Types of Businesses and Organizational Structures

1

Table of Contents
INTRODUCTION...........................................................................................................................3
SECTION ONE...............................................................................................................................3
Forms of Business and their Working....................................................................................3
SECTION TWO...............................................................................................................................5
Explain Different Types of Companies..................................................................................5
SECTION THREE...........................................................................................................................7
Different Organizational Structures and Impact of External Factors.....................................7
CONCLUSION..............................................................................................................................10
REFERNCES.................................................................................................................................11

INTRODUCTION
The report aims to provide a clear picture of the various types of businesses that exist in the
business environment. The study looks at how the business are classified on basis of their nature
and liability along with the examples. The report also highlights the importance of organizational
structure and the two main structure are defined briefly. Furthermore, the PESTLE analysis is
conducted in this report to assess the external factors that influence business activities.
SECTION ONE
Forms of Business and their Working
Micro Business
A micro business is considered as subcategory of small business that fulfils the following
conditions to be classified as a ‘micro- entity’:-
 The employees must be less than ten in number
 The annual turnover must be less than £632,000
 The balance sheet is required to be less than £316,000
The micro business plays a vital role in ensuring the country’ economic viability. It contributes
in the economy by balancing social stability across different regions of the United Kingdom.
Further it contributes to the economy by concentrating more on rural and underserved urban
regions (Chown and et. al., 2018). This form of business is typically started with the same capital
value which is owned, operated and regulated by the same owner. It is even recognized as family
companies or creative start- ups initiated by young people with passion and growth potential. In
the UK, however, there are 5.7 million micro enterprises, with 95.72 percent of them being
privately owned. Micro companies employ approximately 9.1 million people. As a result, this
form of business is beneficial to the UK economy.
Small Business
Small businesses are considered as privately owned businesses with less workers and
lower annual sales than larger businesses. A small entity is described in the Companies Act of
2006 of the United Kingdom, as follows:
 Employees must be 50 or less
 Annual turnover must not exceed £6.5million
 Balance sheet must not exceed £3.26 million

Even small business contributes its best towards the economy of the nation. The business
aims to contribute by creating jobs and even by providing additional funding on both a local and
national level. Small business operates independently with small income and size. There are
privately owned companies, such as a sole proprietorship, partnership, or company. This form of
company exists in every industry, and some examples include privately owned restaurants or
cafes, bakery shops, architectural firms, and so on. Furthermore, since they are not bound by
bureaucratic inertia, small businesses may adapt to evolving demands more quickly. As a result,
they are beneficial to the local economy.
Medium Business
Medium- sized business is defined under the Companies Act 2006 of the United
Kingdom, as follows:-
 Number of employees must not exceed 250
 Annual turnover to be not more than £25.9 million
 Total of Balance sheet must not exceed £12.9 million
This type of business begins with gradual and steady growth of profitable small companies and
the corporation begins to receive a large portion of capital from sales and profits generated. The
medium- sized business bridges the gaps between small business and large business. They are
regarded as economy’s backbone by fostering growth through various employment opportunities
and provides consumers with new market (Pettigrew, 2020). They account for 45 percent of total
jobs and 33 percent of GDP, according to the source. Verdant Leisure, which employs
approximately 250 people, Crawford Healthcare, Hunter MacDonald, and others are some
popular examples.
Large Business
As opposed to other forms of businesses, large organizations prefer to provide a wider
range of goods or services to their consumers. Large businesses are defined as those with more
than 250 employees and account for 40% of total jobs and more than half of total turnover in the
UK. These businesses typically have a large distribution network and a strong presence in other
parts of the country. Further large business supports and even encourages small as well as
medium sized businesses. This form of business have a dynamic management hierarchy and a
well suitable organization structure along with effective business communication channel. As a
result of their contributions, high rates of economic opportunities, environmental protection, and