Types of Companies

This document provides an overview of different types of companies, including micro, small, medium, and large enterprises. It explains their meaning, features, and provides examples. The document also discusses various organizational structures and external factors that affect businesses. Additionally, it explores PESTLE analysis and its impact on businesses.

Types of Companies

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
Section 1: Meaning, features and examples of micro, small, medium and large sized business.1
Section 2: Determine various organisation from sole traders to cooperatives and Limited
Liability Partnership.....................................................................................................................3
Section 3: Various organisational structure and external factors which affect business.............5
CONCLUSION................................................................................................................................7
REFERENCES ...............................................................................................................................8

INTRODUCTION
The aim of this is to form of business structure which is established by group of
individuals to manage and operate business venture. It is an enterprise which engaged
to generate profit from business activities (Ardolino and et.al., 2018). There are different
types of companies such as micro, small, medium and large organisation. In addition to
this, they may be public or private which helps them to increase profitability and growth
of an entity. This report includes various types of companies which is small, medium
and large sized business their meaning and features with examples, definition along
with characteristics of sole trader, public limited liability as well as partnership, various
organisational structure which affect productivity of business and examine PESTLE
analysis of external factors affect the performance of enterprise.
MAIN BODY
Section 1: Meaning, features and examples of micro, small, medium and large sized
business.
Micro business
Definition: Micro business is defined as the small business where it operates their
business with few people. These type of companies is managed and controlled as family
businesses by few sum of capital which is borrowed from other entity. The size and scope of
micro business is that it manage their work in small industry and the number of employees in this
company is less than 10 employees in business.
Characteristics:
 Minimum profit and revenue in business.
 They do not acquire commercial banking sector.
 This enterprise is working in the small sector such as production as well as production in
business.
 It has less assets and sales in an organisation.
 It creates employment opportunities in the marketplace which contribute and develop the
economy.
Example: Micro enterprises includes street vendors, small farmers, carpenters,
accounting to fulfil the needs and wants of own and family. For example, Issoria is start-
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up company in United Kingdom which is established their business in year 2016. This
operate work in management consulting industry as it is micro enterprise. This
organisation is founded by Ibi Thomson. They provide their services in change
management services which serve their clients.
Small business
Definition: Small business refers to the organisation which produce products
and services in small scale. This business plays and essential role in contributing the
economic development of enterprise. This is usually owned by partnership as well as
sole proprietorship. The size and scope in small business is small scale as the numer of
workers are less than 50 employees in an organisation.
Characteristics:
 They have limited capital to invest in business and it is operated and run by sole
proprietorship (Blair and Hitchens, 2018).
 All the activities are managed and handled by owner to accomplish the desired
goals.
 They use limited resources to reduce the wastage in business. They take their own risks in their organisation which helps them to increase
profitability and performance.
Example: Small business includes those enterprises such as tuition classes,
photography and printing press. For example, Davison Canners is a small business
which is operated by his family as they produce different fruits and offer jams as well as
operate bakery shop in order to increase profitability and turnover. This company is
established in year 1981.
Medium business
Definition: These are the enterprises which are engaged in production,
manufacturing and processing of products and services. The size and scope of this
business is medium and has numbers of employees which is 250 or more.
Characteristics:
 Organisation have sufficient amount of money to invest in business.
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Examples: Captify is the medium sized company which is specialized in media
along with search intelligence. The CEO of Captify Dominic Joseph and founded in year
2011.
Large business
Definition: Large business is defined as which contribute huge amount of capital
and adapt new technologies in business to achieve long term goals. These type of
enterprises operate and manage their business with large team’s members and operate
their business operation daily to maximize the growth and success of organisation
(Chung, Jo and Lee, 2021). Number of employees in this entity is 500 or above.
Characteristics:
 These types of companies are huge capital intensive organisation.
 They update and implement new technology in business to attract the customers
in marketplace.
 They mainly focus on producing high quality products at affordable prices.
Examples: Large enterprises includes iron and steel, textile and automotive
organisation which invest lots of money to develop the operations and productivity. For
example, AstraZeneca is the multinational biotechnology and pharmaceutical company
which is located in Cambridge, England, London. This organisation is founded in year
1999. The CEO of this organisation is Pascal Soriot.
Section 2: Determine various organisation from sole traders to cooperatives and Limited
Liability Partnership.
Sole trader
Definition: It is owned by single person which is self-employed as the individual
run their own business and keep their own profits and bear all risks. In this type of
business they have one or two persons who operate their business with their family.
Characteristics
 This type of companies has single ownership.
 Owner does not share their profits with other.
 No legal formalities related to their business. Unlimited liability which means when they are not able to pay the liabilities from
their business assets then they have to pay from their personal assets.
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Example: Sole proprietor includes artists, freelance, beauty parlour and retail
business as this all business is run and controlled by individual person.
Partnership
Definition: This term is defined as the arrangement of more than two people to
run business activities and contributes their profit and loss in the agreed ratio in order to
achieve the targeted goals and increase organisational operations and performance.
Number of members to operate their firm is two persons.
Characteristics
 In partnership firm, no partners transfer their partnership to another person in
business without the consents of parties.
 It is not compulsory to register their firm under Partnership Act.
 Share their income and losses in their agreed ratio which is defined in
partnership deed (Meister and Willyerd, 2021).
Examples: For example, of partnership firm is John Lewis which is partnered
with Waitrose & partners which own and operate their business to attain common goals.
John Lewis established their partnership business in year 1864.
Limited liability
Definition: It refers to as structure of business where the shareholders is not
responsible for any losses or liabilities in business. The size of this business is 7 or less
to operate their enterprise.
Characteristics:
 This enterprise is separate from its members.
 Taxation of this firm is as partnership.
 This is the type of company where there is less paperwork in business.
 Limited liability does not pay any taxes and the income and losses goes to the
members.
Examples: Example of limited liability is Oxfam. It is the type of charitable
organisation which focus on poverty, disaster relief and policy research. This is founded
in year 1942.
Public limited liability
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Definition: It is defined as those company which have limited liability and offer
their stocks to the public. Minimum seven people require to form the public limited
company.
Characteristics
 It is separate legal enterprise.
 The shares of this organisation is freely transferable without the prior notice of
other owners.
 The company has to register its name with the word 'limited' as it is public limited
liability.
 Public limited is listed on London Stock Exchange.
Examples: Amcor is public limited company which deals in packaging in
Switzerland which has 35000 employees in their organisation to perform their task
effectively. The CEO of Amcor is Ron Delia and he establishes his enterprise in year
1860.
Cooperatives
Definition: It is defined as association of individuals to meet the requirements
and needs of economic, social as well as cultural which has joint owner organisation.
Characteristics
 Finance of this enterprise are offered by the individuals through the buying of
shares.
 It has limited interest on capital.
 Profit is not distributed on the agreed ratio as some amount is transferred to the
general reserve.
Examples: Edinburgh Bicycle is a cooperative enterprise which is located in
Scotland, United Kingdom. This company offers bicycles as it has two stores as well as
they sell their products online. The establishment year is 1977.
Section 3: Various organisational structure and external factors which affect business.
Organisational structure: It refers to a system which defines the tasks as to
accomplish the goals of business. These includes allocation, direction, supervision as
well as responsibilities in the company. These structure is to organize to perform the
activities and handle the performance of employees in workplace. There is various
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structure such as functional, matrix, divisional and flatarchy structure which is followed
by every enterprise. Tesco is considered in this report. There is some organisational
structure which is mentioned below:
Functional structure: It signifies the structure which divides their business into
various departments such as sales, marketing, informational technology as well as
operations. Management of Tesco can adapt this organisational structure because in
this workers work together based on their specialised, knowledge and skills which lead
to increase in productivity as it helps them to perform their work in defined manner.
Matrix structure: It is the mixture of more than two types of structure as they
have had different managers to report them. In other words, employees have two or
more superiors within organisation. Administration of Tesco may follow this type of
structure as it helps them to manage and control their work and focus on particular
goals.
From the above analysis it is evaluated that manager of Tesco follow functional
organisational structure as it focusses on various departments in business. Tesco use
this organisation because they have different sections in business and it is located in
different areas. It ensures that the business activities are done effectively and efficiently
which affects the productivity of business.
PESTLE analysis
It refers to an external factor which is used to identified and analysed the macro
business environment. These factors consists of political, economic, social,
technological, legal and environmental. These factors of Tesco are explained below:
Political: This factors includes government policy, political stability, corruption,
foreign trade, tax policy and trade restrictions.
Positive impact: Tesco is operating in various places so they have to implement the
changes in political situations.
Negative impact: Tesco has affected by the rules and regulations of the Brexit which
impacts the sales of business. (Riad and et.al., 2019).
Economical: This signifies economic growth, exchanges as well as interest rate,
inflation rates, disposable income and unemployment rates.
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Positive impact: Reduce in inflation rate as the buyer will purchase more this increase
the profitability in business.
Negative impact: Pandemic has affected individual’s earnings and jobs which minimize
the spending level and switch to other brands as it affects the business profitability and
operations in organisation.
Social: This states that population growth rate, age distribution, career
behaviour, health consciousness, lifestyle attitudes and cultural barriers.
Positive impact: Administration of Tesco has meet the needs and demands of
customers in United Kingdom by offering vegetarian and vegan drinks and foods which
lead to growth and success in business.
Negative impact: Changes in behaviour affect negatively because after pandemic
audiences are conscious about their health.
Technological: It consists of technology incentives, innovation, launching of new
products, automation, R&D activity and technological change.
Positive impact: Tesco has adapted RFID technology which helps them to improve
customer service and experience as it maximizes the business performance and
productivity in business. Tesco use Clubcard in United Kingdom and in other countries
which result in success of organisation.
Negative impact: It involves huge cost ti implement and update the automation machine
and equipments.
Legal: It consists of discrimination laws, employment regulations, consumer
protection, copyright and patent as well as health and safety laws.
Positive impact: Implementation in government policies affect the business operations
of Tesco. It has to adapt both the law which is local as well as international law to run
their business effectively and smoothly.
Negative impact: Advertising impacts negatively as it can be misappropriate by the
organisation.
Environmental: This factor comprises of weather, climate, changes in
atmosphere and pressure from NGOs.
Positive impacts: Manager of Tesco has minimized the use of plastic in marketplace as
it positively benefits the enterprise from their competitors which create sustainable
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community. Currently Tesco has introduced its phase 2 which is Remove, Reduce,
Reuse and Recycle plan as this innovation bring new opportunities in business.
Negative impacts: Maximization in pollution impacts negatively to Tesco as when
enterprise not follow any guidelines given by UK government.
CONCLUSION
From the above analysis, it is concluded that there are different types of companies such
as micro, small, medium and large enterprises which have different features along with the
examples. Partnership firm is started with two or more business whereas sole proprietorship is
operated with individual person. Organisational structure is important for every organisation
because it focus on the strategy to perform the activities in an appropriate manner. However,
Tesco use functional organisational structure which lead to increase productivity in business. On
the other hand, PESTLE analysis of Tesco that affects the organisational performance.
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REFERENCES
Books and Journal
Ardolino, M. and et.al., 2018. The role of digital technologies for the service
transformation of industrial companies. International Journal of Production
Research. 56(6). pp.2116-2132.
Blair, D. M. and Hitchens, D. M., 2018. Campus companies: UK and Ireland. Routledge.
Chung, W. Y., Jo, Y. and Lee, D., 2021. Where should ICT startup companies be
established? Efficiency comparison between cluster types. Telematics and
Informatics. 56. p.101482.
Meister, J. C. and Willyerd, K., 2021. The 2020 workplace: How innovative companies
attract, develop, and keep tomorrow’s employees today. HarperCollins
Publishers Inc.
Riad, O. and et.al., 2019, October. Neural networks for measurement of the eco-
responsible decision's impact on the governance system: the case of Moroccan
companies. In Proceedings of the 4th International Conference on Smart City
Applications (pp. 1-7).
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