Types of Companies: Definition, Characteristics and Examples

This report discusses the definition, characteristics and examples of different types of companies such as micro, small, medium, large business and sole trader, partnership, limited or public limited business. It also covers different types of organizational structures and how external factors can affect business using PESTLE analysis.

Type of Companies

Table of Contents
INTRODUCTION...........................................................................................................................4
SECTION 1......................................................................................................................................4
Definition of micro business........................................................................................................4
Characteristics of micro business.................................................................................................4
Example of micro businesses.......................................................................................................4
Definitions of small business.......................................................................................................5
Characteristics of small business.................................................................................................5
Example of small business...........................................................................................................5
Definition of medium size business.............................................................................................5
Characteristics of medium size business......................................................................................6
Example of medium size business...............................................................................................6
Definition of large size business..................................................................................................6
Characteristics of large size business...........................................................................................6
Example of large size business....................................................................................................6
SECTION 2......................................................................................................................................6
Definition of sole trader business................................................................................................6
Characteristics of sole trader business.........................................................................................7
Example of sole trader business...................................................................................................7
Definition of partnership..............................................................................................................7
Characteristics of partnership......................................................................................................7
Example of partnership................................................................................................................8
Definition of limited liability business........................................................................................8
Characteristics of limited liability company................................................................................8
Example of limited liability business...........................................................................................8
Definition of public limited liability business.............................................................................8
Characteristics of public limited business....................................................................................8
Example of public limited business.............................................................................................9
Definition of Cooperative............................................................................................................9
Characteristics of cooperative......................................................................................................9
Example of cooperative...............................................................................................................9

SECTION 3......................................................................................................................................9
Different organizational structure................................................................................................9
Organizational structure affects business productivity..............................................................10
External factor affects the performance of business using PESTLE analysis...........................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
A company is a judicial entity defined the people or group to work collectively to
accomplish the objective. There the company is an artificial person, it is created by law.
The company may organized is many ways. The company is generally formed to earn
profit from the business and each company has its own structure. This report is
discussed the definition, characteristics and examples of different companies such as
micro, small, medium, large business and sole trader, partnership, limited or public
limited business. Likewise, the report also contain different types of organizational
structure and how the external factors can affect the business using PESTLE analysis.
SECTION 1
Definition of micro business
These are microenterprise or small business. These business can employee few
people (Sedek Abdul Jamak and et.al., 2017). A micro business have 0-9
employees or persons they appoint. The business need small amount of capital
which would be taken in advance from a bank or any organization. The small or
limited loans are often enough to set up a small business in easy way.
Characteristics of micro business
 The borrowers in the micro finance are from low-level income backgrounds.
 The loan provided in the micro finance are ordinarily in small amount.
 The loan holding period is little.
 These loans do not need any security for the repayment.
 These loans can be repayable at higher rate.
 The loan is taken for the purpose of income generation.
Example of micro businesses
Boss Brewing Company

Definitions of small business
The small business function their operation with little capital investment on small
level. The number of machines and labour are less here. Business is small, so they
produce the goods & services in a small amount. This business can play a vital role in
the improvement of an economic system (Soundararajan, Jamali and Spence, 2018).
The estimated turnover of these business are 2.3 trillion. These enterprises generally
set up their business in urban areas. These are labour-intensive organization, and they
create employment possibility which will proves to be helpful for the concerned country.
These industries can establish the average income of country. These industries help
rural people to improve the living standard.
Characteristics of small business
 Small business are the major source for the people living in the rural areas,
whereas they play an important role in employment generation of the economy.
 They contribute the economy on a large scale as these small scale business are
responsible for 40% total goods & services produced in the country.
 These industries have single owner which is also represented as sole proprietor.
 They use natural resources and the amount of wastage should be limited here.
They utilize those resources which are easily available to them.
 All the tasks done in the organization should be controlled by owner.
Example of small business
Divisions Canners
Definition of medium size business
The medium size business are managed business or it may be family hold
business. The employees in this business should be 50 to 249 (Enterprises by business
size.,2021). These business are recognized by the government. Medium business
operates the business around the world.

Characteristics of medium size business
 It creates a structure between the big business firms and small organizations.
 These business start from decreasing growth and proceed their work without any
interruptions (Rhodes, 2017).
 The turnover of these enterprises is not more than 25.9 million.
Example of medium size business
Smith Brothers
Definition of large size business
A large size business is a business where the number of employees should be
250 or more. The annual turnover should be more than 2.6 trillion (A guide to the
different types of partnerships.,2021).
Characteristics of large size business
 The value of assets is same as the value of turnover.
 Managers or owners power are clearly different or separate.
 Large number of operation should be performed, the multiple factories, stores
and branches are there.
 In large business the market share grabbed is also in large percentage.
Example of large size business
Unilever
SECTION 2
Definition of sole trader business
A sole trader is a person who is self-employed. The person owns and runs the
business individually. The owner of sole trader business does not have separate legal
entity. Business is easy and inexpensive to set up, the business contain the simple form

of business structure. The sole trader have all the powers to take decision regarding
starting and running of business entity along with making employing the employees
(Cribb, Miller and Pope, 2019).
Characteristics of sole trader business
 The business can started by an individual person. All power lies in the hand of
owner regarding employing others and taking of decisions.
 The business has unlimited liability and the individual person is liable for all the
losses occurred in the business.
 The trader enjoy all the profit and expansion of business lies with him.
 The individual person manage all the work by which the secrecy should be
maintained in its work easily.
Example of sole trader business
NotOnTheHighStreet.com
Definition of partnership
A partnership is a business form where two or more persons share the holding or
ownership. They share the responsibility by which the company manage their income
and loss generated in the business (Loan, 2020). The persons of the business are
individually called partners and these members are collectively known as a firm. The
company is governed by partnership act 1890, UK.
Characteristics of partnership
 The main aim of partnership is to share profit on the agreed ratio and there the
profit & loss are equally divided among the partners.
 Partnership is the agreement between the two or more people, agreement may
be in written or oral form.
 The identity of partners are lies on the identity of firm.
 The partnership firm is registered under the act is not compulsory.

Example of partnership
Social Chain
Definition of limited liability business
Limited liability business is a form of company structure by which a partnership or
a company both can gain benefits. There are many companies which come in this
structure. This organization has a type of legal structure. There the private assets are
not at risk if the company can not run properly or fail (Mehta and Rastogi, 2021). These
companies must registered at the companies house.
Characteristics of limited liability company
 These companies have its separate legal entity from owners or members.
 One director must be present in the company.
 In the private limited business the minimum number of shareholders must be
one.
 The company does not require any company secretary.
Example of limited liability business
Bakes Group
Definition of public limited liability business
The share legally offers to the public in private limited company. This company is
not a popular choice in UK. There are 95% companies in UK which are private limited.
Characteristics of public limited business
 In the public limited business the minimum number of shareholders must be two.
 The accounts filled in this company is within 6 months.
 The company needs minimum two number of directors.
 They need to higher a company secretary.

Example of public limited business
Amcor Plc.
Definition of Cooperative
They are jointly owned and controlled by its members. The members include in
this business can be businessperson, customers, occupant or employees. There every
cooperative shares the same values and principles.
Characteristics of cooperative
 Cooperative business are voluntary in nature.
 There the finance of these business are arranged through the shares purchase.
 These business organize on the basis of limited and unlimited liability.
 The profit provided to the members after limited interest paid on capital.
 The motive of these business is to maximize the profit.
Example of cooperative
Scotmid
SECTION 3
Different organizational structure
 Hierarchical structure- this is pyramid shape structure. It is the most common
organization structure there the chain of command flows from top to low level.
There the authorities and responsibilities should be better explained.
 Functional structure- this structure starts with top-level to down level. There the
department can manage individually. It is easy measured in company. Since the
work is performed on the basis of function so it will lead to have efficiency with
respect to company.

 Horizontal structure- the structure fits between low level and upper level. There
the employees get more responsibility. The mode of communication should be
faster here. This will lead to have better decision-making in terms of making and
sharing of responsibilities between various horizontal level.
 Divisional structure- there the company control own resources. This structure
generally plays their role in large companies as it empowers various divisions.
Here the work is being performed on the basis of division in terms of making
departmentation.
 Matrix structure- this structure shows the cross functional for special projects. It
can give more dynamic view to the organization.
 Team based structure- there the work can done as a team, by which problems
can be more focused. By this productivity increased. It promotes the growth of
company. This will lead to have better team working and the management. It will
lead to have easiness of the work.
Organizational structure affects business productivity
Unilever's use corporate structure, by which the firm is responsible for adequate support
for the creation of the product. The company design these structure to build the system
and arrangement. The company adapt changes in the industry goods and global
market. There the organizational construction suitably assist the diversified global
operations. It enables the effective development of product.
External factor affects the performance of business using PESTLE analysis
 Political factors- Unilever is subjected to all the regulatory limitations and guidelines
which was marked by European Commission. If the Unilever is unable to fulfil the
company would face legal issue such as risk fines. Political stability presents more
opportunities for Unilever to grow the business in the market.
 Economic factors- Economic factors include as there are the more booms in the economy,
higher profits and revenue are generated and companies are rising to compete against

Unilever. Luckily since Unilever is present in different market so if the one product is
suffered then the other product is on its boom.
 Social factors- Unilever social factors consists of health and safety, attitude, health
consciousness, cultural norms and expectations. These factors in Unilever can be useful
for the companies to plan their marketing strategies and analysis. Unilever can consider
many products which focuses on personal care and well-being, the companies express a
strong desire to fulfil the needs of people.
 Technological factors- Unilever makes a point by which they can develop their digital
marketing and selling methods. Unilever consists of higher level of automation by which
they can produce better goods as compared to their competitors. So, Unilever is
consistently producing new products and sell them through online mode with the
respective brand location.
 Legal factors- Unilever is subjected to many laws and legal restrictions, as there the
Unilever can own over 400 brands in several industries like food, health, personal care
and various other industries. Their each brand and location are specified to follow laws
regard to health and safety, copyright, product safety and taxes in international or
regional level.
 Environmental factors- There the environmental factors can increase the sustainable
resources in Unilever. There the Unilever should conduct ethical sources too. Unilever
can grow impacts that how the companies can operates and utilize the products they offer
by creating new markets.
CONCLUSION
From the above report it is concluded that the micro business are the type of
organization that need little capital to start the work. There the medium size industries
are managed or family owned business, they create a structure between small
organization and big firms. Large organization are the work place whose assets
turnover is similar to the value of assets. Sole trader business is a self-employed
business. Partnership firm is a place where two or more people can share the
ownership. In limited liability business the company need limited members. Co-
operative business can owned or controlled by its members. There different structure of

Unilever can be discussed such as hierarchy structure, organizational structure and
more. using PESTLE the external factors affect the productivity of business.

REFERENCES
Books and journals
Cribb, J., Miller, H. and Pope, T., 2019. Who are business owners and what are they
doing? (No. R158). IFS Report.
Loan, I.F.T., 2020. Building on a partnership.
Mehta, A. and Rastogi, S., 2021. LIMITED LIABILITY PARTNERSHIP: AN EMERGING
FORM OF BUSINESS ORGANISATION.
Modenov, A.K. and Vlasov, M.P., 2018. Organizational structure and economic security
of an enterprise. Revista Espacios. 39(39).
Phan, S., 2021. The effect of PESTLE factors on development of e-
commerce. International Journal of Data and Network Science. 5(1) pp.37-42.
Rhodes, C., 2017. Business statistics. Briefing paper, (06152).
Sedek Abdul Jamak, and et.al., 2017. Micro-Enterprise Growth Strategies: A
Conceptual Model. Global Business & Management Research. 9.
Soundararajan, V., Jamali, D. and Spence, L.J., 2018. Small business social
responsibility: A critical multilevel review, synthesis and research
agenda. International Journal of Management Reviews. 20(4). pp.934-956.
Online references
Enterprises by business size.,2021( [Online]. Available through
<https://data.oecd.org/entrepreneur/enterprises-by-business-size.htm>)
A guide to the different types of partnerships.,2021 (Online]. Available through
<https://www.qualitycompanyformations.co.uk/blog/guide-to-different-types-of-
partnerships/>)
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