Types of Companies and Their Characteristics - Desklib

This report covers various topics which are named as different kinds of firm and how they should work, dissimilar firms like sole traders, limited liability, partnership and public limited liability companies along with characteristics and examples and how external factor affect their business productivity and profitability.

Types of Companies

Table of Contents
INTRODUCTION...........................................................................................................................1
SECTION 1......................................................................................................................................1
Different kinds of companies and how they work with various characteristics and examples . .1
SECTION 2 .....................................................................................................................................3
Define sole trader, partnership, public limited liability and cooperative, limited liability along
with examples and characteristics ...............................................................................................3
SECTION 3......................................................................................................................................4
How external factors affect firm productivity and different business structures ........................4
CONCLUSION ...............................................................................................................................6
REFERENCES ...............................................................................................................................7

INTRODUCTION
The term company is a form of legal entity within which firm operates and form of group
of individuals are work together towards accomplishing their goals and objectives (Baron and
Hannan, 2021). It is also depend upon their liability paying taxes and financial liabilities purpose
upon depending law. Companies either public or private with a common goals and objectives
within an organization and having a separate legal entity. For this assessment, selected
organization is Unilever PLC, is a multinational consumer goods organization which is situated
in UK and sold various product such as food, personal care and household products are included.
This report covers various topics which are named as different kinds of firm and how they should
work, dissimilar firms like sole traders, limited liability, partnership and public limited liability
companies along with characteristics and examples and how external factor affect their business
productivity and profitability.
SECTION 1
Different kinds of companies and how they work with various characteristics and examples
Micro business: This term defines that micro business operates a very small business
within fewer employees are 10 including owner and manager in business. Micro business work
as other businesses also to select a formal structure or changing in any partnership purpose,
setting up a marketing, finance and operations of firm and to get a business plan. Micro business
consist that should be recognized or long term standing family having play a vital role in
business. Examples of micro business are art & crafts business, graphic and design business and
many more (Basu, 2020).
Characteristics of micro business:
 All work are should be related to management and controlled by owner and there is
having a single owner in business.
 Resources are available immediately and better utilization of resources and wastages are
limited.
Small business: It should be defined that as a privately owned corporation with fewer
workers are there where 50 employees and it will be helpful for firms to support local or national
economy. It is also categorized by limited organization and size are compared on such sector.
Examples of small business are restaurants, salon, bakery shops and so on.

Characteristics of small business:
 There is lower income and profitability that will be generate lower than companies which
will be operate on larger scale.
 Small business include fewer employees are there with 100 which is also depended upon
type of business organization.
 They have a limited area of operation where sales have multiple states and stores are also
setting up a multiple states.
Medium size business: These type of firm covers 250 workers are there and develop
firm growth when firm increase more profits and revenue in particular situation. These are the
family owned business where ownership are also separated within firm and facilitates with
lenders and investors. Examples of medium size business are tiles manufacturing shops, furniture
shops and any manufacturing firm in world (Bernstein, Lerner and Mezzanotti, 2020).
Characteristics of medium size business:
 These firm people are passionate about their work no matter what happens when they will
started to getting things done in particular time they have done.
 There is part of dealing with various customers when they have being in difficult
situation they solve their problem automatically with ourself and update such skills.
Large scale business: In this type of business, there are more complexity in management
but there are large scale of employee are there who have great operation of business efficiently.
These type of firm include who have more than 250 employees and turnover 50 million where
are having a larger network in other nations also. There is high terms of employment in
management hierarchy and focus on international level of business. Examples of large scale
business are tea industry, automotive industry, technology in electronic are included in large
scale business (Heikkurinen, Young and Morgan, 2019).
Characteristics of large scale firms:
 There is great volume of communication between manager and employee who are
worked here in this firm.
 There are more than 250 employee in complex management hierarchy and various
number of customer are having great communication.

SECTION 2
Define sole trader, partnership, public limited liability and cooperative, limited liability along
with examples and characteristics
Sole trader: Sole trader is that person who owns and run this business or individual and
does not having separate legal entity in business enterprise. Individual entrepreneur in
organization are liable for all profits and losses and risk in enterprise who carries financial
obligation and it is not owner or manager of business who takes all profits and losses. Examples
of sole trader such as photographers, hairdressers, builders, freelancers and IT consultants
(Honeyman and Jana, 2019).
Characteristics of sole trader:
 It is owned by single person and contribute to required capital for managing whole affairs
in business organization.
 There is an absence of government regulation where no formalities of legal instructions
are required and management its closure.
Partnership: When two or more individuals are joined together and form a new business
enterprise to share all profits and losses with an proper training are required and making all
arrangements related to profits are looses are distributed equally within partners. Examples of
partnerships are uber & spotify, Apple & MasterCard and so on.
Characteristics of partnership:
 In absence of any agreements, they distribute profits or losses equally as remuneration or
lender of money to engage other business.
 At least two person are involved in partnership while other members are involved is 100
and entering into partnership must be legally to share all profits and losses.
Limited liability business: It is a structure for private firm where limited liability are
should be provided to employees and corporate loss will not be exceed amount of invested
money in partnership nor limited liability (Jesslyn, 2020). Owners and mangers are not liable to
pay any taxes and there is no flexibility to pay firm debts that will be combine for various
features in partnership. Examples of limited liability such as Anheuser- Busch, Blockbuster and
so on.
Characteristics of limited liability firm:

 Limited liability company has an separate legal entity where they can own or sell their
property and managers are not liable for obligations their corporation.
 There is separate legal existence to identify from its owners and own their property as a
group of person. They can also transact their firm and enter into contracts into business.
Public limited liability: A public limited liability company describe that association of
members in business enterprise and separate legal existence, members are also limited. Public
limited companies are listed on various stock exchanges where they can treat as shares or stocks
in business concern (Levin, 2020). Examples are Infosys, Rolls Royce
Characteristics of public limited liability:
 There can be easily transferability of shares for public limited company and no restriction
are required to public or inviting shares to subscribe for public.
 In case of public limited company, there is number of director is 3 and maximum is
unlimited that means there is no limit.
Cooperative: Cooperative organization defined voluntarily person to meet their
requirements of common social, and their cultural needs to organization through jointly owned
enterprises. The main objective is to give customer service and profit making is second priority
in such firms (Mullany, 2020). Examples of cooperative business are street markets, Ocean
spray and so on
Characteristics of cooperative:
 There is voluntarily membership where person has common interest of goals and
objectives by the rules of society.
 Liability of members in organization are basis of either limited or unlimited liability and
limited societies are more popular in cooperative societies.
SECTION 3
How external factors affect firm productivity and different business structures
Organization structure should be defined where rules, authority, power, responsibilities
are dispersed and how much information are flows and various levels of hierarchy are involved
in this firm. It should be determined how much level or certain activities are directed towards
accomplishing their goals of an business enterprise. Two most common structure of organization
is divisional and functional organization are as follows:

Divisional structure: In case of divisional structure are should be identified where
hierarchy are divide into various number of groups and firm are dynamic in nature. It will be
helpful to performance and productivity (Murphy, O’Donnell and Jameson, 2019). Unilever PLC
are used divisional structure because they should be divided into groups and increase
productivity and profitability in business concern.
Functional structure: This type of organizational structure represents smaller groups of
people are should be considered in functional area such as finance, marketing, human resource,
IT and so on. Unilever PLC are used functional structure because in terms of productivity, their
structure create adaptability where to much specialization are decrease employ turnover and
lower productivity should be consists.
It is necessary to understand what external factor can affect firm performance and
productivity in business enterprise in both positive and negative aspects. External factor should
affect firm productivity through PESTLE analysis with context to Unilever PLC are as follows:
Political: Political stability can affect performance of business and taking changes in
rules and policies like how government can changes their process in Unilever markets. Firm is
also responsible to all local laws and regional laws to set each and very nation which are
distributed in.
Economic: Unilever firm performance which is dependent upon their situation of
business economies around the globe. To increase their wages in developing nation is very
important to gain more profit and higher sales in business (Weaver, 2020).
Social: It can affect business performance and certain environment of macro which can
drive behavioural aspects of business. Many product on Unilever PLC focus on personal well
being of people in society and helpful for people to feel good and look good in life.
Technological: It should be determined in important level of aspects with increase in
commerce and firm can get opportunities at international level. In case of Unilever PLC, they
sell or create their products in online perspective locations and firm can emphasizes its digital
marketing and selling methods are included. It can also consist of higher level of automation
which is easily compared to rivals that will be allow to supply their products and store their
locations rapidly.
Legal factors: It can consist those factor in legal where formalities are completed
through laws and regulations regarding this industry which can cause impact in business.

Unilever PLC related to consumer goods it is subjected to consumer laws and regulations, legal
formalities are should be completed. They own 400 brands over i8n food, health, personal care
and food safety products and also follow their copyrights, product safety laws and regulation,
health and safety laws in international as well as domestic laws (Baron and Hannan, 2021).
Environmental: This aspect of company performance on such environmental polices and
procedures in business enterprise. For Unilever PLC promotes on sustainable competitive
advantage and renewable resource are should be completed and it should be designed to be safe
for consumers in each and every location in business. It also determine to describe about
business surrounding or environment which is eco friendly from packaging to design.
CONCLUSION
From the above information, it has been concluded that company is a legal separate entity
where group of people are moving towards accomplishing their goals and objectives. It must be
organized in various to paying their taxes and depending upon their corporate law and financial
liability should be considered. This report covers to understand dissimilar types of companies
such as micro, small, medium size and large size business are should be included and provide
separate legal entities, it should be impact on external factor which can affect business
performance and productivity through PESTLE Analysis and organizational structure such bas
divisional and functional structure which can affect productivity in business organization.

REFERENCES
Books and Journals
Baron, J. and Hannan, M., 2021. The economic sociology of organizational entrepreneurship:
Lessons from the Stanford Project on Emerging Companies. In The economic sociology
of capitalism (pp. 168-203). Princeton University Press.
Basu, T., 2020. Performance Assessment of Non-Banking Financial Companies in India: An
Empirical Study (Doctoral dissertation, Vidyasagar University, Midnapore, West
Bengal, India,).
Bernstein, S., Lerner, J. and Mezzanotti, F., 2020. Private Equity and Portfolio Companies:
Lessons from the Global Financial Crisis. Journal of Applied Corporate Finance. 32(3).
pp.21-42.
Heikkurinen, P., Young, C. W. and Morgan, E., 2019. Business for sustainable change:
Extending eco-efficiency and eco-sufficiency strategies to consumers. Journal of
Cleaner Production. 218. pp.656-664.
Honeyman, R. and Jana, T., 2019. The B corp handbook: How you can use business as a force
for good. Berrett-Koehler Publishers.Peralta, A. and Salama, M., 2021. Sustainable
Business Model Innovation for Event Management.
Jesslyn, J., 2020. The impact Of current ratio, receivables turnover ratio, and debt to equity ratio
towards Return On Asset (ROA) Of Automotive Companies Listed On ASEAN Countries
Stock Exchange (Doctoral dissertation, Universitas Pelita Harapan).
Levin, A., 2020. People are media companies. In Influencer Marketing for Brands (pp. 7-18).
Apress, Berkeley, CA.
Mullany, L., 2020. Sociolinguistic awareness in business professionals: Breaking stereotypes and
language myths. Cambridge University Press (CUP).
Murphy, M., O’Donnell, P. and Jameson, J., 2019. Business in engineering education: Issues,
identities, hybrids, and limits. In The Engineering-Business Nexus (pp. 365-396).
Springer, Cham.
Weaver, R. L., 2020. Social enterprise and the capability approach: Exploring how social
enterprises are humanizing business. Journal of Nonprofit & Public Sector
Marketing. 32(5). pp.427-452.