Individual essay

Fundamental features of the formation o a company in

the UK and Structure of Employment Law

University of Suffolk

London School of Commerce

Business law and ethics

S230595
 At present time it is a very true fact that today, forming an organization within the United
Kingdom is one of the very crucial steps and everybody must consider multiple types of factors
presented in the Companies Act. The present essay will give information about a few questions in
which it will discuss fundamental features based on the formation of a company within the United
Kingdom legislation. Along with this, it will also evaluate its effect by discussing the board
structure of the employment law present in the United Kingdom by indicating the favor of law on
the basis of employers or employees.

In the current scenario for doing business, the best potential market at present is the United
Kingdom. The United Kingdom is not only famous across the world on the basis of its efficient
investment but also on the basis of its environment. Companies Act is the base legislation
governing the formation and operation of companies in the United Kingdom. It covers a wide
range of topics like: incorporating a company, shareholders, directors, company meetings, share
capital, accounts and audit, insolvency, share capital, corporate governance. Companies Acts have
played a crucial role in shaping the legal framework for companies in the UK, providing the legal
basis for the incorporation of companies and setting out the rights and obligations of company
directors and shareholders (Baxt & Dal Pont, 2010). The Companies Act in the UK provides
several types of companies that can be formed under its provisions. Here are some of the main
types of companies presented in the Act: Private Limited Company (Ltd): A privately held
company with a minimum of one shareholder and a maximum of 50 shareholders, and which is
not allowed to offer its shares to the public, Public Limited Company (PLC): A publicly held
company that can offer its shares to the public and which must have a minimum share capital of
£50,000, Company Limited by Guarantee: A company without a share capital that is formed for
non-profit purposes, such as a charity or a club, Community Interest Company (CIC): A special
type of company designed for social enterprises that wish to operate for the benefit of the
community rather than for profit, Unlimited Company: A company with no limit on the liability
of its members, which means that they are personally liable for the company's debts and
obligations. Limited Liability Partnership (LLP): A hybrid form of partnership and limited liability
company, where the partners have limited liability for the company's debts and obligations
(Companies Act, 2006).
Despite of the various types of companies that the United Kingdom offers, there are
individuals who work as sole traders. They are self-employed and operates their business as a sole
proprietorship. The Companies Act do not specifically define the status of sole traders, but it set
out the legal requirements and regulation for setting up and operating a business in United
Kingdom. Some of the characteristics of sole traders are: the fact that they are personally liable
for the debts and obligations of their business, they are required to register for self-assessment
with HM Revenue and Customs and file annual tax return and a sole trader does not have a separate
legal identity from its owner. In other order of ideas, there are some characteristics that are very
important when funding a company. They are, Company name: It is one of the very essential
fundamental feature data to be followed by companies at the time when they are forming their
business within the United Kingdom (Zheng, et al., 2019). For the business, it is very essential
that they must select a very good name that does not have any type of sensitive word that gives a
bad impression. While selecting the name of the business it is very essential for an individual to
make sure that it must not the same as compared another company, Constitutional documents:
It is a type of document that is fully based upon business enterprises and has two primary
documents in which one is related to the memorandum of association and the other is related to
the article of association. The short document gives all the information regarding the formulation
of the business is referred as the memorandum of association. It also gave information about the
people who are showing their interest in becoming a member of the company. On the other side,
all the main constitutional documents based upon the company are defined under the article of
association (Nambisan, et al., 2019). It provides full assistance and support in the form of
reflecting through administrative provisions for the organization, Registered office: The physical
address of the company is also one of the very essential features of the business when they are
operating within the United Kingdom. They must ensure that they have a physical address in which
all their important documents will be shared so that is one of the biggest reasons that physical
address is very important and essential, Statement of capital: This feature is fully associated with
the companies who want to formulate themselves within the United Kingdom. One of the reasons
that this feature is very essential is because it gives information about company share, values, And
structure. This document is also very essential because it reflects upon all the rights that are given
to the individual within the company regarding dividends, voting, and redemption along with
capital.

The employment law present in the UK has its full attention on the country so that they
can protect not only employers but also employees at the same time. The employment law of the
UK has a structure that includes the facility of holidays, pay, discrimination, dismissal, and others.
The main aim of laws active in the UK related to employment is that they want to protect all the
rights of the people who are working there along with giving them safety and all safeguards to the
employers. The structure of the law is based upon three different types of sources that are related
to European law, common law, and statute law which are present in the United Kingdom
(Chiripanhura & Wolf, 2019). Besides this, the country has also developed a lot of influential and
effective legislation along with law so that it will help them at the time of making themselves top
as compared to other countries. The main aim of the law is to develop and keep a very good
relationship between employer and employees.
There are a number of laws that are present in the structure of UK employment law in
which one of which is the Employment Right Act 1996. The main reason behind this act was
formulated that is to protect all the employee's rights in the context of unfair dismissal, paternity
leave, dismissal, and maternity leave. However, the laws of the UK are divided among the
individuals on the basis of independent contractors, workers and employees. The other structure
related to employment law is the minimum wage act 1998 which gives information about the
minimum wage rate to employers at the time of giving wages to employees across the country. It
is also viewed by the government regulators that are present in the country so that they can make
sure that all the things are present within the line on the basis of the inflation rate. The other act
that comes under a structure related to employment law is Employment Relations in 1999. It is
very essential because through these professionals can easily maintain relationships between
employers and employees. One of the influential and vital roles that come under UK employment
law is Equality Act 2010. It is very essential law because it guides both employers and employees
so that they can make sure that all discrimination within the workplace is prevented. It is very
essential for all the companies present in the UK to follow it in a proper manner so that they can
provide positive work culture by maintaining fair treatment within the workplace. From the above
scenario, it is very clear that the government of the United Kingdom has made the law in a very
good sense so that it can give equal growth opportunities to all the individuals that are living within
the country. Apart from this, there are also five different areas based upon the employment law
within the United Kingdom for every organization whether it is small or large. It is the duty of
the business owner to make sure that they are aware of different areas like unfair dismissal,
employment contracts, discrimination, personal data, and unfair dismissal (Khan, et al., 2018).
From all the above, it can be said that employees are more favored by the United Kingdom
employment law, because it was the reason that law was developed so that they can different types
of benefits and rights to employees.
 This essay has shown that every individual who wants to make the first steps in funding a
company and own a business must have in attention the regulations from Companies Act 2006
where is clearly detailed what owners must obey. It is known that employees have more
advantages by employments laws but there will be a time when everybody will understand that
employers brings the prosperity for the business and then the right of employers will be respected
more.
References
Baxt, R. & Dal Pont, G., 2010. The Companies Acts: A Study of the Law of Business Association
in the United Kingdom. 1st ed. s.l.:Oxford University Press.

Chiripanhura, B. & Wolf, N., 2019. Long term trends in UK employment: 1861 - 2018, s.l.: Office
for National Statistics.

Companies Act, 2006. legislation.gov.uk. [Online]

Available at: https://www.legislation.gov.uk/ukpga/2006/46/pdfs/ukpga_20060046_en.pdf
[Accessed 10 02 2023].

Khan, N., Korac-Kakabadse, N., Skouloudis, A. & Dimopoulous, A., 2018. Diversity in the
workplace: An overview of disability employment disclosures among UK firms.. Corporate
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Nambisan, S., Zahra, S. A. & Lou, Y., 2019. Global platforms and ecosystems: Implications for
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Zheng, P., Wang, Z., Chen, C.-H. & Khoo, L. P., 2019. Zheng, P., Wang, Z., Chen, C.H. and
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