UK Business Organizations: Legal Framework and IOM Solutions Analysis

This report discusses business organizations and their legal structures in the UK, focusing on sole proprietorships, general partnerships, partnerships, and limited liability companies. It examines relevant UK laws, including the Companies Act 2006, and explores the roles and responsibilities of directors, termination of partnerships, and business liabilities. The report provides recommendations for IOM Solutions, suggesting a partnership structure to enhance business operations and address challenges effectively. The analysis emphasizes the importance of understanding legal frameworks for successful business management and growth in the UK context, with a conclusion highlighting the need for well-organized business practices to meet customer needs and organizational goals. Desklib provides access to similar solved assignments and study resources.

Business Organisations

Table of Contents
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
Business and organisation in the UK .........................................................................................4
Legal business structure of UK companies.................................................................................5
Recommendations for IOM Solutions .......................................................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business organisation basically refers to an entity which is formed for the purpose of
carrying on commercial enterprise. These are the organisation which are based on the systems of
law that governs the contract and which exchanges property rights and incorporation as well.
Business organisations are important because if the business is not properly organised, paper
work gets lost and valuable time is spent on finding information that should be readily
available(Bajdor Bubel and Lis Buckley., 2016).It has been observed that good organisational
skills can break or make the business owner which ultimately saves the time and also reduces the
stress level as well. The present report will cover discussion about businesses and organisation
in the UK and also about legal structure of business of the companies of UK. In addition to this,
the report will cover analysis about the recommendations for IOM Solutions.
MAIN BODY
Business and organisation in the UK
In the UK country, the economy is majorly dominated by the service sector which
includes banking, insurance and business services and these are all the main drivers of the
country's growth. There are other important industries as well which includes chemicals, metals,
aerospace, ship building, motor vehicles, textiles, clothing, food processing, arts, electronic and
communication equipment.
Laws followed by the UK organisation: There are different kinds of laws which have been
followed by the UK organisation in order to perform into effective manner. It basically include
company law, small business, enterprise and employment act 2015, financial service act 2012
and financial services (Banking reform) act 2013. Company law in the UK is mainly set out the
companies act 2006 which sets out the requirements for distribution, preparation and filing of
reports and accounts which includes the choice of accounting framework(Gold and Heikkurinen.,
2018).This is the law which has been introduced in order to simplify the administration and to
improve the rights of shareholders as well. This is the law which has been used in order to update
and simplify the corporate law.
Transaction management of the organisation: For the effective transaction management of the
company it is very important that to have proper coordination between accounts and finance
department and management as well.

Vicarious liability: Within the UK country, there are certain companies who work under
vicarious liability where it is a situation in which one party is held into partly manner who is
responsible for the unlawful actions of the third party.
Business liability in negligence: There are situations into the business where liability is into
negligence where a professional fails in terms of meeting out their own responsibilities to the
required standard or breaches the duty of care as well (Malongwe., 2018). There are different
forms of negligence which includes accounts negligence, legal negligence, architectural
negligence and clinical negligence as well.
Roles and responsibilities of a Director: Within a large organisation of UK, there are certain
roles and responsibilities of a director which needs to be followed into appropriate manner. A
Director is responsible for not applying company assets into wrong manner. There is no
requirement to make secret profits and needs to maintain the duty of confidentiality as well. The
Director is also responsible for not permitting the conflict of interest and also there is duty attend
meetings into appropriate manner. The director is also responsible for not to exceed powers so
that it imbalances the overall nature of working of an organisation.
Termination of partnership in business: It is a process through which the relationship between
the partners is terminated and also comes to an end situation as well(Mohapatra and Samaddar.,
2020). It is also that situation where all the assets, accounts, shares and liabilities are disposed of
and settled into the end situation as well.
So in this manner, all the organisation into UK country have performed by following all
rules and regulations and also fulfil all the requirements of business into positive manner. That's
why for getting success on the large scale it is very important for business organisation to
perform into effective and efficient manner as well.
Legal business structure of UK companies
Sole trader: Sole trader also known as sole proprietorship which is a type of enterprise
that is run and owned by the individual where there is no legal legislation between the owner and
business entity. A sole trader can keep all the profits of business even when the tax have been
paid into positive manner. At the personal level, a sole trader is responsible for any kind of losses
that the business makes. For becoming a sole trader it is very important to have records of
business of at least five years and send the self assessment tax return every year.

It is also required to pay income tax on the profits and class two and class four national
insurance as well. There are certain advantages of sole trader which includes the individual is the
main boss, keeps all profits with themselves, start up costs are low and also have higher level of
privacy as well(Nkwabi and Mboya., 2019). There are disadvantages of being a sole trader
which includes the individual has unlimited liability for debts, capacity to raise is very limited
and all the daily basis decisions has been taken by the individual only.
General Partnership: General partnership basically refers to the partnership under
common law which is a kind of association of persons or an unincorporated company as well.
There are two main conditions for having general partnership which includes the first one is
about that the company must have two or more owners. Second condition is that all partners
must agree to have unlimited personal responsibility for any legal liabilities or debts the
partnership might incur. Under general partnership they need not to pay income tax. They also
have unlimited liability for the obligations of the business which includes taxes and debts as
well. The main advantage of general partnership is that they are easy to establish which is
simpler and cheaper in terms of nature as well. There are certain disadvantages of general
partnership where general partners are responsible for other partners actions and there could be
disagreements as well. The personal assets are vulnerable as well and there is requirement to split
the profits as well.
Partnership: Partnership basically refers to the arrangement between two or more people
in order to oversee the operations of business and also shares the profits and liabilities as well.
Partnership is basically formed out of the contract. Co-ownership is also formed either from an
agreement or by the operation of law such as through inheritance. In the UK country,
partnership itself isn't being taxed instead the legislation looks through the partnership and taxes
the partners into direct manner(Nussholz., 2018). In the case of partnership liabilities, its
basically about the division of responsibility with regards to any losses or debts of a business
partnership. The main advantage of partnership is that they have more capital which is available
for the business and also have greater borrowing capacity as well. There are certain
disadvantages of partnership which is related to the difficulty in terms of ownership transfer and
also have unlimited liability as well.

Limited Liability: Limited liability is a condition under which losses that owners of a
firm of business may incur are limited to the amount of capital invested by them in the business
and also do not extend to their personal assets as well. It is a kind of legal status where individual
financial liability is fixed to a sum which is most commonly the value of a person's investment in
a company, corporation or partnership (Pölling and et.al., 2017). For setting up a limited liability
company, it is important that to follow certain steps which include first of all checking that
setting up limited liability company is right or not and then choose a name. After that choose the
directors and company secretary as well and after that decide that who are the shareholders or
guarantors as well. After that prepare documents which agrees to how to run the company and
also need to check what records an individual needs to keep.
There are certain advantages of limited liability which includes the members which are
not personally responsible for actions of the company and also have management flexibility as
well. They also have limits into the context of limited liability and also need to pay only the self
employment tax only (Ramachandran and et.al., 2017). There are certain disadvantages of
limited liability which includes they have pay more costs into the form of formation and also
states charge as an initial formation fee as well. There are certain issues related with transferable
ownership where it is harder to transfer than with a corporation.
Recommendations for IOM Solutions
As IOM Solutions who sells electrical parts to the local garages and he has not a very big
business as well. It has been recommended that Sam has to reorganise their business into the
form of partnership where they can easily work into proper manner as well. There are certain
advantages of partnership where it is better to work under two heads rather than one and also the
business is easy to establish and also the start up costs are also very low. There are more capital
is available for the business and also have greater borrowing capacity as well. It has been
observed that at the organisational level there are high calibre employees who can become
partners. It has been recommended that it is beneficial for the Sam to work into partnership
because even in the case of losses or challenges then these tow partners can together face the
problem into positive manner. When company has to face losses then it can be equally divided
and both are liable for any kind of losses as well.

Under partnership, it has been observed that there are opportunities for income splitting
which act as an advantage of particular importance due to resultant tax savings. Under this kind
of business, it has been observed that there are limited regulations as well. It has been observed
that at the organisational level, even the circumstances have changed then its easier to change the
legal structure as well. So this is the best way or form of business which needs to be adopted by
the Sam for IOM Solutions in order to perform into effective manner as well. This is the best
recommendation for IOM Solutions in order to perform into effective manner at the
organisational level and to attract large number of people into positive manner as well.
CONCLUSION
The above stated report concludes that business organisations are very important into
this business world. It has been concluded that different organisations have their own nature and
management as well. There are different kinds of laws which been followed by the particular
country in order to perform into legalised manner as well. It has been determined that there are
different kinds of legal structures as well which has their own importance on their own level. It
basically include sole trader, partnership, general partnership and limited liability as well. It has
been observed that there are certain recommendations are required for the type of ownership of
business so that they can take appropriate decisions for their upcoming period of time. So its
very important for business organisation to perform into well mannered way so that they can
fulfil the requirements and needs of their customers into positive manner.

REFERENCES
Books and Journals
Bajdor, P., Bubel, D. and Lis, T., MANAGEMENT OF A VIRTUAL ORGANISATION FROM
THE ASPECT OF CREATING BUSINESS PROCESSES.
Buckley, P. J., 2016. The contribution of internalisation theory to international business: New
realities and unanswered questions. Journal of World Business, 51(1), pp.74-82.
Gold, S. and Heikkurinen, P., 2018. Transparency fallacy: Unintended consequences of
stakeholder claims on responsibility in supply chains. Accounting, Auditing &
Accountability Journal.
Malongwe, P., 2018. Business and information strategic alignment of project and procurement
management processes in the railway organisation in South Africa (Doctoral
dissertation, Cape Peninsula University of Technology).
Mohapatra, S. and Samaddar, U., 2020. Adopting technology adoption model organisation in
human resource management through primary research. International Journal of
Management and Enterprise Development, 19(4), pp.313-329.
Nkwabi, J. and Mboya, L., 2019. A review of factors affecting the growth of small and medium
enterprises (SMEs) in Tanzania. European Journal of Business and Management,
11(33), pp.1-8.
Nussholz, J. L., 2018. A circular business model mapping tool for creating value from prolonged
product lifetime and closed material loops. Journal of Cleaner Production, 197, pp.185-
194.
Pölling and et.al., 2017. Business models in urban farming: A comparative analysis of case
studies from Spain, Italy and Germany. Moravian Geographical Reports, 25 (3), 166-
180.
Ramachandran and et.al., 2017. Strategy Performance Evaluation of a Port Organisation based on
Multi-Criteria Decision Making using Fuzzy Logic Method. NMIMS Management
Review, 33, pp.27-34.