Understanding Different Types of Companies and Business Structures

This report provides an understanding of different types of companies, ranging from sole traders to cooperatives and limited liability partnerships. It also explains different business structures and how external factors affect businesses. The report includes a PESTLE analysis of Tesco.

Individual report

Table of Contents
INTRODUCTION...........................................................................................................................3
Section 1:understanding of the different types of companies................................................3
Section 2: explain different companies from sole traders to cooperatives and Limited Liability
Partnerships............................................................................................................................5
Cooperatives...........................................................................................................................6
Limited Liability Partnerships................................................................................................6
Section 3: different business structures and how external factors affect businesses..............6
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment consist of micro ad macro environment factors that are affecting
the business organisation. Present report is based on the discussion of evaluating of different
types of companies, ranging from sole traders yo cooperatives and LLP's. Further there is
consideration of different business structures to evaluate the way external factors are affecting
the business. Each type of structure is affecting the business productivity so there has to be
evaluation of macro environment by application of PESTLE framework.
Section 1:understanding of the different types of companies
Definition, characteristics and example of micro business, small business, medium size
business and large size by Micro business
Definition characteristics example
Micro business Micro business is one
that has fewer than 10
employees and posses
a annual turnover or a
balance sheet that is
not greater than 2
million (Fabuš, 2017).
 The turnover
must not be
more than
632000 pounds
 The Balance
sheet has to be
not more than
316000 pounds
 The average
number of
employees
should not be
more than 10
Bross brewing
company is a example
of micro business that
is focussing on
changing the gender of
beer industry. It is a
woman led craft
brewery south Wales.
Creft brewery is based
on Swansea that has
secured listings with
UK largest national
pub chains and
achieved a 248 percent
turnover in a time
period of last three
years.
A small business in The number of Broadcast event house

small business UK is defined as the
one that does bot has a
turnover of more than
6.5 million pounds
and the balance sheet
total is not example
exceeding a amount of
3.26 million pounds.
Where the average
numbed of employees
is not more than 50.
employees in these
business are generally
ranging from 10 to 15
employees (Hamilton
and Webster, 2018).
is a limited company
in UK that is a small
sized business it is
located in Beckenham
house limited and has
36 employees
presently working in
this company and they
are generating a
revenue of 6.30
million dollar sales.
There are future three
companies that are part
of this event house
corporate family.
Medium size
business
A medium sized
business in UK is
defined as a
organisation that have
less than 250
employees and the
overall turnover is
under 12.9 million
pounds.
 The medium
sized business
is having a
turnover of 25
million pounds.
The employees
are generally
less than 250 in
number and
gross assets are
less than 12.5
million pounds.
Verdant leisure is a UL
based Medium sized
organisation where the
turnover is more than
50 million pounds. It is
holiday park company
that is operating in
north of England and
Scotland. It was
launched in the year
2010 and has been able
to maintain a
impressive customer
services with a annual
Turnover of 31 million

pounds in 18-19.
Large size business
Large businesses in
UK consist of 250
employees that is
accounting for 0.1
percent of business 40
percent of
employment and 53
percent of turnover.
 These business
are generally
operating on a
international
scale with
having
branches across
international
borders.
Adam group is a
global marketing
service organisation. It
has become one of the
most famous
interconnected
business that consist of
400 people across 27
offices in 19 countries.
The key objective is to
integrate the software
platforms for
improvement of
resilience and
improvement of
customer experiences.
Section 2: explain different companies from sole traders to cooperatives and Limited Liability
Partnerships
Sole traders:
Definition: It is a type of business that is owned and managed by one single individual, there is
no distinction between the company and the owner and all the dents, after tax profits belongs to
the owners (Prajogo, , 2016).
characteristics:
They posses freedom to ensure or discontinue the business and a freedom to make decisions that
are having lower running cost, owner is responsible for keeping the daily financial records.
There is nobody to share the responsibility with others sometimes sole traders are difficult to
afloat and owners are complete responsible for every action of the business.

In these type of business owner is liable for all the debts ad they have to pay for all the business
losses as there is unlimited liability.
Example: Columbus photographed is a example of sole traders business. In this types of
business there is no differentiation that exist between the owner of the business and the actual
business. The sole trader of Columbus is responsible for all the loses & profits that are taking
place in the business (Cherunilam, 2016).
Cooperatives
Definition: Cooperative is a association of person that is owned & controlled by people to meet
the economic, social and cultural needs & aspirations by use of a jointly owned and a
democratically controlled business.
Characteristics: Cooperatives are open and have voluntary association, they are democratic
structure and each member posses one vote. There is fair distribution of economic results
according to volume of operations.
Example: There is a cooperative group where there are 22 independent consumer co operatives
that includes the customer owners, corporate members and consist of central England co
cooperative, channel of islands co-operation society, heart of England co operative society, east
of England co operative society.
Limited Liability Partnerships
Definition: Limited liability partnership is a business in which all the partners posses limited
liabilities. There can be exhibiting of elements of both corporations and partnerships. The board
is organizing itself and are hiring corporate offices who posses identity as corporate individuals
with legal responsibility to manage the corporation in best interest.
characteristics: LLP can be a company or a person and each member is known as the corporate
member. They are paying tax on their profitability share as a ordinary business partnership but
they are not personally liable for any type of debts of business.
Example: Hands UK Ltd. Is a example of limited liability partnership in UK.
Section 3: different business structures and how external factors affect businesses.
 Hierarchical Organisational structure - It is the pyramid-shaped structure which is the
most common type of organisational structure. Here, the chain of command goes from
top to bottom. Which includes from CEO to the low-level Employee. It effects the

business productivity directly and indirectly both. Here due to this structure individual is
able to know that which type of projects is going on which department. It saves the time
of the employee and due to having the coordination the productivity goes in smooth
manner which automatically helps in increasing the productivity (Masud and et. al., 2018).
 Flat or Horizontal structure - It the business structure which is generally adopted by the
start-up businesses which initially they grew up firstly, then after they built different
departments. It requires more involvement from the employees and less supervision. It
gives the employee more responsibility which leads to the better performance and which
also helps in the increased quality. It also improves in implementing new ideas with the
coordination.
 Divisional organisational structure - In this, the company have the control on their own
business resources. Each division having its own sales team, marketing team, IT team etc.
it gives the authority for taking decision. Market based division, Product based division,
geographic division are some distributed division through which company is able to
respond quicker in industry change or customer need. This helps the large companies to
stay flexible in nature and it promotes autonomy, customised approach and independency
which helps in increasing productivity of the company.
 Functional Organisational structure - It is similar to the Hierarchical organisational
structure, where the highest level of authority at the top and other goes down through
there. Here, employees are organised through their specific skills and functions in the
company where each separate department is individually managed. This allow their
employee to focus on their role and is scalable in any company. Due to this company is
able to focus in the company productivity (Wallace and et. al., 2016).
 Matrix Organisational Structure – In this, the organisational chart have the grid look, it
seems like cross functional teams to form special type of projects. It gives the individual
employee to learn new things and play some different role other than their main role
which enables them to develop new skills and help in company productivity.
 Team based organisational structure – It refers to the team which are created based upon
the different task and different work. They generally works towards the common goal
while working on individual task. This is a flexible structure which reinforce decision

making, teamwork and problem solving which automatically affect the productivity of
the company and help in increase it.
PESTLE analysis of Tesco
It is a tool which is used to analyse and monitor the macro-environmental factors which
impacts on an organisation (Semenova and et. al., 2020).
Political factor-
This company operates in 12 country which includes the Asia & Europe. Many political
factors are exposed which can effects the company operations. These factors includes the
unemployment rate, economic conditions, political instability, legislation and tax rates. Import
tax can also effect the company because some of the inventories are imported from the different
places like East Asia and China. In this time of COVID, it also is a risk factor which can affect
the business. Another issue which are effecting the business of Tesco is the US and China trade
war. It is the multinational company which affects its business by any instability is there is any
country where it is running the business.
Economic factor-
It is the second factor which is used to analyse the companies macro-environment. This is
the largest factor which plays a major role in their product consumption. The company regularly
need to have eye on the economic change which is occurring in the country. This is the factor
which effects the revenue, distribution, sales and profit of the company. The world is facing the
low economy due to COVID effects, which ultimately decreases the company sales and its
businesses. The earning have down and the people are not ready to expense more.
Social factor-
It is the factor which is effecting the company business. The obesity is the big issue in the
society and customer are getting more health conscious in today times. The company full fill the
need of different customer who need branded as well as non-branded products and the packaging
and libelling should be of good quality which does effect the environment. The product choice
depends on the various cultural factor which is lived by the individual for all his life. The
customer are shifting towards the organic products and Tesco need to manage the attitude in
promoting the organic products for satisfying their customer (Saeed and et. al., 2017).
Technological factor-

It is the big factor for the Tesco which makes it is in market and takes it ahead in this
competitive market. The company after using the advancement in the technology which gives
them many benefits over the year. This makes the Tesco overcoming from the issue of customer
experience. Like this the technology helps the company in regain the customer trust. This gives
their customer to many option for the payment.
Legal factor-
It affect the business directly. In any changes in the law, creates the big effect on the
business. In 2006, 17 workers of the Tesco has taken legal actions against the age and gender
based discrimination in the company.
Environmental factor-
Company has taken many initiatives for helping in improve the environment for creating
a sustainable society. Company has launched phase 2 to Reuse, Reduce, Remove and Recycle
Plan. The company has improved in their packaging which is recyclable in nature. The pressure
is not only from the government but also from the public who are conscious about this.

CONCLUSION
From the above discussion, it can say that the understanding of different types of
companies and the business environment is necessary for the effective business. The sole traders
of different companies and the partnership are able to run the business and the different functions
of the organisation are studies above. The PESTLE analysis is done for the company for the
analysis of the macro-environment.

REFERENCES
Fabuš, M., 2017. Current development of business environment in Slovakia and Czech Republic.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International journal of production Economics, 171,
pp.241-249.
Cherunilam, F., 2016. Business environment. Himalaya Publishing House.
Masud and et. al., 2018. Past and Future of Human Resource Functions: Are We Done?.
International Journal of Academic Research in Business and Social Sciences, 8(11).
Wallace and et. al., 2016. Real-world executive functions in adults with autism spectrum
disorder: Profiles of impairment and associations with adaptive functioning and co-
morbid anxiety and depression. Journal of autism and developmental disorders, 46(3),
pp.1071-1083.
Semenova and et. al., 2020. Debiased machine learning of conditional average treatment effects
and other causal functions. The Econometrics Journal.
Saeed and et. al., 2017. Relationship of organisational flexibility and project portfolio
performance: assessing the mediating role of innovation. International Journal of Project
Organisation and Management, 9(4), pp.277-302.