Types of Companies and Their Characteristics

This report examines the different types of companies and their characteristics, including micro businesses, small businesses, medium-sized businesses, large businesses, sole trader businesses, partnerships, limited liability businesses, and public limited liability businesses. It also discusses the impact of external factors on business activities.

Types of companies

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK1.............................................................................................................................................3
Different types of companies......................................................................................................3
Micro business: ...............................................................................................................................3
Different companies from sole traders to cooperatives and Limited Liability Partnerships .....5
TASK 3............................................................................................................................................7
Different type of business structure and its affect on business .................................................7
External business factors that affects its activities......................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The aim of this report is to examine all type of companies and business is described as
the enterprise entity that is involve in the various activities such as commercial, industrial and
professional. There are various types of business that are different from each other such as sole
proprietorship, partnership, limited partnership, corporation and non-profit organisation.
Entrepreneurs have to choose the type of business before starting activities. All types of business
have their own characteristics and challenges. In this report various types of companies and their
characteristics are mentioned. Functional as well as divisional organisational structure are
described. Effect of external factors on the organisational activities are discussed in the project
report.
Section 1: Different types of companies and how they work
Micro business:
Micro business is also termed as the micro enterprise that conduct all business activities
with few peoples. Respective business involves less than 10 people and it started with the small
capital that is borrowed by the bank and other organisations. These types of business provide its
goods and services in the local areas. Micro business provided its services in the retail sector,
construction, social assistance and healthcare sectors. After that, business get licence and run it
in legal manner (Aladwan, 2018). For example- Vermont is the micro business that conduct it
with less than five people. The organisation is found in 1791, headquarter situated in the United
State.
Characteristics of Micro business:
Lower revenue and profitability: Revenue and profitability of the micro business low
in compared to the large organisation because they have limited resources.
Smaller team of employees: Micro businesses are conduct all organisational activities
with few number of employees. Respective business provide products and services to small
market area.
Focus on achievement of goals: The main objective of micro business is to achieve all
defined short, medium and long term goals for that the organisation come in existence. For that
owners review whole processes and changes in order to attain objectives quickly.

Small business:
Small business are conducted at small level that involves less amount of capital
investment, number of employees are less as well as fewer machinery and equipment’s are used
to run business. In the small business 10 employees are working with each other. This type of
business produces respective products and services at small level. These industries are very
important for the development of economy. In this type of business owners invest on the
machinery and plants. Davison Canners and Imaginer is the example of the small business that
conduct their activities according regulations of small business. The respective organisation is
incorporate in 19 April, 1978.
Characteristics of small business:
Limited investment: In the small business, capital is funded by the individual and small
group of individuals. Finance is the major problem of the business that is limited. Mostly small
business is conducted under the sole-proprietorship and partnership form.
Owner management: All functions of the small business is done by its owner own self.
Owner of business manage all functions of business in effective manner.
Labour- intensive: Small level businesses are mostly conduct business by labour-
intensive manner. Instead of latest machinery and equipment, business use manual labour to run
it in efficiently.
Medium size business
The medium size business is described as the family owned business that is controlled
and managed by the leaders with their own mind. (Ambrose, 2017. Medium size business are
come in existence under companies Act. In this type of organisation 250 employees are work in
order to achieve defined goals and objectives. Hello Cleaners is the medium size business which
is established in 2013 by the Paul Leyden and Morgan O'Neill.
Characteristics of medium size business
Innovation capabilities: Medium size organisations have variety of employees who have
skills in the area of management and they are able to innovate and manage organisation in
effective manner.

Networking: Medium business have various types of sources, by using these sources
business can manage all policies that facilitate them to perform more effectively and efficiently.
Large size business
Large size businesses involves a number of members who work with other employees. It
involves 6000 individuals in their management. This business is conduct its activities at large
level and provides goods and services at wide area of market. GlaxoSmithKiln is the large size
organisation that is founded in the 2000 by the Sir Philip Hampton.
Characteristics of large size business
Higher profitability: This type of organisation is able to earn more profit and revenue at
the end of year. As organisation have large resources it utilise them in effective manner and use
technologies in working that enhance profitability level.
High level resources: In large scale business a number of employees are working
together. It contains high level resources, so facilitates it to attain goals in defined time period.
TASK 2
Different companies from sole traders to cooperatives and Limited Liability Partnerships
Sole trader business:
The business of sole-proprietorship is referred as the incorporated business which has one
owner that manage whole organisational managerial as well as operational functions and
activities. The sole-proprietor deal with all income tax functions too(Sole trader business,2021).
Whole profit id earned by the owner, there is no distribution is done among various people.
Barclays is the business that is conducted within the sole-proprietorship format. Barclays is the
multinational investment bank which is established in 1690. headquarter of organisation is
situated in the London, England.
Characteristics of sole-proprietorship
Free from formalities: It is not required for the sole-proprietor to meet all legal
requirements (Ayala, 2017). Sole-proprietor start business activities unless it is necessary to get
licence in that particular business.

Unlimited liabilities: In the sole-proprietorship, sole-proprietor liabilities are unlimited.
In the situation when business assets are enough to pay liabilities then he is obliged to pay it
from his personal properties.
Sole management: Sole traders manage all organisational activities own self. In the sole-
proprietorship owner manage all organisation functions and operations by own self. All decisions
are taken by owner.
Partnership
The tern partnership is used to describe a business structure in which two or more
individuals, come together to conduct an undertaking that is run by the partnership laws and
these partners are agreed to work together in order to share all profits and losses that are raised
by the business(Partnership,2021). All organisational functions are performed by all partners or
some of them on the behalf of others.
Characteristics of partnership
Sharing profits and loses: In partnership firm all profits and losses are distributed in the
ratio of capital and according to partner ship deed. If there is no agreement between partners
then all profits and losses are divided in the equal ratio.
Membership: In the partnership firm at least two members are required and the
maximum limit is 100 members. There is a legal contract between all partners that contains all
policies and information about partnership, this is called partnership deed.
Limited liability business:
Limited liability business is termed as the combination of ordinary segment of partners as
well as limited partners. Basically it is type of legal structure of respective organisation in which
businesses losses are not exceed then the invested capital of partners. In this business owners and
investors private assets are not liable in the situations when business face continue losses.
Characteristics of Limited liability business:
Limited liabilities: In the limited liability business, employees liability is limited to their
capital amounts of partners. They are not liable to pay business losses from their private
properties, as their liability is limited.

Simplicity in formation and operations: It is very easy to formulate this business\. The
procedure of incorporation is quite simple and there is no more legal requirements to be
fulfilled . Operations are respectively simple of this business.
Public limited liability business:
Public limited business is termed as the limited liability business that offers its shares to
the general public(Jordon, 2019). Stock of respective business is being acquired by anyone by
the initial public offerings and by the trade in the stock markets(Public limited liability
business,2021). A public limited company is followed all rules and regulations strictly in order to
publish it appropriate financial statement to its shareholders. Capital PLC in the public limited
private business which is founded in the 1984 and headquarter situated in the London, England.
Characteristics of public limited liability business
Paid up capital: The paid up capital of the public limited business is 5 lakhs minimum
and the maximum amount is described under the act of business.
Name: It is required to add public limited at the end of company name. By this it is
identified that it is the public company.
Directors: As per the company act, the public limited company have 3 directors and
there are no restrictions on the maximum limit of directors.
Corporative:
The corporative is defined as the independent association of various individuals and
group of members that follow all managerial functions such as economic social and cultural
activities (Tuve, 2019). Corporative have the various goals at all levels. It is basically related to
political systems under which various principals of economic function, banking as well as labour
are included. National building society which headquarter is situated in the United Kingdom.
Characteristics of corporative:
Voluntary membership: In the corporative society everyone can take part by voluntary
system. It provides various benefits to members who are involve with the organisation it
provides them finance facilities at low interest rates.
Open membership: In the corporative society, there is no any specific rules and
regulations that are not prohibited the entry of the members. So it facilitates open membership
option to its members.

TASK 3
Different type of business structure and its effect on business
Organisational structure:
Organisational structure is referred as the system that direct organisation to how to
conduct all activities in structural manner in order to achieve all defined goals and objectives. It
defines a specific structure in which all required information is flow in the all level of
organisation (Meager, 2017). Like centralise structure of organisation, all decisions are flow
from the top level. There is various type of organisation structure is used by the organisation
according to their business activities and its type and these structures also affect the productivity
of bushiness. These types are discussed below:
Types of business structure:
Functional structure: Functional structure is defined as the structure in which all
organizational structure is divided into the smaller parts and some specific task and roles. As
organisation divides its functions in the marketing, finance and information technology. Tesco
use the functional structure which is founded in 1919 by the Jack Cohen. In Tesco each and
every department has their own managers who are responsible for its activities. All works are
allotted in the members according to their skills and capabilities. This structure of respective
organisation facilitates the organisation to improve its productivity because all departments
complete their work in efficient manner.
Divisional structure: Divisional organisational structure is referred as the structure in
which on the bases of various factors department are formed. These factors are function, product.
Project, combination approach and geographical territory. In this respective structure Tesco
divides in all activities in various divisions that have their own marketing, finance and human
resource department. (Murmura, 2018). These divisions are able to complete their work without
any disturbance of any other department. Each department conducts its activities separated from
other one. By adopting this structure organisation is able to perform all task efficiently and
enhance the overall productivity of that particular organisation.
External business factors that affects its activities
Internal and external factors are two types of forces or factors that affect the performance
of company. External factors included those factors which affect the company from outside. The

management cannot control these factors. It also impacts on the productivity and profitability of
company. For controlling these external factor organisation industry uses PESTLE Analysis.
Political factors: Political factor includes various Government policies, corruption,
foreign trade policies and political stability and instability. All these factors affect Tesco
performance. These are properly examined and formulate various strategies accordingly in order
to overcome their negating effects.
Economic Factors- Economic factors includes economic growth, inflation rates, interest
rates and exchange rates that have positive as well as negative impact on Tesco performance.
These factors are continuously monitored and effective planning are prepared by the respective
organisation to enhance its performance in efficient manner.
Social Factors- It represents various demographic characteristics, income distribution,
lifestyle attitudes and cultural barriers that have direct and indirect impact on the Tesco
functions.
Technological Factor- this involves changes in technology, innovation, automation,
research and development factors. Tesco enhance all technological factors in order to survive in
the competitive environment and help to increase organisation performance.
Environmental Factor- Environmental factors involves climate conditions changes in it
and weather condition that affect the functioning of Tesco. So, these factors are examined closely
and develop effective strategies to overcome their negative impact.
CONCLUSION
As per the above report, it can be concluded that there is various type of businesses are
available such as sole-proprietorship, partnership and limited liability business and many more.
All business has their own characteristics and regulation that are followed by the organization.
Business as well as organisational structure facilitates organization in order to improve their
performance and productivity level as well. Various external factors also effect the decision
making and productivity of organisation, so these factors are being evaluated appropriately.

REFERENCES
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with regard to intangibles. Management Decision.
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Cleaner Production, 174, pp.691-700.
Tuve, R., 2019. Allegorical imagery: some mediaeval books and their posterity (Vol. 5416).
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Online
Public limited liability business.2021 [Online] Available through
:<https://www.iedunote.com/public-limited-company>
Partnership.2021 [Online] Available through
:<https://www.entrepreneur.com/encyclopedia/partnership>
Sole trader business.2021 [Online] Available through :<https://www.deskera.com/blog/sole-
trader/>