Types of Companies

This report provides an explanation of the different types of companies, including micro businesses, small businesses, medium businesses, and large businesses. It discusses their characteristics and how they operate. The report also explores different business structures and how external factors such as political, economic, social, technological, environmental, and legal factors can affect businesses. Examples of different types of companies are provided to enhance understanding.

Types of Companies

Contents
INTRODUCTION......................................................................................................................................3
Section 1: Different types of companies and how they work......................................................3
Section 2: Different companies from sole traders to cooperatives and Limited Liability
Partnerships............................................................................................................................................5
Section 3: Different business structures and how external factors affect businesses.........7
CONCLUSION..........................................................................................................................................8
REFERENCES........................................................................................................................................10

INTRODUCTION
A company can be defined as a legal entity that is formed by a group of individuals to
operate a business enterprise, which can either be industrial or commercial (Brennan,
Canning and McDowell, 2020). Different companies have different purposes such as
offer high-quality products to the customers, enhance profitability, gain a competitive
advantage, innovation etc. as well as core values. A company has a separate legal
entity and is separate from its members. There are different types of companies such as
small, medium and large. And all these three types of companies have different ways of
conducting their business operations. The report provides an explanation about the
different types of companies as well as their characteristics. It also provides a
description about the different business structures as well as how organizational
structure affect the overall productivity of the business. Lastly, there are different
examples that are included in the report to help the readers develop a better
understanding.
Section 1: Different types of companies and how they work
The different types of companies along with their characteristics are explained
below -
Micro Business
A micro business is a type of business that employs less than 10 people that
require setting up financial, marketing, management as well as operations just like any
other business (Brown, Bocken and Balkenende, 2020). Micro businesses are taxed
depending on the type of business. And the owner of the business is required to pay
taxes as well as salaries to the workers. The operations within a micro business are
simple and there is an opportunity of growth. But since the scale of the business is very
small, it can be a little difficult for the owner to get a loan. There are many micro
businesses in the United Kingdom and one such business is Boss Brewing Company.
The business is one of the few women-led businesses in the United Kingdom.
Small Business

A small business can be defined as a privately owned corporation or partnership
that have less than 1500 employees. One of the common characteristics of a small
business is that the owner is willing to take risk. Such businesses are driven to succeed
and achieving goals. Small business owners who are successful, know how to seek
advice from experts in the industry (14 Common Characteristics of Successful Small
Business Owners, 2020). Small businesses usually have one owner and thus, it is
known as sole proprietorship. All of the major decisions are taken by the owner and
since the size of the business is small, the dependency on technology is also very little.
Cafepod Coffee Co. is one example of small business that is focused on offering high
quality coffee to the customers. The business was established in the year 2011 and
offers a variety of coffee products such as whole bean, ground coffee, Nespresso pods
as well as brew at home kits.
Medium Business
Medium-sized businesses can be defined as businesses that have up to 250
employees and these types of businesses are generally family-owned. The
management in medium-sized businesses is informal and the employees are normally
expected to do their duty while the owners of the business have to do most of things
and also make important decisions. Owners of small and medium businesses are
passionate and they are good at dealing with customers. For example, Eggfree
Cakebox is a medium-sized business that is based in London, United Kingdom. The
business sells different types of cakes, all of which are egg free as the family members
of the founder follow a strict lacto-vegetarian diet. Medium businesses generally
represent a source for entrepreneurship abilities, innovation as well as creation. There
are a lot of medium business enterprises in the UK as the government supports such
businesses.
Large Business
Large businesses are another type of business that employ at least 5000
employees and offer a wide range of products as well as services to the customers.
Such businesses have a complex hierarchy as compared to small or medium-sized
businesses. Besides this, large businesses are characterized by a large number of

clients, business contacts as well as communication (Huang, 2020). Such businesses
operate across various geographic locations, both domestically as well as internationally
and also, have latest technology installed within the workplace in order to ensure that
the business operations are conducted in an effective manner. Large businesses have a
structured hierarchy and different employees who are responsible for carrying out
different tasks. Marks and Spencer is an example of a large business within the UK.
The company was founded in the year 1884 and is a leading multinational retailer of
clothing as well as household products to the customers. The company has a large
base of customers across the world who are loyal to it.
Section 2: Different companies from sole traders to cooperatives and
Limited Liability Partnerships
Sole Trader Business
A sole-trader can be defined as a self-employed person who owns as well as
runs their business. Such businesses do not have any legal identity besides their owner
and thus, all of the profits are possessed by the owner and they don’t have to share it
with anyone else (Niskanen and Rohracher, 2020). This also means that the owner of
the business is responsible for making important decisions and taking risks in order to
ensure the success of the business. Also, there is absence of adhering to any kind of
government regulations and the sole trader is responsible for managing all the
operations of the business. For example, freelancers and self-employed tradespeople
can be cited as examples of sole trader businesses.
Partnership
Partnership is another for of business that can be defined as a formal
arrangement by two or more people in order to manage as well as operate a business
and share its profits. In a partnership, the minimum number of parties required is two. It
is important for the parties in a partnership to have a similar interest so that the
business operations are conducted in an effective manner (Sadou, Alom and Laluddin,
2017). Both the partners in a partnership business have the liability of handling the

business. Marketing Runners can be cited as an example of a partnership business in
the United Kingdom.
Limited Liability Business
A limited liability business can be defined as a type of business that is primary
meant for private businesses. The operations of an LLC are managed by the managing
members. Since there is no board of directors, there are no requirements for holding
regular board meetings. This type of business has a different identity from its owners
and the members of a LLC are only responsible for the acts of the other partners of the
business. The formalities for formation as well as filing are very simple for such type of
businesses.
Public Limited Liability Business
A PLC designates a agency that has provided shares of inventory to the majority.
The buyers of those shares have restrained legal responsibility (Shin and et.al., 2018).
The minimum number of shareholders should be (a non-public confined organization
handiest needs one shareholder) Accounts must be filed within 6 months of the 12
months cease (the restrict is 9 months for a personal enterprise) The Company
Secretary should be a certified individual (in a personal business enterprise the
secretary does now not want to be qualified). This type of businesses are led by a board
of directors and the business collects capital through the sale of its shares.
Cooperative
A type of enterprise operation that proclaims the business as a separate, legal
entity guided by a set of officers known as the board of administrators. A company
shape is possibly the maximum high-quality manner to begin an enterprise due to the
fact the enterprise exists as a separate entity. The main purpose of this type of business
is to realize the economic, cultural as well as the social needs of the members of the
organization (Thorlakson, de Zegher and Lambin, 2018). Common examples of service
cooperatives include finance, insurance, utility, housing as well as health care
businesses. One of the main characteristics of a cooperative is that they have a
democratic structure and an equitable distribution of the economic results.

Section 3: Different business structures and how external factors
affect businesses
An organizational structure can be defined as a system that outlines how certain
activities within the organization are directed in order to achieve goals as well as
objectives. These activities can include roles, rules as well as the responsibilities of the
different employees within the workplace. There are different types of organizational
structures depending on the type of business of the organization. The four general types
of organizational structures are functional, matrix, divisional and flat. A functional
organizational structure can be defined as a type of structure wherein the staff members
are grouped based on their specific knowledge as well as skills. One of the benefits of
this type of organizational structure is that there is coordination among the workers at
the workplace. Divisional organizational structure is a structure wherein each
organizational function is grouped into a division (Wu, Dluhošová and Zmeškal, 2021).
The division comprises of all the necessary functions as well as resources to support
the product line. Matrix organizational structure is where the employees report to two or
more managers instead of one manager overlooking every aspect. And lastly, flat
organizational structure is an organizational structure with very few or no levels of
middle management between the executives as well as the staff members.
Organizational structures can affect the productivity of the business to a great
extent. This is because an organizational structure sets the hierarchy for responsibility
within the workplace and also creates various levels of communication for the
employees. Besides this, an effective organizational structure promotes creativity and
ideas among employees that can be implemented in order to improve the overall
efficiency of the company. They also promote growth of the organization and helps it in
gaining a competitive advantage against the competitors.
PESTEL Analysis
Political Factors – The political stability of a country can have a significant level
of impact on the performance of the business. Other political factors that can affect the
performance of the business include corruption, tax policy, corruption, government
policy, labor law etc.

Economic Factors – These factors determine the performance of the economy
of a country. The factors can either have a positive or negative impact on the
performance of the business (Zellweger, 2017). Examples of economic factors include
interest rates, inflation rates, unemployment rate and exchange rates.
Social Factors – These factors include the level of education, lifestyle attitudes,
age, gender etc. If a business does not take these factors into account, there can be an
effect on the overall levels of productivity as well as profitability of the business.
Technological Factors – Advancements in technology have changed the way in
which businesses conduct their operations. These factors include automation,
innovation, research and development activities as well as the amount of awareness
about technology.
Environmental Factors – People are increasingly becoming aware about the
harm that is being caused to the environment. As a result, companies are implementing
various measures in order to build a sustainable business (Galea, 2017). This can help
in enhancing the overall performance of the business by attracting more customers.
Legal Factors – All organizations operating within a nation are expected to
adhere to different types of legislations in order to run their operations smoothly. Some
examples of these legal factors include copyrights and patent laws, health and safety
laws etc. It is important to comply with these legislations to build a successful as well as
profitable business.
CONCLUSION
From the above report, it can be concluded that there are different types of
businesses such as sole proprietorship, partnership, cooperative etc. And each of them
has their own characteristics. Besides this, there are also micro, small, medium as well
as large businesses that differ from each other on the basis of the scale of their
operations as well as number of employees. Organizational structures are an important
part of companies and help them in enhancing the overall productivity as well as
efficiency within the market. They also contribute to the overall productivity of the

company to a great extent. Lastly, various external factors such as political factors,
social factors, technological factors etc. can also affect the performance of a business.

REFERENCES
Books & Journals
Brennan, R., Canning, L. and McDowell, R., 2020. Business-to-business marketing.
Sage.
Brown, P., Bocken, N. and Balkenende, R., 2020. How do companies collaborate for
circular oriented innovation?. Sustainability, 12(4), p.1648.
Galea, C. ed., 2017. Teaching business sustainability: From theory to practice.
Routledge.
Huang, Y., 2020. The Relationship between the Impact that Customer Satisfaction has
on Service Companies' and Product Companies' Revenue. Frontiers in
Economics and Management, 1(12), pp.20-22.
Niskanen, J. and Rohracher, H., 2020. Passive houses as affiliative objects: Investment
calculations, energy modelling, and collaboration strategies of Swedish housing
companies. Energy Research & Social Science, 70, p.101643.
Sadou, A., Alom, F. and Laluddin, H., 2017. Corporate social responsibility disclosures
in Malaysia: evidence from large companies. Social Responsibility Journal.
Shin, K. and et.al., 2018. Measuring the Efficiency of US Pharmaceutical Companies
Based on Open Innovation Types. Journal of Open Innovation: Technology,
Market, and Complexity, 4(3), p.34.
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sustainability through global supply chains. Proceedings of the National
Academy of Sciences, 115(9), pp.2072-2077.
Wu, X., Dluhošová, D. and Zmeškal, Z., 2021. Corporate Social Responsibility and
Profitability: The Moderating Role of Firm Type in Chinese Appliance Listed
Companies. Energies, 14(1), p.227.
Zellweger, T., 2017. Managing the family business: Theory and practice. Edward Elgar
Publishing.
Online
14 Common Characteristics of Successful Small Business Owners. 2020. [Online].
Available through:< https://www.gilroygannon.com/14-common-characteristics-of-
successful-small-business-owners/ >.