Business Organizations Report: IOM Solutions - Recommendations, UK

This report examines various business organizational structures within the UK context, focusing on the scenario of IOM Solutions, a sole trader business. It explores the nature and management of companies, sources of law, business transactions, and the roles and liabilities of directors. The report details different legal structures, including sole trader, general partnership, limited liability partnership, and limited liability company, outlining their management, taxation, and legal frameworks. It analyzes the advantages and disadvantages of each structure, providing recommendations for IOM Solutions' expansion, emphasizing the suitability of a limited liability company to facilitate growth, attract investment, and provide flexibility. The conclusion summarizes the key findings and reinforces the recommended structure based on the analysis.

Business organizations

Table of Contents
INTRODUCTION...........................................................................................................................3
Business & Organisations in UK................................................................................................3
Legal business structure of companies in UK.............................................................................4
Sole trader...................................................................................................................................4
General Partnership.....................................................................................................................5
Limited Liability Partnership......................................................................................................6
Limited liability company ..........................................................................................................7
Recommendation.........................................................................................................................8
CONCLUSION................................................................................................................................9
REFRENCES.................................................................................................................................10

INTRODUCTION
Organisations plays an integral role in overall growth and development of a nation by
generating several opportunities of employment. It helps to enhance the job opportunities and
significantly contribute in the economic development of country (Buckley, Burton and Mirza,
2016). In the current report different type of forms of organisations are discussed in context of
given scenario. It comprises various business structures such as sole trader, limited liability
partnership, company along with their management, taxation, law and dissolution. Lastly, there
is recommendation have been given to select an appropriate structure as per the given case study
that will help to expand business effectively and earn potential profit margin.
Business & Organisations in UK
There are several business organisations are present in UK that are working in different
areas such as retail, hospitality and more. In context of IOM solution that different information
regarding company is given as under:
Nature and Management of company:
It is analysed that management comprise ample number of members who are responsible
to prepare effective strategies and policies for the betterment of company. Management is made
with several members such as Chief executive officer (CEO) board members, executive and non
executive directors and more. There are different type of structure can be adopt by entities based
on the level of operations (Dimitrova, 2017). It is monitored that IOM solution is operating as
sole trader organisation that is run as well controlled by a single business owner.
Source of laws:
There are ample of laws are followed by manager of IOM solution that helps to meet with
legal constraints in an efficient manner. Here, several legislations & compliances such as
business and employment protection law, Equality Act 2010, Health and safety at work act 1974
and more are followed by organisations in order to run business effectively.
Business transactions of company:
As per the given scenario, it is monitored that IOM solution is owned by a single owner
and deals in electrical parts. They are operating at local levels by providing necessary products to
local garages. In addition, the business has grown overtime in terms of profit as well as number
of employees that is essential to sustain at market place for longer run.

Duties, role and liabilities of directors:
Here, directors are responsible to take appropriate decisions and formulate necessary
policies for growth of company. It is the duty of directors to prepare annual report, business plan
of company (Grandori, 2017). They are liable for the losses incurred in company due to failure of
directors to perform their duties in an efficient manne4r. In addition, they are also liable to
maintain confidentiality in terms of data & information of company and acts in good faith for the
growth and benefit of business.
Memorandum of association ( MOA) & Article of association ( AOA) :
It is an essential document that is prepared at the time of registration of company. It
comprises several information regarding relationship between company and its shareholders,
objectives for which it has been formulate and more. On another side AOA is a document that is
also essential and can be modified by companies as per their requirements. Unlike, MOA there is
no prescribed format is used for this. Responsibility of members, transactions of company,
process to take the decisions and more are included in Article of association of a company.
Legal business structure of companies in UK
Sole trader
Sole trader is a person who initiate a business entity in order to earn higher profit margin.
Here, organisation is operated, managed as well as controlled by a single business owner who is
also responsible to take necessary decisions. In this structure, business owner can take individual
decisions without any interruption of external parties (Korableva and Kalimullina, 2016). There
are several organisations are being operated in UK by individuals owners with an aim to earn
higher profitability.
Management:
Here, whole business is managed by owner who is responsible for outcomes of business
activities. There is no compulsion to consider the suggestions of other persons to formulate
necessary strategies and policies for betterment of organisation. Business owner is liable for
profit and loss of organisation.
Taxation:
There are different rate as well as norms of tax are prevailing within country. Business
trader is required to pay tax on the profit of organisation. It is analysed that there are different tax

slabs are used to determine appropriate tax amount for sole traders. For income up to £37500 tax
rate is 20% while there is 40 % tax is applicable for taxable income more than £ 37500.
Therefore, rate is also fluctuate as per the level of income.
Source of law:
There are several laws, compliances need to abide by single business owner. These are
regulations regarding to safety and security of employees, equality at work place and more
(Kostera and Pirson, 2017). It is essential to follow these regulations in order to operate business
successfully.
Advantages and Disadvantages:
It is analysed that in respective business structure owners has the authority to take
decisions and operate business in desired manner that also minimizes conflicts at work place. On
another side, there is lower opportunities of growth and success as resources also limited due to
single business owner.
General Partnership
Partnership refers to the agreement between two and more person who initiated a
business entity together with an aim to earn profit. For partnership, it is essential to have the
presence of minimum two person having similar goals. All the partners are responsible to
undertake business activities for the betterment of firm.
Management:
Here, ratio of profit as well as loss is predefined by partners while entering into
partnership. In addition, all the decisions are taken with mutual concern of partners (Raff and
Scranton, 2017). They manage firm as per the guidelines mentioned in partnership agreement.
Taxation:
In case of partnership, firm is not taxable rather partners pay taxes on their respective
share in profit and gains. Here, tax is paid only on profits (after deducting expenses) that is
essential for fair calculation of taxable income.
Source of law:
It is analysed that in UK partnership is governed with Partnership act 1890. The
agreement of partnership is also prepared with respect of this act. In addition, profit sharing ratio
and day to day operations of firm is also operated as per the guidelines of Partnership Act. In

addition to this, they are also required to follow general laws related to business, employment
and customer protection and more.
Advantages and Disadvantages:
It is analysed that partnership can be started with limited efforts as well as resources.
Here, different individuals share their knowledge, skills together that is ensure success of firm at
market place (Swarnakar and Vinodh, 2016). There is higher probabilities of conflicts between
partners that may lead business towards dissolution.
Limited Liability Partnership
It refers to a type of partnership in which liability of partners are limited to the extend of
money they put in business. In this case, if firms is unable to pay the debts then creditors can not
approach to the personal assets of partners. It provides higher flexibility thus gaining popularity
nowadays. Here, agreement is prepared to undertake different business activities effectively.
Management:
However, partners have limited liability but they are responsible to perform different
activities of business effectively. All decisions are taken with mutual understanding between
partners. Profit and loss is shared as per the predefined ratio. Here, all partners are individually
responsible for their work due to limited liability in firm.
Taxation:
For tax purpose, LLP is not consider as a single entity thus partners are required to pay
tax on their income from partnership. Members are responsible to pay tax only the income they
earned within UK.
Source of law:
It is governed with the limited liability partnership act 2000 (Young and Ghoshal, 2016).
As per the act, there should be predefined agreement between partners that consists several
information to operate firm in an efficient manner.
Advantages and Disadvantages:
Here, responsibility is shared between partners that is essential to perform different
activities in an efficient manner. In LLP members are only responsible for the amount they have
invested in business. It is analysed that there is lower autonomy in LLP as there decisions are

collectively taken by partners. In addition, there is higher probability of conflicts and ambiguity
at work place due to lack of consensus in partners.
Limited liability company
It is a separate entity that has its own identity apart from members. Company is a separate
entity that can purchase, sale as well as hold assets with own name. In addition, it can sue others
and can be sued by other parties. Here, liability of members are limited upto their investment in
company. Members are not liable to pay the debts of company from their personal assets. It can
be limited by shares and guarantee given by members.
Management:
It comprises directors, managers who are responsible to take the decisions and
formulation of policies. All the functions of a company is governed with article of association.
There are managers appointed in order to take effective decisions for the betterment of company.
In addition, there are several stakeholders included in management team of organisation such as
shareholders, managers, board of directors and more.
Taxation:
It is analysed that LLC pay corporation tax on their profits after deduction of relevant
expenses. In addition, the current rate of tax for LLC in UK is 19 %. Here, tax free allowances
are not included rather company need to pay straights forward 19 % tax over profits. Therefore,
managers are required to analyse the prevailing rate of tax on regular basis in order to make
necessary improvements in current policies.
Source of law:
Formation and regulation of company in UK is governed with Companies Act 2006.
Here, different documents of company such as memorandum and article of association are
prepared with reference of this act. In addition, there are different laws such as consumers
protection, wages act and more are also followed by entities to operate business successfully.
Advantages and Disadvantages:
There are less formalities need to follow in corporation of a company. Here, identity of
company is separate from its members that provide advantage to work with more liberty and
flexibility. Here, members also have limited liability as they are not responsible for the debts of
company. In case of LLC, it is more expensive in comparison of other forms of business
structures. In addition, it is not easy to transfer the ownership within company.

Recommendation
There are different business structures such as sole trader, partnership, limited liability
partnership and limited liability company are present at market place of UK. Each has its own
advantage and disadvantages that need to consider before selecting an appropriate structure. For
current scenario, limited liability company is the most suitable structure where business owner
wishes to expand its business at wide level. Advantages of this structure for IOM are given as
under:
It helps to expand business at wide level as here shareholders are also invited to invest in
company that helps to enhance the brand image at market place. In addition LLC is more flexible
for company as well as members. Here, company is consider as a separate entity and can easily
execute transactions with its own name. In addition, liabilities of members are also limited either
with shares or grantee. So they are not required to pay additional amount.
For IOM solution, they are increasing in terms of demand as well as employees so it will
be better for sole trader to adopt LLC structure in order to explore business at market place. With
this, owner will be able to get the advice and suggestions from expert members that will be
helpful for growth of business.

CONCLUSION
From above discussion, it can be concluded that organisations play a vital role in overall
development of a country. There are different structures are present at market that can be avail
by managers to expand business at wide level. It is analysed that different structure have
different laws, management and taxation regulations. Moreover, these structure are consider vital
to explore present business operations.

REFRENCES
Books and Journals
Buckley, P.J., Burton, F. and Mirza, H. eds., 2016. The strategy and organization of
international business. Springer.
Dimitrova, K., 2017, September. Modeling, measurement and management of business processes
in organization. In International Conference on Intelligent Information Technologies for
Industry (pp. 410-419). Springer, Cham.
Grandori, A., 2017. Linnaeus in the jungle: configurational lenses for discerning forms of
economic organization in agri-business. It's a jungle out there–the strange animals of
economic organization in agri-food value chains, p.51.
Korableva, O.N. and Kalimullina, O.V., 2016, September. Strategic approach to the optimization
of organization based on BSC-SWOT matrix. In 2016 IEEE International Conference
on Knowledge Engineering and Applications (ICKEA) (pp. 212-215). IEEE.
Kostera, M. and Pirson, M. eds., 2017. Dignity and the Organization. Palgrave Macmillan UK.
Raff, D.M. and Scranton, P. eds., 2017. The emergence of routines: Entrepreneurship,
organization, and business history. Oxford University Press.
Swarnakar, V. and Vinodh, S., 2016. Deploying Lean Six Sigma framework in an automotive
component manufacturing organization. International journal of lean six sigma.
Young, C. and Ghoshal, S., 2016. Organization theory and the multinational corporation.
Springer.