Types of Companies and Their Characteristics

This report discusses the various types of companies, including micro businesses, small businesses, medium-sized businesses, and large businesses. It explores the characteristics of each type and how they operate. It also covers different business structures and external factors that can affect businesses, such as political, economic, social, technological, environmental, and legal factors.

Types of
Companies

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
Different types of companies and how they work. ....................................................................3
TASK 2............................................................................................................................................5
Different companies from sole traders to cooperatives and limited liability partnerships .........5
TASK 3 ...........................................................................................................................................7
Various business structures and external factors affecting business...........................................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
There are various types of companies in a country. Every company has different
characteristics and there advantages and disadvantages. Various forms of business are in the field
of legal structure are figured as a form of business administration (Allem, 2020). It is an
organisation of individuals and group of individuals that could various activities of a business in
perceptual way of common framework. In this report there are different types of companies are
taken and there characteristics are discussed below. Their operation and functions are also
mentioned their. Also it covers characteristics of sole traders and limited liability partnerships
and cooperative company. It covers different business structures and external factor which can
affect the businesses. This can be done by using PESTLE analysis.
TASK 1
Different types of companies and how they work.
There are certain types of companies which are involves in the country and they perform
different functions and operations. Companies are classified into various types based on their
mode of incorporation, number of members and liability of members etc. these companies are
discussed below with their characteristics:
Micro business
Micro business is a appreciable mark in our economy. It is a foundation of creation of
nation and it is the important part of economy and strength of our communities. It is usually a
term in which there are nine employees or less then people are working in a business
administration (Condé and Cisel, 2019). For example Boss brewing company, it is a women led
craft brewery. This was founded by Sarah John who has made this for changing the perception
around women in brewing.
Characteristics of micro business
 Changing flexible: A micro business characteristic is that it is flexible in nature as it can
be change anytime and can adjust according to the taste of customer. They focus on
various section of business so that they could focus on every employee.
 Low overhead expenses In micro business, the cost and expenses of there is also very
low. As they could not perform that much activities as compare to large industry so this
could help them in saving their time.

Small business
Small business is usually termed as privately owned business, it can be partnerships and
sole proprietorship that consist of few amount of candidates. For example Mother-care
organisation that is made to offers a government support that is frequently enhance the pattern. It
depends on the term of country and industry.
Characteristics of small business
 Goal oriented : Small business are the business which mainly focus on their achievement
of goals and objectives (Fei, 2020). There major plans are made accordingly sop that
target may achieved successfully.
 Self employment: They primarily concentrate on self employment because they are the
owner and managers both of the company. In small scale company, they themselves
create a value of organisation and perform their functions by themselves.
 Budget making : Small business helps in making budget appropriate because they
perform small activities so their budget is also small. So this helps them in making budget
properly without any mistakes. This is a sense of knowledge that can be managed by
funds and decisions are to be made properly.
Medium size business
Medium size business refer to the types of business which can be used as family owned
business by managing their work and size of a company. The medium size enterprise is John
lewis partnership that is well established in the UK market. And also have a observable record in
managing all complex task in management structure. There are certain characteristics of medium
size enterprises.
Characteristics
 Dealing with customers: Medium size enterprises are the enterprise which deals in
customer better as compared to large size companies because they mainly focus on
customer satisfaction (Giacosa, Ferraris and Bresciani, 2017). They analyse the negative
behaviour of customer and turn them into positive behaviours so that customer is fully
satisfied. This is considers to be most important in business growth and development.
 Adapting changes: Medium enterprises are mostly focus on adapting changes according
to the customer taste and preferences. They change themselves according to the dynamic
environment and adjust themselves in effective manner. They create such marketing

strategies and activities which will helps them in identifying customer needs and
demands and this results in achievement of goals and objectives.
 Stay calm under pressure: By meeting unwanted customers, some of the company get
frustrated and turn into losses. But small medium enterprises stay calm in all situation
and this will results in customer satisfaction.
Large size business
A large medium enterprises are those whose main focus on the customer satisfaction and
profitability of company (Hummel and Hörisch, 2020). They consist of more than 10000
employees in a company and turnover is around 1.8 billion. For example – Tesco is the largest
company as it has about more than 43,000 employees working in a company. The revenue of
company is about 64 billion.
Characteristics
 Large number of employees: Large number of employees consist by organisation as this
helps them in serving better to customer and by this customers are satisfied.
 IT skills : Managers have IT skills and operational skills which could helps them in
training an developing an employees for long run.
TASK 2
Different companies from sole traders to cooperatives and limited liability partnerships
Sole trader business
It is a usually created by a single individual and is operated by him only. This is not that
much expensive. But in sole trader business, the owner needs to mange all activities and also
responsible for losses.
Characteristic
The characteristic of a sole trader is that it is owned by a single individual so he have a
freedom to work and making quick decision regarding business activities. In sole trader business
owner himself enjoy all profits and is responsible for losses the business bear. There is no one to
share all losses or profits (Knezović, 2018). In addition, There is no separate legal entity in sole
trader business.
Partnership

It is a business in which profits and losses are being share by two or more person.
Because this business is carried on by two or more persons. They all mange all activities and
functions. There profits and losses are shared according to the decided contract which they have
signs.
Characteristics
The major characteristic of a partnership[ business is that there is a mutual agency.
Partners are allowed to share profits and losses as per the contract is made previously. There is
unlimited liability as partner who may utilise their assets as per the management ratio. In this
partnership agreement is require in order to share all profits and losses (.Koklic, Kukar-Kinney
and Vegelj, 2017).
Limited liability business
It is a separate and distinct legal entity. It is not a corporation under the state of legal
form of a business that provides the limited liability to their owners. It is considers with the
flexibility which is provide to business owners in view of partnership.
Characteristics
It is a separate legal entity of limited liability business. In this owner deals with their own
assets to incurred their debt as group of an individual. Also there is a limited liability of partners.
It ensures that their members with terms of tax liabilities that will determined the corporation to
select a way the organisation want.
Public limited liability business
It is generally a public company that relate with voluntary associational of staff faculty
which are incorporated and adjusted for separated legal entity for liable manner. Te public
limited company is recorded on the stock exchange which they are traded as publicly. There are
certain characteristic of this type of company which are discussed below:
Characteristics
Public limited company is separate legal entity for mentoring the another shareholders in
staff faculty (Ku, Hsu and Wu, 2020). It is related with that shareholder of public limited
business that can easily transferable into shares to the public administration. In public limited
company there is no restrictions in transferring of shares to public or inviting the public section.
Cooperative

This is an independent association of individuals that comes together to meet
organisational objectives with social, economical and cultural needs that are joined owned by it.
Characteristics
The characteristic of cooperative company is that in this there is a voluntary association
which have common goals and objectives of the society and there finance of co-operative society
that are protected by members.
TASK 3
Various business structures and external factors affecting business
Identification of various business structures
Organisational structure: Organisational structure is a structure in which various
actions are managed in relation for the achievement of goals and objectives (Leonardo, 2017). It
focus on the structure in which how information flows from various levels from top to bottom in
an organisation. It is made by an executive of a company in order to improve profitably and
productivity of a business. There are two types of structures functional and divisional structures.
Functional structures: It is a structure in which reporting relationships of a company are
divided according to their functional area. It is a difficulty to fix responsibility on particular
department.
Divisional structures: It is an organisational structure where organisational functions are
classified into division as per the services line. It is easy to fix responsibility for performance.
Impact of organisational stricture on the business productivity
Organisational structure can affect the business productivity. As in case of functional
structure, management hierarchy needs to be string and ensure the employees that all policies are
to be designed by company. In this structure, employees lacks creativity and flexibility and
adaptability (Liu and et.al., 2020). This can also results in reducing morale of employees and
moreover results in reducing productivity of employees. In vase of divisional structure, it is
perfect foe when there are more products and services than just one. In this company is separated
into various divisions. In this employees are being adaptable in nature and they feel happy in the
organisation. This results in increasing productivity of employees.
PESTLE analysis

For analysing factors which can affect the business performance, the PESTLE analysis is
done by company. This is done by company in order to analyse external factors which can affect
a business.
 Political: Factors which are needed to be utilise while processing the manner of quality
of potential market (.Panchenko and et.al., 2019).
 Economical : Factors like economical growth,inflation rates and interest rates etc. can
affect the business performance and the buying behaviour of customers.
 Social: It includes factors like growth rate, distribution age etc. which can affect the
business performance. This can affect any types of company whether it is micro or large
enterprises.
 Technological: Technological factors can affect the business as if company will not
make use of modern technology then it may affect the business and results in loss of
company.
 Environmental : It involves environmental and ecological factors that can affects
company to grow while operating their function in a country.
 Legal : If an organisation is to be stable in the market then it needs to follow all the rules
and regulations made by government. And if company will not follow then it may have
top suffer in future (Pieroni, McAloone and Pigosso, 2021).
CONCLUSION
From the above report it has been concluded that a company is a set of administration
management that creates certain laws and regulations. It promotes start-up and young business.
There are various types of companies which are existing in a country. Every company has their
own characteristics. These involves micro businesses, small and large enterprises. Now a days
small and medium enterprises are also working in a efficient manner and working towards a
achievement of goals. However, there are certain factors which can affect the businesses so these
needs to be considers in mind.

REFERENCES
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