BMP4002 Business Law: Report on Legal Context for UK Business

This report provides an overview of the legal context for business organizations in the UK, focusing on key sources of law and their impact on businesses. It covers various aspects of business law, including company law, contract law, and employment law, and examines different business structures such as sole traders and partnerships. The report details the advantages and disadvantages of each structure, including aspects like liability, capital raising, and operational considerations. It concludes with a recommendation for IOM Solutions based on the analysis, suggesting a partnership as a suitable form of organization to facilitate business growth. The document also discusses general and limited liability partnerships, emphasizing the importance of legal compliance and strategic decision-making in the UK business environment. Desklib is a great platform for students to find similar documents and study tools.

BSc (Hons) Business Management
BMP4002 Business Law
Assessment 2
Report describing the key sources of
laws as the legal context for business
organisations in the UK
Submitted by:
Name:
ID:
Contents
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Introduction
Business laws are those laws that is used in order to set rules and regulations
which helps in forming business organization with proper legal framework prescribed
for it. As per business law different aspects in relation to goals and objectives of
business is covered within it. Further business law leads towards making business
organization perform its activities with full perseverance helping in growth and
sustainability in particular market. In this file various aspects in relation to business
organization has been covered. Then in the end different business organization like
sole trader and partnership has been discussed.
Businesses & Organisations in the UK
Business organization are those organizations that has been formed to make
business done in smooth and effective manner. Further business organizations in
order to improve business environment used various laws which are company law,
contract law and tort law. These laws helps in performing different business activities
in more effective way(Fairchild, and et. al., 2018). According to company law different
aspects in relation to working of business organization is covered. These laws are
covered within Companies Act 2006 which provides more precised guidelines in
relation to forming and running of business organization. Under the act it is
mandatory to form memorandum of association and article of association. Then
under these laws role of director has been specified in a way that they are owner of
business and all decision is taken by them. Then comes contract law which deals
with formation of agreement in relation to monetary transaction. In contract law
elements is used which are offer, acceptance, obligation, legality and validity. This
makes contract formation possible, it is better with the help of example that is ABD
Ltd and PDP Ltd willing to come together for making agreement of supply between
them. So, for this purpose contract laws is to be used so that agreement formed cam
attain legality within the eyes of law. Also tort of negligence is applied with vicarious
liability which makes employer liable for act done by employee. As under vicarious
liability principle is applied which says “master is held liable for act done by its
servant. Then comes employment law which deals over rights and duties of
employees in these laws various other acts like Employment right act 1996, Equality
law 2010, National minimum wags act 1998 is covered with health and security act of
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employees is covered. Together these laws makes employees satisfaction created in
more effective manner by developing strong triparte relation between employer and
employee. These laws helps an organization in analysing various factors which
hinder's the growth of an organization within particular market situation. Further
business organization through such laws is able to establish itself with more
effectiveness.
The legal business structure of UK companies
Sole Trader: These organizations are most commonly used businesses
organization in order to execute business. As per such organization only single
owner exists known as sole proprietor. Responsibility of such organization is handled
by one person only. Such organization provides room to start ups for expanding
themselves within market. Further sole proprietor is known as individual
entrepreneurs within which single person exists. This is simplest legal entity present
within an country. The formation process of these organization is also very easy and
does not include any document within it. They are not required to get themselves
registered within Companies House. Under the establishment process only INHRC
number is required to be generated through an self declaration to start a business.
Name should be there only to start business. There are certain advantages and
disadvantages of sole trader which has been explained as follows:
Advantages of sole proprietor are:
 Easy and inexpensive process: It is one of the biggest advantage of such
organization. As per this such business organization formed very easily and
money involved is also less. Also sole proprietor includes minimum or no work
in relation to its registration which make business establishment possible in
effective way(Dickinson, 2017).
 Few government regulation: Sole proprietorship has very less government
interference within its work. So, they are not required to spend time over
resources and government requirement which make its easy to operate. This
reduces various complexity that can arise in relation over sole proprietors
working.
 Tax advantage: These organizations has tax advantage in an way that they
are not required to pay tax only personal tax is paid by the owner of business.
It is paid out of profit that is earned by owner themselves from the business
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processes. The entity does not pay tax in any manner. It makes owner to earn
direct profit out of the business activity.
Disadvantage of sole trader are as:
Unlimited liability of owner
Sole proprietorship are considered to be separate legal entity which makes
owner face various liabilities over all debts that is incurred by entity. Further this give
rise to personal liability over debts that has been incurred by business entity. In other
words at times organization is not able to meet financial liability making organization
face difficulties in payment done(Courcelles, 2019).
Limitations on capital raising
This is one of the most common disadvantage of these organization as funds
is not arranged through reliable resources. Thus making business organization
cause difficulty within its running which makes business collapsed at time.
Partnership
An partnership means formal agreement that has been formed by two or more
then two parties which makes business operations performed with an common
motive to earn profit that is shared by partners themselves. Further partnership is
considered as agreement that has been made by two or more then two parties which
makes them earn profit over business formed by them. In partnership all work is
handled by the partners themselves including work done by them. In simple words
partnership means those organizations that is made with the help of two or more
than two persons. Formation of partnership firm is easy as only NHRC number is
required to be generated. Partnership agreement is created only for legal purpose if
involved while forming partnership. Advantages and disadvantages of these
organization are as follows:
Advantages of partnership organization
 Bridging the Gap in expertise and Knowledge: In partnership business two
or more then two persons are involved which helps in enhancing of ideas
leading towards innovation produced within a business. As per this better and
satisfactory results can be achieved from various process of partnership.
 More cash: As per this prospective partner can bring in fusion of cash into
business. The person have more strategic connections which makes business
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done in more effective manner. In this funding is done by partners themselves
which makes potential impact created over capital that has to be arranged in
order ti make business growth possible. The right business partner may also
enhance ability to borrow money to finance the growth of the business. It
helps to keep these money issues in mind as part of the criteria in evaluating
a potential partner(Conrad, 2018).
 Cost Saving: Having a business partner can allow to share the financial
burden for expenses and capital expenditures needed to run the business.
This could result in more substantial savings than by going it alone.
 More business opportunity: One of the advantages of having a business
partner is sharing the labor. This is helpful in increasing productivity with
flexibility making business opportunities created in more effective manner.
Further business is improved through the opportunity by reducing negative
impact upon it.
Disadvantages of partnership organization
 Liabilities: In relation to this sharing of profit and assets partnership shares
entails in relation to business loss with responsibility over debts that has been
incurred by other partners. This makes burden to be increased over partners
making partnership firm face difficulty in its operations. Further is dependent
over decisions taken by partners which makes business decisions taken in
more effective manner. This is one of the biggest disadvantage possessed by
partnership firm which makes partnership face difficulties at times(Burri,
2021).
 Loss of Autonomy: This is another disadvantage that is posed with
partnership as per this partners enjoy control upon business which makes
conflict arise due to different thinking process. It leads upon conflict arise
making organizations working process improved in more effective manner.
This makes partnership dissolve making business organization lead towards
winding up form market.
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 Emotional issues: This is another disadvantage as it directly impacts
working of partnership firm. As per it if an partner dies then partnership is
dissolved immediately. Also dissolution of partnership takes places because
of emotional issues as partners are not able to work in synchronized manner
after particular dispute.
General Partnership
These partnership is one of the most easiest form of partnership within which
all responsibility is hold by the partners themselves. According to general partnership
business all the rules applicable to partnership is applied within it. There are certain
advantages and disadvantages of these firms they are as follows:
 Better Work/Life Balance: By sharing the labor, a partner may also lighten
the load. It may allow to take time off when needed, knowing that there's a
trusted person to hold down the fort. This can have a positive impact on
personal life.
 Moral Support: Everyone needs to be able to bounce off ideas or debrief on
important issues. And we may need moral support when we encounter
setbacks or have to cope with work and everyday frustrations.
Disadvantage of general partnership are as follows:
 Future Selling Complications: As circumstances change in the future, you
or your partner may wish to sell the business. This could present difficulties if
one of the partners isn't interested in selling(Buchheit, 2019).
Limited Liability
These are those partnership firm within which all partners contributes as per
the investment done by them. Such partnerships are formed for specific goals and
objectives only.
Recommendations for IOM Solutions
As per the above case scenario it can be observed that Sam is looking for
opening of new business organization and has been in the business form few years.
This makes partnership to be right form of organization formed as it helps business
to grow in right direction.
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Conclusion
From the above discussion it can be concluded that business laws are the
laws that is used in order to form an business organization as per legal entity of an
organization. These laws covers various business organizations which are sole
proprietor and partnership. Under partnership two types has been covered within the
file that is general and liability. Then in this best form of business organization that is
partnership in relation to business has been covered. Such business organization is
not bound by rules and regulation of government making business free form legakl
liability of any kind.
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REFRENCES
Books and Journals
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Burri, T., 2021. The New Regulation of the European Union on Artificial Intelligence: Fuzzy
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Conrad, C.A., 2018. Ethics in Business Education. In Business Ethics-A Philosophical and
Behavioral Approach (pp. 327-337). Springer, Cham.
Courcelles, D., 2019. The Ethics of the Merchant in the Islamic Faith: From Ibn Khaldoun to
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Dickinson, A.L., 2017. Recent Ethics Opinions of Significance. J. Legal Prof., 42, p.291.
Fairchild, and et. al., 2018. 14. Health Justice. In Public Health Law and Ethics (pp. 587-612).
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