Types of Companies: Understanding Different Business Structures

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
Contents
Introduction 2
Section 1: Different types of companies and how they work
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Section 2: Different companies from sole traders to cooperatives
and Limited Liability Partnerships 3
Section 3: Different businesses structures and internal factors
affecting business 5
Conclusion 7
Reference List 8
Introduction
A company is a judicial entity which is formed by the combine contribution and
unification of group of different people who wanted to work together for the accomplishment
of joint objective. Companies can be categorized into different types like industrial or
commercial and the tax revenue of these firms also differ. On the basis of the tax imposed on
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the industry their categories are defined. It is a corporate or integrated commercial governing
body which is certified by companies act. They could be private, government, limited, or
share capital company etc. The aim of this report to examine the understanding of various
type or companies and their functioning and characteristics. Further the report will also
determine the structural formation and the impact of external factors on the company.
Section 1: Different types of companies and how they work
Micro business:
These are generally small type of commercial enterprises. Their initial investment
capital is low and the employee count is is around 10 or lower than that. Sometimes these
businesses have only sole owner without any employee. It has lower revenue generation with
very minimal customer base. Generally they don't have any extended business in different
locations, it is limited to their domestic area or locality. Example: Tikog product making,
small eatables kiosk, Tie & dye shops, tailoring etc.
Small business:
This is defined as individually held, partnership or private corporation. They have
less workers and small annual turnover. In U.K. and U.S they have different characteristics
of small firms according to their line of work for example: manufacturing firms have around
400-500 staffing and wholesalers can have not more than 100 workers. Their initial
investment is little more than the micro-enterprise and they also have more customer count
and may have more than one or two extended outlets. Example: Accommodations, cafe's, day
care services etc.
Medium size business:
This particular scale size enterprise have more than 100 and less than 250 employees.
It is enrolled under the companies act. It can be family owned but the possession and
ownership is completely detached from the administration. They have systematically
structured infrastructure and the capitalist and lenders are also involved in the financial
decision making of the business (Cavalieri and et. al., 2018). Such entities operate their
functions in high potential market which have high profit and growth possibilities. Example:
furniture, leather products manufacturers, textile industry etc.
Large size business:
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