Exploring UK Legal Business Structures: Analysis and Recommendations

This report provides an overview of business organizations in the UK, focusing on their legal structures. It begins by introducing the importance of corporate regulation and then delves into the different types of business entities in the UK, including sole proprietorships, partnerships (general and limited), private companies limited by shares, and public limited companies. For each structure, the report outlines the formation process, advantages, and disadvantages. It also includes a discussion of professional negligence and vicarious liability within these business contexts. The report concludes with recommendations for IOM (Fresh Produce), suggesting a partnership as the ideal business organization for expansion due to its simplicity and lower capital requirements. The document emphasizes the importance of adhering to the Companies Act 2006 and other relevant regulations for effective business management and growth. Desklib provides similar solved assignments and past papers for students.

BUSINESS
ORGANIZATION

INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
Businesses & Organizations in the UK....................................................................................................3
The legal business structure of UK companies........................................................................................4
Recommendations for IOM (Fresh Produce)...........................................................................................7
CONCLUSION...........................................................................................................................................7
REFRENCES..............................................................................................................................................8

INTRODUCTION
Corporate regulation is a significant subject that covers all of the legal issues that arise in
the business world. For this reason, it is critical that each task be performed in order to decrease
the risk of error. Mercantile regulation is the cry of business change. Various sorts of aspects on
the subject of business and its unique viewpoints are covered in these legal standards. Business
regulation is progressed during the establishment of a commercial, resulting in the enactment of
laws and acts that have aided in making business organizations carry out their missions more
effectively. The various forms of file enterprise businesses, as well as their benefits and
drawbacks, have been addressed. The IMO replies have been examined in depth in the give up.
MAIN BODY
Businesses & Organizations in the UK
A commercial enterprise is a legal entity established for the purpose of carrying out
business. Regulatory frameworks that govern settlement and commerce, property rights, and
incorporation are the foundation of this form of business. Legal liability is limited for the
majority of large commercial and corporate enterprises. Any company should be structured
according to the laws and regulations (Fenwick, 2016). It is vital to recognise that if any of the
characters fails to execute in accordance with the rules, the company firm could face
imprisonment time. The terms "unincorporated business enterprise" and "incorporated business
enterprise" refer to two different types of companies. This section discusses unincorporated
corporations a business that is not incorporated. A business enterprise that is unincorporated has
no legal rights and is free to operate. When an expert fails to meet their commitments to the
stated general or breaches a duty of care, this is referred to as professional negligence. Almost
always, this type of behaviour results in monetary loss, bodily harm, or damage to the customer
or consumer. Anyone who is deemed to have knowledge of the services they provide, such as an
era or control consultant, a surveyor, and so on, might be sued for professional negligence.
Vicarious legal responsibility refers to a situation in which one party is held partially responsible
for the illegal activities of a third party. The personal share of the legal liability of the third party
is also mentioned. Vicarious legal duty may occur in instances where one party is intended to be
liable for and exert control over a third party but is negligent in carrying out that obligation and

exerting that control. Proof that the service supplied did not fulfil the requirements of their
profession, resulting in a terrible consequence, is required for the claim to be successful. In these
types of businesses, commercial enterprise hobby is carried out at a lower level. It has a wide
range of organizational structures and corporate entities.
The legal business structure of UK companies
Sole proprietor: This type of firm is small, and it is unlikely that it will have a one-of-a-
kind manner of doing things. It's vital to realize that after a single proprietorship is founded, all
of the hobbies must be conducted in accordance. Furthermore, it has been recommended that the
corporation's control should be exercised by the investors. Credit cards and private funding may
be excellent reasserts for sole proprietorships to manage their funds (Desai and Kroll, 2017).
Such businesses are generally simple to shape and have a much simpler shape. This category of
business comprises the most effective types of businesses. A single proprietor runs a business in
this type of organization. It isn't deemed a prison entity because it doesn't have the required
registration procedures in place, like a personal corporation. The entrepreneur is entirely and
alone accountable for all forms of sports associated with the business in this company. There is
no need for cumbersome paperwork or a lengthy registration process with these companies.
Articles of association and incorporation are not required paperwork for this form of business
entity. For the generation of financial help or finances, only a dependable resource should be
organized. In order to manage such a business agency, one needs follow criteria and have a
National Insurance number or NI number on hand. Registration is only completed for the
purpose of registering to a volume of self-assessment. To establish the business, National
Insurance and HMRC must be received in order to begin the business activity. These
organizations should be handled by a person, and their money should be managed by him. Funds
can be raised through friends, family members, and the use of a personal or non-public loan. The
management of those firms is carried out by the most effective man or woman, who takes on the
entire responsibility of dealing with everything in order to carry out business activities(Allen,
2016). Benefits of a single proprietorship include the ease with which groups can be formed and
the lack of a difficult process. It requires fewer monetary assets to put it up. Disadvantages of
being a lone proprietor: While running a business, the proprietor is responsible for his actions,
and any losses must be handled by him. Self-employment tax must be paid by the proprietor.
One of the most fundamental advantages of those types of organisations is that they have "sole

authority." This indicates that the person in charge of a company has entire control over it,
including the money it generates. A downside of various types of enterprises is the "difficult in
expanding." It will be tough to expand further because the resources available are restricted and
control is achieved by having a character wander through the firm. Partnership: More than one
person is concerned about how to conduct a business of this type, hence such business entities
are created by an agreement (Bird and Park, 2016). These businesses were founded with the
primary objective of profiting from activities carried out under the auspices of a corporation. The
profits and losses of the company are shared among a number of partners. A partnership can
potentially benefit from a tax break. To carry out an activity, each of the partners in a partnership
corporation signs a contract. Such events can take many forms, which means that an agency's
operations must be restricted to only its partners. Governments, non-profit groups, and
individuals can all arrange events. A partnership is a relationship in which two or more people
join forces with the purpose of accomplishing a common goal. It is believed that partnership
businesses require substantially less capital and must conform to tight standards. When a
partnership corporation is formed, it must initially have a deed that assigns rights and
responsibilities. Then there's the problem of HMRC registration. In companies that are managed
with the assistance of more than one individual as a partner. Findings are made possible through
the use of personal organisations and the acquisition of bank loans. All of the companions
involved in this business are responsible for every aspect of it, and the companions have the legal
responsibility for running it. Advantages: Forming this firm may be a simple and straightforward
process. As the number of people involved grows, the likelihood of making large sums of money
grows as well. Partnership disadvantages: The liability of the accomplice is reduced. There is a
lack of harmony because disagreements can arise at any time. The following are the two types of
partnerships that have been described:
General Partnership
A general partnership, the most basic sort of partnership under common law in most
countries, is a group of people or an unincorporated business that meets the following criteria.
It's necessary to have an agreement, proof of existence, and estoppels. A group is made up of two
or more persons. Unless otherwise stated by law or in the agreement, the owners are jointly and
severally liable for any legal actions or responsibilities that the company may face.

Personal Income Flow is an advantage. A common partnership permits all participants in a
corporation to automatically avoid personal profits taxes on earnings and losses. Limited
partnerships and limited liability companies are examples of this. As a result, the partnership's
earnings are taxed at its non-public profit tax rates rather than being classified as a separate
commercial venture business. This is perfect for small businesses where money moves quickly
and income is a constant struggle. Disadvantage: As part of a large partnership, all partners are
responsible for the company's debts as well as any criminal difficulties that arise. There is no
statutory criminal protection in place because the enterprise is not split into a separate criminal
entity.
Limited Liability
A restricted partnership is a type of partnership in which a few of partners make
significant financial commitments and are solely accountable for the amount of money they have
committed. Restricted partners are protected from the size of their investment in a restricted
partnership structure. The main advantage for constrained companions is that their personal legal
responsibility for business debts is limited. In my opinion, a restricted companion may only be
held responsible for the amount she or he invested. Limited companions have a protected
investment, knowing that they can't lose more money than they've put in. The most major
disadvantage of a Limited Partnership is the lack of legal distinction between the General
Partners and the business itself. In the vast majority of cases, this vulnerability to legal liability
makes common partnerships poor commercial vehicles. It might also give an experience where
each buddy is treated as a separate creature. Private Company Limited by Shares: A private
company limited by shares is an organisation in which a small group of stockholders band
together to do business in a systematic manner. It is required that work be carried out in
accordance with the Companies Act, 2006(Davitti, 2016). To begin this form of organisation,
you must first choose a name and an address. By meeting all of the criteria, such as deciding the
number of members in the firm, a Memorandum of Association and Articles of Association are
required. Private Limited Corporation Advantage and disadvantage: A benefit of this type of
company is that it is a "distinct legal entity," which means that it exists independently as a
person. The 'division of ownership' disadvantage is that there is no single owner; instead, they
are divided among directors and stockholders. Public Limited Company: This is a company
that is required to understand that it must be able to act in accordance with the Companies Act of

2006. The primary motivation for establishing this type of organisation is to attract public
investment because it is simple to raise funds and offers a wide range of benefits. The procedure
of forming this type of organization is quite time consuming because choosing a name is very
crucial and takes a long time. Public Limited Corporation Advantage and disadvantage: The
advantage of a public limited company is that it has "more money," which implies that shares are
offered to the general public, resulting in significant investment and serving as a useful resource.
The disadvantage is that ‘more regulation' means that there are more rules and regulations to
follow, which leads to more rigidity.
Recommendations for IOM (Fresh Produce)
Following the analysis of the case situation, it is clear that the ideal business organization
for expansion is a partnership. Because it is simple to set up and does not require a lengthy and
complicated process. Above that, the amount of money involved is lower. So, Virat shoul use
partnership in order to make expansion of IOM(Fresh Produce) done.
CONCLUSION
The concept of business and its establishment has been described in the preceding file,
which explains the formation, management, and finance of an organization. Advantages and
disadvantages have also been discussed in respect to the various organizations, as well as the
fundamentals of each organization. The report goes on to explore numerous types of corporate
groups.

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