Detailed Report: Exploring Various Business Organization Structures

This report provides a detailed analysis of different types of business organizations. It begins with an introduction to business organizations, defining their purpose and outlining the two main types: profit and non-profit organizations. The main body of the report delves into four distinct business structures: sole trader, partnership (including general and limited partnerships), limited liability partnership, and limited company. Each type is thoroughly examined, covering its characteristics, processes for establishment, advantages, and legal implications. The report also includes a recommendation for a sole trader (IOM Solution) to consider converting to a partnership to share the business burden, facilitate capital generation, and enhance decision-making. The conclusion summarizes the key findings and emphasizes the importance of understanding these business structures. The report references various sources to support its analysis.

INDIVIDUAL REPORT

Table of Contents
INTRODUCTION................................................................................................................................2
MAIN BODY.......................................................................................................................................3
Sole trader........................................................................................................................................3
Partnership.......................................................................................................................................4
Limited liability partnership............................................................................................................5
Limited company.............................................................................................................................5
RECOMENDATION............................................................................................................................6
CONCLUSION ...................................................................................................................................7
REFERENCES.....................................................................................................................................8

INTRODUCTION
A business organization is an organization where group of peoples work together to attain
the goals and common objectives for the generation of profit. The business enterprises is
construction for the intention to carry on the commercial business. The main aim of running the
business is to either generate the profit or improving the standard of living of society. There are two
basic forms of business organization such as profit organization(Those organization whose main
focus in on generating profitability) and non profit organization(Those organization whose main
focus is not generating the profit. For Example- NGO).
The given reports includes many terms related to the business organization such as its
definition, different types of business organization and process followed in each types and the legal
consequences of every form of business organisation(Betta, 2019).
MAIN BODY
The business in the United Nation is carried out in accordance with the company Act 2006. in which
detailed procedure of functioning and managing the business company is provided with all the rules
and regulations so that the company can run in an effective manner. The social importance of
business organisation is to supply goods and services to the society for the purpose of earning. The
business enterprises helps in creating the employment and enhance the standard of living of
peoples. A business organization follows the business ethics and moral for stopping the business
malpractices.
There are four types of distinguish business organization:
Sole trader
It is considered as the simplest and most common types of business organization. In this distinguish
types of business organization, individual runs the whole business for the benefit of making profit.
The individual person took all the decisions regarding the business enterprise. In this type, business
enterprises will end if the owner of the enterprises dies. The structure of business is flexible. The
examples related to sole trader are local grocery store, freelancing, IT consultant, convenience
stores and many more.
The given below in the process of starting a sole proprietorship-
the sole trader can easily establish and run the business enterprises. Because it is not essential for
the proprietor to register their business in the state where the individual is going to develop the
business.

 Step-1: the first step of establishing the business is providing the specific name to business
enterprises because name helps in recognize the business in the mind of individuals. It is
legal to use the personal name.
 Step-2: the second step in process of establishing the sole enterprises is the individual
should have employer identification number which helps them in identification of the
company while paying different types of taxes.
 Step-3: the third step includes having a specific bank account of company for all the
transactions of funds of the company.
 Step-4: different states in the country requires different types of business documents such as
business licence, business permits and other. The business trader required this document as a
legal operations that follows the rules and regulation of the country(Wial, 2018).
Partnership
This type of business organization is established by the two persons in the partnership. The
partnership business is distinguish into two forms such as general partnership and limited
partnership. The main advantages of the business is that it is easy to establish with low start-up
cost(Davis, 2019).
MAIN BODY.
 General partnership- in this types of partnership business organization, both partners of
the business invest their capital, property, labour and many more into enterprises and both
partner are equally liable for the debts. In simple words, if a person invest small part of the
money in the business than he is responsible for for the debts. The formal agreements are
not generally necessary between the two partners. Different examples of partnership
business in UK are real estate, law firms, investment firms and many more.
 Limited partnership- this type of business organization requires legal documents and
formal agreement between the both partners. It is compulsory for him to file a certificate of
partnership as it is necessary for future conflicts. it is completely different from general
partnership as partners are can limit their liabilities for the debts according to the section of
investment in the business(Tang, 2019).
Process of establishing the partnership businesses
In this, both the partners have share equal responsibility for the business firm which involves losses
in business and bills of all the assets that any partner buy for the business. The business profit is
share between both the partners and the have to pay taxes on their portion.
The first step in the process of creating the partnership business is the name of the company

because name is anything that helps in identifying the business. The name of the business should
not include limited liability partnership or public limited company and the name must not be
offensive and not same as an existing trade mark. After that the second steps involves the choosing
of any partner for the nominee. The nominated person have to register the partnership business in
HM revenue and customs for self Assessment. The nominated parter is obligated for transferring the
tax return and it is the duty of him to manage all the business records. There are different rule and
regulation that both partner have to follow for the smoothly running of the business firm(Gheorghe,
2020).
Limited liability partnership
The limited liability partnership is similar to the limited partnership with a major difference
that it has limited partnership liability on the invested money in the firm. It is necessary to prepare
all the records of account and file them. The company must be registered under the company house
and HM revenue and customs. It involve more than two or more than two members. And the
company or the person can be the member. It is the duty of every member to submit the self
assessment tax return every financial year. The LLP agreement must contain all the responsibility of
members and share of the profit. The member of LLP have to pay tax on its shares profit and also
the national insurance to HMRC.
The steps involve in the process of establishing LLP are followed as-
 Choosing the name for the company. The name should not be same to other name of
registered company. And there are different rules that the company have to follow in order to
display their name.
 The registered address is considered as the company official address. The company have to
register their address. It must be a physical address, in the nation where the company exist.
 The next steps involves the registration of at least two designated members. And the
formation of LLP which contain all the detail of how the company will run.
 The last steps involves the registration of company in the company house and HMRV.
Limited company
A limited company is a type of business organization where assets and income of the owner are
distinguish from the assets and income of the company which is known as limited liability. The
company's assets and debts are separate from shareholders. The transfer of ownership can be done
easily in the limited company. Some examples of limited company in the UK is Virgin Atlantic,
John Lewis Partnership and others(Markova and Kuznetsova, 2018). There are two types of limited

company such as-
 Limited by shares- in this the company is owned by one or more than two shareholders and
it is managed and regulated by one or more than one directors.
 Limited by guarantee- in this types of limited company, there is one or more than one
director who manage the firm and the company is owned by at least one guarantors.
The major advantage of the limited company that the company is legally distinct and its structure
provide a firewall in between the finances and the owners.
Process of establishing the limited company-
 Step 1 involves the selection of which type of limited company an individual wants to set
up.
 Step 2 contain the choosing the right name for the company. The name of the company must
be unique and trademarking the name of the company.
 Step 3 involves the choosing of right directors\, shareholders and the guarantors which
consist of different types of responsibility towards the company.
 Setting up of limited company in the UK is step 4. in which the owner decides what types of
business to be carry out in the company with the helps of standard industrial classification. It
includes the registered address.
 Last steps includes the different legal documents of the company to be submitted in the
company house. The documents includes the MOA(Memorandum of Association),
AOA(Article of Association)and many more. These are the signed documents by all the
shareholders which involves al the details of the company and the responsibility of every
person in the company(Mitmek and Worawattanaparinya, 2020).
Advantages of limited company are given as-
 the individual pay minimum tax and national insurance part in limited company as paying
tax is different from sole traders and other form of business.
 The liabilities in this type of company is limited as it has its own legal entity.
 The limited company presents less risk to lenders as it is a separate legal entity from
directors which gets the advantage in easy funding as compared to sole traders(Moreno,
2020).
RECOMENDATION
From the above information it has been recommended to the Sam operators who is a sole
trader(IOM Solution) who sales electrical parts to local garages to convert their sole traders into
partnership because partnership business helps in sharing the burden of the business. When

comparing to sole traders, partnership type of business helps in managing and operating the
business easily. The sole trader face difficulty in generating the capital for the expansion of
business and the growth of it but partnership business reduces the problem of capital generations
and it allow in expanding the business in United kingdom and rapid growth of the business
enterprises. A partnership business helps in enhancing the better decision making when compared to
the sole trader. It is recommended to the IOM business of Sam operator to find the partner which is
knowledgeable and skill in running the business and can invest in the company. The partnership
type of business an be the most suitable business for Sam operator because it can be difficult for
Sam to operate al l business with one hand. In partnership, both partner can control the business and
divide the task between them which can helps in reducing the burden and can easily face other
issues of business.
CONCLUSION
From the above data, it has been concluded that the business organization is an entity that
perform different types of task to achieve the goals and objectives. The main objective of any
business is to generate the profit. The report conclude different types of business organization such
as sole trader in which less regulation is followed for establishing the business, partnership business
in this type of business two partners come together and operates the business firm. The report also
explained about the different types of limited company such as limited by shares and limited by
guarantee and the process of establishing the limited company. At the end of the report there is a
recommendation to Sam operator to convert their business in the business partnership form.

REFERENCES
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Gheorghe, C.M., 2020. Intellectual Capital and the Romanian organization performance in
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Markova, V.D. and Kuznetsova, S.A., 2018, October. Ecosystems as Network Forms of Business
Organization. In 2018 XIV International Scientific-Technical Conference on Actual
Problems of Electronics Instrument Engineering (APEIE) (pp. 418-421). IEEE.
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INDUSTRIAL BUSINESS ORGANIZATION. Academy of Entrepreneurship
Journal, 26(1), pp.1-11.
Moreno, S., 2020. Examining the relationship between Observed Global Leadership and
Organizational Behavior Effectiveness (Globe) and job satisfaction, as well as gender and
ethnicity differences in the Globe cultural dimensions, among business organization
leaders. Our Lady of the Lake University.
Tang, K.N., 2019. Leadership in business organization. In Leadership and change management (pp.
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Wial, H., 2018. 21. New Bargaining Structures for New Forms of Business Organization.
In Restoring the promise of American labor law (pp. 303-313). Cornell University Press.