Types of Companies: Micro, Small, Medium, Large, Sole Trader, Partnership, Private Limited Liability, Public Limited Liability, Cooperative

This article discusses the main criteria used for the classification of different types of businesses, including micro, small, medium, and large businesses. It also explains the characteristics and examples of sole trader, partnership, private limited liability, public limited liability, and cooperative businesses. The article includes relevant references from books and journals.

Type of companies

TABLE OF CONTENTS
QUESTION 1...................................................................................................................................3
QUESTION 2...................................................................................................................................4
REFERENCES................................................................................................................................5

QUESTION 1
1. Main criteria which is used for the classification of the different types of businesses:
Ans. The main criteria which is commonly used for the business classification is the product
which is produced by the company, the methods of the production. Basically the classification of
the businesses is done through comparing the sectors of the economy. The company serving the
services and the products they are offering helps in classifying the businesses. The business
activities which the company is performing is also considered as the basis for the classification
of types of businesses.
2. Explanation of microbusiness with the using suitable examples:
Ans. The microbusiness can be defined as the small business which is having very less or few
employees in the organisation. This type of the business usually has the employees less than 10
as well as it is started with very less amount of the capital which is advanced from the bank or
from any other organisation (Smith, 2021). This type of the businesses helps in the encouraging
the good quality of the life for the other organisations. For example A small grocery store and
many more.
3. Explanation of small business with using suitable examples:
Ans. The small businesses are those which involves services or any retail operating businesses
such as the grocery stores, medical stores, bakeries as well as the small manufacturing units.
These basically are the independently organisations which are owned by the single owner was
well as this type of the businesses requires very less amount of the capital, less labours and less
machinery. The small businesses has limited to invest the equipments of not large investments.
4. Explanation of medium size businesses with using examples:
Ans. Medium sized business can be described as the businesses which is having employees
ranging between the 100 and to 1500 employees. This type of the businesses is considered as the
medium sized businesses which is having the annual turnover under the Euro 50million (Ritchi
and et.al., 2020). The medium sized company requires more investment then the small business
as this company has the more number of the labours, machinery and also have to perform more
number of the business activities. The examples of the medium size businesses are such as the
local restaurants, trading companies, export-import companies, retailing, service companies and
many more.
5. Explanation of large sized businesses with suitable examples:

Ans. A large sized businesses is the type of the business with having above average size of the
business, having large operating activities as well as having high economies of scale. This type
of the businesses hires large number of the employees in the organisation for performing many
business activities. The main aim of this type of the organisation is to have the leading position
on the international as well as at the national level. According to the United Kingdom's
Department for Business Enterprise and Regulatory Reform, the organisation which has the
growth beyond the limits of the medium sized businesses as well has they have more than 250
employees in the organisation (Bocken and Short, 2021). The large businesses has the gross
receipts averagely more than the $ 10 Million over the previous three years. Some of the
examples of the large businesses are such as the Unilever, HSBC Holdings, AstraZeneca and
many more. As all of these companies has very huge amount of the capital with them for
performing many number of the activities.
QUESTION 2
1. Definition of sole trader businesses with the suitable example. Brief explanation of main
characteristics of this business:
Ans. The sole trader businesses is also known as the sole proprietorship and it is the
unincorporated business which has only one owner who is liable for performing all the business
activities as well as for paying all the liabilities and expenses of the company. This single owner
does not have to share the profits and can enjoy the overall earnings itself. This type of the
business is considered as the most easiest category of the business for establishing due to the
reason as there is lack of government regulation in this type of the businesses (Curto, 2018).
There are many benefits of this type of the businesses such as it is very easy to create this
business, costs very less for the business creation and for the maintenance as well. Some of the
examples of this type of businesses are such as electricians, gardeners, plumbers, decorators and
many more.
The main characteristics of the sole trader businesses are such as-
Full control: The sole trader has the sole ownership of the businesses and has the full control
over the business. The owner does not have to consult with the directors and the shareholders
prior of making the decisions.

Not the separate legal entity: In the sole trader business, the business and the owner is
considered as the one or the same. There does not exist the separate legal identity which means
that the owner is solely responsible for the overall transactions of the company.
Unlimited Liability: The owner of this business has the full responsibility of paying all the
debts of the business. There is no limit for any maximum amount of the debt for the owner.
Privacy: The sole trader business owner enjoys the greater level of the privacy as they does not
have involvement of other people.
2. Definition of Partnership with suitable examples. Brief of three characteristics of this
businesses.
Ans. Partnership can be defined as the formal agreement between the two or more groups and
parties for managing as well as operating the business and sharing the profits earned (Nayak,
2020). This is basically the type of the business in which the two or more people forms the
agreement and combines their resources for forming a complete business as well as agrees for
sharing the profits, risks ans the losses. Some examples of partnership businesses are such as law
firms, physician groups, investment firms as well as the accounting groups (Hliebova and
Olkhovyk, 2020). There are four types of the partnership such as the-
 General Partnership
 Limited Partnership
 Limited Liability Partnership
 Limited Liability limited Partnership
The three main characteristics of the partnership businesses are as follows-
Existence of the agreement: Partnership occurs when there is outcomes of the agreement
between two or more parties for carrying out the business.
Existence of business: Mainly, the partnership is formed by the carrying on the business.
Sharing of profits: The main purpose of the partnership is to share the profits among the
partners of the company. When there is no agreement made on the sharing of the profits then the
partners has to share the profits in the equal profits.
3. Definition of Private Limited Liability with suitable examples. Brief of three characteristics
of this type of businesses

Ans. The Private limited liability company is privately held and type of small business entity.
This category of the business has the limit over the owner for the liability of the shares as well as
the limited number of the shareholders to the number 50 and the shareholders are also restricted
for trading the shares publicly. Some examples of the private limited liability companies are such
as the Flip-kart, Ola, Snap deal and many more. In this type of the company, private ownership
is been used in many jurisdictions and in contrast to the public listed company. There are many
liabilities for the directors in the private limited company such as the tax liability, company
debts, share application money payment and many more (Cavric, Buljat and Lesic, 2020).
The three main characteristics of the private Limited Liability company are such as-
Number of directors: According to the act, the private limited company must have the two
directors as the minimum and the maximum number of the directors are 15.
Limited Liability: The liability of all the members as well as the shareholders of the private
limited company are limited. This means that when the company faces the situation of the losses,
the shareholders are not responsible to sell their personal assets for the payment.
Perpetual Succession: The term perpetual succession means that the company will be able to
continue to have presence in the eyes of law instead of its insolvency and bankruptcy.
4. Definition of public limited liability businesses. Briefly explanation of three characteristics
of this type of company.
Ans. The public limited company can be described as the business which is controlled and
managed by the directors as well as the owner of shares. This type of the businesses has the right
and are allowed to offer the share of the company to the public. The are many other obligations
for these businesses that they must meet the due for being as the public company which includes
admin related to tax, making the financial reports publicly so that the shareholders could know
the financial position of the company as well as the information which they want to know prior
to the investment (Abdikhalikovich, 2020). There are many advantages of this company as they
are able to raise the capital by sales of share, the capital used can be used for paying off the
debts, increasing the brand awareness and many more.
The three main characteristics of the public limited liability businesses are as follows-

Directors: According to the act, for starting the public limited business, the company must
have ,3 directors as the minimum ans there is no boundation over the maximum number of the
directors in the company.
Limited Liability: The liability of each stakeholders of the company is limited that means the
shareholders of the public limited company are not solely responsible for the loss as well as
payment of the debts of company.
Paid up capital: This type of the company requires the minimum paid up capital 5 lakh or more
than this amount.
5. Define cooperative by using suitable examples. Brief explanation of three main
characteristics of the cooperative.
Ans. The cooperative can be defined as the association of the group of people which is owned
and controlled by the groups for meeting the common social, economic as well as the cultural
needs through the jointly owned business (Belás, Kmecová and Čepel, 2020). Examples are retail
outlets, utility companies, insurance companies and many more.
The three main characteristics of cooperative are as follows-
Membership is voluntary: The membership in this is much voluntary.
Absence of exploitation: The cooperative has the ability of exploiting the members and the
consumers.
Role of bank: The cooperatives does not have the ability of leaving itself as there is role of
providing assistance to peasants.

REFERENCES
Books and journals
Abdikhalikovich, A.G., 2020. Types And Forms Of Small Business And Private
Entrepreneurship. European Journal of Molecular & Clinical Medicine, 7(07), p.2020.
Belás, J., Kmecová, I. and Čepel, M., 2020. Availability of human capital and the development
of the public infrastructure in the context of business activities of SMEs. Administratie
si Management Public.
Bocken, N.M. and Short, S.W., 2021. Unsustainable business models–Recognising and
resolving institutionalised social and environmental harm. Journal of Cleaner
Production, 312, p.127828.
Cavric, D., Buljat, M. and Lesic, D., 2020. THE TAX ASPECT IN EARNINGS OF SOLE
PROPRIETORS. Economic and Social Development: Book of Proceedings, pp.49-58.
Curto, J.C., 2018, April. Exploring Legal Terminology: Types of Business Organization in the
United States. In Ideas (Vol. 3, No. 3).
Hliebova, A. and Olkhovyk, O., 2020. A non-profit organization: essence, types and basic
business processes. ЕКОНОМІКА І РЕГІОН, (2 (77)), pp.68-76.
Nayak, H., 2020. How Partnership Act Ease-out Doing Business for Partnership Firm?. Jus
Corpus LJ, 1, p.641.
Ritchi, H.,and et.al., 2020. The influence of business process representation on performance of
different task types. Journal of Information Systems, 34(1), pp.167-194.
Smith, P.D., 2021. Sustainable Growth Practices of Micro-Business Owners (Doctoral
dissertation, Northcentral University).
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