Types of Companies and Their Impact on Business Performance

BSc (Hons) Business Management with Foundation
BMP3002
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
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Section 2: Different companies from sole traders to cooperatives and Limited Liability
Partnerships p
Section 3: Different businesses structures and internal factors affecting business
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Conclusion p
Reference List p
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Introduction
The aim of this report to examine what are the different types of business exists in terms of
size, type, management, control and ownership. Different type of organisation such as micro,
small, medium and large businesses will be explained through definition, its characteristics
and examples in the context of UK. Also, different forms of business organisation such as
sole traders, corporations, cooperatives, partnerships, limited liability business and public
limited business will be explained with the help of definition, characteristics and examples in
the context of UK (Betta, 2019). Organisational structures adopted by these forms and types
of businesses will be discussed by highlighting how it affects the productivity of the
businesses. And at last the impact of external factors on the business performance will be
evaluated with the help of PESTLE analysis framework. In order to evaluate different
business structures and the impact of external factors over the performance of a business, in
the context of UK based organisation that is ASDA, discussion will be carried out.
Section 1: Different types of companies and how they work
Micro business:
Definition of micro business: A smallest type of business which hires minimum number of
employees’ ranges from two to ten and also where there is a need of very less amount of
initial investment to start the business operations is known as micro business. The particulars
of identifying micro business are those businesses having turnover up to £632,000, balance
sheet total or total assets investment up to £ two million and the average no. of staff hired is
not more than ten (DUMITRIȚA, 2020). It is the scale of the operations which decides the
level of turnover, balance sheet total and number of staff employed. Generally, such type of
businesses are existed and adopted sole trader form of business organisation, as due to small
size less capital, employees and assets are required.
Characteristics related to micro business are:
 Such business have the turnover which must not be greater than £632,000.
 Also, the balance sheet total of micro business should not be greater than £ two
million.
 The average no. of staff hired should not be greater than 10.
Examples of micro business are freelancers and independent contractors such as freelance
graphic designer, home based business, Amazon suppliers and solo consultants.
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