Understanding Forms of Business and Organizational Structures

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Table of Contents
INTRODUCTION...........................................................................................................................3
SECTION ONE...............................................................................................................................3
Understanding forms of business and their working..............................................................3
SECTION TWO...............................................................................................................................5
Different Types of Companies...............................................................................................5
SECTION THREE...........................................................................................................................7
Types of Organizational Structures........................................................................................7
Impact of External Factors on Business.................................................................................8
CONCLUSION................................................................................................................................9
REFERNCES.................................................................................................................................10

INTRODUCTION
The aim of the report is to provide briefly the various types of businesses that exist in the
business environment. The report examines how businesses are categorised based on their nature
and liability accompanied by various examples. The significance of organisational structure is
also highlighted in the study, and the two key structures are briefly identified. The report also
conducts the PESTEL analysis in order to access the impact of external factors on business
activities.
SECTION ONE
Understanding forms of business and their working
Micro Business
The microbusiness sector is critical to the country's economic viability. It contributes to the
economy by balancing social cohesion around the United Kingdom's various regions.
Furthermore, it benefits the economy by focusing on rural and underserved urban areas
(Webster, 2020). A micro business is a subcategory of a small business that meets the following
criteria in order to be listed as a ‘micro-entity':
 Employees to be ten or less
 Annual turnover is required to be £632,000 or less
 Balance Sheet total must be £316,000 or less
This type of company is usually initiated with the same capital value, and the same owner
owns, operates, and regulates it. It is also known as family businesses or innovative start-ups
founded by young people who have a strong desire and zeal to succeed. However, there are 5.7
million micro businesses in the United Kingdom, with 95.72 percent of them being privately
owned. Approximately 9.1 million people are employed by micro businesses. As a result, the UK
economy benefits from this type of business.
Small Business
Even small business makes a significant contribution to the nation's economy. On a local and
national level, the company hopes to contribute by generating jobs and even providing additional
support. Small businesses are privately run companies with fewer employees and lower annual
revenue than larger corporations. The Companies Act of 2006 of the United Kingdom defines a
small entity as follows:

 Number of employees must be 50 or fewer
 Annual turnover must be £6.5million or less
 Total of balance sheet must not exceed £3.26 million
Small companies can also respond to changing demands more easily because they are not
constrained by bureaucratic inertia. As a result, they help the nation with the valuable economy.
Some of the examples are as bakery shops, architectural firms, restaurants which are privately
owned.
Medium Business
The medium-sized enterprise fills the gaps between small and large enterprises. Medium
Business is form of business where company starts with slow and steady growth of prosperous
small business and further the corporation a large portion of the capital generated from sales and
income. The Companies Act 2006 of the United Kingdom defines a medium-sized enterprise as
follows:-
 Number of employees should not exceed 250
 Annual turnover must be £25.9 million or less
 Balance sheet total must not exceed £12.9 million
They are known as the backbone of the economy because they promote growth through a
variety of employment opportunities and provide customers with new business opportunities
(MacLennan, 2020). According to the source, they account for 45 percent of total employment
and 33 percent of GDP. Such well-known examples include Verdant Leisure, which employs
approx. 250 people, Crawford Healthcare, among others.
Large Business
Large companies, described as those with more than 250 workers, account for 40% of
total employment and more than half of total turnover in the United Kingdom. Large companies,
in contrast to other types of enterprises, tend to provide a broader variety of products or services
to their customers. These companies usually have a wide distribution network and a broad
presence across the world. Furthermore, large business even promotes small and medium-sized
companies. This form of company has a complex management hierarchy, a well-suited
organisational structure, and an efficient business communication channel. High rates of
economic opportunity, environmental security, and international relations promotion are