Types of Companies and Their Legal Structures

Types of companies

Table of Contents
INTRODUCTION...........................................................................................................................1
MAINBODY....................................................................................................................................1
Section 1...........................................................................................................................................1
Different types of companies......................................................................................................1
Section 2...........................................................................................................................................3
Legal structure of the different companies .................................................................................3
Section 3..........................................................................................................................................5
Different types of organisational structures and its impact on business productivity. ...............5
PESTEL analysis of Tesco PLC.................................................................................................6
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Company is a form of business entity that has rise immensely in the recent decades. The
development of business entity had set different types of companies based on its scope and
liability. However, there is no exact type of the company there are many factor affects to
identify company i.e. formation, control, ownership and liability. The following report present
the different types of the companies based on its size, scope and liability to shape competitive
strategies to combat market competition. Tesco is a leading and popular retail company in UK
and also beg off as the third largest retailer company in the world (Brogi and Lagasio, 2019).
This report work also illuminates the legal structure of different company based on types of
ownership. Moreover, there are some external factor that may influence operations of Tesco,
therefore following assignment also throw light on external environmental factor by using
PESTEL analysis tool.
MAINBODY
Section 1
Different types of companies
A company is a legal business entity that is formed with association of people that share a
particular common business objective.
Types of company based on size an scope-
Primary aim of every company is to earn profit, but its profit depends on the nature, size
and scope of the business organisation, according to Company Act 2017, companies based on
size are as follows-
1. Micro company-
A micro company is a type of very small organisation with limited scope. Micro
companies have not come under the section of the class 18 of companies listing in the fifth
schedule of the Company Act 2014. Moreover, micro company in UK have separated
accounting standard i.e. FRS in UK GAAP. Boss Brewery is a type of micro company which is
popular winning brand because of its craft brewery at South Wales (Chung, Jo and Lee, 2021) .
Boss Brewery is leaded by the solo lady and employed only 7 employees, however its revenue is
more than 1 million.
Characteristic & features of micro company-
1

 Most of the micro company have single owner (in context to Boss Brewery, it is managed
and controlled by Sarah John.
 A micro organisation has only strength of employees less than 10, in reference to Boss
brewery, they have 7 employees. A micro company has annual turnover of less than 2 millions, Boss brewery has annual
turnover of 1 million.
2. Small company-
As per company's act of UK, a small company that is smaller in size and have annual
turnover less than 50 millions pounds. In UK, 60% organisations are small companies. Mostly
all the star-up are a kind of small company. Webexpenses is a type of SaaS organisation that is
providing software to various business organisations for improving the visibility of the expenses
by using online expense management system. Webexpenses has 69 employees
Characteristic & features of small company-
 A small company doesn't have annual turnover more than 50 millions pounds.
Webexpenses has annual turnover of 11 millions pound in 2020.
 A small company does not have employees more than 100, Webexpenses has 69
employees (Hensmans, 2019). Small companies are owned by a single or on partnership basis.
3. Medium company-
A medium company is one that has annual turnover more than 50 million pounds and has
blandish hierarchies. Smith brothers (contracting) Ltd is a medium size engineering service
company in UK. There are nine medium size company listed under the title of Smith brother
(contracting) family company with employees more than 120.
Characteristic & features of medium company-
 A medium size company has turnover more than 50 million pounds, Smith brothers
(contracting) Ltd, annual turnover of approx 68 million pounds in 2019.
 Medium size company are owned based on single, partnership, franchise, and limited
liability company. Medium size companies contributes much in the GDP of UK as well as medium size
company provides more employment opportunities.
4. Large company-
2