M3
To achieve M3, for each of the legal and financial aspects you have identified in P4, you must
evaluate how this factor will, and can, impact on the business, for good and bad results.
Legal status based on ownership type- Wrap Up Regent is a private limited company, this itself
is a benefit for the company as it provides good results . In case the company goes into financial
difficulty, the assets and personal finances of shareholders are protected beyond value of their
shareholding. This means that if a company is unable to pay debts, the shareholder will only
have to contribute according to the nominal value of their shareholding. It can be as small as £1.
Furthermore, tax efficiency allows more opportunity and great flexibility to be offered by limited
companies in the case of taxation on profits and on personal income. This means that
corporation tax will always be 20% regardless the size of profits being generated. In addition to
this, a professional and corporate image is created by a limited company, thus boosting the
value of business. More corporations and industries like to do business with companies, instead
of sole traders. This is because limited companies are considered to be more established,
credible and committed. Sense of security is also provided by limited liability to certain industry
professions while choosing to use the services of new business or while investing. With the
result of this, it is easier to generate finance because of the higher chance of investments from
businesses or individuals. On the other hand, being a private limited company can also be a
negative factor for Wrap Up Regent and can produce bad results, such as how expensive it can
be to start up a company because a lot of costs are included and it can become complicated.
And, accounts need to be published annually, adding costs and giving competitors access to
company information which can be distressing especially to new or small businesses.
Trading terms and conditions- This is a document which explain the terms and conditions of the
business to consumers and suppliers, this can consume a lot of time to write up and make sure
that everything is covered. This is why it is important that every aspect of the business and what
they do is covered to make sure that both customers and suppliers are satisfied with their
trading with the company. The benefits is that if it is written well, and agreed with, suppliers and
customers would have a good relationship with the company and will have no issues when
trading, also it can help to avoid any future disputes or resolve any that do arise. Furthermore, if
the terms and conditions meet Trading Standards, it will ensure that customers and business
are protected from any scams or other risks when trading. Oppositely, if the trading terms and
conditions are not written well, or does not meet Trading Standards, then a lot of problems
would occur for the business. For example, no customer or supplier would want to trade with
the company as it would be risky and dangerous for them, also as there is a consumer
protection law there can be consequences if the company’s actions infringes this law. This can
lead to fines, charges or even worse the business shutting down.
Licences, planning permission, contracts- Licences are needed for legal purposes to show that
a company are able to do the type of business that they do. For Wrap Up Regent, the company
needs a licence to be able to sell their products to ensure that they are following legal duties,
which we are doing with the licence given to the company by YE (Young Enterprise). The main
positive outcome of this, is that if we ever get stopped by a police or someone else for selling
To achieve M3, for each of the legal and financial aspects you have identified in P4, you must
evaluate how this factor will, and can, impact on the business, for good and bad results.
Legal status based on ownership type- Wrap Up Regent is a private limited company, this itself
is a benefit for the company as it provides good results . In case the company goes into financial
difficulty, the assets and personal finances of shareholders are protected beyond value of their
shareholding. This means that if a company is unable to pay debts, the shareholder will only
have to contribute according to the nominal value of their shareholding. It can be as small as £1.
Furthermore, tax efficiency allows more opportunity and great flexibility to be offered by limited
companies in the case of taxation on profits and on personal income. This means that
corporation tax will always be 20% regardless the size of profits being generated. In addition to
this, a professional and corporate image is created by a limited company, thus boosting the
value of business. More corporations and industries like to do business with companies, instead
of sole traders. This is because limited companies are considered to be more established,
credible and committed. Sense of security is also provided by limited liability to certain industry
professions while choosing to use the services of new business or while investing. With the
result of this, it is easier to generate finance because of the higher chance of investments from
businesses or individuals. On the other hand, being a private limited company can also be a
negative factor for Wrap Up Regent and can produce bad results, such as how expensive it can
be to start up a company because a lot of costs are included and it can become complicated.
And, accounts need to be published annually, adding costs and giving competitors access to
company information which can be distressing especially to new or small businesses.
Trading terms and conditions- This is a document which explain the terms and conditions of the
business to consumers and suppliers, this can consume a lot of time to write up and make sure
that everything is covered. This is why it is important that every aspect of the business and what
they do is covered to make sure that both customers and suppliers are satisfied with their
trading with the company. The benefits is that if it is written well, and agreed with, suppliers and
customers would have a good relationship with the company and will have no issues when
trading, also it can help to avoid any future disputes or resolve any that do arise. Furthermore, if
the terms and conditions meet Trading Standards, it will ensure that customers and business
are protected from any scams or other risks when trading. Oppositely, if the trading terms and
conditions are not written well, or does not meet Trading Standards, then a lot of problems
would occur for the business. For example, no customer or supplier would want to trade with
the company as it would be risky and dangerous for them, also as there is a consumer
protection law there can be consequences if the company’s actions infringes this law. This can
lead to fines, charges or even worse the business shutting down.
Licences, planning permission, contracts- Licences are needed for legal purposes to show that
a company are able to do the type of business that they do. For Wrap Up Regent, the company
needs a licence to be able to sell their products to ensure that they are following legal duties,
which we are doing with the licence given to the company by YE (Young Enterprise). The main
positive outcome of this, is that if we ever get stopped by a police or someone else for selling
