Types of Companies and Business Structures

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
Submitted by:
Name:
ID:
Contents
Introduction 2
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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
Introduction
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Business management is a practice defined as managing the business operations of the
organisation. This report is based on the case study of different types of businesses and its
management. Henceforth, report is emphasis over the various types of business operations
associated with the organisation. Furthermore, project will discuss about the business
structure and external factor affecting or influencing the business operations of the
organisation.
Section 1: Different types of companies and how they work
Micro business:
Micro business is the smallest of all the type of businesses where there is a
minimum number of employees not more than nine and also minimum amount of
investment is needed to start such businesses. The scale of operation is such a
small where only two employees are also sufficient and thus such businesses
generally exists in a form of sole proprietorship business. The turnover of such
business is less than two millions.
Characteristics of micro business are:
 The turnover of such business must not exceed £632,000.
 The total of the balance sheet should not exceed £316,000.
 The average staff employed should not be more than 10.
Examples of micro business are freelancers and independent contractors such as
freelance graphic designer, home based business, Amazon suppliers and solo
consultants.
Small business:
As per the companies act of UK 2006, small business can be as those economic
entity whose turnover is not more than £6.5 million, the total of business balance
sheet should not exceed £3.26 million and the staff employed are not more than 50
people. It can be in any form sole proprietorship, corporation or partnership owned
by private body having fewer employees and comparatively less turnover per year
than what a regular sized business have.
Characteristics of small business:
 Any form of business organisation having less than £6.5 turnover,
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 Whose balance sheet total should not be more than £3.26 million, and
 The number of employees recruited are less than 50 people, then such type
of business can be regarded as a small business.
 It can be like online fashion stores, online medical facilities, sports academy,
etc.
Examples of small business are Davison Canners, LovetheSales.com and
TrustedHousesitters.
Medium size business:
As per the companies act of UK, medium size business can be defined as those
business entity which is having a turnover of not more than £36 million and balance
sheet total should be less than £18 million and the staff recruited should be less than
250 people (Kushare, Kabra and Ghotekar, 2019). It can be either a family owned,
controlled and managed business, or may be a complex entity where there is a
separation between ownership and management.
Characteristics of medium size business are:
 Turnover of business in on an annual basis should be less than £36 million,
 The total asset investment as per balance sheet should not exceed £18
million,
 And the average staff involved in the business are not greater than 250
people.
 Form of business can be both family owned and complex entity by having
separate management authorities and owners.
Examples of medium size business are local restaurants, wholesalers,
manufacturers and transport companies generally have the above characteristics.
Large size business:
According to the companies act 2006 of UK, where the following three criteria can be
satisfied such as the total turnover in a year is more than £36 million, the total of
balance sheet is greater than 18 million and the more than 250 employees are
recruited within the business. Again, the form or organisation are generally include
large corporations which may be both privately and publicly owned, controlled and
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