Business Law: UK Business Organizations - Formation and Management

This report provides a comprehensive overview of business law in the United Kingdom, focusing on the nature, formation, and management of various business organizations. It discusses the legal framework governing businesses, including the Companies Act of 2006, and explores different business structures such as sole proprietorships, general partnerships, limited liability partnerships, and limited liability companies. The report also examines the roles and responsibilities of directors, the importance of the Memorandum of Association (MOA) and Articles of Association (AOA), and potential liabilities that may arise in business operations. Furthermore, it offers recommendations for IOM Solutions, suggesting the adoption of a limited liability company structure to facilitate growth and expansion while mitigating risks. Desklib provides access to this and many other solved assignments for students.

Business Law
Title:
Nature, formation, and
management
of
Business Organisations

Table of Contents
Introduction .........................................................................................................................................3
MAIN BODY.......................................................................................................................................3
Business and Organisation in United Kingdom ..............................................................................3
Legal Business Structure of the companies in the United Kingdom: .............................................5
Limited Liability Partnership...........................................................................................................6
Limited Liability Company.............................................................................................................6
Recommendations for IOM Solutions:............................................................................................6
Conclusion ...........................................................................................................................................7
References ...........................................................................................................................................8

Introduction
The start up which is commenced by the individual or the group of individual with a prime
objective of making profit then I will refereed as a business. In this business, they produce goods
and providing services to the customers and generate revenue from the same. The organisation must
have the goodwill at the marketplace so that the brand in recognizable among their competitors who
are offering the identical goods and services. There is a specific sector in which the organisation and
the new enterprise emerge themselves, it is known as the marketplace and with the assistance of the
new enterprises they will be grow and expand in their industries. With all the fresh developments at
the sectors then it will be increase the import and export which will impacts the scenario of the
economy in regards of the society and the sectors and even the specific area. In this paper, it
discussing about the businesses structure, various recommendation which is relevant for the SAM I
their enterprise of the IOM solutions.
MAIN BODY
Business and Organisation in United Kingdom
There is an act according to which the organisation perform the activities and services in the
organisation and even the management of the businesses are planned according to the same act and
this act is the Companies Act of 2006. This act is mainly used to provide all the rules and
regulations according to which the companies have to perform their task and guide the owners all
the rights they have over the company. And the act even makes them aware about all the liabilities
they are liable for which in the association of the company. A business requires staff for the
operation of the organisation, a company cannot run without employees for running the business in
a smooth manner. Therefore there is a need for rules and regulations for the employees and the
employers so that the behaviour and conduct in the company should be up to the mark of the market
marking. There should be the need for the rules such that the legal liabilities are fulfilled without
causing any trouble in the working of the company. Every company gets its individual identify
while establishing the business and it is used to provide the legal liabilities which gives them
professional entity.(Butturini, P., 2020. ) Along with personal identity, they are also given a common
stamp with a company name on it and a seal, also a components like perpetual existence, separate or
distinct properties and with this comes the responsibilities and the rights for the business like one
can sue the business and vice versa. While formation of the business , the owners of the business

have to sign various agreements for having a fully legal operation of the business and there are no
causalities in the running of the organisation. All the business differ from any other business on the
basis of the source of business, agreement over sale and purchase of the goods and the services
provided in the organisation.
Various liabilities arise due to unprofessional behaviour of the employees and misconduct done
during their working hours in the office. Vicarious liability is one of the liability that built up in a
business due to the scale of the business is large and there are a lot of services offered by the
company. All the liabilities occur only when there is any kind of dishonestly within the company
and even with the customers, any act done by the employee which is unprofessional and is harmful
for the growth of the business and even these are the factors for leading the business in wrongful
acts. (Lewis, K., 2019. )When any kind of act that is not legally obliged is done by the employee
than the employer is liable for the same. If any role that is promised by the business to the
customers is not fulfilled by them than also the owner will be held liable. The main and the senior
most position is given to the Director of the company, and he is liable to answer when ever there is
any kind of trouble in the business. The Director has many roles in the business which they are
required to complete with honesty and with their full attention, and if the duties are not performed
well by the directors than they will also be held reasonable for the loses in the organisation can be
the first person to ask about the same. The duty of the director is to make sure that there is a proper
working in the business and assign task to the employees according to their capability. If the
director is not capable of performing his task than he might even have to leave the position of the
directorship. The role of director is also to make sure that there is no misunderstanding among the
employees and there is a healthy working environment in the business. If there is any lose in the
business because of the director than he will only be held liable and would have to pay the remedy.
The Partnership Act is the act that regulates partnership agreements by providing provisions
governing how a company is established and operated, which can result in the termination of a
partnership as a result of fraudulent activity. Effective governance of a company can be achieved
with the assistance of the Memorandum of Association (MOA) and the Articles of Association
(AOA). A MOA is a kind of legal statement that helps control the establishment of a company when
it is established, but only after it has been signed by shareholders and a guarantor. (Lord,L.,
2018.)AOA is a kind of written statement that defines the company's rules and regulations to be
followed while working for the company. It is therefore said that the approval from directors,
shareholders, and owners is necessary in the company before done activity is performed.

Legal Business Structure of the companies in the United Kingdom:
There are various type of businesses that are registered under the companies act, Sam's IOM
solution is registered as a Sole proprietorship. The business is running since eight years and the
business is growing from last two years. This form of business offer profit to him only as he gets the
whole profit individually and do not have share it with anyone. Him being the only one so he is
liable for all the misconduct and any behaviour which is not in the favour of business. When there
is a lose in the solution he will be the one to pay all the losses on his own.
Sole Trader
Sole trader is a kind of stand alone structure of business which is managed by the one individual at
this full capacity. It is the framework which gave advantage of being cheap in comparisons to others
in set up. It makes them easy to create and operate. It is the kind of business structure which is
famous for the entrepreneurs who is young and aspiring who are emerging their businesses from a
small scale. They have very little funds with them to start their business. Generally, it is being
pursued by a single individuals who aspire to be the owner of the business of their start-ups. The
sole individual is the only beneficiary of all the profit which is incurred from the business (pia-
Meza,.p.,2022.). They can take decision independently without any objections. The control of the
ownerships is in the hand of the individual which attracts more businessman. But it also have
downsides in regard debts, liabilities and losses that the person has to incurred in regard of the
running the business. They have management which is private in nature which prevail
confidentiality. Whether it is income or corporation taxes, both have to pay by the owner and they
has the responsibility to keep their customer data in respect to General Data Protection Regulations.
General partnership
This form of partnership includes or extra than people who get concerned as well-known
companions with partnership settlement. These companions perform the enterprise with the aid of
using sharing all of the roles and obligations concerned with inside the enterprise. They must
percentage the income and losses on a well timed foundation with same share at the same time as
handling the enterprise.(Thomson, L.W., 2022. ) The partnership agreement states that the
companions will percentage charges of establishment, the monetary dangers and money owed and
additionally the blessings which might be incurred with inside the enterprise. Due to the settlement
they get together concerned closer to the operations of the enterprise and must preserve joint
liabilities with recognize to control of dangers and duty of all of the movements taken with the aid
of using them. Thus they get concerned with limitless private liabilities. But this shape is extra
dependable than a sole dealer because of smooth investments with inside the enterprise. Also
because of special competencies and revel in of the companions they have got innovative selection

making which enables to enhance the productiveness of the enterprise. But the companions face
trouble while they may be punished for the wrongful movements of the opposite companion she to
joint legal responsibility This is ruled with the aid of using the partnership act which defines the
formulations and dissolution of the enterprise in case any of the companion suffers loss of life or
bankruptcy.
Limited Liability Partnership
In this partnership has fewer liabilities than a typical partnership. The situation is different from
creating debt that limits the amount that shareholders can spend on the company. The company is
formed by her two or more partners who are personally responsible for all actions taken at the
company. However, they have no collective or collective responsibility. However, this partnership
requires a registration office and must comply with government regulations. (Shardlow, S.,
2020.)The 1907 Limited Partnership Act regulates his LLP by also protecting the interests of his
partner. Creating a written agreement that contributes to the proper working of the company.
Limited Liability Company
It is likewise seemed as a non-public restricted corporation whose control is ruled with the aid of
using the Companies act 2006 which presents information of the restricted liabilities. It lays down
provisions figuring out how a corporation is fashioned and function, what's required to shape a non-
public corporation and the way it is able to be dissolved. It additionally created criminal
responsibilities with recognize to the rights and obligations of the heads and contributors of the
corporation who should abide with the aid of using the charter of the corporation. Director is
typically the pinnacle of the corporation who runs the control of the corporation. The corporation is
owned with the aid of using the stakeholders. It has a awesome company individuality. Owners on
this experience minimal non-public liabilities.(Małozięć, C., 2020. )
Recommendations for IOM Solutions:
There will be a well timed inspection of the enterprise, as to how is the operation occurring
within the enterprise and wherein all place there's a want of interest and what all steps are to be
taken through the employer to clear up the problems which can be inflicting hassle within the
jogging of the solution. When a enterprise grows and develops it calls for well timed growth in
order that it may take gain of the developing possibilities inside the market. It additionally
facilitates the enterprise to conform with the dynamic circumstances. (Peters, 2018.)Thus, Sam need
to pick restricted legal responsibility employer for the growth of his enterprise of IOM Solutions.
This criminal systems gives a variety of benefits. It facilitates to proportion the duties of the control
with individuals. It additionally facilitates to maintain better profits. It gives performance in tax

planning. More buyers are interested in this kind because of its dependable nature, this facilitates in
capital formation. This additionally gives minimal private liabilities that could clearly gain Sam.
Conclusion
From the above report, we can conclude that the company can have a good organizational
culture with proper management within the organization in order to run the business effectively. To
keep your business out of trouble, laws are in place to operate your business with proper policies
and procedures. Earning revenue and making a profit is the main goal for a well-functioning
business. They may differ in size and type as determined by the owner. Sam is offered to choose a
limited liability company to grow the solution. And with the help of recommendations, his solution
runs smoothly.

References
Books and Journals
Butturini, P., 2020. Written Resolutions in UK Companies Act 2006 and Their Possible Relevance
beyond UK Borders. European Company and Financial Law Review, 17(6), pp.760-784.
Lewis, K., 2019. Vicarious liability. BDJ In Practice, 32(4), pp.16-17.
Lord, N., Wingerde, K.V. and Campbell, L., 2018. Organising the monies of corporate financial
crimes via organisational structures: Ostensible legitimacy, effective anonymity, and third-
party facilitation. Administrative Sciences, 8(2), p.17.
Thomson, L.W., 2022. Is Decommissioning Liability Creating a Barrier to Deal Activity on the
United Kingdom Continental Shelf?. Aberdeen Student L. Rev.,11, p.68.
Shardlow, S., 2020. Legal responsibility and liability in fieldwork. In Fieldwork in the Human
Services(pp. 117-130). Routledge
Małozięć, C., 2020. Participation in a Limited Liability Company as an Element of Marital
Property. Law and Administration in Post-Soviet Europe, 7(1), pp.22-33.
Peters, J. and Mathias, L., 2018. Enacting student partnership as though we really mean it: Some
Freirean principles for a pedagogy of partnership. International Journal for Students as
Partners, 2(2), pp.53-70.
pia-Meza, P., Alvarez-Risco, A. and Del-Aguila-Arcentales, S., 2022. The Circular Economy: The
United Kingdom. In Towards a Circular Economy (pp. 247-262). Springer, Cham.