Different Types of Companies and Their Legal Structures

This article discusses the involvement of different types of companies with its different characteristics so that they can effectively maintain their business operations. It also explains various legal structures and organizational structures that can help improve the effectiveness of the business.

Business in Practice

Table of Contents
INTRODUCTION...............................................................................................................4
MAIN BODY.......................................................................................................................4
SECTION: 1 Different types of companies and how they are working.............................4
Micro business...................................................................................................................4
Section 2 : Different companies from sole traders to cooperatives and Limited Liability
Partnerships.......................................................................................................................6
Section 3: Different business structures and external factors affecting business.............7
CONCLUSION.................................................................................................................10
REFERENCES................................................................................................................11

INTRODUCTION
On the basis of current scenario, it is mandatory for the entrepreneurs to pay
more attention on business so that they can effectively maintain their business through
their creative mind. In United Kingdom, Various companies are effectively operating
their business with a specific purpose and all companies are containing different aim,
goal, purpose and scale (Jardón, Molodchik and Paklina, 2018). This assessment is
mainly discussing about the involvement of different types of companies with its
different characteristics so that they can effectively maintain their business operations.
This assessment will also explain various legal structure which are considering by the
entrepreneurs in order to maintain their companies. Furthermore, various kind of
organisational structure will also discuss which demonstrate the working structure and
helpful to improve the effectiveness of the business. Lastly, the impact of external
environment so that company can effectively gain high level of productivity.
MAIN BODY
SECTION: 1 Different types of companies and how they are working.
Micro business
Micro companies are need low level of resources & target limited location as per
to maintain their business activities. In context of micro businesses, entrepreneurs are
required less resources and they are providing their goods & services to the less
people. The purpose and size of these companies are different and perform their
operations in specific manner because these companies are constantly trying to
improve their brands image (Lee and Huh, 2017). The size of the micro-organisation is
less, only 0 -9 people can perform their task everyday & the annual turnover rate under
less than £ 2 Million. Some specific examples of the micro-organisations such as Boss
Brewing venture are containing as the best examples of the micro businesses.
Characteristics - Some specific characteristics of micro organisations like small team
of employees, limited market size, sole or partnership business structure, involvement
of less people, small capital and resources. All these characteristics are demonstrating
the working conditions of the organisation & differentiate from the others.

Small business
Basically, small businesses are required more financial resources & target more
population as compared to the others businesses. Those entrepreneurs who have
different ideas to start their business than they can appropriately formulate their
business operations. Small businesses are need a specific ownership structure so that
they can work collectively and manage their business activities with full legal
consideration (Leontieva, 2018).The size & turnover of these businesses are different.
Small companies are providing employment chances to 0 – 49 people and the annual
turnover rate is considered under £ 10 Million. Small businesses are giving positive
impact in the development of the country economy. Cage Pod coffee, Margot Bakery is
containing as the best example of the small businesses in UK.
Characteristics - Small businesses are containing appropriate characteristics such
as lower level of profitability& revenue, small market areas, optimal utilisation of
resources, less business activities, target local communities. All these strategies are
helpful to manage the working situation of the small businesses. These businesses are
not paying tax because of low revenue. Davison Canners, Imaginera are small scale
companies in UK.
Medium size business
Medium size businesses are cover more area as compared to other business like
micro and small. The size and scale of these businesses are more and providing work
opportunities 50 – 250 people so that they can work collectively and show their active
participation in the day-to-day task of the company. Medium size businesses are
generating annual turnover under £ 250 Million. These organisations are targeting more
people so that they can earn more profitability. The best example of medium size
business is Captify and this company is managing their operational activities effectively
& also ensure that company can improve their brand value appropriately (Mohammadi
Shahahroodi and et. al., 2020).
Characteristic - The main concern of medium organisation is that they are usually
performing their operations in the competitive market situation. Few characteristics
which are maintaining by these organisations such as Evaluation of customers,

Systematic system, passionate about business, be persistent, willing to learn new skills,
strive for the continuous improvement. Good dealing with the customers and many
more.
Large size business
These types of businesses need large number of working employees so that they
can participate collectively to improve their business & expand their business operations
all around the world. Large businesses are manufacturing innovative goods so that they
can target more customers & enhance their brand effectiveness internationally.
Generally large firms are giving employment more than 250 workers and the turnover
rate maintain annually more than £ 250 Million. Large organisations are providing
massive impact on the economy of the country. Morrisons, Tesco, Burberry and Marks
and Spencer are containing as the most appropriate examples of the large size
businesses which are operating their business activities all around the world
(Seehausen, 2019).
Characteristics – For the development of the large cooperation, its characteristics are
playing most specific role. Some appropriate of the large cooperation such as more
employment opportunities to the people, large number of resources, generate more
revenue, high productivity level, global reach,
Section 2 : Different companies from sole traders to cooperatives and
Limited Liability Partnerships.
The description about different companies’ business structure is given below -
 Sole Trader Business - Basically legal structure mainly adopted by most of the
entrepreneurs because it can be very convenient and easy to register & maintain
business operations of the company. As for this legal structure, entrepreneur is
responsible to pay taxes and maintain specific lawful procedures in their
business. This legal structure mainly incorporated with lots of procedures which
need to maintained by business owner. In this legal structure, the involvement of
government is very less so it is quite convenient for the entrepreneur to working

style. Few characteristics also considered by this structure such as unlimited
liability, authorities to take decision, strategic planning and control, legal
agreements & sole management procedure (Soniewicki, 2021).
 Partnership - The prime motor what this legal structure is to involve two or more
people who can be a partner of the firm and take risk & decision for the
development of the organsiation. Business partners are responsible to each and
every activity such as working operations, organizational culture, structure,
specific roles and responsibilities, profit and loss of the company. This legal
structure associated with a specific characteristic like sharing the profit, sign
proper agreement system, partners need to keep records, nature of limited
liability, non-transferability and many others.
 Limited Liability Business - This LLB legal structure is work same as
partnership firms excluding that partner are contain limited liability & they need to
maintain Limited income tax amount that the invested in the business. LLB legal
structure medley monitor and control why more than two people who also
involved in all the business activities. Business owners need to sign LLP
agreement and also provide specific self-assessment report which show their
proper contribution in the business. Limited liability, transferable shares, separate
entity, tax ease are the appropriate characteristics of LLB legal structure.
 Public Limited Liability Business - This legal structure mainly incorporated for
profit maximization and it is categorized into various shares which are publicly
tradable in context of stock exchange. Buyer of the shares have contained limited
liability and they are not directly responsible for the business loss in the
exchange of some amount which they pay for the shares. Few characteristics
such as high cost and capital, transferable shares, Limited liabilities, perpetual
succession, paid up capital, borrowing capacity, directors.
 Cooperative -it is contained as the autonomous association of the people who
are work unitedly to meet it is specific objective related to the economic, cultural
& social requirement of the company. Cooperative legal structure democratic

control by their members & each members contains one vote in the electing
board of directors. This legal structure includes some specific characteristics like
voluntary membership, Limited interest on capital, open membership, democratic
control, liabilities of the members, distribution of surplus and many.
Section 3: Different business structures and external factors affecting
business
Different organizational structures & explaining how does organizational
structure affect business productivity
Organizational structure is work like a strategical & structural framework which can
help full to manage each and every activity systematically. Structure of the organsiation
is also maintain proper discipline in the working environment so that all the staff
members work accordingly as for the guidelines which are provided by the HR manager
of the company. Dyson is a large multinational technological organsiation which
operating their business internationally. Company is adopting a specific organizational
structure so that company can appropriately manage their all operations all around the
world. Explanation about various types of organizational structure are given below -
 Functional Structure - this organizational structure is liable to maintain all the
operation systematically and also flow of the information from upward to
downward. In this structure, all the working authorities are divided into specific
layers so that they can appropriately communicate to manage all the operational
activities in a systematic way. This is structure also perform their task same as
hierarchical structure. In this structure top level of management are liable to
monitor each and every operation and also take appropriate decisions for the
development of the employees and organsiation. There are various benefits of
this structure like it can help full to improve the productivity level of the staff
members, with the help of this structure the flow of communication can be direct
in a proper manner so that employees can share adequate information with each
other. This is structure is beneficial for the involvement of employee’s productivity
and also organsiation (Ying, Xian and Qiu-hua, 2020).

 Flat organizational structure - this is structure is explained as an entity in which
top management it is responsible to direct contact with frontline employees and
sales person at the floor level and also customers. As for this structure,
leadership can be decentralized & there is no rules & responsibilities of the
middle level. This is structure also popularly known as self-managed
organizational structure. Dyson mainly adopt flat organizational structure so that
company can effectively elevate where employees responsibility. This is picture
can help full to remove excess layers of the management & increase the
coordination & speedy communication among the staff members. Few layers of
the structure can help full to encourage and quick decision-making process of the
employees.
As per the discussion about organizational structure, it is evaluated that flat
organizational structure is convenient for the Dyson company and it can help full to
maintain flow of communication and target and improve employees performance &
improve organizational effectiveness. This is structure can provide positive impact on
the business productivity of the company.
How different external factors affect the performance of a business – PESTLE
Analysis
PESTLE analysis is helpful to determine the impact of external and macro
environmental factor on the working of the business. The explanation about this
analysis in context of Dyson are given below -
 Political Factors - In this this factor, the involvement of so many elements such
as foreign trade policies, political procedure, trade regulations. Due to Brexit,
Dyson company experience various fluctuating situations in their business so
now company is more concern about their strategies. It is mandatory for the
company to maintain political stability in an appropriate manner.
 Economical Factors - This factor related to the economical ups and downs so it
is mandatory for the Dyson company to adopt appropriate pricing strategy to take
more competitive advantages. Because of pandemic, the whole market of the

company disturbed it is mandatory for the company to follow competitive pricing
policy to gain more competitive advantages (Zerfass, Verčič and Volk, 2017).
 Social Factors - This factor is all about to maintain cross cultural activities,
analyzing purchasing behaviour of the people, maintain demographical &
geographic segmentation. Dyson need to arrange small market research so that
company can appropriately consider exact requirement of the people so that
company can make some changes in their production process to gain customers
satisfaction.
 Technological Factors - Technological modification & changes are considered
in this factor. Dyson is totally electronical and technological waste company it is
mandatory for the company to produce innovative products and adopt
advancement technologies in order to lead the whole market place.
 Legal Factors - This factor is responsible to maintain lawful activities, acts, legal
procedure. Dyson is a multinational British corporation which manage all the
legal considerations and also follow appropriate acts in order to make their
working environment healthy.
 Environmental Factors - This factor is all about manage environmental
protocols, climate change, population growth rate, pollution level. Dyson can take
green marketing initiative so that company can appropriately reduce the carbon
emission rate in order to get more environmental sustainability rate.
CONCLUSION
On the basis of this assessment, it can be concluded that companies are
considering different type, scale, purpose and size so that they can effectively provide
adequate services to their potential customers. In this assessment, different types of
companies & their legal structure are discussed so that it can be appropriate for the
entrepreneurs to adopt specific structure in order to maintain their companies’ activities.
This project determined various types of organizational structure and also provide their
benefits for the company. Pestel analysis also conducted in this project so that company

can effectively evaluate the effect of outside factors on their business performance and
profitability.

REFERENCES
Books and Journals
Jardón, C.F., Molodchik, M. and Paklina, S., 2018. Strategic behaviour of Russian
companies with regard to intangibles. Management decision.
Lee, J.S. and Huh, E.S., 2017. A Study on Standard Types of Free Carrier (FCA) on
Incoterms for Seaborne Container Goods Transportation: Korean Trade
Companies’ Perspective. Journal of International Trade & Commerce, 13(5),
pp.51-66.
Leontieva, I., 2018. TYPES OF COMMERCIAL ORGANIZATIONS IN SWITZERLAND.
In Экономические исследования молодых учёных (pp. 141-145).
Mohammadi Shahahroodi, H. and et. al., 2020. Survival Resistance, Opportunism, and
the Growth of Organizations in Challenging Situations: Presentation a Strategic
Concept of Resilient Organizations Types. Journal of Executive
Management, 12(23), pp.289-313.
Seehausen, J., 2019. European Model Companies Act (EMCA): A Critical Review of
Chapter 12–Annual Accounting and Auditing. European Business Law
Review, 30(4).
Soniewicki, M., 2021. The effect of knowledge appreciation and development of internal
ideas on the competitiveness of service industry companies. International
Journal of Innovation and Learning, 29(4), pp.431-448.
Ying, S.U.N., Xian, Z.H.A.N.G. and Qiu-hua, S.O.N.G., 2020. Asset Light Operation,
Equity Nature and Capital Efficiency: An Empirical Study of Listed Manufacturing
Companies in China. Commercial Research, 62(12), p.99.
Zerfass, A., Verčič, D. and Volk, S.C., 2017. Communication evaluation and
measurement: Skills, practices and utilization in European
organizations. Corporate communications: An international journal.