bank loans, assessing their suitability. The report also identifies key sectors within the UK economy where the business can operate. The report also analyzes HR policies, and concludes by summarizing the key findings and providing references.

The Structure of
Business

Table of Contents
Table of Contents.............................................................................................................................2
Introduction......................................................................................................................................1
Main Body.......................................................................................................................................1
Question One:.........................................................................................................................1
a) The various legal statuses of the business and the relative strength and weakness of the
statuses....................................................................................................................................1
b) The business idea, its strength and weakness of the different sources of the finance
available to the business start-up............................................................................................7
Question Two: The different sectors within the UK economy within which a business can
operate. There are three area where business can work in fruitful way that are, associated as
under:....................................................................................................................................10
Question Three: The different HR policies..........................................................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

Introduction
The present report initiates to design a business idea for encouraging growth and
development in the current pandemic of COVID 19, as the government of UK has mounted one
of the most aggressive economic response to the Covid 19 pandemic, pledging billion of pound
to support the business and the start ups via the crises. The government of UK has pledged the
equivalent of around 8.5 percent of the GDP towards fighting the crises. Therefore, the major
spending is going towards supporting the businesses for managing the stability of economy. In
this present study, the idea of business plan is based over setting up a business of rental car
facility for people in UK with the name of the business “Car on Rent” for providing effective and
safe driving facilities to the people (Lewandowski, 2016). As the pandemic has affected the
normal routine of people as they are having fear of going out and be a part of a crowed and in
this situation the individual car facility with full safety measures of COVID 19 has provide
relaxation to the people. Therefore, the idea is also effective to contributing a lot in the economic
development of the country.
Main Body
Question One:
a) The various legal statuses of the business and the relative strength and weakness of the
statuses.
Business works under different legal status and acts as per the legal norms, the suitable
legal status of the business which are effectively be implement by the businesses are categorised
among private limited company, limited company, registered charity and so on, therefore, the
suitable evaluation of the legal status are associated as under (Steingold and Steingold, 2019).
Basis Description Characteristics Framework Strength Weakness
Private
Limited
Compa
ny
(PLC)
A private
limited
company is
the business
which is
effectively
owned by the
The key
characteristics
of private
limited
company are
the limitation of
The company is
mainly following
the structure
where the
operations held
under the
guidance of
The key advantage
of private limited
company is the no
minimum capital
which is needed to
form a private
limited business. a
The key
disadvantage of
PLC business is
which it restricts
the transfer
ability of shares
through its
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non-
governmenta
l businesses
or the
relatively
small number
of
shareholders
or the
members of
the business.
A private
limited
company
does not
offer or trade
its share to
the general
public over
the stock
exchange,
but rather the
private stock
of the
business is
owned and
traded. The
private
limited
business is a
legal entity
membership.
The paid capital
is less in this as
the company
needs around
1lakh rupees
paid up capital
to start the
business.
director and the
structure is based
on owner and the
employees of the
business.
private limited
business can be
registered through
a mere sum of
rupees 10000 as a
total authorized
share capital.
articles and the
number of
shareholders in
any case cannot
exceed to 50
people.
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within its
own right,
allowing the
organisations
owner to
keep their
assets
separate
through the
originations
itself (Cole,
2018). The
companies
act 2013,
mainly
allows the
incorporation
for the
shareholders
and members
of the
assorted type
of business
with varying
the level of
liability.
Private
limited
company
encompasses
over different
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types i.e.
company
limited by
share,
company
limited by
guarantee,
unlimited
business. The
business
“Car On
Rent” relay
under the
legal status
of private
limited
company, as
it is
completely
owned by the
single owner
and works
for the
intention to
increasing
the
profitability
via rendering
the effective
facility to the
people.
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Limited
compan
y
(LTD)
The limited
business is
the most
common
legal form
which is uses
for running a
business.
This
represents
that the
business can
operate and
enter within
the contracts
in its own
name. Under
the
company’s
act 2006, a
business is
needed to
have two
constitutional
documents
like a
memorandu
m and
articles of
association.
A limited
The key
characteristics
of the limited
are that it has
separate legal
existence as the
company has its
own existence
then its owner.
There is high
flexibility in
management
and operations
flexibility as the
operations of
the businesses
running
systematically
with the
assistance of
management.
There is high
paid up capital
incurred in
more than 1lakh
the business and
the profitability
of business is
high.
The company
works under the
framework of
authorities,
directors,
management and
the employees,
therefore, suitable
discussion are
taking via the
discussion held
among the
authorities and
director of the
business.
The key strength
of limited
company is that it
is likely to be tax
efficient which is
compared to a sole
trader or that is
one of the many
aspects its popular
business model.
Another benefit of
limited company is
that it has separate
entity from its
owner.
The major
demerit of
limited business
is that, it
incorporates at
the business
house and the
business needs
to pay an
incorporation
fee to the
business house
for executing
operations.
Business names
are subjected to
some
restrictions like
an individual is
not setting up a
business who is
bankrupt or the
disqualified
director.
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business is
effectively
owned by the
people who
are invested
in the
business.
Registe
red
Charity
The
charitable
business is
defined as
the aspect
under that
charities can
now be set
up and to that
existing
charitable
business or
trusts can
convert. The
charitable
business will
have to be
limited
through the
guarantees
rather than
the shares
when the
business
A charitable
business needs
to be
institutionalized
and registered,
and needs to
have well
defined
program
objectives as
well as rules
and regulations
of governance.
This type of
businesses does
not distribute
profit.
The charitable
follows the
business structure
where board of
directors, staff
and the operations
department are
involve in the
framework of the
business.
Therefore, there
is no senior
available as
individual work
for the zeal of
social work not
for the intention
to gain
profitability.
Charities are
effectively termed
as the available for
the social
purposes; this can
assist with fund
raising (Xi, J.M
and et. al., 2015).
The charitable
trust can be tax
benefits.
A business with
charitable status
cannot implement
assets for any
reasons other than
the chase of the
charitable goals.
The major
disadvantage is
related with the
restrictions
arises that are
arises in
carrying the
funds.
Charity law
impose high
standards of
regulations and
the bureaucracy.
In this, political,
trading and
campaigning
activities are
restricted.
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registers. The
charities act
2011
determined
assorted
areas of
activities that
may be
charitable.
b) The business idea, its strength and weakness of the different sources of the finance available
to the business start-up.
The business idea is based over starting up a business in rendering rental car facilities for
the people in UK. The company was setting up with the name of “Car on Rent”, therefore, this is
an effective idea and progressive plan which helps an individual in gaining profitability
(Aguilera and et. al., 2020). The company will provide online booking and payment facilities to
the people and also ensuring about providing safety and security measures related to COVID 19.
However, the plan is effective in terms of providing benefit to the business and also contributing
in the economic development via increasing the employment opportunity and safe environment
to the people to have a safe journey. For setting up business, there are assorted ways by that, the
owner can arrange the funds, therefore, the description of investment sources is associated as
under:
Basis Description Strength Weakness
Government
Backed
Schemes:
Businesses up to 24
months old can
implement for a
government backed
individual star up loan
of around £25,000. As
through entire loan
applications individual
The key strength of this is
that, these are available in
less interest rate or there is
no need to provide the
fund back to the
government.
The key weakness of
such funds is that, some
time businesses may face
loss and this can occurs
issue in wastage of funds.
7

will be credit checked.
The loan can be
implemented for the
most start t-up costs or
cannot be implement
training or debt
repayment.
Savings and
Friends:
At the time of
commencing the new
organisation, very often
the initial fund invested
will come through the
person’s personal
savings. The tendency of
the organisation starts
ups to approach relatives
or friends to aid finance
the ventures is also a
widespread practice.
This is the sort of
primary income which is
effectively be implement
by the business owners
at the starting of the
business.
 The key strength
of this sort of
finance is that,
these are easily
flexible and the
arrangement of
this sort of money
is easy (Cosenz,
Rodrigues and
Rosati, 2020).
 Less and no
Interest fund.
 The money will
alter the
interrelationship
when it is in debt
to the family
member, they
may feel
responsible to
exert control over
the life.
 limited legal
protection.
Bank loans
and
Overdrafts:
The primary port of call
which most individual
think in relation to when
trying to obtain finance
is their own bank.
Therefore, banks are
 The strength of
over draft is that it
is highly flexible
and can alter the
range borrowed
within limits.
 The key weakness
of overdraft is that
it cannot be
implemented for
the large
borrowing.
8

very active within the
market and seek out
organisation to which
they can assist money.
Over drafts are very
elastic ways of finance
that, with a healthy
income within the
business, can be paid off
more effectively than a
formal loan.
 The benefit of loan
is that it is an
effective process
that can help in
borrowing large
amount.
 There is less
flexibility in the
arrangement of
loan as it requires
lots of paper
work.
The business starts up of “Car on Rent” is concern over implementing government backed
schemes, savings and friends as these two are effective in managing funds and capital for the
business to assisting the operations in effective manner. The government backed scheme is the
scheme which is offered by the UK government to the entrepreneur who is having successful
business and is increasing employment within the country. In addition to this, savings and friends
support also helps the business to arrange the money and assisting the operations in effective
manner.
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