Types of Companies and Business Structures - Desklib

This report by Desklib explores different types of companies based on their size and business structures such as sole traders, partnerships, cooperatives, and limited liability partnerships. It also covers the impact of external factors on business performance through PESTLE analysis. The report includes examples of companies and their characteristics. Course code: BMP3002, Subject: Business in Practice, College/University: Not mentioned.

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
Submitted by:
Name:
ID:
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Contents
Introduction 2
Section 1: Different types of companies and how they work 3
Section 2: Different companies from sole traders to cooperatives
and Limited Liability Partnerships 4
Section 3: Different businesses structures and internal factors
affecting business 6
Conclusion 8
Reference List 9
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Introduction
The aim of this report to examine various types of companies and how they work in
the market in order to get the higher success and growth. Companies usually categories on the
basis of size that includes, micro, small, medium and large organisations. Business is the
separate legal entity which is formed for establishing the commercial operations with the
common goal of generating higher growth and revenue in the market. Moreover, this report
will cover the business which are categorised on the basis of their type such as sole trader,
partnership, cooperatives, limited liability and so on. This also analyse the various types of
business structure and the external aspects which is hurdling the overall macro environment
in the market. PESTLE Analysis has been used in order to analyse the macro factors in the
business environment (Chung, Jo and Lee, 2021).
Section 1: Different types of companies and how they work
There are various types of business which are conducting its functions in the market.
A business can be vary as per the size such as micro, small, medium and large. When the
business organisation is working with the sole aim of having good brand image in the market.
This leads to attract the large group of customers. Following are the types of business are
given below:
Micro business:
A micro business is the small business which employs fewer than 10 people. They
have a single owner which owns and control the entire working of the business. They usually
generate the annual revenue approx. 2 million euros. They operate their business with less
capital as it is micro business and conducting their business in the single location. Examples
of micro business are cobbler, make-up artist and many more (HORÁK and PAVLOVÁ,
2022).
Small business:
These are the type of business which usually work with at-least 10-50 workers and
they are having the annual turnover of higher than 2 million but this is less than 10 million
euros. They basically require less capital and employees in order to conduct its business
operations. This is the suitable business which is helpful in serving the large community and
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having the company in target market. Best examples of small business are food corner,
photographers. Medical stores and so on.
Medium size business:
It is the type of business which is defined as the commercial firm which is the average
business size. They tends to generate the revenue of more than 10 million but less than 50
million euros. They are working with less than 250 employees. It is the safe and appropriate
business size for the individual who wants to operate the local business and further expands
it. Online retailer, consultants and garages are the best examples of small business
organisations.
Large size business:
It is the type of business who usually operates their business with its above average
size, earning annual turnover of more than 1.5 million euros. They are operating its business
with more than 250 employees. They also conduct its business in international and national
boundaries. It is the type of business who usually formed with huge capital. Best example of
big firms are HSBC, Tesco and many more (Jiaojiao and Zenglong, 2021).
Section 2: Different companies from sole traders to
cooperatives and Limited Liability Partnerships
Sole trader business:
Meaning: It is the type of business which is owned and controlled by the single
owner and they are following the simple business structure. All the necessary
decisions are being taken by the owner itself and they are responsible for all the
profits and looses in the market.
Characteristics: This is the business owner who have the separate legal entity. They
are completely liable for their profits and looses so that they can run its business operations in
an appropriate manner. Risk is considered as the major factors that is linked with the venture.
Thus, they needs to focuses on the task so that risk can be eliminated and business can be run
in an appropriate manner.
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Example: Plumbers, carpenters and hair designer.
Partnership:
Meaning: This is basically defined as the agreement among the two parties with the
sole consideration of performing some Commerical task so that they can sustain in the market
in long run. Both the partners are liable for the profits and looses on the agreed basis. They
use their resources in an appropriate manner so that effectiveness of the work can be maintain
under the partnership act (Smerek and Vetráková, 2020).
Characteristics: The main attribute of partnership is they are responsible for all the
profits and looses which is incurred in the company. All the decisions also being based on the
agreed basis of both the partners. These type of business have the operations of limited period
of time and the agreement of partnership.
Example: The best example for such type of business is Deciduous partners. This is
the UK based organisation that is giving knowledge to the people related to the manager
services and certain practices.
Public limited liability business:
Meaning: This is basically defined as the business which usually work under the
direct control of the government and all such decisions are being made by the government
only. Such type of company often sale its share to the general public and in such as way they
manage the flow of money in the market with full control.
Characteristics: This is basically the legal business that is having the separate entity
from its shareholders and all such rules and polices are being framed by the government
bodies.
Example: Tesco and Burberry are the best example of such type of business as they
are focuses on getting more profits with the consideration of meeting the needs and wants of
their potential customers.
Cooperative:
Meaning: This is the type of business which is being formed with the sole
consideration of group of people and they are not having such implications of government
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bodies as they are manufacturing goods and services. The main focuses such business to have
th higher revenue and sales (Rachinger and et. al., 2019).
Characteristics: Such type of business is being formed as there is no tie up with the
government and they usually conduct the business with any legal interference so that they can
have more revenue ans profits as well.
Example: Dyson is the leading company which is being formed, this is the
multinational company in UK that is dealing in electronic appliances that includes the hair
dryers and so on.
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
Organisational Structure
This is the functional business unit which establish the business in order to attain the
pre-defined goals of the company (Talebi Anzab and et. al., 2021). This basically includes
the rules and regulations in that the people have to work in an well-defined manner. There is
the effective flow of communication & employees which are well known that to whom they
are accountable by which they can ensure the good results within the company. This basically
includes the organisational structure and every business organisation are using such structure
as per the size and operations which are given below:
 Divisional structure- This is the organisational structure in that the manager form
their group of sub departments in to small groups. They are keeping all the task in a
group who are having the similar skills and abilities by which they can ensure the
effective operations for achieving the group goals. In respect to Tesco, this is the
multinational company and having the large scale operations by which they can use
the structure by which they can maintain and divide the operations in the small groups
by which all the task can be accomplished on appropriate manner.
3.2 How different external factors affect the performance of a
business – PESTLE Analysis
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PESTLE analysis is used to evaluate the environment present for the business and making
strategic decisions based on the evaluation. Marks & Spencer is a renowned British
multinational company, established in 1884 as a small stall in an open market . It is one of the
largest and leading retail clothing and food company. It performs its business operations
across the world, having approximately more than 1463 store locations across the globe.
Pestle analysis of Marks and Spencer is -
 Political factors – It refers to government policies and change in legislation which
affects the organisation or that industry. Nowadays, free trade has been established
between multiple countries. Many companies have established or expand their
business operations in other countries. Marks & Spencer, which majorly operates in
United Kingdom has opened their stores in the market of other countries and started
to increase their market share.
 Economic Factors – These are the factors which are determinants of an economy's
performance which directly affects an organisation. New upcoming brands and
competitors are stealing away market share from well established brands like Marks
& Spencer by selling similar products at lower price and offering heavy discounts to
the customers.
 Sociocultural Factors – It refers to the social environment which is affecting the
organisation. Marks & Spencer is a well known brand in UK and have been there
since 1800's . But now it is having an adverse effect on the company, as consumers
begin to associate M&S with the past and also new and trendy brands are coming to
the market which makes the competition tougher than before.
 Technological Factors – It refers to the new and advanced technology which is
affecting the organisation. One of the biggest trend in retail stores is self checkout,
especially in food stores which reduce the cost of cashiers and provide a smooth
experience to customers. M&S has already implemented a number of self service
checkout portals which gives a big advantage to the company.
 Legal Factors – These are the factors which are determined by the certain
implications of laws and change in the existing laws. Marks & Spencer is operating
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in many countries and company have to follow the laws of every country which
makes it difficult for the company to operate and follow the rules of every country in
which they are operating. It is also necessary for the company to follow the rules and
regulation of every country (Mrňová and Roudná, 2020).
 Environmental Factors – These factors refers to effects which happens due to the
surrounding environment of the organisation. Marks & Spencer has taken an
initiative of becoming a more sustainable brand. Their objective is to become eco-
friendly company for which company has taken many initiatives such as packaging.
Marks & Spencer uses packaging which is reusable and recyclable which helps the
company in sustainable development.
Conclusion
It can be concluded from the above report there are different business structures
available for the entrepreneurs according to their needs on different operating sizes and
features. There are different businesses based on their sizes such as micro, small, medium and
large. Every organization uses their own business structure having different features and
communication processes. Every communication processes have their advantages as well as
disadvantages. Also there are different environments or factors that influence or affects the
business in various forms. Business is affected due to political, economic, environmental and
so on environments.
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Reference List
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.
HORÁK, J. and PAVLOVÁ, Š., 2022. CAPITAL STRUCTURE OF COMPANIES
APPLYING PRINCIPLES OF CIRCULAR ECONOMY. Ad Alta: Journal of
Interdisciplinary Research, 12(1).
Jiaojiao, L. and Zenglong, Q., 2021. Investor Types and Company Performance through
Private Placements Basing on State-Owned and-Controlled Listed
Companies. International Journal of Business and Management, 14(11), pp.250-
250.
Mrňová, Z. and Roudná, V., 2020. FORMS OF FACILITY MANAGEMENT PROVISION
IN DIFFERENT TYPES OF COMPANIES. International Multidisciplinary
Scientific GeoConference: SGEM, 20(6.2), pp.193-200.
Rachinger and et. al., 2019. The Influence of Technological Disruptions in Business
Ecosystems on Elements of Companies’ Business Models.
Smerek, L. and Vetráková, M., 2020. Difference in human resources development in
various types of companies. Polish Journal of Management Studies, 21.
Talebi Anzab and et. al., 2021. The effect of personality, social and motivation psychology
types on reporting of social responsibility of accepted companies in Tehran Stock
Exchange using the pattern of structural equations. International Journal of
Nonlinear Analysis and Applications, 12(Special Issue), pp.2413-2427.
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