Types of Companies and Their Impact on the Economy

This article discusses the various types of companies, including micro businesses, small businesses, medium-sized businesses, and large businesses. It explains the characteristics of each type and how they contribute to the economy. The article also explores different business structures and how external factors such as political, legal, social, economic, environmental, and technological factors can affect businesses.

Types of Companies
Table of Contents

Introduction................................................................................................................................................3
Main body..................................................................................................................................................3
Different types of companies...............................................................................................................3
Explain different companies from sole traders to cooperatives and Limited Liability
Partnerships..........................................................................................................................................5
To consider different business structures and how external factors affect businesses..............7
Conclusion.................................................................................................................................................8
References................................................................................................................................................8

Introduction
There are various types of companies in the economy like public limited
companies, private limited companies one person company etc these companies helps
in providing the services to the economy so that needs and requirement of the country
can be satisfied effectively in the market. if the companies will not be able to satisfy the
needs and requirement of the economy then it can affect the growth of the economy as
well as the profit of the organisation in the market. different companies provide different
services to the customers companies are classified into various catergories like small,
business, large businesses and medium size business theses business provides
different services to the economy which will helps in satisfy their requirement and will
also helps in developing the lifestyle of the economy so that services of the economy
can be developed accordingly. in this report different types of companies will be
explained and various internal and external factors of the companies will be discussed
so that its impact on the companies performance can be identified properly
(Devarasetty, 2017).
Main body
Different types of companies
Micro business
Micro businesses are the small size businesses which have few numbers of employees
in the business they mainly operate to provide the basis services to the customers so
that there needs can be satisfied properly in the economy and growth of the economy
can also take place in the market. for example, amazon suppliers, owners of the etsy,
home based businesses etc. these are considered as the micro businesses because
they helps in satisfying the needs of the customers revenue of these companies are
less are compared to other businesses in the economy because there demand in the
market is less because people are not aware about the services of these businesses. If
the person wants to start its business (Holt, 2019). it will first be considered as the
micro business if the customers will satisfy by the services of the business then it
demand in the market will be increased micro businesses take time to grow in the
economy because there are other businesses also who are providing the best quality of
services to the economy.
Characteristics
 Less number of employees: micro business have less number of employees in
the businesses they provide basic services to the economy to satisfy their needs

and requirement in the economy because its services are less are compared to
other business they does not require more employees in the companies.
 Smaller area: These businesses operate in the small areas so that they can
target the customers easily and can increase the demand of the business by
providing the best quality of services to the economy in the market so that
revenue of the company can be increased in the market and profit can also be
increased in the marketplace.
Small business
These are the business which are privately owned they have less numbers of
employees in the business they does cover the large market area to operate they have
the less revenue than the other corporation in the market For example bakaries,
chocolates shops, grocery shops etc. these companies are known as small businesses
they provides the basic necessity products to the customers so that there demand in the
market can be increased and more revenue can be generated. These companies are
mostly settled in the urban countries so that growth of the economy can take place by
satisfying the needs and requirement of the customers in the market they does not hire
large numbers of employees because they operate to provide the general products to
the economy which will helps in the day to day living (Ackermann, 2019).
Characteristics
 Ownership: In small scale business single owner is present to handle the
services of the company due to which it is also known as sole proprietorship all
the functions are handle by the single owner in the business.
 Labour intensive: These organisation are not depended on the technology they
are dependent on the labour which they have because technology required huge
amount of investment in the business due to which they depend on the labour to
operate in the economy technologies are required by the businesses which have
high revenue generating power because it requires high amount of investment in
the company.
Medium size business
These businesses have more staff as compared to small size businesses they operate
in the selected geographical areas for examples clif bar and companies, capco etc
thses are the medium size companies there revenue is more as compared to small
scale companies in the market. medium size companies are smaller then large size
businesses they does not operate in the large market areas there revenue is less as
compared to large size businesses.
Characteristics

 Unorganised labour: These organisation does not huge numbers of employees in
the business they are few number of the employees in the business to provide
the services of the companies in the market.
 Local areas of operations: these organisation have local areas for operation they
does not cover the large areas as compared to large businesses in the
marketplace
Large size business
These are the organisation with the large number of market share in the economy they
are more than 500 employees in the businesses there profit in the market is also more
as compared to other business they are basically the industries which helps in providing
the best services to the economy in the market they helps in developing the growth of
the business byproviding innovation in the business they help in creating the innovation
in the economy so that revenue of the economy can also be increased in the market
and growth of the economy can also take place in the market. for example apple,
google, Microsoft these are the big organisation which provides innovation in the
economy by developing the services of the company in the market (Liaw, 2019).
Characteristics
 Large number of employees: these organisation have large number of
employees in the business due to the services which they have in the economy
they require huge work force to develop the services of the business in the
market so that growth of the economy can take place in the market and profit of
the company can also be increased in the market.
 Large numbers of marketshare: large businesses operates in more than one
countries due to which there profit in the economy is more they helps in the
growth of the country they also helps in providing innovation in the economy so
that development in the economy can take place effectively in the market.
Explain different companies from sole traders to cooperatives and Limited
Liability Partnerships.
sole trader business
Sole traders are basically the self employed person who are the owner of the
organisation they have the rights to take various decision in the business they have the
legal identity separated from the owner for examples are micro business and small
business.
Characteristics

 Ownership is in the hand of the single person who can enjoy the various rights in
the business.
 Freedom to take decision as the individual is the own boss which has the right to
take various decisions in the business.
Partnership
In this business is shared between two or more people are responsible for the
operations and profit of the business in the market and profit of the business is also
equally divided between them. for example go pro & red bull they are in partnership they
share their profit equally (Zhong, 2018).
Characteristics
 Existence of agreement takes place between two parties who are in partnership
on the basis of which they have to perform.
 Sharing of profit is done between the two parties according to which their share
their duties.
limited liability business
In this the owner of the business is not personally liable for the debt and liability of the
business they are basically the hybrid entities. For example blackberry, nike these are
the limited liability companies.
Characteristics
 They have the separate legal existence from there owners.
 They have the limited liability in this business everyone is responsible for their
own actions.
Public limited liability business and Cooperative.
It is basically the voluntary association of members in which limited liability is given and
they also have the separate legal entity the company collects the capital from the share
which are been sold. For example oil and gas companies.
Characteristics
 They have the separate legal entity from its shareholders and members.
 Shareholders can easily transfer their shares to the public.

To consider different business structures and how external factors affect
businesses.
There are various structure in the business which have various responsibilities in
the business accordingly to which organisation have to perform its activities in the
organisation there are various types of business structure which are given below:
 Functional structure: In this structure employees are grouped in the same
department accordingly to the skills they so that growth of the business can take
place effectively in the market and more profit can be earned if the employees
will have same skills and knowledge then it will helps in making effective
communication in the business due to which profit of the business will also get
increased in the marketplace.
 Divisional groups: In this structure the employees are grouped to develop the
similar products matching the requirement of the individual so that needs of the
customers can be satisfied effectively in the market and more profit can be
earned in the business.
 Matrix structure: it is the combination of functional and divisional structure it help
in developing the innovation in the business by decentralizing the decision
making in the business which further helps in increasing the productivity of the
business in the market so that demand of the business can be increased in the
market and more profit can be earned (Ataabasum Avea, 2020).
 Hybrid structure: this structure is the combines both functional and divisional
structure like matrix structure it divides the activities of into different groups which
can be either functional or divisional so that goals of the business can be
achieved effectively in the market so that growth of the business can take place
effectively in the market.
Pestle analysis
This analysis involves various factor like political, legal, social, economical,
environmental, technological which can affect the performance of the business in the
positive or negative way.
 Political factor: If the tax rate which will increased by the government then it
can affect the import and export of goods and services in the market due to
which profit of the business will get affected in the market.
 Economical factor: If the inflation rate will be increased in the market then it
can affect the demand of the business in the market due to which profit of the
company will also get in the market.
 Social factor: in the economy demand of the customers is changing day by
day due to which organisation has to develop its services accordingly in the

market so that its demand in the market cannot get affected and more profit
can be earned in the business.
 Legal factors: there are various policies which have been made by the
government which has to follow by the companies if the companies will not
follow these policies then it can affect the functioning of the business in the
marketplace (Aftab, 2017).
 Environmental factors: to maintain the condition of the environment
organisation has to reduce the use of carbon footprint so that smooth
functioning of the business can take place.
 Technological factors: to increase the demand of the business there various
technologies which has to be used by the business so that development in
the business can take place better services can be given to the customers.
Conclusion
As per the above report it has been analysed that there are different types of
businesses in the market which are there personal ability to provide services to the
economy if the services will not be provided to the economy then growth of the
economy will not take place effectively in the market due to which revenue of the
economy will also get affected in the market. there are different macro environmental
factors which affects the performance of the business in the marketplace due to which
they have to plan various strategies in the business so that there performance cannot
get affected and growth of the economy can also take place in the marketplace. if the
companies will not plan its strategies accordingly then it can affect the revenue and
demand of the company in the marketplace. if the company wants to earn more profit in
the market then it is important for the business to analyse the various macro factors so
that performance of the businesses cannot get affected and smooth functioning of the
business can take place.

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