Arden University: BUS0005NFBNM Structure of Business Module Report

This report analyzes the structure of businesses, focusing on the legal statuses available in the UK, including sole trader, partnership, and limited company, detailing their strengths and weaknesses. It evaluates three sources of finance for business start-ups: overdrafts, business credit cards, and merchant cash advances, outlining their advantages and disadvantages. The report also examines the three key sectors within the UK economy—food, pharmaceutical, and clothing—highlighting their differences and contributions. Furthermore, it explores the importance of two HR policies in modern organizations. The chosen organization for analysis is Sainsbury's, and the report provides a comprehensive overview of these business aspects. The report is contributed by a student to be published on the website Desklib, a platform which provides all the necessary AI based study tools for students.

The Structure Of
Business
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Table Of Content
INTRODUCTION……………………………………………………………………………..3
TASK 1
A)Prepare a table which shows the various legal statuses of businesses that the business may
adopt. Find out about the strengths and weaknesses of these legal statuses…………………..3
B) What are the weaknesses and strengths for evaluating and identifying the three sources of
finance which are available for business start-up after considering the business idea………..5
TASK 2
What are the three sectors within the UK economy where business can be operated. Explain
about the differences between these three sectors? Describe about their value to the UK
economy……………………………………………………………………………………….7
TASK 3
Explain about the two HR policies and describe about their value into the current
organisations…………………………………………………………………………………9
CONCLUSION………………………………………………………………………………10
REFERENCES………………………………………………………………………………11
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INTRODUCTION
Business structure is that structure which is recognized as the legal structure of an
organisation which is defined in a given jurisdiction. The key determinant of all the activities
that has been taken place in the business is due to the organisational legal structure. It
includes growth in the capital, business obligations responsibility and about the amount of
taxes which the organisation owes to tax agencies. In this report, the analysis has been done
on the various legal structure of businesses. (González-Val, R. and Marcén, M., 2017).The
analysis has also been done on the pros and cons of the three sources of finance which is
available to business start-up. Within the UK economy in which the business can operate in
terms of the three sectors, the research needs to be done on it. The research has also been
done on the HR policies and about their modern workplace. The chosen organisation is
Sainsbury’s. It is the company which is the second largest chain of supermarkets in the
United Kingdom. This company was founded in 1869 by John James Sainsbury. The
company’s headquarter is in the Holborn Circus, City Of London. The company has been
divided into three sectors which is named as Sainsbury’s Supermarkets Ltd, Sainsbury’s bank
and Sainsbury’s Argos.
TASK 1
A)Prepare a table which shows the various legal statuses of businesses that the business may
adopt. Find out about the strengths and weaknesses of these legal statuses
There are four main types of business structures which are available in the UK
country. It has been described in the following manner:
SR.NO
.
Business
Structure Type
Description
1. Sole Trader
Sole trader is that type of trader where an individual is
responsible for all kinds of activities in this kind of
business structure. (Hooper, M. J., 2016). The individual is
responsible for all kinds of profits and he is the person who
keeps it as the profits and also responsible for all kinds of
tax and national insurance after filling out the self
assessment form.
2. Partnership Partnership has been defined in the manner that it involves
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two or more individuals who agrees on the legal terms and
conditions. Under the partnership head, it shares all kinds
of risks, costs, benefits, responsibilities and other aspects
also. Partners are those who are known as the
unincorporated entities and they are self employed by
nature.
3. Limited Liability
Partnership(LLP)
The amount of money invested in the business is limited to
the partner’s liability. Partnership is similar to the LLP.
The LLP must be registered with companies house and
with HMRC.
4. Limited Company Under this head, it is owned by its shareholders and it is a
privately managed business. (Arévalo, and et.al., 2016).
Due to its own rights and obligations the company is a
separate legal entity. Their finances are always separate
from their personal affairs and the company is whole sole
responsible for everything that they does.
Strengths of Sole Trader: Their main point is that they are easy and simple to form. It is
simple in terms of managing it. (Dudin, and et.al., 2015). They themselves enjoys all kinds of
profits. This profit motive is a kind of an incentive to work hard. In this sector, start-up costs
is always low. It has the maximum privacy also.
Weaknesses of Sole Trader: It has the unlimited liability for debts. The overall liability for
making every day business decision depends on the individual person. Its very difficult to
take holidays.
Strengths of Partnership: Under this head, it is less formal with fewer legal obligations. It
easy to get a start in this head. It gives the advantage to share the burden. It gives the better
decision-making power. It shows the ownership and control in form of combined manner.
Weakness of Partnership: Under this head, if any businesses losses and liabilities are there
then they have to bear equally both of them. The decisions can’t be made in a self-manner
way, it is because of the reason that they are working as a partner.
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Strengths of Limited Liability Partnership: It is easy to start and manage the business like
entrepreneurs. (Al-Ansaari, and et.al., 2015). There is no minimum capital requirement. Also
there is no limit on the owners of business. Under this head, lower registration cost has been
incurred.
Weaknesses of Limited Liability Partnership: He/she has to obtain consent of all the
partners if the partner wants to transfer its ownership. In this case they are not given
recognition in every state as a business structure because they are limited by the state
regulations.
Strengths of Limited Company: It act as a separate legal entity with the uninterrupted
existence. It is easy and free to transfer the shares. It is a kind of dual relationship.
Weaknesses of Limited Company: Limited companies must be incorporated at companies
house. It is required that an individual has to pay an incorporation fee to companies house.
The names of the company are subject to certain restrictions. In the case of disqualified
director, an individual can’t set up a limited company.
B) What are the weaknesses and strengths for evaluating and identifying the three sources of
finance which are available for business start-up after considering the business idea
The three sources of finance which are available for business start-up has been
explained in the following manner:
 Overdraft: It has the advantage that it can be used as the back up arrangement and
this facility is flexible in nature. It considered as the short term funding arrangement.
It is usually easy to arrange. It can be an expensive way to grow and it mostly tends
for smaller amounts. (Svensson, and et.al., 2016). This can be subject to recalled by
the bank. It is a form of unsecured lending. These are available only for established
businesses. There are some disadvantages associated with it. For the purpose of
extending the overdraft, it is required to pay an arrangement fee. The bank can charge
from the individual, if the overdraft limit has been exceeded without authorisation. At
any point of time, the bank has the right to ask for the repayment of the overdraft. It is
difficult to calculate accurately the borrowing costs in the case when the interest rate
is always variable.
 Business Credit Cards: It is the useful medium for purchasing and day to day
transactions. It can be used by the multiple people and helpful for this particular type
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of expenditure. It is best suited to spending on smaller items over the short term. It is
not generally appropriate for large investments as it can be an expensive form of
borrowing. (Trigo, and et.al., 2016). There are sometimes zero percent promotional
deals are available. It can be generally credit card borrowing which will incur interest
charges and fees. For the qualifying purpose, the business will need a trading history
and credit rating. There are disadvantages of business credit cards. It can be expensive
in nature. To apply for credit cards it is a very time-consuming process. It can
sometimes leads towards the temptation. It sometimes comes as a surprise to
accidently borrow too much against the business line of credit and spend the profits
on interest payments.
 Merchant cash advance: It is one of the new form of financing, which is also known
as the business cash advance and it is also based on the future sales. By bringing
future card sales in the forward manner then it works in that manner. It is through the
credit card machine and monthly transactions are based on the percentage of
repayments. With the seasonal sales it can be a helpful form of financing. In this case
payback is aligned to revenues and if the sales are strong then the debt will be paid
back in the fast manner. (Taghian, and et.al., 2015). These can be arranged in
arranged into the fast and simple way to arrange. There are some disadvantages
associated with merchant cash advance. They are expensive in nature as compared to
other products. These considered under the category of the short-tem solution.
Sometimes they are unable to solve the problems. It has been also observed that
financing the future sales is risky.
So these are the advantages and disadvantages of the three sources of finance for the purpose
of business start-up.
TASK 2
What are the three sectors within the UK economy where business can be operated. Explain
about the differences between these three sectors? Describe about their value to the UK
economy.
In today’s time period where the condition is difficult in all over the world. The three
main sector where business can be operated into the successful manner has been described in
the following manner:
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 Food Sector: In today’s pandemic situation, it is very difficult to get healthy food in
the overall period of time. So sainsburry’s is the retail company who can offer
packaged food and healthy food to their customers so that they can fulfill their basic
needs and requirements.
 Pharmaceutical Sector: According to the current requirement this sector is booming
that’s why they can offer medicines and related products to their customers. They can
deliver the medicines and other online ordered products in the case of emergency.
 Clothing Sector: This sector can also perform better in this critical situation. Where it
has been observed that on the reasonable rates they can offer the clothes and hygienic
products to their customers. So that they can sometimes take relaxation in the time
period of ill situation and regularly washing clothes during the time of suffering.
All these three sectors are different from each other because they are fulfilling the different
requirement of common people. (Barry, N., 2016). They solve the problem of starvation in
the case of emergencies. Pharma sector gives the solution of their illness problems so that
they can overcome themselves from this difficult situation. This sector somewhere supports
the daily requirements of people. All the three sectors have different way of working and the
aim is common to provide relaxation to the common people. In the overall manner, all the
three sectors have targeting different age group people and also there is no boundation for
purchasing the products. All the three sectors have their different objectives and also have the
different way of approaching their customers. All the three sectors have different range of
earning the revenues and also have different criteria of earning the profits in terms of
financially even in this pandemic situation.
The importance of these sector is very significant at the very large scale in the UK economy.
They contribute towards the development of nation and also supports in terms of earning
revenue for the country. They also support the common people of their nation so that they can
come out of this difficult situation in a very fast pace manner. In terms of business they come
out with different range of products and with new kind of innovation also so that they can
support their country into the out of the box manner. (Voigt, and et.al., 2017).When all the
three sectors have worked in the successful manner then it also gives the opportunity to
circulate the money into the nation in the form of positive spectrum. In this difficult situation
when the sectors comes with new ideas then it gives inspiration to other sectors also to not
give up and continuously work in the difficult situation with the positive hope. Through this
way, it gives a new thought and change in the people behaviour in terms of supporting other
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kind of people. Businesses are the base of country’s increasing their gross domestic product
so for the economy it act as in the form of right way it is always required that continuous
circulation should be maintained in the country or within the country. (Khmara, Y. and
Kronenberg, J., 2018). All the three sectors are very important for the UK economy in terms
of their growth, progression and emerging as a good example at the time period of difficult
situation also.By doing these kind of activities it not only emerge as good businesses in the
market in the difficult situation but it also gives inspiration to other countries to always
support their nation people into the positive manner.
TASK 3
Explain about the two HR policies and describe about their value into the current
organisations
The two HR policies which are necessary for the current organisations has been discussed
in the following manner:
Health and Safety Policy: Under this kind of policy, every business should ensure that there
should be precautionary measures have to adopt so that they can take care of their employees
and workers working over there. It explains about how as an employer has to manage the
health and safety into the businesses. A written general health and safety policy demonstrates
that to the managers, supervisors and workers there is a commitment for ensuring the higher
standards for health and safety. (Nussholz, J., 2017).The policy includes some kinds of
incidents which are accidents, first aid and physical and mental ill-health. This kind of policy
sets out the general approach and commitment together with the arrangements that an
individual put into place for managing health and safety into the business.
Equality and diversity policy: Under this kind of policy, it is a kind of written document or
agreement for the group which tells about how to avoid the discrimination against people and
it is also about creating the safe and inclusive atmosphere for the members and service users.
It is about protecting the employees regarding the inequality, cheating and giving importance
to specific person without any reason. Its all about the equality and diversity which should be
provide into the workplace. (Baiyere, and et.al., 2020). This policy is about giving the equal
opportunities to each and every member of the organisation. This policy covers the point that
the existing staff and job applicants and workers should be treated in a fair manner in the
environment which is free from any kind of discrimination. Al the women employees and
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fresher s should be treated in a well mannered way so that they can work in the organisation
in a fair manner and also privilege to be given and support system should be there for the
pregnant women. In this manner, pregnant women can also perform their roles and
responsibilities in a positive manner. Without discrimination positive growth can be possible
within the organisation and organisation can achieve their goals into an effective manner.
These policies have their importance into the modern workplace because of the certain
reasons. (Zhao, and et.al., 2016).Health and safety policy plays a very important role into the
organisation. Because without the provision of these kind of policies it is impossible to
support their employees in terms of their health and safety into a legalise manner. If there are
provisions then the employee will feel relaxed and cool and they can give their full potential
in terms of achieving their organisational goals. Health and safety policy ensures that in case
of any emergency the organisation will give first aid on the priority basis which they can
done on the initial level for saving the life of an employee. Sometimes organisation can
support their employees in terms of financially in the case of major injury. Under the case of
equality and safety policy, it is very important into the current period of time. Because people
are following false approaches and ways for getting the success in a shorter period of time.
Due to which inequality and discrimination situation has arises in the organisation. As a
result the equal opportunities will not be provided to each and every employee working in the
organisation. If the opportunities will not provide in a vast and equal manner then it becomes
difficult for the organisation to grow into an ethical manner. If the employees do not
experience the diversity in their working field then it becomes challenging for every person to
grow into a fast and positive manner. (Burns, and et.al., 2016).Equality and diversity gives an
opportunity to grow themselves into their personal as well as in their professional way also.
These kind of policies are very important not only for the employees welfare but it is also
essential for the positive growth of the businesses.
CONCLUSION
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In the business world, there are different kinds of business structure exist in the external
environment. Their working is also different from each other and they have to execute their
work in a positive manner so that they can achieve their goals into the effective manner.
Every business structure has their own strengths and weaknesses due to which they have to
work vey smartly by analysing their advantages which can match into the real market at the
international level. There are various kinds of sectors in which businesses can be operated.
But these can be successful only into those matters when they analyse the current requirement
of the market. Every business structure has their own importance into the country and they
directly and indirectly contributes towards the growth of the country. For running the
business into the successful manner, it is necessary that they handle the situation into a
positive manner by following the rules and regulations and policies of the organisation.
(Hirschmeier, J. and Yui, T., 2018). By doing this they can maintain the decorum of the
company and also helps in achieving the goals of the organisation.
REFERENCES
Books and Journals
Hirschmeier, J. and Yui, T., 2018. The development of Japanese business, 1600-1980 (Vol.
8). Routledge.
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Burns, and et.al., 2016. The business of fashion: Designing, manufacturing, and marketing.
Bloomsbury Publishing USA.
Baiyere, and et.al., 2020. Digital transformation and the new logics of business process
management. European Journal of Information Systems, 29(3), pp.238-259.
Nussholz, J., 2017. Circular business model framework: mapping value creation architectures
along the product lifecycle. In PLATE: Product Lifetimes And The Environment (pp. 309-
314). IOS Press.
Khmara, Y. and Kronenberg, J., 2018. Degrowth in business: An oxymoron or a viable
business model for sustainability?. Journal of Cleaner Production, 177, pp.721-731.
Voigt, and et.al., 2017. Business model pioneers. Management for Professionals. AG
Switzerland: Springer International Publishing.
Barry, N., 2016. Business ethics. Springer.
Taghian, and et.al., 2015. A stakeholder approach to corporate social responsibility,
reputation and business performance. Social Responsibility Journal.
Trigo, and et.al., 2016. Accounting Information Systems: evolving towards a business
process oriented accounting. Procedia Computer Science, 100, pp.987-994.
Svensson, and et.al., 2016. A triple bottom line dominant logic for business sustainability:
framework and empirical findings. Journal of Business-to-Business Marketing, 23(2),
pp.153-188.
Al-Ansaari, and et.al., 2015. Strategic orientation and business performance: An empirical
study in the UAE context. Management Decision.
Dudin, and et.al., 2015. Business model canvas as a basis for the competitive advantage of
enterprise structures in the industrial agriculture. Biosciences Biotechnology Research
Asia, 12(1), pp.887-894.
Arévalo, and et.al., 2016. A metamodel to integrate business processes time perspective in
BPMN 2.0. Information and Software Technology, 77, pp.17-33.
Hooper, M. J., 2016. The global business handbook: The eight dimensions of international
management. CRC Press.
González-Val, R. and Marcén, M., 2017. Divorce and the business cycle: a cross-country
analysis. Review of Economics of the Household, 15(3), pp.879-904.
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