Different Forms of Business and Organizational Structure

Business in Practice

Table of Contents
INTRODUCTION...........................................................................................................................3
SECTION 1......................................................................................................................................3
Working of Different Forms of Business...............................................................................3
SECTION 2......................................................................................................................................5
Different Types of Companies...............................................................................................5
SECTION 3......................................................................................................................................7
Organizational Structure.........................................................................................................7
External Factors Influencing Business Performance..............................................................8
CONCLUSION..............................................................................................................................10
REFERNCES.................................................................................................................................11

INTRODUCTION
The purpose of the report is to present a comprehensive picture on various forms of business
that exist in the environment. The report examines how businesses are classified based on the
nature and liability as well as providing instances. The relevance of the organizational structure
is also highlighted along with the brief explanation of two main structures. This report also
includes a PESTLE analysis to evaluate the external factors present in the changing environment
that influence business activities.
SECTION 1
Working of Different Forms of Business
MICRO BUSINESS
A micro business is a subtype of a small business that meets the following criteria in
order to be classes as a ‘micro- entity’. The criteria includes that the employees must not exceed
more than ten in number (Obrecht, 2021). The annual turnover must not be more than £632,000
and total of balance sheet must not exceed £316,000. This micro business is often started with
same capital worth and the same person operates, relates and controls. This form of business is
even regarded as family businesses or innovative start- ups founded by people of young age who
have strong desire to succeed in the competitive market. However, there are 5.7 million micro
businesses in United Kingdom with 95.72 percent of them are privately owned. Approximately
9.1 million individuals are employed in this type of businesses. As a result the economy of the
UK benefits from such micro businesses. The micro business plays critically towards nation’s
economic viability. It contributes towards the economy by balancing the social stability among
areas of UK. Furthermore, it is beneficial for economy by focusing on the rural as well as
underprivileged urban areas.
SMALL BUSINESS
This type of business are privately owned businesses with fewer employees accompanied
by lower annual revenues as compared to large businesses. The Companies Act, 2006 of UK
provides that the employees must not be more than fifty. Further, the annual turnover must not be
more than £6.5million and the total of balance sheet must not exceed £3.26 million. Small
businesses are self-sufficient in terms of income and size. Even this form of business makes a
significant contribution to the nation’s economy. On a local and national level, the company

hopes to assist by creating jobs and perhaps contributing more funding. One of its main
characteristics is that the small enterprises adjust to the changing demand and environment more
quickly since they are not hampered by the bureaucratic lethargy. As a result, they help to assist
economy of local area. A sole proprietorship, partnership, or corporation are examples of
privately owned businesses. The small business includes bakery shops, privately owned
restaurants, firms of architectures and so forth. Broadsword Event House, CafePod Coffee Co.
are some illustrations of small businesses.
MEDIUM BUSINESS
The Companies Act 2006 of the United Kingdom defines a medium-sized business as the
number of employees require not be more than 250, the annual turnover must not exceed £25.9
million and the total of balance sheet must not be more than £12.9 million. This style of business
begins with the gradual and steady expansion of the profitable small businesses, with the
corporation receiving a major percentage of the cash generated through sales and profits (Sen,
2021). The medium- sized enterprise aims to fills the gap between small and large enterprises.
According to the source, they contribute for 45 percent of total job opportunities and 33 percent
of GDP. Therefore, this form of business is known as the economy’s backbone since they
promote growth through variety of employment opportunities and fulfils the customers’ demand
by opening new markets with high competitive spirit. Northern Monk Brew Company which
engages with approximately 250 employees, Verdant Leisure, and so on are some examples of
medium businesses.
LARGE BUSINESS
Large Enterprises, in contrast to other forms of enterprises, prefer to offer broad selection
of products or services to its potential customers. Large businesses, defined as those which
employs more than 250 members, account for 40 percent of total employment opportunities and
more than half of overall turnover in the United Kingdom. These companies usually have a wide
distribution network and a strong presence across the country. Furthermore, huge corporations
assist and even encourage small and medium-sized firms. This type of enterprise possess a
hierarchy with dynamic management along with well- suited organizational structure and an
effective channel of communication between customers and company (Di Pietro and et. al.,
2021). AS a result it helps to attain economic opportunity, environmental protection and other