Types of Companies - Analysis of Different Forms of Companies
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This report analyzes the different forms of companies present in the business environment, including micro, small, medium, and large companies. It also outlines the various business structures, together with extrinsic factors that influence the process and functions of business.
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BSc (Hons) Business Managementwith Foundation BMP3002 Business in Practice Assessment 1 Types of Companies Submitted by: Name: ID: 1Limited liability business
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Contents Introduction3 Section 1: Different types of companies and how they work 3 Section 2: Different companies from sole traders to cooperatives and Limited Liability Partnerships4 Section 3: Different businesses structures and internal factors affecting business6 Conclusion8 Reference List9 2Limited liability business
Introduction The term “Company” can be represented as any legal entity established under the Companies Act, 2013. It is abbreviated as Co., is a legal entity showcasing an association of individuals, whether, legal, natural or a combination of both, with a certain objective. The members of company shares a common goal while uniting to attain declared and certain objectives(Boldyrikhin, 2021). The key purpose of this reportistoanalyzethedifferentformsofcompaniespresentinthebusiness environment. These companies highly contribute in the growth of nation's economy. It also outlines the various business structure, together with extrinsic factors that influences the process and functions of business. Section 1: Different types of companies and how they work Micro business: Amicro-enterpriseisalsoknownas atypeofsmallbusinessinwhich employeesarefew,approx.onetoninepeople.Thesebusinessesplaysan important role in the development of national economy and are the most general type of company in UK. These businesses usually face difficulties in getting funds and credit for the start-up or expansion. The turnover of this company is less than Euro 2million. It helps in satisfying the basic needs of an individual by opening micro businesses. One of micro businesses in UK is Marshfield Bakery. This business aims to increases its sales so that sufficient amount of revenue can be generated. Features of Micro-business: There is a need of low capital investment. Minimum employees- one to nine. The profit or revenue should not cross the limit of£2 million. Small business: Small business can be characterized as the company which is privately owned company, or it can be sole proprietorship or partnership that has fewer staff memberswhilelessyearlyrevenuethanregular-sizedorcorporationbusiness (Chang, Paramosa and Tsai, 2021). It is able to apply for the support of government as well as qualify for preferential tax policy. It is varies by nation to nation and industry as well. One of the good examples is CafePod Coffee Co. Features of small business: The members cannot exceed the limit of 50. 3Limited liability business
The revenue of the business should not exceed the limit of£10 million. If grants a chance to the individuals to generate revenue while making money through such businesses which raises the living standard. Medium size business: Medium size companies are the businesses which are generally bigger in size incomparisonwithmicroandsmallbusinesses.Thesecompaniesarerapidly growing in the country as its turnover is rising day by day. Captify is a good example of medium size business. Features of medium size businesses: Minimum employees are only 250. Turnover should not cross the limit of£10 million to £50 million. Import and export activities plays an important role in the expansion of such businesses. Large size business: Larger businesses have an important role in the contribution of nation's GDP. These businesses are highly contributed in the global economy. It is necessary for the massive businesses to obey all the rules and regulations imposed by local government wherever it operates their business so that it cannot impacted negatively by such extrinsic factors. AstraZeneca is a example of large business(Efimova, Rozhnova and Zvyagintseva, 2020). Features of large businesses: It should have more than 250 employees. The revenue or turnover should be exceeded£50 million. The key purpose of such businesses is to increase the annual turnover every year. This is the cause these companies are highly concentrate on their marketing activities. Section 2: Different companies from sole traders to cooperatives and Limited Liability Partnerships Sole trader business: Soletraderbusinessisalsonamedassoleproprietorship,individual entrepreneurship or sole tradership. It is owned and run by single owner while having 4Limited liability business
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noseparatelegalentitybetweenowner,togetherwithbusinessentity.Itcan employee other people in the business for the support. The sole trader gets all the generated profits while having limitless liabilities for all losses and debts(Ku, Hsu and Wu, 2020). The sole trader may utilize the business name or trade name other than their legal name. If it is differ from their legal name than they may have to trademark their company in a legal manner. Hairstylist, plumbers or electricians are few examples. Partnership: A partnership can be understood as the form of businesses where a formal agreementis developedbetweentwoor moreparties whoallagreetoshare responsibilities, income or losses and more as a co-owners. In general partnership, all co-owners share both income and liabilities. There may be tax advantages to a partnership in comparison with corporation. It is essential for the organization to carry some sort of business while having a motive to earn profit. Spotify and Uber, Casper and West Elm and so forth are few examples of partnership. Limited liability business: A limited liability company refers the company whose main aim is to protect its owners from individual liability for its debts or liabilities. It is the business which have hybrid entities that joints the features of a corporation with those of sole tradership and partnership. It benefits from flexibility as well as flow through taxation of sole tradership and partnership and keep the limited liability status of businesses. In such typeofcompanies,theentrepreneursarerecognizedasmembersinsteadof shareholders. It showcase the legal structure of privately owned companies. This businesses enables members to bear all the financial liabilities and risks of business (Luo and et.al.). If the company is unable to clear off its debts, then members are only responsible up to limit of their shares. It has minimal paper formalities than any other businesses. Anheauser-Busch is the good example of limited liability company. Public limited liability business: A public limited company are those businesses in UK which are public in legal structure. The company use PLC abbreviation after their company's name which is compulsory to use and communicates to investors and to any person who deals with 5Limited liability business
the business that it is a publicly listed corporation. It has limited liabilities in which shares may be sold freely while trading to the public. It has minimum share of capital of Euro 50, 000(Prushkivska and Avramenko, 2020). It can be either listed or unlisted company on the exchanges of stock. In UK, a public company commonly utilize cover the words public limited company or the abbreviation of PLC at the end of their legal business name. British Petroleum Company is a public limited company in UK. Cooperative: A cooperative company is a company in which an association of individuals amalgamated voluntarily to fulfill their social, economic as well as cultural aspirations and objectives through a jointly owned company. These are democratically owned by theirunit,witheachpersonhavingonevoteinchoosingtheBOD(boardof directors). It owned, managed and operated for the employee's welfare that makes useofcateredservices.Whatevertheorganizationgeneratedthemoneyare distributed among the members of the business and lately use for the goodness of its members without any condition to be paid to the external members. Housing cooperatives is one of the examples of cooperative business. Section 3: Different business structures and external factors affecting business 3.1 Identification of different organizational structures and explaining how does organisational structure affect business productivity An organizational structure explains how particular activities are delegated towardaccomplishingthegoalof business. Itshowcase theroleanddifferent responsibilities of employee within the organization(Ranta, 2021). Following are few types of organizational structure are discussed: Functional structure:Through this structure, the companies are categorized intospecificgroupswithcertainrolesandresponsibilities.Mostofthe business firms divides their organization into different department such as marketing, finance, R&D or HR. Each of such departments has a manager to 6Limited liability business
manages activities. This manager is directed by an executive or administrator who manages multiple departments. Divisional structure:In this type of organizational structure, different groups work alongside each other towards a common or shared goal. Each of these units has its own manager who tackles how that division operates, allocate its resources as well as budget. Each division can have its own sales team, marketing team, IT team and many more. It is mainly used by larger firms as it authorizes the different branches to make decisions without every person having to report to few managers. 3.2 How different external factors affect the performance of a business – PESTLE Analysis An organization needs to analyze its external factors that have a significant impact on their business and its day to day operations. If these factors are not analyzed effectively then it may affect the business's long term profitability and performance(Seehausen, 2019). Unilever is taken to analyze different external factors of business environment. These are as follows: Political factors:Unilever is a global company which deals in international activities of their business, due to which they have to face many challenges and problems. Every country has their own policies of trading and dealings so it makes company to focus on the changes in the political factors. In UK, Brexit has created a vital impact on the businesses, including Unilever. It has impact the trade activities of business. Economicalfactors:Covid-19hasinfluencedtheglobaleconomyand resulting recessions. The global pandemic and lockdown situation influences shockingly on the country's economy. The chosen organization is also gets impacted negatively while facing difficulties and generates less productivity. Socialfactors:Itshowsthedemandsandneedsofconsumerswhich influences the business's productivity(Soniewicki, 2021). Unilever has gained the value by customers as it is able to fulfilling the demands with a range of products and services. It shows a positive performance globally. Technological factors:It is essential for the organization to upgrade their equipment, machinery and tools so that better productivity can be attained. 7Limited liability business
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Thechosenorganizationalwaysfocusingontheadvancedtoolsand techniques to promote their business effectively and efficiently. Legal factors:It showcase the laws and legislation which makes company to adheresothatbetterflowofworkingcanbeheld.Therespectivefirm considerstaxationlaws,employmentlawsandsoforth,whereverthey operate their business. Environmental factors:It is observed the global economy is also influenced bytheenvironmentalfactor(Zhangandet.al.,2022).Therearemany activities which are considered by companies in order to reduce the negative impact on the environment. Unilever is focusing on the recycle of wastage, utilize more natural resources and many other steps. Conclusion From the above study, it can be said that there are many types of companies mentioned under the Companies Act, 2013.These companies are micro, small, medium as well as large companies. All such companies plays an important role in the growth of national economy as revenue generated by these companies helps in creating various positive results for the better of the nation. Sole proprietorship, partnership,publiclimitedcompany,limitedliabilitycompanyaswellas cooperatives,allsuchcompanieshavedifferentlegalstructureandfeatures. Organizational structure has many types of structure which showcases how duties and roles are assigned to the employees towards a common goal. It helps in creating better productivity and profitability. Functional and divisional structure are discussed in this report. Pestle analysis covers various extrinsic factors such as political, economic, social, technological, legal and environmental factors. These factors must be assessed by the organizations so that better strategies can be made to tackle the impacts of such variables. 8Limited liability business
Reference List Boldyrikhin, A., 2021. SHADOW MANAGEMENT AS A NEW UNDERSTANDING OF INFORMAL LEADERSHIP IN COMPANIES.Панорама, (38), pp.34-39. Chang,A.S.,Paramosa,L.S.andTsai,C.Y.,2021.Linkingkeytopicsto environmentalindicatorsincorporatesocialresponsibilityreportsof construction companies.Corporate Social Responsibility and Environmental Management,28(4), pp.1335-1347. Efimova, O., Rozhnova, O. and Zvyagintseva, E., 2020, May. Creation of a System forClimate-RelatedRisksDisclosuresinCompanies’Reporting. InInternational Conference on Integrated Science(pp. 201-211). Springer, Cham. Ku, E.C., Hsu, S.F. and Wu, W.C., 2020. Connecting supplier–supplier relationships to achieve supply chain performance of restaurant companies.Journal of Hospitality and Tourism Insights. Luo, Z. and et.al., Profit Loss Risk Modeling and Avoidance Decision of Power Selling Companies for Medium and Long-term Electricity Market. In2020 IEEE 4th Conference on Energy Internet and Energy System Integration (EI2)(pp. 3517-3521). IEEE. Prushkivska, E.V. and Avramenko, K.O., 2020. Innovative strategies for development ofinternationalcompaniesintheconditionsofglobalization.Economic Bulletin of the National Mining University scientific journal,72(72), pp.28-35. Ranta, A., 2021. Consumer types of sustainable convenience food companies. Seehausen, J., 2019. European Model Companies Act (EMCA): A Critical Review of Chapter12–AnnualAccountingandAuditing.EuropeanBusinessLaw Review,30(4). Soniewicki, M., 2021. The effect of knowledge appreciation and development of internalideasonthecompetitivenessofserviceindustry companies.International Journal of Innovation and Learning,29(4), pp.431- 448. Zhang, Y. and et.al., 2022. Turnover of Companies in OpenStack: Prevalence and Rationale.ACM Transactions on Software Engineering and Methodology. 9Limited liability business