Types of Companies

This article discusses the various types of companies, including micro, small, medium, and large businesses. It also explores different forms of companies such as sole traders, cooperatives, and limited liability partnerships. Additionally, it analyzes various business structures and how external factors can impact businesses.

Types of Companies

Table of Contents
Introduction......................................................................................................................................1
Section 1...........................................................................................................................................1
Discuss various kinds of companies and also how they functions.........................................1
Section 2...........................................................................................................................................3
Discuss various forms of companies from sole company to the cooperatives and limited
liability partnerships...............................................................................................................3
Section 3...........................................................................................................................................5
Analyse various business structure and how external factors affect businesses....................5
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

Introduction
Company is a form of business entity which is created by the law in order to carry out
production and manufacturing activities with the aim of maximising the profit and satisfying
their potential customers. A company can be corporate or incorporate entity registered under the
companies act. There are various type of companies formed by the group of individuals engaged
in the operating a business. Under this report Unilever is taken as the base company. Unilever is
the top multinational consumer goods company offering products like foods, beverages, cleaning
agents and personal care. Company was founded in 1929. This report highlights the various types
and size of the business organisation the company needs to compete with and also the business
structure and the external factors affecting the business organisation is also highlighted in this
report.
Section 1
Discuss various kinds of companies and also how they functions
Company is defined as the legal business entity which is formed by the group of people to
engage in the business activities and operate it effectively. Company can be an corporate or
incorporate entity listed under the companies act (Bihari and Khanuja, 2019). There are various
type of companies based on the size and functions, they can be limited or unlimited, or can be
private or public each functioning accordingly. The various type of company can be micro,
small, medium and large size business which can affect the chosen company are discussed
below:
Micro business: The micro business which are also known as the micro enterprises are
type of business enterprises that includes or employees only few individuals and operated by less
than 10 individuals and generally started with only small amount, these type of business entities
are started by the single of more individual in order to survive and mostly offering product and
services to the local community (Capriotti and Ruesja, 2018).
Characteristics:
Some of the characteristics of the micro business are as follow:
 One of the essential characteristics of the micro business is that there is a small market
area which leads to reducing the competition in the marketplace.
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 In case of micro business there is smaller team of employees to be manage, so it becomes
easier to manage and control them effectively.
 These type of companies are operated and managed by the single or less then 10 employees
offering product and services to the local community.
Example: A grocery store started by an individual in the local community selling dairy products
and other groceries, fruits etc.
Small business: The another type of company is the small business enterprises, these type of
business enterprises are small is size and mostly started by single individual with small or limited
amount of capital, and labour and limited number of employees (Galai, 2019). These are type of
business produce goods and services in the small quantity.
Characteristics
Some of the characteristics of the small business enterprise are discussed below:
 One of the characteristics of the small business enterprise is that they are mostly owned
by the single individual so the management is controlled and managed by the owner.
 The aim of the small business enterprise is to survive in the market and earn minimum
profit effectively
 Another characteristics of the small business enterprise is that they are open and flexible
to changes because as they are small in size.
Example: some of the examples of small business can be catering services, cleaning services,
courier services and business consulting. Such as Davison canners, Cafe Pod Coffee Co.
Medium size business: The medium size business are the type of business organisation which
are medium in the size and having less than 250 employees and these are mostly with the
average revenue (Mariani and Wamba, 2020). The medium size business are largely contributing
towards the enhancement of the economy.
Characteristics
 The main characteristics of the medium size business mostly has limited amount of
resources.
 Another characteristics of this type of business enterprise is that they are mostly started
with the aim of satisfying customers and earning minimum amount of profit.
 The management of the medium size business is usually informal, the owner carries out
all the business activities effectively.
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Example: some of the examples of the medium size business can be manufactures, transport
companies, wholesalers and so on. Such as Verdant leisure, John Good Shipping.
Large size business: The last type of the company is the large size business, this type of
business entities are large in size and employs more than 250 peoples and more (Nonaka and
Takeuchi, 2019). these type of business organisation are started with the aim of earning profit
and operating in the market for the longer period of time, these organisation focus on satisfying
their customers’ needs in order to increase customer base.
Characteristics
 The large business entities have large number of employees and more complex
management hierarchy in comparison to the medium size business.
 Another characteristics of this type of the business organisation is that they continuously
work towards satisfying their customers and earning maximum profit.
Example: The examples of the large size business can be Tesco, amazon, Walmart and so on
such as Unilever, AstraZeneca, BHP Group.
Section 2
Discuss various forms of companies from sole company to the cooperatives and limited liability
partnerships.
There are various forms of entities such as sole traders, cooperative and limited liability
Partnership Company, these various businesses are discussed below in detailed:
Sole traders: A sole traders corporate entities are the companies which are owned and
managed by the single individual, the sole trader is someone who is self employed and manages
his own business and individually responsible for business profit and the risk as well.
Characteristics
 One of the essential characteristics of the sole trader is that it is owned and managed by
the single individual so is the only bearer of risk and profit (Pandey, 2021).
 Another characteristics of this is that there is unlimited liability as there is single owner.
Example: Some of the examples of the sole trader are the plumbers, hairdresser and
electricians,
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Partnership: Under this two or more individual with the mutual agreement decides to join
together and do the business as the partner sharing all the responsibility effectively, the profit is
equally share between both the partners as well as the risk is faced by both.
Characteristics:
 Under the partnership, the responsibility of taking the decision and managing the
business activities are effectively managed between the partners equally.
 Another characteristics of this is that the profit is equally divided between both the
partners as well as the risk is equally shared among the partners leading to enhance the
overall performance of the organisation.
Example: some of the examples of the partnership are Ernst & Young, Bloomberg and
PriceWaterHouseCooper.
Private limited company: The private limited company is the type of private company which
are generally formed through the company’s house with minimum one share and with no capital
requirement (Peruta and Shields, 2018). These type of company are private and mostly owned by
it major shareholders, the aim of the company is to maximise the profit and enhance the
satisfaction level of its employees.
Characteristics
Some of the characterises of the private limited company are follow:
 One of the characteristics of the private limited company is that its paid up capital,
company can have a minimum paid up capital which can be of any amount.
 Under the private limited company the liability is limited.
Example: some of the examples of the private limited company are John lewis , B&M Retail,
River Island and so on.
Public limited company: the another form of the company is the public limited company, these
form of the company are generally registered under the Companies Act (1980). The public
limited company are managed and controlled by the government and the profit or the revenue
earned is also taken by the government (Rejeb and Younes, 2018).
Characteristics
 The characteristics of the public limited company is that the shareholders of the company
can easily and effectively transfer their shares to the public with no restriction.
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 Another characteristics of these form of the business organisation is that the liability of
the shareholders and the director of the business organisation is limited.
Examples: Some of the examples of the public limited company are HSBC Holiday, British
Petroleum Company limited and British American Tobacco.
Cooperative company: The last form of the company is the cooperative company, these are
the voluntary association of individuals, who are working towards the welfare of the
individuals, it is defined as the company which is owned and managed by the individual who
utilises its product and services and who gets benefited through what company offers
effectively (Saenz and Brown, 2018).
Characteristics
 One of the essential characteristics of this form of company is that they are owned and
managed by the selected managing committee and also decision is taken by the
committee itself.
 Also another characteristics of the company is that the liability of the members of the
cooperative is limited.
Example: some of the example of the cooperative are Central England Co-operative and Credit
Unions.
Section 3
Analyse various business structure and how external factors affect businesses.
Business structure are defined as the different department or business units divided within
the business organisation each department performing specific function and together working
towards achieving organisational goals and objectives effectively. There are different type of
organisational structure as discussed below:
Functional structure: The first one is the functional structure, under this type of structure
employees are grouped into same unit based on their same skills, task performed and the
accountabilities. This leads to effective flow of communication and decision making with the
department.
Divisional structure: under this the organisation activities are organised into particular
market, product and services or can be customers group with the aim of creating work team who
can work towards similar products.
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Matrix Structure: Another type is the matrix structure, this is the combination of both
functional and divisional structure, allowing decentralised decision making, high authority and
productivity.
Hybrid structure: It is also the combination of both functional and divisional structure,
activities into the department can be both functional and divisional, helps in utilisation of
resources. It is largely used by large organisation.
Organisational structure affects business productivity
Organisational structure helps the business organisation to ensure that all the important
task are assigned to the right person enhancing the overall performance and profitability of the
business. It also enables smooth flow of communication between the departments (Schönsleben,
2018). The organisational structure helps business organisation by improving overall operations
of the business organisation through dividing work and activities accordingly. Also helps in
smooth flow of communication between the departments which leads to increasing the overall
profitability of the business as well as helps business to reduce errors and defects which leads to
increasing the overall profitability of the business.
External factors affecting business
External factors are the different factors available outside the business organisation which
has direct influence on the functioning and profitability of the business. In order to under
understand how external factors affect the business PESTEL analysis can be be taken into
consideration.
PESTEL analysis: It is one of the most essential framework used by the business organisation in
order to analyses the various external factors available in the environment and how they can
directly influence the functioning of the business as discussed below:
Political: It includes factors like government policies, rules and regulation and laws
which directly influence business environment, stable political environment of the country will
create favourable business environment for the companies and vice versa.
Economical: It includes factors like interest rate, inflation rate, taxation, demand and
supply rate, consumer spending power and so on. Developed economy will help company to
grow and be successful it will also allow consumers to spend more which leads to increasing
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profitability of the business, similarly poor economy will create barriers for the company’s
growth.
Social: It includes factors like consumer behaviour of cultural factors which directly
influence the functioning of the business, for example the increasing trend has shifted the
attention of consumers towards more organic foods, and company needs to offer organic food in
order to satisfy their customers (Schönsleben, 2018).
Technological: The technological factors are the technological changes or advancement
in the technology which can directly influence the functioning and profitability of the business,
in order to gain competitive advantage into the market company needs to ensure that they are
using well advance technology as per the requirement.
Environmental: It includes factors like working towards welfare and sustainability of the
environment, each company has responsibility towards the sustainability of the environment
which can helps them to gain competitive advantage into the market also not fulfilling this will
leads towards failure.
Legal: The legal factors includes legal laws, rules and legislation which are needed to be
followed by each and every one, strict legal laws will create barriers for the company similar
favourable laws will create chance to grow and develop, each company needs to ensure that they
are following legal laws of the country (Young, 2019).
Conclusion
From the above discussion it can be concluded that there are different kind and forms of
companies available which helps individual to grow and become successful, this report is divided
into three section, first section highlights the various type of companies available, second one
highlights the various forms of the companies available and the last section of the report includes
the various type of business organisation structure and also the external factors affecting the
business.
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References
Books and Journals
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Manufacturing Companies in India. SCMS Journal of Indian Management, 16(3), pp.112-
126.
Capriotti, P. and Ruesja, L., 2018. How CEOs use Twitter: A comparative analysis of Global and
Latin American companies. International journal of information management, 39,
pp.242-248.
Galai, K., 2019. Regulating Private Military Companies: Conflicts of Law, History and
Governance. Routledge.
Mariani, M.M. and Wamba, S.F., 2020. Exploring how consumer goods companies innovate in
the digital age: The role of big data analytics companies. Journal of Business
Research, 121, pp.338-352.
Nonaka, I. and Takeuchi, H., 2019. The wise company: How companies create continuous
innovation. Oxford University Press.
Pandey, A., 2021. A taxonomy of asset management companies. Journal of Banking Regulation,
pp.1-11.
Peruta, A. and Shields, A.B., 2018. Marketing your university on social media: a content analysis
of Facebook post types and formats. Journal of Marketing for Higher Education, 28(2),
pp.175-191. Beugelsdijk, S. and Jindra, B., 2018. Product innovation and decision-
making autonomy in subsidiaries of multinational companies. Journal of World
Business, 53(4), pp.529-539.
Rejeb, H.B. and Younes, M.A.B., 2018. Proposition of a methodological framework for
measuring innovation capacity of Tunisian companies. International Journal of
Technology, Policy and Management, 18(2), pp.89-124.
Saenz, C. and Brown, H., 2018. The disclosure of anticorruption aspects in companies of the
construction sector: Main companies worldwide and in Latin America. Journal of
Cleaner Production, 196, pp.259-272.
Schönsleben, P., 2018. Integral logistics management: operations and supply chain management
within and across companies. CRC Press.
Young, A., 2019. The sogo shosha: Japan's multinational trading companies. Routledge
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