Question Number 1

As the situation of COVID19 is becoming better day by day and the government is providing StartUp loans of £500 to £25,000 to start or grow businesses, a construction company will be set up by me that will enable me to catch potential opportunities in the market. My startup will assist from the construction of homes to commercial places. It will also provide decor and renovate facilities in already build buildings. 

Limited Company

Public Limited Company

Registered Charity

A UK limited corporation has many advantages.

Firsttime entrepreneurs, single proprietors, or current firm owners may profit from the form of a limited company, such as in the UK.

 

 

The concept of limited liability

 

Because the business itself owes money, it is legally responsible for such obligations. Owners assets are not confiscated to pay for corporate debts or satisfy any legal claims made against the firm.

 

 

 

This item has a professional image.

There are strict reporting and filing requirements to successfully implement this kind of legal structure; the details of the business and its finances are welldocumented in public records, and all business activities must be thoroughly monitored by Companies House and Her Majesty s Revenue and Customs (HMRC).

 

Third, taxation

 

For UK businesses with yearly earnings up to £300,000 (about $435,000), Corporation Tax is 20% on annual profits. You may save money on your compensation by paying yourself a modest salary and monthly dividends as a director and shareholder of a UKbased business.

 

eternal life

 

A UK limited company is unique because, when a shareholder dies or decides to sell their shares, the firm is impacted since they are no longer shareholders.

 

 

 

5. The United Kingdom s presence

 

With a UK Limited Company, you may use it to create a new or current commercial presence in the UK and also expand your organization throughout the globe (Startups.co.uk, 2014).

 

 

Weaknesses of a UK LTD

 

All in all, establishing a limited company in the UK comes with certain tradeoffs, but they are insignificant when compared to the benefits you ll get.

 

The Task Of Administration

Reporting your company s financial activities via yearly reports to Companies House and HMRC.

 

Due to the mandatory need to file an annual company tax return with HMRC, Many companies need board members to retain a work address so that they may receive formal communication that pertains to their duties as a board member, although the work address doesn t need to be in the UK. In the US, you may provide your residence or your company s address if you want.

 

Anonymity

For every business information, such as the registered office address, the names of the directors, and service addresses, as well as all company records, the company register kept by Companies House is accessible to the public. To protect both the business and the public, the right to examine company documents at the registered office location is provided.

 

Penalties are due beyond the deadline.

Your business may face fines and legal actions if you fail to meet reporting and filing obligations, or if you fail to pay all applicable taxes by the deadlines (Nixon Williams, n.d.).

In time, as a firm develops, it may opt to incorporate and issue shares as a public limited company (PLC). Shares are bought and sold on the public stock market in a PLC. A shareholder is someone who owns stock. They take on a partial financial stake in the company and are allowed to have an impact on how it runs. Executives, directors, and management supervise the company s business operations.

 

‘Floating on the stock exchange is the term used to describe when a company sells shares on a stock market.

 

 

 

One of the advantages of working with a PLC is that:

 

 

 

It is in a position to get more money in the form of extra shares.

 

limited liability is imposed on shareholders

 

Prices are going down as a result of greater negotiating possibilities with suppliers because big companies have economies of scale.

 

You ll have a lot of disadvantages if you work in a PLC.

 

 

 

It has a minimum startup cost of $50,000.

 

Reporting and accounting obligations are more difficult

 

In the event of a hostile takeover, there is a higher chance of a competitor s business taking control of the company.

 

Shareholders are likely to anticipate receiving dividends as a proportion of earnings.

 

When it comes to company choices, shareholders may have disagreements (BBC Bitesize, n.d.).

In setting up a charity, there are many benefits to be found. A boost in trust within your organization may be the main benefit. It s easy to see why individuals are more likely to donate money or their time to a recognized charity. This will have a significant impact on your fundraising efforts.

Some suppliers and other organizations will offer more consideration to registered charities than to other businesses or organizations. In certain instances, providers may provide you with a reduced or waived the charge.

 

 

Unregistered charities, in addition to the variety of tax advantages that are available to registered charities, are permitted to operate taxfree. Your organization s finances will be positively impacted by these advantages. Remember, your charity s revenue and profits are often taxexempt, provided that the money is utilized solely for charitable purposes. Additionally, registered charities are allowed to utilize the Gift Aid system, which makes it possible for UK taxpayers to enhance the value of their contributions.

 

Disadvantages

While registration may offer many advantages, it also has some potential drawbacks. As part of the registration process, you must uphold the rules of your governing document. This may imply that you don t have the freedom you would normally have.

The organizations that may gain from your actions are likewise affected by these restrictions. Activities of the charity cannot benefit any individuals with whom you are connected. Family members and friends are included.

 

 

Your organization is banned from engaging in any political activity as a registered charity. It will be illegal for the organization to have any political agenda and to be associated with any political party.

 

 

 

While registering as a charity may significantly increase the amount of paperwork you have to do, it is also essential to note that only a nonprofit organization can qualify for grants and taxdeduction programs. New reporting requirements, together with the increased regulatory load, make this a challenging period for your company. As long as the structure used is reasonable, this may be minimized. A little more information on the subject of selecting a structure for your charity may be found on this website elsewhere (Agency, 2018).

 

We will choose a Limited liability Company as legal status for our startup as it will protect personal assets. All customer or creditor claims against the company are limited to the assets owned by the business.

Sources of finance my startup could adopt and their possible consequences are discussed below

Business Loans

To provide smaller companies with a greater supply of financing, the government established the British Business Bank to collaborate with experts and government money to provide specialized financing to smallbusiness markets. This project is putting in a total of £10 billion, spread out over five years, with 80 other organizations to grow the industry by creating a wider variety of companies and suppliers. By doing this, you may get brandnew projects and possibilities, and avoid the loss of current contracts to rivals. If you had a financial injection, you could lessen your cash flow strain and focus on what s important; creating greater value for your company. pros to your company Due to this, there is now a viable option for small company owners instead of using traditional financial institutions. As a result, 80% of the businesses that have obtained one of these loans would choose to start a conversation with these lenders instead of their bank. from £5,000 to £1,000,000, loans terms from one to five years (Fleximize, 2016).

Other rules go along with larger loans. For example, you must provide quarterly financial statistics with them. Loans are extremely inflexible, which means you will be paying interest on the money you aren t utilizing. Cash flow issues may arise if your customers fail to pay you on time, which would put you at risk of not being able to make your monthly payments (www.nerdwallet.com, n.d.).

Asset Financing

Asset finance refers to financing equipment, plant, and machinery utilized by businesses. It s becoming a more popular form of financing since it s less restrictive than a conventional bank loan or overdraft. There are many asset financing arrangements: some are contracts that provide you with the equipment you will own once you make a series of payments over a specified length of time, while others are leases. Most lease agreements follow a simple structure in which you agree to rent the items under discussion, but you do not end up owning them at the end of the period. Also available are refinancing packages, allowing businesses to release some equity in their physical assets (like equipment) and/or using the proceeds to pay down debt. The lender will purchase the asset(s) from you and lease it back to you over some time. return on investment Enabling people to get access to cuttingedge technology they may not have been able to buy otherwise. Your yearly investment allowance may be used to help decrease your tax burden when purchasing HP products. You may pay as low as 2.8% p.a. for up to 90% of the value of the asset. Fixed monthly payback interest rates assist with cash flow and company planning. Some of the company s money already exists, and that money may be kept and utilized as working capital rather than to buy equipment that the company needs.

Risks associated with asset financing are following

  1. It is possible to lose key assets which are needed for daytoday operations.
  2. The value of the assets pledged as collateral for a loan may fluctuate and may be at a low value

Lending longterm funds will not be as beneficial for them (Fatima, 2018)

Cashflow Financing

To keep running, any business requires money. If suppliers and employees are not paid, the firm will eventually collapse. For the majority of companies, capital injections, debt financing, vendor payments, and customer revenues must be roughly balanced. Because the job they do in the construction business is usually done on a payasyougo basis and a contract basis, construction workers in this field are at a distinct disadvantage. Many people in the past regarded access to this kind of financing as an impediment, and this has been taken into consideration by their traditional brickandmortar bank, who informed their customers that they could not provide this service. But, the time has passed and new, specialized financing alternatives are now available. A big increase in the number of companies utilizing the cash flow service has occurred during the past several years (Bourgeron, 2018).

The flow of cash is enhanced. the amount of an invoice may be disclosed to be as much as 90% Funds are ready for use within a day. Unlike overdraft facilities, it allows you to access a continuous flow of cash that increases with your sales. You can better control seasonal variations. With more confidence, take on new initiatives and possibilities. Staff may be recruited or equipment purchased if it will help your company. Helps your business avoid bankruptcy. With a credit control system, management is freed up to focus on their core competencies, helping businesses save time.

Many construction firms are employed on many projects and are always on the lookout for more work to boost their income. Building companies granted construction contracts risk placing themselves in a difficult financial position due to a lack of sound financial management. By managing a project s finances and resolving construction sector cash flow issues, a company is assured of profitability. (Guide to finance for construction companies, n.d.)

 

Question Number 2

The three major sectors in the economy in which businesses can operate are services, manufacturing, and tourism. The differences among them and their importance in the UK economy is highlighted below

Service Industry

It is an example of the tertiary sector. When looking at all of the industries that fall under the umbrella of the service sector, it is safe to say that services (e.g. a service, as opposed to a tangible product) are their central commodity. The service sector consists of numerous service industries such as warehouse operations and passenger transportation; data services; bonds and other wealth management; technical services; wastewater treatment; education and medical assistance; and arts, amusement, and leisure. Economies based on the service sector are regarded as more developed than economies that are based on industry or agriculture (Witt and Gross, 2019).

Value of Service Industry in the UK

According to a study conducted by the Chartered Institute of Personnel and Development, the UK s services industry returned to growth in April after the lifting of shutdown restrictions. The economy, which comprises 80% of the nation s GDP, grew at its highest pace since October 2013. IHS Markit/CIPS/creative When the result is over 50, it indicates that the market is growing. After pandemic limitations were removed, new research from IHS Markit shows that private sector growth in the UK has hit its highest level since October 2013. For young adults under the age of 35, UK borrowing has reached its highest since the end of World War II. The road plan he presented led to a large rise in new project launches throughout the service industry. He also pointed out that, if the recovery in order books continues, service sector production growth would break the survey record set in April 1997. increasing trust According to Duncan Brock, servicesector firms have created employment at a level and that was in October 2015, and they are paying aboveaverage wages to attract the best talent. A sign of increased confidence for the year in front, he said. He went on to say that he expected the overall good trend in recovery to speed up, but he also cautioned that strained supply chains are still an obstacle, coupled with rising inflation possibly shaving bites out of salaries and profit margins (Kedir, Williams, and Altinay, 2018).

Manufacturing Sector

It is an example of the secondary sector. As a result of globalization and increasing international rivalry, major manufacturers in established nations, like the UK, have outsourced and offshored lower value operations in their value chain to developing countries like China, Malaysia, and Vietnam. With these strategies, company production and expenses have been increased while also giving them access to lucrative, expanding developing markets.

Value of Manufacturing Sector in the UK

Incorporating many sectors, technology, and business models, the manufacturing sector is varied. New sectors are starting to emerge alongside existing industries such as food & drink, aviation, medicines, technology, and automobiles. These include low carbon, industrial biotechnology, nanotechnology, digital and sophisticated materials, as well as more traditional biotechnology approaches such as synthetic biology. Manufacturing was the third biggest sector in the UK economy in 2009, accounting for 3.3% of total GDP and ranking above wholesale/retail and business services as a portion of GDP. It produced about £140 billion in gross value added, which accounted for almost 11% of the UK GDP. Also, it employed over 2.6 million individuals, accounting for almost 8% of the entire workforce in the UK (Korinek and Stiglitz, 2021).

Extractive Production

Primary production comprises the acquisition of raw resources. Due to this, metals and coal must inevitably be mined, the oil must be dug from the earth, the rubber must be plucked from trees, and cereals must be cultivated, while fish must be scoured. Extractive production is also known as this.

In the UK, there are vast amounts of minerals extracted in the past. Traditionally important sectors include: oil, natural gas, and coal

Building materials include aggregates, brick clay, and cement, which are only some of the construction minerals. All of these industrial minerals are found in China, where china clay (Kaolin) and ball clay (China clay) are manufactured as well as sand, lime, potassium, salt, commercial hydrocarbons, fluorite, and barytes, tungsten, gold.

Nonenergy minerals, in general, are used in the building industry. UK industrial minerals include glassmaking silicon dioxide and limestone, while porcelain, spherical clay, and potassium have major worldwide markets. Supporting a broad range of upstream, middle, and downstream businesses is provided by mineral production.

Since the early 2000s, UK mining and quarrying noncoal output has seen a rise, while coal production has declined since the late 1990s (Peša and Ross, 2021).

Key Differences

The production of primary raw materials is involved in primary production manufacturing and assembly, as a second step in the production process, is known as secondary production. Converting raw resources into components. Commercial services that assist the manufacturing and distribution process are known as tertiary production.

For service and manufacturing organizations, there are five key differences: the extent to which their output is tangible; products that can be done at any time or ondemand; consumer products; workers or automated operational activities; and the requirement for a physical place for production. Nonetheless, in the real world, both service and industrial companies tend to have a lot in common. In certain cases, companies may provide their service operations, both of which require specialized staff to successfully operate.

 

Question Number 3

The two best HR policies that are essential in the modern workplace environment are discussed below.

Employment security

Employment Security is the first Human Resources best practice. Work is an essential steady element in the lives of almost everyone. One of the most common reasons why individuals choose to work is to be able to care for themselves and their families.

There are two main types of contracts between employers and employees: The formal contract is one in which both parties exchange work for money. The informal contract is when the employee gives additional effort and the employer takes excellent care of the employee. If you have job stability, you may return home after work and ensure your wellbeing and the wellbeing of your family. There is an underlying assumption of security that underlies almost everything HR does (Hur and Perry, 2019).

It s widely agreed that, when job security is compromised, for example via downsizing or reorganization, it shows up very quickly across the company.

Organizations can benefit from employment security since it helps them retain their employees. Often, layoffs result in losses for the company since workers pay the price. They are the ones who have invested in the growth of these workers, including hiring, training, and supervision. This is an expensive procedure, to say the least. Retaining employees is especially important in small businesses since these companies are more prone to lose their employees to their competitors.

Job security was determined to be the third most important issue among workers in a study conducted in 2020. More than onethird of 1,100 UKbased professionals cited job security as a significant issue for them. Job security is an issue that is relevant across all global HR management strategies (Borghouts – van de Pas, Bosmans and Freese, 2021).

Employee Compensation

The second HR best practice is contingent compensation. The goal is to get more for less.

You should provide your employees aboveaverage compensation in the first place, regardless of who you recruit. The best employees for your business are the ones you want to keep since they are essential to your organization s growth. This example illustrates how various best practices, such as selective recruiting, contingent pay, and job security, work together to generate greater value than they would alone.

Additionally, paying individuals more than the standard has certain possible drawbacks. Another example of this is that it encourages underperforming workers to resign. Aboveaverage pay is also required, though, if you re regularly recruiting worldclass workers.

In this kind of compensation package, basic salary and benefits may be combined. To succeed, you must track the latest market movements throughout your field and neighboring farms (many of the best employees may come from other career areas). If you have such information, you will be able to see how much you would earn on average and where your business falls in the range of salaries offered.

You also want to blend individual incentives with the many ways workers contribute. These are incentives based on performance.

By incentivizing individuals to aim towards the organization s performance result, those individuals are motivated to optimize that outcome. In addition, it instills pride in the employee and makes them feel as if they have the project under control.

An alternative concept is profit sharing, shared ownership, or stock options, to name a few examples. These are excellent strategies for inspiring employees to embrace the company s longterm objectives and retaining the best prospective employees. Compensation is an important factor in ensuring a people management strategy is effective (Kang and Lee, 2021).

 

References

Guide to finance for construction companies. (n.d.). [online] . Available at: https://www.ukconstructionmedia.co.uk/wpcontent/uploads/StGeorgesFinance.pdf [Accessed 3 Apr. 2020].

 Startups.co.uk. (2014). Sole trader vs limited company business structure: A comparison. [online] Available at: https://startups.co.uk/settingup/choosingtherightbusinessstructure/.

Nixon Williams. (n.d.). Limited Company Advantages and Disadvantages | Should you go LTD? [online] Available at: https://nixonwilliams.com/freeresources/startingup/advantagesdisadvantageslimitedcompany.

BBC Bitesize. (n.d.). Public limited companies (plc) Business ownership AQA GCSE Business Revision AQA. [online] Available at: https://www.bbc.co.uk/bitesize/guides/zdc6mfr/revision/4.

Agency, C.R. (2018). Advantages and obligations of becoming a registered charity. [online] www.canada.ca. Available at: https://www.canada.ca/en/revenueagency/services/charitiesgiving/charities/registeringcharitablequalifieddoneestatus/applybecomeregisteredcharity/deciding/advantagesobligationsbecomingregisteredcharity.html [Accessed 3 Jul. 2021].

Fleximize. (2016). Construction Finance Building Loans For UK Businesses Up To £500K. [online] Available at: https://fleximize.com/businessloans/constructionfinance [Accessed 3 Jul. 2021].

www.nerdwallet.com. (n.d.). Pros and cons of bank loans for small businesses. [online] Available at: https://www.nerdwallet.com/uk/businessloans/proandconsofbankloansforsmallbusinesses/ [Accessed 29 Nov. 2020].

Fatima, U. (2018). The Moderating Role of Debt Financing on the Relationship Between Leverage and Performance: An Empirical Analysis of the Textile Sector of Pakistan. Organization Theory Review, 2(1), pp.0115.

‌ Bourgeron, T. (2018). Optimizing “cash flows”: converting corporate finance to hard currency. Journal of Cultural Economy, 11(3), pp.193–208.

Witt, U. and Gross, C. (2019). The rise of the “service economy” in the second half of the twentieth century and its energetic contingencies. Journal of Evolutionary Economics, 30(2), pp.231–246.

Kedir, A.M., Williams, C. and Altinay, L. (2018). Services industries and the informal economy: an introduction. The Service Industries Journal, 38(1112), pp.645–649.

Korinek, A. and Stiglitz, J. (2021). Artificial Intelligence, Globalization, and Strategies for Economic Development. Institute for New Economic Thinking Working Paper Series, pp.1–53.

Borghouts – van de Pas, I., Bosmans, M. and Freese, C. (2021). Unemployment prevention: The role of Human Resource Management in jobtojob transitions in the event of redundancy. European Journal of Social Security, p.138826272199520.

Hur, H. and Perry, J.L. (2019). Job Security Rule Changes and Employee Organizational Commitment. Review of Public Personnel Administration, p.0734371X1984262.

 Kang, E. and Lee, H. (2021). Employee Compensation Strategy as Sustainable Competitive Advantage for HR Education Practitioners. Sustainability, 13(3), p.1049.

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