Types of Companies and Their Characteristics

This report discusses different types of companies in the UK, including micro, small, medium, and large companies, and their characteristics. It also explores various ownership structures such as sole traders, partnerships, cooperatives, and limited liability partnerships. Additionally, it examines different organizational structures and their impact on business productivity. The report concludes with an analysis of how external factors affect business performance using PESTLE analysis.

Types of Companies

Table of Contents
INTRODUCTION.......................................................................................................................................3
MAINBODY...............................................................................................................................................3
Section 1......................................................................................................................................................3
Different types of companies & how they work......................................................................................3
Section 2......................................................................................................................................................5
Different companies from sole traders to cooperatives and Limited Liability Partnerships.....................5
Section 3......................................................................................................................................................6
Different organizational structures & organizational structure affects business productivity..................6
Using PESTLE analysis explain how different external factors affect the performance of a business.....8
CONCLUSION...........................................................................................................................................9
REFERENCES..........................................................................................................................................10

INTRODUCTION
As per the current scenario, there are various type of companies are regulating in the
society e which are providing their best contribution to develop the economic situations and
living standard of the people. Some different type of companies includes various ownership
service structures, size, scale, another resource full consideration which are essential to run a
company smoothly at the marketplace (Aithal, 2017). In UK, there are numerous kinds of
companies like micro, small, medium and large playing essential role in the development of the
communities and societies. The main motive of this project is to discuss about different type of
companies and determine how they work. This report also explains about many characteristics of
the companies. This report will also discuss different ownership structure which is hold by the
company. This report considers Sainsbury's company which contain second rank ok as the
largest business corporation in term of retailing multinational company. This company
established in 1869 and headquartered in London, UK. This report applies PESTLE analysis to
evaluate the affect of external environment factors on the performance of the firm.
MAINBODY
Section 1
Different types of companies & how they work.
There are different kinds of Companies running in UK that contain different type of
purpose, scale, size, turnover rate. In UK, micro, small, medium and large type of companies is
doing their business nationally and internationally and provides job employment to the rural and
urban people. The description of different type companies and their characteristics are as
follows-
Micro Companies
Micro company started by the individual which contain small size and scale and created
by the Innovative ideas by the entrepreneurs. In micro firms less than 10 employees can perform
their task and these type of firms maintain turnover £2 million.

Characteristics
 Low level of operations - In micro company, the business activities and performance are
operating at low level. This is contains as the initial level of business. Limited participants - In these kinds of companies, limited participants are involved to
perform day to day operations.
Small Companies
This type of Companies mainly privately owned and controlled by the one single people and tow
to more people. Small companies regulate specific ownership structure like sole proprietorship,
corporations and partnership. In small companies less than 50 members can work & the turnover
rate contain under £10 million.
Characteristics
 Cover small market area - Small businesses business operation is not very large so that it
covers only small market areas. Small businesses mainly cover niche market and local
market (Brandano, Detotto and Vannini, 2019). Small team of members - There is only less than 50 members are involved so there is a
small team members are actively participate their job activities.
Medium Companies
Medium companies operate their operations in various locations and provide more employment
to the local community people and urban area people so that they can improve their living
standard. In these companies, less than 250 employees can perform £50 million.
Characteristics
 Good productivity - Medium companies gain more productivity and profitability as
compared to the micro and small companies because there is involvement of more
people.
 More revenue - Basically Medium companies generate more revenue and profitability
because they are operating and they are providing their good quality of products at low
cost and gain customers satisfaction.

Large Companies
Large businesses can demand Massive capital and funds to operate business activities.
These businesses required more resources and manpower. In large company’s more than 250
workers can work & its turnover contain more than £50 million.
Characteristics
 International applicability - Large companies are very large in size and they are
operating their businesses across the whole world. Through innovative product and
services they lead the whole market (Brown, Bocken and Balkenende, 2020).
 High level of production and profitability - Large level of companies can perform high
level of production and manufacturing activities and gain more profitability. The main
motive of profit maximization.
Section 2
Different companies from sole traders to cooperatives and Limited Liability Partnerships.
The explanation of various ownership structure in term of different types of companies are given
below - Partnership - In this on ownership structure, there is involvement of two or more people
who can agree to provide their equal participation in business operations and also take
responsibility to share same profit and loss together. Business partners are responsible to
take decisions on their risk and it operates and manages their business by their own.
There are various characteristics are involved in partnership structure like follow proper
agreement, maintain full transparency, share same profit and loss, and take appropriate
decisions, nature of liabilities and many more (Dang, Le-Hoai and Kim, 2018).
 Sole Trader Bbusiness - This ownership structure is easy registration of the company.
Owner of the company is responsible to pay property tax and also maintain every
operation by their own. There is less involvement and interference of government so that
their can properly do their work in their own style and take proper decisions by their own

understanding for the welfare of the business. Most of the entrepreneurs adopt this
ownership structure so that they can effectively regulate their business activities. This
structure also contain some specific characteristics such as free from proper legal
formalities, maintain secrecy, unlimited liability, freedom to take decisions, soul
management. Limited Liability Business - This kind of ownership structure a similar as partnership
structure excluding that Indus structure partner’s library is limited in context of funds that
owners invested in the firm. LLB structure contain individual and also association of
some people who are liable all the business operation itself. All the members who are
participate in this type of structure they follow proper LLP agreement and worked as a
fixed profit. Industry structure processor assessment report also prepared and Deccan pay
also income tax and shared profit. Specific characteristics also involved that is limited
liability, flexibility, separate entity and tax ease (Gray, et. al., 2020).
 Public Limited Liability Business - This on a surface structure is considered as the for
profit incorporation that mainly divided into specific shares which are generally
publically tradable in term of stock exchange. Some characteristics also contained this
structure such as transferable share, number of participants, more cost & high capital ,
shareholders liability etc.
 Cooperative - Basically cooperative structure also known as " Co- op ", this type of
business control and monitored by their member who are happen to use goods and
services of co- operatives. Specific characteristics also include in this structure like
voluntary membership, democratic control & open membership, limited interest on the
capital.
Section 3
Different organizational structures & organizational structure affects business
productivity.
In order to take more profit advantage and regulate each and every company’s activity in a
proper manner it is necessary to follow appropriate organization structure which can maintain the
operations of the employees in a proper manner. Organization structure is considered as the
systematic framework which regulates all the activities in a systematic form which are followed

by the employees. Organization structure follow formal working conditions so that all the
employees can share specific information from their manager and leaders systematically in an
appropriate way (Napoli and Caplan, 2017). Sainsbury's is a large company which providing
various products and services from their supermarket and stores nationally and globally.
Sainsbury's manager follows appropriate organizational structure so that company can effectively
manage all their regular operations. There are many types of organizational structure which
impact the business productivity. The description of various types of ownership structure are
given below-
 Functional organizational structure - This organizational structure is working same as
hierarchical organizational structure. Function structure various layer and regulate flow
of information from top level to bottom level. Top management is liable to take decisions
for the development of the organizations and their employees. This is structure maintain
a proper well managed employees so that they can work properly and follow specific
structure. This organizational structure is appropriate to improve the productivity and
performance level of the employees so that they can seek their career growth within an
organization (Olufadi, 2018).
 Matrix organizational structure - Basically Matrix organization structure perform their
task as a grid and demonstrate cross-functional activities why the team members who are
connected with the specific projects. For example, marketing manager working in
marketing department but apart from this, marketing manager also so do some activity in
other departments. Matrix organization structure maintains both roles and reporting
relationship of each and every employee. Hierarchical organizational structure - This kind of organizational structure is work in
the pyramid shape formed and manage an appropriate organizational chart. In this
hierarchical structure, specific chain of command is followed which contain all regulating
task in an effective manner. The flow of information and responsibilities considered top
down approach. Board of directors, chief executive and top level management are
responsible to take decisions on behalf of employees. Sainsbury's follow hierarchical
organizational structure because Sainsbury's is a large corporation and operating their
business all around the word so it is necessary to follow each and every operational
activities in an appropriate manner. With the help of this organizational structure

manager can arrange specific training sessions for each departmental level of employees
so that they can improve their skills and provide their best contribution in the
development and welfare of the organization (Pradabwong and et. al., 2017). This
organizational structure provides most appropriate outcomes which can help to improve
the productivity of the organization so that organization can achieve each and every goals
and objective in an effective way.
Using PESTLE analysis explain how different external factors affect the performance of a
business.
It is mandatory for the companies to analyze the impact of external business environment
factors on their performance and operations so that company can take appropriate steps to
maintain operations effectively. Sainsbury's conduct PESTLE analysis to determine the impact
of external factors which are as follows -
 Political Factors – These factors contain trade, trade regulations, taxation policy,
political stability, political instability, foreign trade policies. Sainsbury's take care about
all these factors so that company can regulate their business operations effectively in UK
and across the UK. Company can consider the political stability and all other
considerations for smooth functioning of their operations.
 Economical Factors - Economical factors considered the changes in economy rate,
economic growth, interest rate, inflation and recession, employment policies and many
other factors which are directly connected with the country economy. Sainsbury's mainly
focus on these factors because entry is a large corporation and also helpful to generate
more foreign currency e which can improve the economical situation of the country
(Thorlakson, de Zegher and Lambin, 2018). Social Factors - This factor mainly include region, cross cultural activities, taste and
preference of the customer, buying power of the customer. Sainsbury's company
operating their business all around the world so it is necessary for the company to
consider requirements of the people. Sainsbury's provide high quality of products at low
price which improve their market value.
 Technological Factors - This generation is totally depending upon the technologies. This
factor considers the involvement of modification of technologies. Sainsbury's adopt high

level of technology so that customers can get good shopping experiences all around the
world (Thorlakson, de Zegher and Lambin, 2018). Legal Factors - On the basis of legal factor, company need to follow specific act, laws
and legislation so that company can operate their business operations in an appropriate
way globally. Sainsbury's follow properly on the legal considerations and applications so
that company can regulate their business operations nationally and other foreign countries
effectively and gain more profitability.
 Environmental Factors - This factors involved environment changes, climate change,
pollution rate, population and also environment sustainability. Sainsbury's also provide
their contribution to maintain the environmental sustainability and also follow green
marketing which can help to improve the environmental situation (Zeng and et. al.,
2017).
CONCLUSION
According to this report it can be said that there are many types of businesses and
companies are running in United Kingdom like micro, small, medium and large companies.
Every company considers a specific purpose for their establishment in the society. This report
discussed about where is type of ownership structure like sole proprietorship, partnership,
cooperative and many more which are adopted by various entrepreneurs. This report also
determined various kinds of organizational structure like functions structure, hierarchical
structure and matrix structure and it is evaluated that hierarchical structure is the most
appropriate for the large companies. This report also applied PESTLE analysis and identified the
external environmental factors so that company can effectively maintain their business
operations and productivity.

REFERENCES
Books and Journals
Aithal, P.S., 2017. An effective method of developing business case studies based on company
analysis. International Journal of Engineering Research and Modern Education
(IJERME), ISSN (Online), pp.2455-4200.
Brandano, M.G., Detotto, C. and Vannini, M., 2019. Comparative efficiency of agricultural
cooperatives and conventional firms in a sample of quasi‐twin companies. Annals of
Public and Cooperative Economics, 90(1), pp.53-76.
Brown, P., Bocken, N. and Balkenende, R., 2020. How do companies collaborate for circular
oriented innovation?. Sustainability, 12(4), p.1648.
Dang, C.N., Le-Hoai, L. and Kim, S.Y., 2018. Impact of knowledge enabling factors on
organizational effectiveness in construction companies. Journal of Knowledge
Management.
Gray, S.et. al., 2020. Strengthening coastal adaptation planning through scenario analysis: A
beneficial but incomplete solution. Marine Policy, 111, p.102391.
Napoli, P. and Caplan, R., 2017. Why media companies insist they're not media companies, why
they're wrong, and why it matters. First Monday.
Olufadi, K.G., 2018. Pestle on Mortar_A Coordinated Management of Meaning.
Pradabwong, J. and et. al., 2017. Business process management and supply chain collaboration:
effects on performance and competitiveness. Supply Chain Management: An
International Journal.
Thorlakson, T., de Zegher, J.F. and Lambin, E.F., 2018. Companies’ contribution to sustainability
through global supply chains. Proceedings of the National Academy of Sciences, 115(9),
pp.2072-2077.
Thorlakson, T., de Zegher, J.F. and Lambin, E.F., 2018. Companies’ contribution to sustainability
through global supply chains. Proceedings of the National Academy of Sciences, 115(9),
pp.2072-2077.
Zeng, J. and et. al., 2017. The impact of organizational context on hard and soft quality
management and innovation performance. International Journal of Production
Economics, 185, pp.240-251.