Types of Companies

This article explores the different types of companies and legal entities, including micro businesses, small businesses, medium-sized businesses, and large businesses. It provides definitions, characteristics, and examples of each type. The article also discusses different organizational structures and how they impact business productivity. Additionally, it examines the influence of external factors, such as political, economic, sociological, technological, legal, and environmental factors, on business performance. The case study of Aston Martin is used to illustrate these concepts.

Types of Companies

Table of Contents
INTRODUCTION...........................................................................................................................1
Main Body.......................................................................................................................................1
Section 1 - Distinct kinds of organisations and the way they work.......................................1
Section 2 – Distinct organisations from sole traders to Limited Liability Partnerships and
cooperatives............................................................................................................................2
Section 3 – Distinct structures of business and the way extrinsic factors affect businesses. .3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
A company is basically a legal entity that is mainly formed by a group of individuals who
are tend to engage in and operate a business which can be a commercial or industrial enterprise
(Allam, Scagnelli and Corazza, 2020). The organisation selected for current investigation is
Aston martin which is a well-known independent producer of luxury sports cars as well as grand
tourers of Britain the main headquarter of which is situated at England, UK. The current
management report consists of definition, characteristics and examples of various types of
companies and legal entities along with description about the distinct intrinsic and extrinsic
forces that influence on businesses.
Main Body
Section 1 - Distinct kinds of organisations and the way they work
In every business environment some common types of commies are present which are
different on the basis of there and scope of working a description about which is provided as
below:
Micro Business – A micro-business which is also commonly known as a micro-entity are
defined in the UK as the company with around 0-9 employees or mitigate one of the criteria
employs few than 10 workers and has a yearly turnover or balance sheet no bigger than 2 million
euro or utilizes no more than 100,000 kWh of electricity every year; or utilizes no more than
293,000 kWh gas per year (Conceição and Rodrigues, 2021). The main characteristics and scope
of working of a micro business consists of the fact that they have limited business operations and
a simple organisational structure with limited activities and operations. The examples of top
micro business in United Kingdom comprises of Castle Hill Fire Protection Ltd, Boss Brewing
Company, Mantons Cards and many more.
Small business- As per the provisions of Companies Act 2006, United Kingdom a small
organisation can be described as one that does not have and exceed the turnover of over
£6.5million, along with nit having a balance sheet total of over £3.26 million and does not
employ and have over 50 employees. The main characteristics and scope of working of a small
business is also limited to domestic or local boundaries with limited access to resources.
Therefore, small business is tending to operate at local level with limited resources and simple
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organisational structure. The main examples of small business currently operating within in UK
consists of Broadsword Event House and CafePod Coffee Co.
Medium size Business- A medium-sized businesses can be defined as an enterprise which
is having between 100 and 250 employees, or between $50 million and $1 billion in revenue are
considered and termed as medium sized business. The main characteristics of a medium sized
business consists of Lower Revenue and Profitability along with Limited Area of Fewer
Locations of operations with the main aim of profit maximisation and future growth. The
examples of medium sized business consist of Verdant Leisure and Captify.
Large Business- These type of business enterprises comprises of companies which are
having huge workforce comprises of more than 250 employees. Thus, they are having a large
scope of working and mainly comprise of big multinational firms operating at global level. The
main characteristics of a large business consists of aim of profit maximisation along with
complex working structure with large number of branches and departments across the world
(Zuñiga-Collazos and et. al., 2020). The examples of large business consist of Tesco plc, Aston
martin, Burberry and many other big firms.
Section 2 – Distinct organisations from sole traders to Limited Liability Partnerships and
cooperatives
Sole trader business- It is basically referred to an unincorporated business in which the
ownership is in the hands of one person only who tend to pays income tax on profits which are
earned from the business. Therefore, sole proprietorship is one among the easiest business type
to develop or take apart, Because of lack of government directive. The main characteristics of a
sole trader consist of the fact that only a single individual is liable and responsible for all profit
and risk. J.C. Penney, Ebay, WalMart, Kinko's, and Marriott Hotels are some of the examples of
sole proprietorships.
Partnership- A partnership can be defined as an arrangement between two or more people
to oversee business operations together in mutual way along with share their profits and
liabilities. The main characteristics of partnership comprises of having mutual agreement in the
basis of which all the operations are undertaken (Steffen, Oliveira and Balle, 2017). Further,
Nature of liability and Fusion of ownership and control are also some vital concept of
partnership. The main examples of partnership consists of Pottery Barn & Sherwin-Williams,
GoPro & Red Bull, and Casper & West Elm.
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Limited liability business- Limited liability business mainly represent a legal structure of
company where its losses will not exceed the invested amount in a limited liability or partnership
company. However, if an organisation goes bankrupt, private assets of owners and investors will
not be threatened. Thus, the main characteristics of limited liability business comprises of the
fact that an individuals or partner is liable for the amount of risk up to which the liability is
limited in case of bankruptcy (Bitiktas and Tuna, 2020). Besloten vennootschap is a suitable
example of this type of business.
Public limited liability business- It can be referred as a limited liability company which
has provide shares to general public as well as has limited liability. The main characteristics of a
PLC's stock comprises of the fact that it is offered to general public and its share can be get
through anyone, either during an initial public offering or privately or even by the way trading on
the stock market. BBC news channel is a suitable example of public limited liability business
within UK.
Cooperative- This form of business organisation can be referred as a people-centred
enterprise that is monitored and controlled as well as run through and for the members to realise
common social, economic, and cultural aspirations and needs (Weidong, Yunqian and Ruomeng,
2017). Thus, the main characteristics of Cooperatives business comprises of bringing people
together in a democratic and equal way to meet and fulfil their common interest by the way of
operating a business entity. Central England Co-operative, Channel Islands Co-operative Society
and Chelmsford Star Co-operative Society are some examples of cooperative business.
Section 3 – Distinct structures of business and the way extrinsic factors affect businesses
Different organisational structures and how organisational structure affects business
productivity
The various forms of organisational structure which are commonly seen within in
companies and business enterprises are disused below along with presenting their effects on the
productivity level of business:
Functional Organization Structure- Under this form of organisation structure, the
employees who do are engaged in similar tasks and have common interest and skills are grouped
together as one team on the basis of their specialty like all the accountants are placed in the
finance department. The impact of functional organisation structure on productivity of a firm
comprises of quick decision making as all the group members can easily communicate thus, lead
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to better coordination among them therefore ensure better and improved productivity level for a
business. Further, better in functional organisational structure the employees can also learn from
one another as they possess same kind of skill sets as well as interests thus leads to better
motivation and improved productivity for business (Singh and Hess, 2017).
Divisional Structure- Under the divisional structure, the companies tend to groups
workers into teams based on the products or projects in order to effectively meet the needs of a
certain type of customer. Thus, the divisional structure works well with the large companies as it
empowers and tend many divisions to make more effective and quick decisions without everyone
having to report to just a few executives. Therefore, under divisional structure, the employees
achieve greater efficiency and higher output that leads a positive impact in the productivity level
of business enterprise.
Flat Organizational Structure- This form organizational structure aim at disrupting the
traditional top-down management system of most companies as under this organisational
structure the management is decentralized where there is no everyday “boss and Each individual
is the boss of themselves (Allam, Scagnelli and Corazza, 2020). Thus, the flat organisational
structure is best suitable for small enterprises that aim at eliminating bureaucracy and red tape
and also leads to improvement in direct communication thus, a positive impact on the
productivity level of a small enterprise.
Out of the theses above stated organisational structure, Aston martin is having functional
organisation structure as it allows and tend to employees to focus on their role and also
encourages high level specialization which have a positive impact on the efficiency and
productivity level of a firm.
Utilizing PESTLE analysis to elucidate the way distinct extrinsic forces affect the business
performance
A PESTLE analysis provides a vital framework to analyse the key factors of external
environment which comprises of Political, Economic, Sociological, Technological, Legal and
Environmental along with evaluating there influencing on an organisation from the outside.
Following PESTEL analysis is conducted on Aston Martin to evaluate the different external
factors along with analysing their effect on the performance of a business:
Political- These determine of the external environment comprises of the extent to which
government and government policy have impact on an organisation which consists of political
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policy and level of stability as well as also comprises impact of trade, fiscal and taxation policies.
An analysis can be made that a stable political environment has positive impact on performance
of an organisation while a strict political framework can hamper its performance (Pan, Chen and
Zhan, 2019). In context of Aston martin, the strict tariff barriers applied by government of UK
after Brexit issue has negatively affected the business performance while tax rebate given on
production of electric vehicle have positive impact on Aston Marin.
Economical- This aspect of PESTEL analysis consists of interest rates, foreign exchange
rate, growth of GDP and other aspects of economy and its performance, which in turn directly
impacts on the organisation and its profitability. In context of Aston martin, a reduction in
interest rate would cost positive impact on the business performance as they can get investment
at lower rates which is beneficial in reducing the cost of operation thus, have positive impact on
its business performance.
Social- This factor consists of cultural trends, buying habits, attitude changes and
changes in lifestyles of the customers in which there needs and wants are depending thus have a
direct affect in the performance and productivity level of a firm (Çitilci and Akbalık, 2020). In
context of Aston Martin, a change in attitude of consumers towards environmental friendly cars
had lead a positive impact on its performance while improving the scope of success for its e-
vehicles.
Technological- This aspect of external environment consists of technological innovation
and development which significantly impact the way of distribution, manufacturing and logistics
of a firm that impacts its performance and efficiency level. In context of Aston martin,
digitalisation and use of 3D design has improved its performance level whereas use of online
promotional tool and social media lead to better advertising which has also boost its profit
margin and sales.
Environmental- This factor is mainly related with the surrounding environment and
comprises of impact of ecological aspects (Jadan, 2020). The high level of awareness in
customers for environment safety and protection has negatively impacted the productivity of
Aston martin as it has to enhanced its cost and expenses for improved Corporate Sustainability
Responsibility but it also has improved the brand image of Aston martin and provide more
economical and environmental friendly ways of production which has a positive effect on its
business operations.
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Legal factors- These are mainly related with the consumer law, employment legislation,
international as well as trade regulation and restrictions, health and safety, which has affected the
performance of Aston martin as it become vital to comply and follow all the set rules and
provisions which is quite complex and difficult.
CONCLUSION
On the basis of above report, a conclusion can be made that a company or enterprise may be
organized in various ways and types for tax and financial liability purposes that is mainly
depending on the corporate laws and its jurisdiction along with its main characteristics and
working. Further, a summarisation can be made that medium size, micro business, small
business, and large size business are main types of companies. At last, a conclusion can be made
that PESTEL analysis ensures better evaluation of external factors along with presenting the
impact lead out by external factors on business performance of a company.
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REFERENCES
Books and journal
Allam, I., Scagnelli, S. and Corazza, L., 2020. Sustainability Reporting, a New Type of
Companies’ Hypocrisy: Zara and Volkswagen Cases. In Responsible Business in a
Changing World (pp. 195-211). Springer, Cham.
Bitiktas, F. and Tuna, O., 2020. Social media usage in container shipping companies: Analysis of
Facebook messages. Research in Transportation Business & Management, 34, p.100454.
Çitilci, T. and Akbalık, M., 2020. The Importance of PESTEL Analysis for Environmental
Scanning Process. In Handbook of Research on Decision-Making Techniques in
Financial Marketing (pp. 336-357). IGI Global.
Conceição, O. and Rodrigues, V., 2021. Academic Entrepreneurship in Portugal: Case Study of
Academic Spin-Off Companies. In Handbook of Research on Nascent Entrepreneurship
and Creating New Ventures (pp. 316-334). IGI Global.
Jadan, D., 2020. PESTEL Analysis as a Baseline to Support Decision-Making in the Local
Textile Industry. Systems and Information Sciences: Proceedings of ICCIS 2020, 1273,
p.144.
Pan, W., Chen, L. and Zhan, W., 2019. PESTEL analysis of construction productivity
enhancement strategies: A case study of three economies. Journal of Management in
Engineering, 35(1), p.05018013.
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Singh, A. and Hess, T., 2017. How Chief Digital Officers promote the digital transformation of
their companies. MIS Quarterly Executive, 16(1).
Steffen, M.O., Oliveira, M. and Balle, A.R., 2017. Knowledge sharing among companies in a
science and technology park. Business Information Review, 34(2), pp.101-108.
Weidong, Z., Yunqian, W. and Ruomeng, L., 2017. The Relationship between the Type of SEOs
and Over-investment: Empirical Evidence from A-share Listed Companies of
China. Economic Review, p.01.
Zuñiga-Collazos, A and et. al., 2020. Negative Effect of Innovation on Organizational
Competitiveness on Tourism Companies. Tourism Analysis, 25(4), pp.455-461.
Online:
The best small companies with a turnover of up to £10m in the UK. 2018. [Online] Available
Through:< https://realbusiness.co.uk/the-best-small-companies-with-a-turnover-of-up-to-
10m-in-the-uk/>.
The best medium-sized businesses in the UK. 2020. [Online] Available Through:<
https://realbusiness.co.uk/best-medium-sized-businesses-uk/ >.
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