Types of Companies

This article provides an overview of the different types of companies, including micro, small, medium, and large businesses. It also discusses sole trader businesses, partnerships, limited liability businesses, public limited liability businesses, and cooperatives. The article explores the characteristics, ownership, and impact of these companies on the economy.

Types of companies

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
SECTION – 1 DIFFERENT TYPES OF COMPANIES................................................................3
Micro business.............................................................................................................................3
Small business.............................................................................................................................3
Medium business.........................................................................................................................4
Large business.............................................................................................................................4
SECTION – 2 DIFFERENT TYPES OF COMPANIES................................................................4
Sole trader business.....................................................................................................................4
Partnership...................................................................................................................................5
Limited liability business.............................................................................................................5
Public limited liability business...................................................................................................6
Cooperatives................................................................................................................................6
SECTION – 3 DIFFERENT BUSINESS STRUCTURE AND EXTERNAL FACTORS.............6
Organisational structure influencing business productivity........................................................6
PESTEL analysis.........................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
Books and Journals......................................................................................................................9

INTRODUCTION
A company is a type of business organisation which is created by considering the law. It
is a group of people formed to undertake business activities while having a different legal
existence. A company has a perpetual succession and a common seal (Yusop, 2018). Companies
can be differentiated based on the size of the number of members, turnover rate and area it
covers. In addition to these companies can also be divided based on the liability parameters.
Although, there is no fixed type and classification of a company as it can depend on many things.
SECTION – 1 DIFFERENT TYPES OF COMPANIES
Micro business
Micro businesses are defined as small businesses which are working with less than nine
employees in their organisation. Micro companies are the new trend in the entrepreneurial world
as it is new thing and an enterprise which operates with less than ten people. Such businesses
include independent contractors, freelancers and other small organisations. Some of the
characteristics of the micro business are they are flexible to any changes within the market, they
can make adjustments (Çitilci, and Akbalık, 2020). They have the benefit of having quicker
turnaround in the times of decision making and forming business strategies as the nature of
business. Freelancer and consultant are examples of micro business owners who have few skills
but are specialised in that particular industry. Along with this they have low overhead expenses.
Some examples on the micro companies are Boss brewing company which is a woman led
crafted brewery business. Then there is Mantons cards offering the greetings cards and gifts.
Small business
Small scale business enterprises are defined as privately owned companies having the sole
proprietorship. Small companies have few employees and less annual revenue when compared to
a regular sized business. The functions of small scale businesses involve using less capital
investments and fewer machines to operate on. The numbers of employees are less than 250
members. The amount of annual turn over is less than 50 million. The characteristics of small
scale businesses is mainly the ownership, they have single owner known as sole proprietorship.
The management system is controlled by owner. They work in restricted area of their operations
which are usually local. They are more dependent on labours and industries than on technology.

They are very different from large industries and because of this quality they are open and
flexible to rapid changes. And lastly, the resources used are local and immediately available and
they utilise the natural resources in an efficient manner without lot of wastage. Some examples
of small business from UK are Davison canners which are specialised in catering for bakery,
dessert and dairy.
Medium business
Medium businesses are the enterprise which maintains their number of employees and assets
below a threshold limit. Each country has its own definition for a medium sized enterprise. They
must meet some certain criteria in which company can operate. Medium sized enterprise plays an
important role on the economy of the country. The characteristics of medium enterprise are that
they have limited number of resources. They are highly dependent on the ability of the owner to
generate new resources. The management system usually informal and the owner is responsible
for doing almost everything and generalising the duties and responsibilities (Álvarez Jaramillo,
Zartha Sossa, and Orozco Mendoza, 2019). They are flexible to adapt to changes happening in
the market place. The decision making is done by the owner itself. Captify is a medium sized
enterprise which specialised in intelligence and media decisions. A family owned contracting
business named Smith brothers is yet another example of medium size company.
Large business
A large business works with a minimum of 5000 employees and has annual turn over more than
1.5 billion. They are considered as the large profit making corporations in reference with their
influence in the social and political policy. They mark as very profitable enterprises. Large scale
businesses work with more complex management hierarchy when company to medium and small
businesses. They have large number of clients, wide range of networks and business contacts and
a larger volume of business communication. They have great number of business operations on
the everyday basis. Some examples of large businesses based in UK are Unilever, Astra Zeneca,
HSBC and many more.
SECTION – 2 DIFFERENT TYPES OF COMPANIES
Sole trader business
Sole trader business is owned by a single person. It is also called as one man’s business and the
owner is known as sole proprietor. That individual carriers the whole business by their own self

and raises the required capital. The sole person is responsible to organise the business and enjoys
the profits while bearing the losses. A sole trader is a person who carries the business and leads
the future of company. They take full responsibility of the risks associated while conducting the
business. The characteristic of sole trader businesses include ownership by one man, freedom of
work, they can perform quick decisions, the business assets have unlimited liability and they can
enjoy the profit all by themselves. There are no government regulations and no separate entity.
Sole trader businesses include the bookkeeping business, electricians, decorators and so on.
Partnership
It is a form of business in which two or more than two people share their ownership. The
responsibility is divided equally into the partners for managing the company, income gained and
loss by the business. The income is paid to partners who can claim it on personal tax returns. The
tax of the business is not separate, it is the arrangement between two or more than two people.
There are many tax benefits to a partnership when compared to a corporation. Characteristics of
partnership business are they exist of an agreement between the partners. The main purpose
behind partnership is that the partners can share the profits and losses in equal proportion. The
liability in this company is both individual and collective. Examples of partnership companies in
UK are notonhighstreet.com which is a creative small business growing in the ecommerce
industry of UK. Social chain is yet another company run in partnership of fast friends who
created an online community. It is an influencer marketing agency.
Limited liability business
Limited liability is a legal form of company which restricts the extent of economic loss in
relation with investment in the assets. Many investors are reluctant to attain the equity ownership
of such companies. Entrepreneurs are cautious to undertake a new venture. Many companies of
limited liability structure can be limited liability partnerships, limited liability companies and
other corporations. Characteristics of limited liability businesses includes having a separate
entity which means that property can be owned, attorneys can be hired and the owners are not
responsible for obligations of the corporation. It is tax Ease Company which works following
simple processes. Such companies are very flexible. For example, blockbuster and Westinghouse
are organisation with limited liability companies.

Public limited liability business
It is a public company in UK. Public limited companies are equivalent to publically traded
companies which have Inc. or a corporation design. The use of PLC after the name of the
company is mandatory for the publically limited liable businesses. All these companies are listed
on the London stock exchange are PLCs (Alkhoraif, Rashid, and McLaughlin, 2019). Some of
the examples based in UK of PLC are Burberry and Shell which includes the suffix PLC.
Features of public limited companies are easy transferability, perpetual succession, paid up
capital, directors and the borrowing capacity.
Cooperatives
It is the type of business which determines the type of entity. Forming a cooperative can be done
by taking less than 100 members or increasing this number till thousands of people. Cooperatives
are associations of persons who are ready to join voluntarily in the goal of achieving a common
economic end. It is done by the formation of democratically controlled organisation, making
equitable distributions for the capital required and getting the benefits of undertaking. The
characteristics of cooperatives are that they are voluntary associations, the spirit of cooperation is
one for all and all for one. It runs by democratic management and have fixed return on capital.
Some examples of cooperatives are Central England cooperative, Channel Inlands cooperative
society, East of England cooperative society and many more.
SECTION – 3 DIFFERENT BUSINESS STRUCTURE AND EXTERNAL
FACTORS
Organisational structure influencing business productivity
The cases of where the organisations are run with a proper organisational structures helps in
ensuring that all the necessary activities of the organisation are completed. It helps in defining
the chain of command, explains better HR solutions. Organisational structure helps in clearing
out the unnecessary excuses. Organisational structure helps in solving the conflicts happening
within the organisation (Fritschi, and et.al., 2017). Along with this, it helps in increasing the
interdepartmental communications. One of the main impact of organisational structure on
business productivity is that it promotes effective communications in between other departments,
it provides a classified responsibilities and support to its employees. When the communication is

proper and open, it will help in making less mistakes and fewer errors. Thus, organisational
structure helps in reducing the production problems.
PESTEL analysis
Political: British multinational companies are more prone to operate in the location where
there is high democracy and freedom of speech. They are looking after the countries where the
intervention of the government is less towards the business. They operate in the country which
offers more peace and security to the business of the company and have diplomatic relations with
other countries. Tax policies affect a lot to the large multinational companies as it affects the
demand and supply process for the products of the companies. Large companies are more
influence by the political factors when compared to small and medium size companies. They are
interested to know regulations and governing trade conditions of the country.
Economic: Large Multinationals are interested in investing in the country where the rate of
GDP is leading in a better direction. It forms a good environment for the growth of such
businesses. Multinational companies have to engage with the international business and trading
and thus the economy of the country affects the business of large companies. Countries which
have national comparative advantage, huge population, better market conditions and a wide
availability of the required resources are the best suited for the large multinational companies.
Social: Multinational companies are operating in the large population and thus the
company must consider all the social factors to keep the working of the business go smooth and
does not offend any community (Formosa, 2018). In the case of powerful economy and
globalisation, it is important about the social cultures which affect the other societies. Social
factors create the opportunity for the large multinational company to engage in the international
business.
Technological: Technological advancements and innovation has contributed a huge extent
for large multinational companies to participate in the international business. Technology
includes the use of internet which has helped the company to connect easily and perform the
tasks quick and efficient. Technology can be used to offer products and services in a different
way which can help the company gain customer satisfaction. Information technology makes it
easy for the large companies to organise their roles and responsibilities.
Environmental: Every company must work in a responsible way (Mancuso, 2019). Large
multinationals must use sustainable methods in their business operations along with their

products and services. It must avoid the use of restricted raw materials and try using more
organic materials. They must check-up regularly on the pollution emission from their side and
control it as much as possible.
Legal: Many large multinational companies offer their products and services to large
population. In order to hold their high reputation among the market, the company must avoid
indulging in any legal matters. High value helps the company to retain their customers at global
levels. The management must be aware of the domestic laws and restrictions of each country
they work in.
CONCLUSION
It can be concluded that there are many types of companies. It can be based on their size
of their business, number of employees, working structure and many more. In the end all the
companies play an important role in influencing the graphs of economy of the country as well as
of the worldwide. It is clear that the organisational structure of any organisation is a very
important parameter in the productivity of the business. It helps in providing a clear approach to
the operations of the organisation. There are many external factors which can affect the working
of an organisation and their business. These factors must be considered well before starting the
business.

REFERENCES
Books and Journals
Yusop, Z.B.M., 2018. PESTEL analysis. COMRAP 2018, p.34.
Çitilci, T. and Akbalık, M., 2020. The Importance of PESTEL Analysis for Environmental
Scanning Process. In Handbook of Research on Decision-Making Techniques in
Financial Marketing (pp. 336-357). IGI Global.
Álvarez Jaramillo, J., Zartha Sossa, J.W. and Orozco Mendoza, G.L., 2019. Barriers to
sustainability for small and medium enterprises in the framework of sustainable
development—L iterature review. Business Strategy and the Environment, 28(4),
pp.512-524.
Alkhoraif, A., Rashid, H. and McLaughlin, P., 2019. Lean implementation in small and medium
enterprises: Literature review. Operations Research Perspectives, 6, p.100089.
Mancuso, A., 2019. Form your own limited liability company: create an LLC in any state. Nolo.
Formosa, A.M., 2018. From a sole trader to a company: a legal and financial analysis (Master's
thesis, University of Malta).
Fritschi, and et.al., 2017. 0352 Does the size of a company make a difference to the prevalence
of exposure?.