Types of Companies and Their Working

This document provides an overview of different types of companies and how they operate. It discusses small businesses, micro businesses, medium-sized businesses, and large businesses, highlighting their characteristics and providing examples. The document also explores different types of companies such as sole trader, limited liability, partnership, and more. Additionally, it analyzes the impact of external factors such as political, social, economic, technological, legal, and environmental factors on business structures. This comprehensive guide is a valuable resource for understanding the various types of companies and their working.

BMP3002
Business in Practice
Assessment 1
Types of Companies

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Section 1: Types of companies and how they work .......................................................................3
Small business..............................................................................................................................3
Micro business..............................................................................................................................3
Medium size business...................................................................................................................4
Large size business ......................................................................................................................4
Section 2: Different companies which includes sole trader, limited liability and partnership........5
Section 3: Business structures and external factors.........................................................................7
Organisational structure that affects productivity of organisation...............................................7
Political Factors............................................................................................................................8
Economic Factors.........................................................................................................................8
Social Factors...............................................................................................................................8
Technological Factors..................................................................................................................8
Legal Factors: -.............................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Books and journals.....................................................................................................................10

INTRODUCTION
Company is a legal entity formed by a group of individuals within a voluntary association
it is an artificial person and they has a separate legal entity. It is identified that different types of
companies are existing in business environment (Mittal, 2020). TESCO is a chosen business firm
in this report. It is a multinational firm of British that trading in global market. It was founded by
Jack Cohen in 1919 as a tea selling group. Currently firm is dealing in number of countries in
order to sell its product within retail industry. Report is discussed about the different types of
companies and their working. Along with this, it also includes identification of companies from
the perceptive of sole traders to cooperatives and Limited Liability Partnerships.
MAIN BODY
Section 1: Types of companies and how they work
Small business
Definition
Small business is a privately owned business cooperation, sole proprietor, partnership,
etc. Number of employees is less as compared to other types such as medium and large scale
business. Employees' number in small business is 1 to 100. Capital should be needed in small
business is between 1.5 lacks - 2 lakhs.
Characteristics
 It focuses on achieving goals is considered as a characteristic of small business firm as it
helps in achieving business function. Successful small business owners are good at inspiring people who are around them
whether that are clients, employees, business partners, suppliers, and family members.
This requires confidence, enthusiasm, and passion.
Example: CafePod Coffee Co.
Micro business
Definition
In micro business, it considered small business framework which have between 1 to 9
employees in organization. Businessman invests fewer capital in business and they earn revenue
approximate $25000. A micro business is freelancer, based on contract, graphic designer, home
based business etc.

Characteristics
 Smaller teams of employees is a characteristic of micro business firms as there are
limited employees.
 Small market area is also considering as a characteristic of this firm, where they can trade
by developing specialization. Sole or partnership ownership and tax is also a character of micro business.
Example: One important micro business companies is Forex in UK. They are doing work
in the department of currency as a specialist. It is analysed that Forex is concerned with
acceptance of coins and notes from approximate 150 countries. They are also deal with pounds,
disperse euros, dollar, sterling, etc.
Medium size business
Definition
Number of employees in medium sized business is between 100 - 999. Investment in
medium sized business is average revenue between $10 million to $1 billion. Bright star
financial is specialist in residential mortgage, lending, broker inquiry (Efremov and Vladimirova,
2017). Medium sized business provide mortgage and lending facility who has need of money.
Characteristics They are adapting quickly to change market conditions is a important characteristic that
used by business firm. There are number of changes in market condition which are easily
adopted by this firms with the use of small structure.
Example: They also provide home assistance and apartment projects for those people
who has interested in purchase. The government also help and provide loans with low interest
rates to growth of business.
Large size business
Definition
Large size business has high number of employees in the company, and they have a very
complex management hierarchy as compared to other organisation such as medium and small
business. In large business, number of employees is 500 workers. They have a capital invest in
large business is identified more than 1 crore (Lizarelli Toledo and Alliprandini, 2019).
Characteristics

 In this type of firm they have more employees, and more complex management hierarchy
other than businesses.
Example: Important example of large scale organisation is Unilever. It is today a large
business in all over world they trade globally and sell daily use product. Unilever treats every
employees as an assets of the company. Unilever is covering a larger market share which attracts
more and more customer that are ready to purchase products.
Section 2: Different companies which includes sole trader, limited liability and partnership.
Different types of companies that are followed by business firm in order to fulfil needs
and performing task in effective way. It divided on the basis of structure that is used by business
organisations in order to perform business activities and earn profits. Some types of companies
are discussed below:
Sole trader business
Definition
A sole trader or sole proprietor is a owner of his own business. Sole trader business is run
by business owner. That means it is the only person that bears all profits and loss in the
organisation.
Characteristics
 It is the mots cheapest and simplest business.
 They do not have any legal entity and they are the separate owner which has separate
legal existence.
 A owner is liable to pay all liabilities such as pay tax, and take decision. Every aspect of business, all external and internal factors legally responsible for the sole
trader.
Example: Local retailers for example, Ron book house.
Partnership
Definition
It is defined as a written & oral agreement between two or more people who ready to
distribute profit & loss. In partnership organisation, there is a written agreement in which two or
more people are mutually agreed to share mutual interest, profit & loss (Krchová, 2019). As per
their share every partner is liable to pay liability accordion to their share.
Characteristics

 Every partner invest their own capital in organisation and takes benefit of profit if
company in loss than bear losses also. Professional like lawyer and doctors are also often limited liability partnership.
Example
NotOnTheHighStreet.com
Limited liability business
Definition
The term LLC means legally registered business under business by limited shares. A
limited liability business is incorporated under Companies Act and it is the private company. In
limited liability business, members are accountable for liability and debt of the organisation.
Characteristics
 It is the organisation that have a limited liability according to the share. That means
shareholders are not responsible for any legal faults of other members. They have a ease in taxation because they are limited to their liability and small in size.
Example
Offsure
Public limited liability business
Definition
A public limited liability company is a government, profit incorporated company which
offer share to public or offer initial public offer (IPO) shares for general public and trading of
shares on the stock market. Public limited liability company has issue unlimited number of
shareholders. And they do not bear any loses of the company.
Characteristics
 The advantage of public limited liability of business has there is no need of any minimum
capital and it has separate legal entity whenever the company needs funds they issue
share in the public. Thy main disadvantage of public limited liability business is they does not issue
prospectus in the public.
Example
NHS
Cooperative Business

Definition
Cooperative Business meaning is who own shares in non-profit cooperation. A
Cooperative Business is a voluntary and autonomous association or group of person. A voluntary
association is controlled and managed by its own member.
Characteristics
 Every member of cooperative business has their own voting rights. Profit are allocated on
basis of labour as they are put in the coop. Every member of cooperative business has add the amount of money for welfare,
provides credit facility to people and they have very low interest rated.
Example
TESCO and M&S
It is analysed from above discussion that these are some business forms which are dealing
in business environment. They are considered to essential element in the market for ensure sale
of products and services with appropriate structure.
Section 3: Business structures and external factors
Organisational structure that affects productivity of organisation.
Many outside factors which are concerned to function of business firm and impact on
performance. They are associated with use of tools and measures which are utilized according to
needs. It will help in meeting needs according to the demands. Here, PESTLE analysis of
organisation is discussed below:
TESCO's PESTLE analysis
TESCO is the multinational food & beverage company that established in 1919, London
which has headquartered in UK and having stores available across 12 countries in the world.
This is second largest revenue earning company after Walmart (Hensmans, 2019). TESCO also
provide finance, insurance, mobile, hardware services and many more. To get the better
understanding of platform. TESCO provides better services to customer and try to know
customer interest, demand and needs earn a important share of market.
Political Factors
Political factors is defining as factors which are concerned with political condition of
country where organisations are working. This factor has a direct influence on working

conditions of business firm. TESCO is operating and retailing company, operate in globally legal
and political factors. They include legislation, laws and other. Political environment includes
Brexit impact on organisations. It impacts directly to business firms because they have to change
these business norms according to it.
Social Factors
It is identified that social factors includes current trends that are running in the
organisation. It is very important for TESCO that they have to run their business as per current
trends because customers are attracted towards those organisation that following trends. Day to
day changes in trend creates challenges for TESCO as they have to follow in their organisation.
They follow trends so that they can invite more and more customers.
Economic Factors
After the pandemic situation, UK is in the critical situation as their GDP get declining due
to COVID-19. Continuous declining in economic growth rate of nation creates an issue that how
they can increase their business operations with low economic growth. It gives a great impact on
organisation functions. During pandemic situation TESCO stores were closed that have a great
impact on their organisation. It is identified that if organisation cannot take a corrective action
then they cannot achieve their target market.
Technological Factors
Business are affected by the modifications in technological factors, TESCO is the leading
& popular brand which always use and adopt innovative idea to attract customer. They offering
customer online or digital shopping services for conveniently available product to customer. It is
used by TESCO in order to meet preferences of customer that helps firm in bring positive impact
on sales and production.
Legal Factors: -
Legal factors includes laws, regulation that are formulated by legal authorities of area &
have met by business firm in order to achieve business objectives. Government's policies and
legislation have a direct impact on business and external factor that affect organisation.
Government's policy & legislation has directly impact on the TESCO business. TESCO is the
multinational company that deals in food and beverages that means it under covers FRC (food
retailing cooperation). Under this, a company follow all rules & regulation.

Environmental factors
It is an important factor which are used by organisation and helps in meeting needs.
TESCO has followed all factors that are related to the environmental factors. In this context,
TESCO is doing a very great job as they are focuses on reduction of use in plastics in order to
sustainability. They are trying to reduce carbon emissions so that they can they can meet
environmental factors.
So all these factors are very important for an organisation to analyse them so that they
can get a competitive advantage. It assists in reduction of risk and uncertainties in the
organisation. All factors are necessary to identify as they gives a great impact on organisation
performance and productivity.
CONCLUSION
It is concluding that there are many types of companies exist in business environment.
Every type of company has different legal structure, investment criteria, liability, etc. That means
a person can choose any type that area suitable for them. It is analysed that every organisation
need to identify and analyse the business environment so that they can identify the risk and takes
a corrective actions. It is very necessary to identify all factors that affect on organisation's
operations and functions. A company can analysed factors with the help of PESTLE analysis.

REFERENCES
Books and journals
Mittal, H., 2020. HOW DOES THE INSTITUTIONAL CONTEXT OF AN EMERGING
ECONOMY SHAPE THE INNOVATION TRAJECTORY OF DIFFERENT TYPES
OF COMPANIES? A CASE STUDY OF INDIA. Economic and Managerial
Spectrum, 14(2), pp.36-52.
Lizarelli, F.L., Toledo, J.C.D. and Alliprandini, D.H., 2019. Integration mechanisms for different
types of innovation: case study in innovative companies. Revista Brasileira de Gestão
de Negócios, 21(1), pp.5-32.
Krchová, H., 2019. Project tools in relation to the implementation of the ability of innovation
companies in Slovakia. Entrepreneurship and Sustainability Issues, 7(1), p.291.
Sala-Garrido, R., Molinos-Senante, M. and Mocholí-Arce, M., 2019. Comparing changes in
productivity among private water companies integrating quality of service: a
metafrontier approach. Journal of Cleaner Production, 216, pp.597-606.
Hensmans, M., 2019. A new matrix for building platform portfolios: how companies can sustain
their leadership. Journal of Business Strategy.
Habu, K., 2017. How much tax do companies pay in the UK?.
Westervelt, M., Schank, J. and Huang, E., 2017. Partnerships with technology-enabled mobility
companies: Lessons learned. Transportation Research Record, 2649(1), pp.106-112.
Efremov, V.S. and Vladimirova, I.G., 2017, July. The typology of organizational forms of
companies' integration. In 2017 2nd International Conference on Politics, Economics
and Law (ICPEL 2017) (pp. 1-4). Atlantis Press.