BMP4002 Business Law: Legal Framework for Businesses in the UK

This report provides a comprehensive analysis of the legal landscape for businesses operating in the UK, focusing on the key sources of law that govern their activities. It examines various legal business structures available in the UK, including sole proprietorships, partnerships, and limited liability companies (LLCs), highlighting their respective legal implications, advantages, and disadvantages. The report also discusses important aspects of business operations such as business transactions, vicarious liability, the role of directors, and the significance of the Memorandum of Association (MOA) and Articles of Association (AOA). It concludes with a recommendation for IOM Solutions, suggesting that adopting a Limited Liability Company (LLC) structure would be the most suitable option for their global expansion plans, citing benefits such as cost-effective taxation planning and protection from personal liability. The report emphasizes the importance of understanding these legal structures and their implications for businesses aiming to thrive in the global market.

BSc (Hons) Business Management
BMP4002 Business Law
Assessment 2
Report describing the key sources of
laws as the legal context for business
organisations in the UK
Submitted by:
Name:
ID:

Table of Contents
INTRODUCTION...........................................................................................................................3
Businesses & Organisations in the UK........................................................................................3
The legal business structure of UK companies............................................................................5
Recommendations for IOM Solutions ........................................................................................8
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
The rights, marketable implications and the lawful trade comes under the sphere
of the business law. The commercial law acts as a regulatory body that take into
account the insinuations of the business ventures. The companies are obligated to act
in a certain manner in respect to their operations and these functions must be abide by
the generalized legal attributes and values that are determined by the superior
authorities of a nation (Acs and Coglianese, 2022). This report thereby tries to illuminate
upon the domineering elements of the external business market that are vividly
associated with the contemplations of the businesses. The explication of the forms of
legal business structures prevailing in the UK will help the chosen enterprise of the
study, IOM solutions, to globally expand their brand as per their inclusive plan.
Businesses & Organisations in the UK
In order to understand the conceptualisation of IOM solutions, it is necessary to
explicate the varied dimensions involved in the process. This would prove to be an aid
in the contemplations of the scrutiny while ascertaining the suitable option of legal
structure for the business.
Nature and management of a company: This particular sphere is very important to
highlight as it explains the basic characteristics of a company. The form of operations
an organisation is involved in, the managerial approaches that are taken into account by
IOM solutions and etc., will have to be expounded for the analysis of the form of
structure that has to be adopted by the business.
Business transactions of a company: An economic event that takes place during a trade
with third party can be considered as a business transaction. These transactions are
measurable and is duly recorded in the accounting system of an organization (Barton
and et. al., 2022). These transactions can be of three types:
 Cash transactions
 Non-Cash Transactions

 Credit Transactions
The most common types amongst the three is the cash transaction. Most of the trading
associations prefer to opt for this particular form of transaction with an involvement of
cash or cash equivalents as a medium of exchange. The engagement of cheques and
other debit transactions will also be considered as cash transaction. IOM solutions
should ascertained the acceptable mediums for the smooth functioning of the
transactions in the business.
Vicarious liability: The relative responsibility of the faulty decisions of the higher
authorise can create malformations and commotion in the management and the guilt is
effectually transferred to he heads of the subordinates. This form of liability occurs,
when a person is reasoned to be liable for the actions of others. The acts of the
directors can influence the management of the company and would eventually result in
the rise of vicarious liability (Benecke, 2022). IOM solutions must be thoughtful in
regards to this conception and should void such transfers. This could hamper the
positing of the personnel working in the venture.
Director’s role in a company: The directors of a company are considered to be the key
component of the managerial division of an organisation. The significant role of the
directors are in regards to the creation of the KPIs of the company and make sure that
the employees work in accordance to the determined standards. The supervision of the
records and security of the company is also the core responsibility of the directors. IOM
solutions must make sure that the responsibilities of the directors are successfully
fulfilled for the assurance of the development of the company.
MOA and AOA: These two influential documents of an organization, Memorandum Of
Association and Article Of Association, helps in defining the scope of objectives, work,
rules and the operation of the internals management of a company. They are
considered to be the basis of the constitution of a company. The foundation of IOM
solution will thereby stand upon the implications and adherence of these documents
(Fuentes, 2022).

The legal business structure of UK companies
The comprehensive legal structure of the businesses in UK is significant in many
ways as it helps in understanding the best suitable option for adoption by a firm in order
to excel in their respective fields. The suitability depends upon the nature of the
business and the types of operations that are conducted by them. This segment of the
study will try illuminate the varied forms of the legal business constructions that can be
taken into consideration by IOM solution for the perspective of the global expansion in
terms of their functional trade.
Sole Trader
This is the most simple and prevalent form of legal structure in the marketplace.
The responsibilities and the liabilities of the owner is self depended and the risks and
the profits are under the control of the owner itself. There exists no legal distinctions
between the business and the owner (Hardman, 2022).
Legal implications: The filing of the taxation is not done by the proprietor itself but it is
reported through the tax returns according to the Schedule C Form. The formulation of
sole proprietary is simple and the costs incurred in the registration criteria is also very
low as compared to other form of business structures. The liability is unlimited in this
structure and the mitigation of the risks can only place with the help of insurances and
other sound contracts of the business ventures.
Advantages: The entire control is in the hands of the proprietor. The amount of privacy
is at its maximum. The ease in changing the legal structure of the company can also be
taken into account as an influential advantage to the sole proprietary. The establishment
as well as the conduction of the operations for the business is not that comprehensive.
Disadvantages: The scope of the liability is unlimited as there exists no legal distinction
between the business assets and the private assets. The capacity of raising additive
capital for the functioning of the business can be limited (Khan, 2022).

Partnership
The engagement of more than one individual can upshot the building of a
partnership firm. The profits, risks , benefits and the costs are divided among the
partners of the undertaking. Each partner is also accountable or liable for other partner’s
carelessness or misconduct in relation to the operations of the business
Legal implications: Each of the partner present in the contractual partnership agreement
is liable to pay the share of taxes on their respective profit or loss. This particular
adoption is considered to be a tax reporting entity rather than the tax paying entity. The
mandatory filing of the annual information return, Form 1065. with an inclusion of an IRS
is critical. This is done to report the level of income and the losses from the operating
activities of the business corporations (Marchenko and Nenakhova, 2022). The
formation of the company in this structure requires a creation of attorney in the form of
an agreement that includes;
 The financial contributions of each of the partner.
 The distribution of the share of profit/loss. The enumeration of the signified responsibilities.
Advantages: The accounting process of the general partnership is generally simpler as
compared to the limited company's accounting. The burden can be share among the
involved partners. The skills, experience and the ability to get influential contacts can
help the business to get the best of the lot.
Disadvantages: There can exists limited access to the capital availability. There exists
significant potential for the issues in regards to the differences and conflict among the
partners of the company, this can affect the decision making ability of the enterprise.
Limited Liability Company (LLC)
This form of structure can be refereed to as a hybrid form which encompasses
the taxation modelling of the partnerships and the sole proprietorship (Oxford Analytica,
2022). The owners of the structure are known as the members of the firm. It is not

considered as a separate entity. It is known as a Private Limited Company (PLC) in
certain countries.
Legal implication: The report of the respective share of profit or the losses is done by
the individual representative of the LLC on their income tax return filings. The members
of this structure are secured from the personal liability. The owners of the LLC are not
allowed to use the financial accounting for their personal motive. The LLC entity only
obligatory to file an informational tax return, analogous in character to the general
partnership. Individual members of the LLCs are permitted to report business expenses
on Form 1040 Schedule C, E, or F (Teague, 2022). The formation of the company
requires the inclusion of operating agreements and they signifies the;
 The allocation of the profit and loss share.
 The ascertained responsibilities and the rights of the members.
 The power of voting amongst the members of LLC. The provision of the Buy-Sell alignment.
Advantages: The existence of the separate legal entity can help in the protection of the
members from the contemplations of the personal liability. The advantages in regards to
the double taxation can also be considered as a vital benefit of LLC. The flexibility in the
distribution of the income is another dimension that can be taken into consideration.
Disadvantages: The differences in the regulation of the company across the borders can
create problems in the conduction of the operations. The complexity in the norms must
be carefully examine before taking the charge in different nations. The transfer of the
ownership can be difficult as it involves a number of heavy restrictions imposed the
transferral (Yilmaz and Özekan, 2022).

Recommendations for IOM Solutions
The most appropriate legal business structure that must be adopted by IOM
solutions in regards to the aim of globally expanding their business is Limited Liability.
The cost effective taxation planning can provide ample of opportunities to IOM
solutions. A conception has been made that the incorporation of LLC can prove to be an
aid in respect of raising significant funds for the company and also to attract influential
suppliers and customers towards imparting in the company. The perks in regards to
running a LLC can be the acquirement of protection towards the aspect of personal
liability which will help the company to take multiple risks for the expansionary deals in
the coming future.
CONCLUSION
An inference can thus be made that in order to understand the best suitable base
of the legal construction for a venture, it is imperative to explicate the varied forms of
permissible structures prevailing in the country in an elucidated manner. This report
thereby helped in the comprehensive illumination of the adoption of the base for the
IOM solutions in order to expand in the global world. The implications associated with
each of the available options are very well examined and presented in this study. Along
with the legal structure, the explanation in regards to the nature and management of a
business is also highlighted which proved to be an aid in expounding the forms of
liabilities and duties of the directors.

REFERENCES
Books and Journals
Acs, A. and Coglianese, C., 2022. Influence by Intimidation: Business Lobbying in the
Regulatory Process. The Journal of Law, Economics, and Organization.
Barton, T.D., and et. al., 2022. Reframing contract design: integrating business, legal,
design, and technology perspectives. In Research Handbook on Contract Design
(pp. 33-54). Edward Elgar Publishing.
Benecke, A., 2022. Challenges in Data Protection in Business Transactions: An
Overview Over Civil Law Approaches to Data Protection and Data Ownership.
Handbook Industry 4.0, pp.159-178.
Fuentes, M.G., 2022. Distressed Mergers and Acquisitions: Price Adjustment
Mechanisms in the Context of Distress. Business Law Review, 43(4).
Hardman, J., 2022. The nexus of contracts revisited: Delineating the business, the firm,
and the legal entity. Bond Law Review.
Khan, M.A., 2022. Proposing a Relative Enforcement Mechanism for the Treaty on
Business and Human Rights. Review of Human Rights, 8(1), pp.21-45.
Marchenko, E.I. and Nenakhova, O.A., 2022. Modern Trends of Administrative Law.
Business 4.0 as a Subject of the Digital Economy, pp.1041-1046.
Oxford Analytica, 2022. UK regulatory agenda will increase risks for business. Emerald
Expert Briefings, (oxan-db).
Teague, M.V., 2022. Barriers to entry: an empirical account of business creation
difficulties in the United States 2011. Journal of Entrepreneurship and Public
Policy, (ahead-of-print).
Yilmaz, G. and Özekan, D., 2022. The Impact of Political Factors on Economy and
Business in Turkey. Journal of International Trade, Logistics and Law, 8(1),
p.179.