Report on UK Business Law: Structures, Regulations & IOM Solutions

This report provides an overview of business law in the UK, focusing on various organizational structures such as sole proprietorships, general partnerships, limited liability partnerships, and limited liability companies. It discusses the legal framework governing businesses, including the Companies Act 2006 and the Partnership Act 1890, along with the rights and duties of employers, employees, shareholders, and directors. The report further analyzes the advantages and disadvantages of each business structure, including tax liabilities and liability exposure. Concluding with a recommendation for IOM Solutions to transition from a sole proprietorship to a Limited Liability Company to facilitate growth, improve financial stability, and enhance work-life balance for the owner, Sam. Desklib provides access to similar solved assignments and study resources for students.

Business law

Table of Contents
INTRODUCTION...........................................................................................................................3
Business and Organizations in UK..................................................................................................3
The legal business structure of UK companies................................................................................5
Sole trader:..............................................................................................................................5
General partnership:...............................................................................................................5
Limited Liability Partnership:................................................................................................5
Limited Liability Company:...................................................................................................6
Recommendations for IOM Solutions:............................................................................................6
References:.......................................................................................................................................8

INTRODUCTION
The business refers to the sell and purchase of goods and services by the one person to
the other person. These involves the involvement of minimum two individuals. The laws that
rules the business of any organisation are called business law. The Companies Act 2006 is a type
of business law in UK. The company law explains about the duties and the powers of the
shareholders ad the director of the company. There is also a partnership act that laid the
provisions related to the duties and rights of partners of the firm(Adamou, Kyriakidou and
Connolly, 2021). This report explains about the business law along with different types of
business concern can be operated in UK. This report also outlines the merits of and tax liability
of all these firms. It also recommends Sam regarding the type of business he want to choose to
grow his present business concern.
Business and Organizations in UK
The business law deals with the different operations in businesses. It explains about the
relationship between the employer and its worker. There are certain rights of every employee
that must be exercised by all the employers in an organisation. The employee has the right to
take paid sick leaves, parental leaves, casual leaves, etc. These has to be followed by all the
business organisations in country. Moreover, the Employment Rights Act 1996, Equality Act
2010 explains about the equal rights of both the employer and employee of a firm. The vicarious
liability refers to the obligation of employer towards the working of employee. This is a kind of
master and servant relationship. The main principle of vicarious liability is that the employer is
responsible for all the acts of its subordinate. If any wrong act is done by the employee then, it
has to be faced by the employer. The negligence is a neglect act of not fulfilling the duty by an
individual. This negligence can create a loss to other party(Charlton, 2018). Hence, negligence is
a type of tort under the civil law of UK. The loss under negligence is compensatory as per the
UK civil law. The compensation can be in monetary or in kind. There are also several laws that
protects the employee from the mistreatment of employer. All the employees is eligible to have
the safe working environment as per the Health and Safety Act of UK. These laws are applicable
to all the industries and factories of the nation. Moreover, the business law also prohibits child
labour in the organisations. Moreover, if the age of child is more than 12 years then he can work
to maximum of 4 hours. There should be a gap of 1 hour after the work of 2 hours for every child

working above the age of 12. it also provides that work should not be dangerous to the mental
and physical health of the child. It is also required that the adequate measures to be adopted for
the safety of the employees in the organisation. The business law also provides that if women
employee is working in the organisation, then there should be healthy sanitation facility provided
by the organisation. These includes that the organisation should also provide for pregnancy and
maternity leaves to the women employees of the company(Cheong, 2020).
The business law has arrives from various sources. Such sources includes the case laws,
precedents, legislation, international law, treaties, etc. in UK. All these sources provides a way to
law for different fields in UK. The precedents are the case rulings that are delivered by the courts
of the country. The next and main source of law is through legislation. The legislation frames the
law for all the citizens of the country. All the acts are framed by the legislative assembly of
parliament. The members of the legislative assembly is responsible for making the adequate laws
and policies for the citizens of the nation. The director is the chairperson of company. All the
decisions of the company is to be taken by the director of the organisation. Generally, a meeting
is held between the shareholders and director for taking any long term decision for the company.
As per the company law, the company is a separate legal unit in the eyes of law. There are
number of shareholders in a company who invest in the business of the company. The director is
accountant able to these shareholders of the company. Moreover, the company is eligibly to sue
any individual or organisation under its own name in the court of the nation. Similarly, a
company can be sued in its own name other than the name of shareholders in the civil court of
the country.
The Partnership Act 1890 rules the working of the partnership firm in UK. This act
specifies the duties of the partners under the partnership firm. There are different types of
partners such as active partner, sleeping partner, investing partner, managing partner, etc. in a
partnership firm. Generally, there are the active partners in a firm. These active partners takes
part in all the operations of the partnership firm. The Memorandum of Association is made for
the long term aims and objectives of the company. It specifies the purpose of the company for
which it is made in the eyes of law. The MOA is the main document of every company.
Moreover, the Article of Association explains about the day to day goals of the company that has
to be achieve in short period of time. These goals are to be achieved by the management in the
shorter period of time(Chinwuba, 2020).

The legal business structure of UK companies
Sole trader:
The sole trader is single individual who manages the overall working of the business
organisation. The sole trader has so many responsibilities as he is responsible for all the
operations of the company. The sole trader has to invest in business on its own. There is a high
level of confidentiality in this type of business. But, the business lacks with unlimited liability on
the sole proprietor. The tax is to be paid under the name of the sole proprietor as it is his own
income. Moreover, the sole proprietor is responsible to file the return on the total income of the
firm. On the contrary to this, there is very lack of personal time for the sole proprietor. The sole
trader is responsible for paying extra from its own personal assets in case where the firm bears
the loss in the market(Deb, 2022).
General partnership:
The general partnership is commonly used business partnership firm in UK. There are at
least two individuals in a partnership business. Both the partners works under the same name of
the partnership firm. There is no separate identity of the partners as they are known by the name
of the partnership firm. The partners enjoy the other benefits of the partnership firm. These
benefits includes the equal liability of all the partners in the company. Moreover, the partners
shares responsibility for the operations of partnership organisation. It provides more time for
private life of each partners that would not be possible in case of sole proprietor. The tax which
is imposed on partnership firm is paid by all the partners of the firm. So, no partner has to pay
individually to the income tax department of the country. The funds for the firm is to be arranged
by all the partners of the organisation. So, no burden on one head. But, the disadvantage is that if
any loss is caused by any one partner, then also it is to be bear by all the partners of the
company.
Limited Liability Partnership:
The LLP is ruled by the law of Limited Partnership Act, 1907. This is the other kind of
partnership firm that gives for lower liability as comparison to general type of partnership firm.
The partners of these partnership organisations has its limited liability to a specified extent. It
means that if any loss is bore by the partnership firm, then there is no need to sale the personal
assets of the partners in order to overcome these loss in the firm. This means the liability and

obligation of the partners are limited to the extent to the capital money invested by the partners
in the organisation. The firm can take maximum to the investment of the partners in case of any
loss to the partnership firm. The tax is also filed under the name of the partnership firm and not
individually(Giliker, 2021).
Limited Liability Company:
The limited liability company is governed by the Companies Act, 2006. It has limited
liability for all its shareholders. The stockholders are liable for the profits and losses of the
institution. The company has the separate legal status in eyes of law. There also lies a number of
shareholders in the company that takes part in the decision making of the company. The tax is
too paid individually by company to tax division of the nation. Moreover, the shareholders has
time for private life in this case. The company has several other function with the respect to the
stakeholders of the company. The company can issue its own shares to other person. It is a very
good source of increasing the capital of the business(Keay, et.al, 2020).
Recommendations for IOM Solutions:
The firm IOM Solutions is recommended to change its business type from sole proprietor
to Limited liability Company. The limited liability company would allow Sam to enhance its
business in the market. It would also provide a good source of finance to the business. The
business has more chances to grow in case of limited liability company as there would be more
employees who will aid in increasing the productivity of the business. The company would also
provide more personal time for Sam which he could give to its family member. Sam is able to
enjoy his social as well as professional life by opting this type of business. Sam could now
compete more with its competitors with the help of more resources. There would be better work
environment in company. It would also reduce the pressure and stress of Sam as there are other
members also involve in it. There would be more department like human resource, finance,
production department, etc. that would expertise all the working of the organisation. The profit
would also be be more due to extra productivity in case of company. Moreover, the business of
IOM Solutions would incredibly increase in the market by opting the business kind as
company(Rajanahalli, 2020).

CONCLUSION
The above report concludes about the meaning of the business firm. It explains about the
various laws that are being applicable on different types of businesses in UK. This report also
summarises about different types of businesses that can be run by an individual or group of
individuals in UK. These businesses are the sole proprietor, partnership, company, limited
liability partnership etc. which is being discussed in this report. This report also concludes about
the recommendations that is to be given to IOM Solutions regarding the change of the business
type. Moreover, Sam is advised to opt for limited liability company.

References:
Books and Journals
Adamou, M., Kyriakidou, N. and Connolly, J., 2021. Evolution of public-private partnership: the
UK perspective through a case study approach. International Journal of Organizational
Analysis.
Charlton, M., 2018. Oscillate Wildly or Business as Usual? A systems perspective on
governance and partnership in the UK shared transport sector. COCREATING
RESPONSIBLE FUTURES IN THE DIGITAL AGE: Exploring new paths towards
economic, p.168.
Cheong, B.C., 2020. Context is the most important factor: one-man companies and corporate
attribution in Singapore. Oxford Business Law Blog, June, 12.
Chinwuba, N.N., 2020. Recent developments in the application of the doctrine of vicarious
liability by United Kingdom courts. Nnamdi Azikiwe University Journal of International
Law and Jurisprudence, 11(1), pp.137-148.
Deb, E., 2022. International Business Law-Critical Review on Corporate Governance in
UK. Available at SSRN 4074105.
Giliker, P., 2021. Can the Supreme Court halt the ongoing expansion of vicarious liability:
Barclays and Morrison in the UK Supreme Court?. Tottel's Journal of Professional
Negligence, 37(2).
Keay, A., et.al , 2020. Business judgment and director accountability: a study of case-law over
time. Journal of Corporate Law Studies, 20(2), pp.359-387.
Rajanahalli, K., 2020. Limited Liability Partnership as a Better Alternative to
Incorporation. Issue 5 Int'l JL Mgmt. & Human., 3, p.514.