IOM Ltd: Restructuring Business, Legal Outcomes and Suggestions

This report examines the case of IOM Ltd, focusing on Sam's desire to reorganize the company's structure. It explores various business organization types including sole proprietorship, partnership, cooperation, and limited liability, detailing their merits, demerits, and legal consequences. The report suggests that IOM Ltd. should consider a partnership to enhance efficiency and effectiveness, sharing responsibilities and mitigating operational risks. The analysis emphasizes the importance of understanding business law in forming and operating a business, referencing various sources on UK business regulations and company law.

Individual Report
INTRODUCTION
Business law is a regulatory body that governs the business corporations in order to
ensure smooth functioning of the business operations . It is a set of rules and regulations which
are obligatory on the part of every business organisation. It encompasses all the legislations that
administer the formation of the business and how to run the business. It is also known as
mercantile law or commercial law. It also supervise Trading activities , buying and selling of
goods and services. The business law also manages the dealings between the individuals in
commercial relations. Every person who is engaged in the reciprocation of business related
Activities must acknowledge the said rules which are being laid down by the law to ensure fair
and transparency In the business. This Report covers the study of IOM Ltd which is a company
that is engaged in selling different electrical parts to the local garages. It explains different types
of business organisation Available to IOM Limited company for the purpose of restructuring the
business. It also covers various legal outcomes of The above mentioned business organisation.
Further It discusses certain suggestions or recommendations for the business in terms of
identifying best suited business organisation for Sam.

MAIN BODY
Different types of businesses available for the reorganising the company
From last two years I OM solutions Ltd has experienced growth and development in the
market. The fast growing business led to Increase in demand of the consumers which has created
a pressure Over Sam who is a sole trader. To meet the growing demand, Sam needs to expand
the business by getting it re-organised. For restructuring the business Sam is searching for
different types of business organisations which are available for the company, IOM solution. In
present scenario the companies in the national as well as international market faces stiff
competition in order to reach to the desired level. For which it is important to choose a suitable
business type for the company so that the business could run in an efficient and effective manner.
This will help Sam to reduce the burden of work and to include more individuals in the business
so as to meet the required demand. Various types of business options available to Sam are as
follows-
Sole trader- It is a type of business which is run by a single owner which means the decisions of
the business is solely taken by the individual who is engaged in Sole trading. The existence of
the business is totally dependent upon the owner. That is there is no separate legal identity of the
business other than its owner. This type of business includes low-cost and is preferred by the
small business enterprises. The income which is earned by the owner is taxable as it is the only
or single source of financial income for the business person. Sam is engaged in this type of
business for the company IOM solution. The profit earning of the business belongs to the owner
itself and there is no regulation in this form of business. It is a flexible business type if compared
with the other forms of businesses .
Partnership- Partnership is another type of business organisation which is based on a written
agreement between two or more persons who run a firm together. The formation of this type of
business can be done by two or more people Who enter into an agreement consists of certain
conditions and rules to run the particular business enterprise. The liabilities and the profits are
clearly stated in the agreement. It is obligatory on the part of the partners to fulfil their
responsibility in in terms of sharing losses and profits of the company equally. General

partnership and limited partnership are the two forms of this type of business. General
partnership means when the partners are accountable for the losses debts and responsibilities of a
company. Whereas, Limited partnership means the partners are only allowed to make
investments and they have no additional liabilities against any losses or loan repayment and
debts. Sam can use this Corporate structure for IOM solutions because it will help them to access
more funding and share accountability. It will also assist Sam in reducing the workload with the
growth of the business.
Limited liability- It is a type of business in which the proprietor has limited liability as well as a
financial benefit. It offers a number of advantages to business owners including restricted
liability for losses and debts as well as profit sharing by avoiding the process of double taxation.
Double taxation system is a process in which the partners are taxed in the name of the company
as well as their partnership. As the name suggest itself that the liability of the Individuals is
limited. It bifurcates the partners from the obligations of the company in the name of liability.
Sam who is a sole trader Can use this type of business since it let them to segregate its personal
identity from the firm. It will also help in the effective management of the business by limiting
the liability. It enables business organisation to attract other partners who may share work
responsibilities by reducing the extra burden. It also ensures the expansion of business enterprise
in the market.
Cooperation- It is a separate legal entity that assist individuals in generating profit for the firm.
It is a structure in which a business corporation develops independently of its owners personal
liability. The individuals can enjoy various rights and responsibilities that a company posses such
as payment of taxes hiring the staff and owning the assets. It is a form of a business that is
governed by state regulations which provides a wide framework of rules and regulations like
double taxation system on the people involved in this type of business. Sam can choose this type
of business for the company IOM Ltd because it helps in restricting the liabilities of the owners.
Profit and loss of the business are associated with the company. This makes the process of
transferring the business easier In which the owner’s personal earnings As well as the assets are
not used for recovering the business debts.

Legal consequences involved in the various business entities
Law and its related proportions are included in the structure of business organizations
with certain repercussions of many forms of businesses. One of the most important
responsibilities of a company’s administration is to assess all of the significant legal implications
while forming any business or a corporate entity. There are basically two forms of business
organizations in the UK, namely incorporated and unincorporated. The unincorporated firms can
be defined as the business structure that are not subjected any kind of state regulations. The
organizations that are being constituted without any legal procedures are said to be included in
the this kind of businesses that is unincorporated commercial corporations. For ensuring a
smooth functioning of the company the unincorporated firm must obey all the rules laid down by
the governing authority. The most common types of businesses that fall under the category of
unincorporated business are sole trading and partnerships. Considering efficient techniques of
generating vital approach that is advantageous in the construction of a legal framework is one of
the primary roles of the business organization. Unincorporated firms can be formed easily and
have fewer legal requirements. It includes both public and private companies.
The private companies are those which use’ private limited’ at the end of its name. The shares
of these type of companies are not available for the general public. For building a strong business
structure it includes minimal or no governmental intrusion. In the past few years many people
have focused in creating the private business corporations to undertake various forms of legal
procedure.
Public companies are those which use public limited at the end of its name. The shares of the
public companies are available for the public at large. Public limited enterprises are governed by
the government in the United Kingdom with full force. Two or more than two directors are
required for the formation of a public limited company. Memorandum of association ,articles of
association and the Automated signature of the proprietor are among the documents that are
required to incorporate public corporations. The administration of public organisation is complex
in nature and comprises More operations than in private organisations. Government authorities,
integrated finances, tax generation from public and other sources acts as Financial supply for
public companies. Public corporations also helps in employment generation and enhancing GDP

of the country.
Sole trader- this type of business is operated by a single individual. There are minimum or less
legal procedures associated with sole trading. The owner itself is responsible for all the legal and
social aspects of the business. The owner is required to utilise the INHRC number in order to
register their firm. The financial arrangement is done by the owner’s relatives and friends in this
form of business. One of the fundamental roles of a business is to focus on the Legal rules and
regulations while constituting a business organisation. In order to function in a lawful Manner,
maximum companies focus on establishing a resilient legal structure.
Partnership- This type of business involves an agreement between two or more individual that
is partnership agreement. Accordingly it requires more legal formalities As compared to any
other business time. The business organisations that used to run their business under this form of
business structure must adopt flexible legal structure Which can be easily understood by the
partners. The legal framework of a corporation plays a vital role in determining substantial
advantages for its growth and development.
Suggestions for IOM solutions in order to choose the best suitable form of business
It is suggested that IOM solutions should go with the partnership form of business as a
main mode of operation. The responsibilities in this type of business is being shared between the
partners of the firm or a company. The liability is distributed equally among the individuals
which helps to eliminate operational risk. Many national and international business organisation
used to rely on this form of business so as to enhance efficiency and effectiveness in the critical
functioning of the business. So accordingly IOM Ltd should conduct its business activities in
partnership.
CONCLUSION
The above report concludes that business or commercial laws is one of the important
aspects in the formation of the business. This report covers the case study of IOM solutions in
which Sam who is the sole trader of the business wants to re-organise the structure of the

company. It covers different forms of business organisations that can be adopted by a person as
per the requirement and circumstances. It further includes various types of businesses ,namely,
sole trader, partnership, cooperation, limited liability. All these structures have their own merits
and demerits along with the legal consequences.
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