Different Types of Companies and Business Structures

This document provides an overview of different types of companies based on their size, such as micro, small, medium, and large businesses. It also explains the various business structures, including sole traders, partnerships, limited liability partnerships, and cooperatives. Additionally, it discusses the impact of organizational structure on business productivity and analyzes external factors affecting business performance using PESTLE analysis. The document includes examples and characteristics of each type of company and structure.

Business in Practice
Assessment 1
Types of Companies
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Contents
Introduction 2
Section 1: Different types of companies and how they work
P
Section 2: Different companies from sole traders to cooperatives
and Limited Liability Partnerships p
Section 3: Different businesses structures and internal factors
affecting business p
Conclusion p
Reference List p
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Introduction
The aim of this report to examine the different size business and to learn
about the different sole traders, partnership, LLP etc. You will also learn about the
organizational structure with the PESTAL analysis which gives the idea about the
productivity. Here, you will learn about the business which and their processing
which is concerned with the business profit.
Section 1: Different types of companies and how they work
Micro business:
Definition- These are the small types business in which there are up to 9 employees
and are able to give about 10% employment to the private sector. These are about 4
million in the UK where they are growing higher and give the positive effect of
economy to the country, They are the business which are getting difficulty in the
credit and funding for the business expansion (Murugesan and et. al., 2016).
Characteristics-
 They are having the lower revenue and the profitability is also lower.
 They are having the smaller team which is up to 9.
 Due to having the small business they are having the small market area for
the business.
 They are able to sell their product in limited location they are not having the
high market.
 Turnover should not exceed the 632000 pounds.
Example-
Bross brewing is one of the example of micro business. It is focusing on
changing the gender of beer industry. It is the UK company which is growing faster
and is having the largest national chain pub in this time and achieved the248 %
turnover in last few years (Rosca and et. al., 2017).
Small business:
Definition- It is the small type business which is privately owned either in partnership
or as a sole trader which is not having the large market and can invest little and
having the less number of the labour and having few machines to operate the
business. These are the industry which are not able to invest more than one million.
Characteristics-
 All the management is driven by the owner itself.
 They are having restricted are for the business and having one shop or the
industry located in one one area.
 They are totally dependent on manpower and labour.
 Due to having the small business they are flexible for changing market.
 They generally able to utilize the local and immediately available resources.
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Example-
CafePod Coffee Co. is one of the small business which is producing the
strong and exciting coffee for the people who are adventurous coffee drinker in the
area. They are making the best quality product which is getting popular among the
people and they came there from far to have the coffee. The business is getting
popular regularly (Turner and et. al., 2017).
Medium size business:
Definition- These are the business which are having the up to 250 employees. These
are mainly the family owned business which are incorporated with the family and
their members. They generally take loans from the bank fro the investment purpose.
Generally they are having the $5 to $10 million for revenue. They are also known as
the mid market.
Characteristics-
 They are having less than 250 employees.
 Generally family owned business.
 They are having more than 25 million pound turnover.
 They are the one who gives 25% of employment to the private sector.
Example-
Verdant leisure is example of the medium size business which offer the
holiday perks to the customer in different range of choices. They are able to provide
the best experience for your holiday and having the wide range of options for staying
(Lam and et. al., 2018).
Large size business:
Definition- It is the one of the biggest business where there are at least 5000 of their
employees and are the cause for economy raiser in the country which are having the
annual turnover greater than 1.5 billion euros. Their owner called as the big
entrepreneur. They are the one which are having all business function in their
business and are able to rule internationally. They are having all the department for
running the business in proper manner.
Characteristics-
 Having the annual revenue $10 million to $! billion.
 They are the one who creates the employment in the country.
 They are having their own team for each task and requirement.
 Having high number of machines and updated technology.
Example-
Tesco is one of the third largest retail company in the UK where they are
ruling as the grocery shops all over the country and in foreign too. They are using the
latest technology and continue increasing the business by adopting the latest market
demand (Lu and et. al., 2019).
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Section 2: Different companies from sole traders to
cooperatives and Limited Liability Partnerships
Sole trader business:
It is the business where there is only one owner for the whole business. The
owner is the one who is responsible for all the business activity. They are the one get
the loss when any circumstances is there but are the only one who enjoys all the
business profit. They are able to manage all the business function by itself. The
business is run by them and due to only owner they are able to keep their business
secret.
Characteristics-
 They posses the freedom for taking any business decision.
 They are the one who can show the flexibility with changing marketplace.
 They are the one who is responsible for all business profit or loss.
Example-
Colombus photographed is the sole trader business where there is only one
owner who is responsible for all the profit and loss. There are no any difference in
the business and the owner of the business (Schwertner 2017).
Partnership:
It refers to the formal arrangement of two or more people to run the business
where the profit is distributed with all the partners. The parties known as the
business partner in that related business. Here the work of the business partner is
distributed for fast and effective business effect.
Characteristics-
 There is existence of the agreement for the business.
 The business should be lawful which mean that existence of the business be
there.
 There should be sharing of profit in equal amount.
 Nature of liabilities are there which means the partner are liable to pay for
debt from their personal property.
 The registration of firm is compulsory for running the business.
Example-
GoPro and Red bull as the partnership where the GoPro is the brand which gives the
way for transforming the visual capture as per their interest and the Red bull is the
energy drink brand where both in the partnership which help and support both to
their business where the partnership take them to the next level in the business
(Nielsen 2018).
Limited liability business:
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It is the type of business in which all the partner posses the limited liabilities
within the business. In this business where the owner is not personally liable for the
debts or liabilities. They are having the corporate structure. Where the business and
business men both are different entity.
Characteristics-
 They are having the separate legal existence of their company.
 There are limited liabilities for the business partners.
 There is flexibility in the tax treatment. Business owners are the member of
the business.
 They are the one who are responsible for the day to day operations.
 Every member of the business is able to pay for their tax from their profit.
Example-
Hands UK Ltd. Is the one of the example for the Limited Liability Business where the
partners are there with having different liabilities.
Public limited liability business:
It is the type of the company which is able to offer their share to the public.
There are about 95% of the limited company are the private. There are having the
better access to capital, they are having the share value which gives the company a
prestigious profile.
Characteristics-
There should be minimum two shareholders for such type of company. Within
6 months company should file its accounts. The secretary of the company should be
qualified and need not to be qualified. There should be minimum two director for
such type of company.
Example-
Burberry Group PLC is one of the example of the UK public limited company
(Sabatier and et. al., 2017).
Cooperative:
Definition- It is the type of business in which there are minimum 5 members in this
business where all the member have the rights to involving in the business functions
and all the member should help in to run the cooperative.
Characteristics-
 There is voluntary membership in this. One have the right to join it and leave
when he or she wishes for.
 There is open membership for all people.
 In respect to finance people are able to buy and sell the share of the company
with some limit.
 This type of the company have the democratic control over it.
Example-
Central England cooperative is one of largest independent retail
cooperative society.
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Section 3: Different business structures and external
factors affecting business
3.1 Identification of different organizational structures and
explaining how does organisational structure affect business
productivity
Functional organizational structure-
It is similar to hierarchical structure, this allow their employees to focus on
their own role. Due to its structure it may created silos within an organization. It
creates hamper in the communication between interdepartmental. Employees are
grouped together by their skill knowledge which allow them to achieve the high
performance. It also effects the business by due to lack of teamwork among
companies different departments. Decision making is slow due to its large
bureaucratic structure. This is the formal organizational structure. In this the
executive and the team leader have all the knowledge related to the field which can
help in increasing the productivity of the organization (Auschra 2018).
Divisional Structure-
It is the structure where the large organization operated the wide geographic
area or separate small organizations which covers the different products. It has
different divisional structure like Market-based, Product-based and geographical
based which each having different benefits for the productivity of the business.
Hierarchical organizational structure-
It is also known as the pyramid-shaped organizational structure. It is the most
common type of organizational structure. In this, the chain of order and command
goes from the top to lower. It is having the ability to whom to talk regarding the
specific projects. It affects the business by slow change and innovation due to its
large bureaucracy. This can makes feel the employee that they have less ownership
and are not allowed to share their idea.
3.2 How different external factors affect the performance of a
business – PESTLE Analysis
Political factor – It is the one of the biggest retail international company
which is having more political effect in context of their business. It affects the
business by having different political effect on the business. Brexit is the cause of
causing creating lot of uncertainty in the country. Which politically affects the
business productivity.
Economical factor – The whole world is suffering through the COVID effect
which creates many job loss and due to this people are spending very less. Which
subsequently, decreases the sales and which associated to the economy of the
country.
Social factor- Tesco has taken many initiatives for the society for which the
company is liable to sell the product which is in demand with the better quality which
is the good opportunity for growth (Fullwood and et. al., 2017).
Technological factor – It is the main factor in today time where to lead the
business you need to have the latest tech which can give more productivity to your
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company and to your customer. Customer can get the self-service checkout which
can be time saving.
Legal factor – For the growth of the company, they need to follow all the legal
terms and activity which is necessary to follow. By applying this, it is challenging to
increasing the productivity.
Environmental factor – Government and public both are creating pressure to
for the Eco-friendly product which can not effect the environment. Packaging
material can comes under the initiatives. This creates the productivity to the
company.
Conclusion
From the above discussion, you are now able to understand the different
types of business according to the business size and learned about the sole trader
business, partnership, LLB, PLLB and cooperatives. You have also learn about the
different organizational structure of the business and also the factor affecting the
productivity of the company. PESTLE analysis gives you the idea for understanding
the business which helps in increasing the productivity as well as the profitability,
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Reference List
Murugesan and et. al., 2016. Business intelligence market trends and growth in
enterprise business. International Journal on Recent and Innovation Trends
in Computing and Communication, 4(3), pp.188-192.
Rosca and et. al., 2017. Business models for sustainable innovation–an empirical
analysis of frugal products and services. Journal of Cleaner Production, 162,
pp.S133-S145.
Turner and et. al., 2017. Strategies for enhancing small business owners' success
rates. International Journal of Applied Management and Technology, 16(1),
p.3.
Lam and et. al., 2018. Analysing business models of liner shipping companies.
International Journal of Shipping and Transport Logistics, 10(2), pp.237-256.
Lu and et. al., 2019. ManuService ontology: a product data model for service-
oriented business interactions in a cloud manufacturing environment.
Journal of Intelligent Manufacturing, 30(1), pp.317-334.
Schwertner 2017. Digital transformation of business. Trakia Journal of Sciences,
15(1), pp.388-393.
Nielsen 2018. Reflections on the applicability of business analytics for management
accounting–and future perspectives for the accountant. Journal of
Accounting & Organizational Change.
Sabatier and et. al., 2017. Social business model design and implementation in
developing countries. Journal of Management Development.
Auschra 2018. Barriers to the integration of care in inter-organisational settings: a
literature review. International journal of integrated care, 18(1).
Fullwood and et. al., 2017. An investigation of factors affecting knowledge sharing
amongst UK academics. Journal of Knowledge Management.
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