Types of Companies and Their Characteristics

This article discusses the various types of companies and their characteristics. It covers micro businesses, small businesses, medium-sized businesses, and large-sized businesses. It also explores the different types of companies, such as sole traders, partnerships, limited liability businesses, public limited liability businesses, and cooperatives. Additionally, it examines the impact of organizational structure on business productivity and the influence of PESTEL analysis on business performance.

Types of companies

Table of Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
Task 1...............................................................................................................................................3
Types of business and their characteristics..................................................................................3
Task 2...............................................................................................................................................4
Types of companies and their characteristics..............................................................................4
Task 3...............................................................................................................................................6
Organisational structure and their impact upon business productivity........................................6
PESTEL analysis and their impact upon business performance.................................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................8

Introduction
Company is a legal entity which is established by the owner of business. The name of
company describes the business, products and services. Company profile includes the aim,
mission, and objectives, working performance, resources and many things of company.
Company profile covers all information about the company (Lizarelli, Toledo and Alliprandini,
2019). There are many types of companies and the size of company is determined by the number
of employees it has and the average revenue earned by the company. Morrison is a chain of
supermarket which is founded by William Morrison in the year 1899. Its Headquarter is located
in Bradford, England, UK. The following report covers types of business and their
characteristics, types of companies and their characteristics, different organisational structures
and PESTEL and its impact upon business performance of Morrison.
Main Body
Task 1
Types of business and their characteristics
Micro business- Micro businesses are those businesses which have less than 25
employees and they earn $25,000 annually at an average basis. It plays an important role UK’s
economy to grow (Krchová, 2019). This business is generally operated by family members and
the head of the family is the owner of business. Fourex Company is the example of micro
business.
Characteristics of Micro business-
 Micro business has fewer employees hence they did not form department and work
according to their interest area.
 The powers to take decisions are in few hands. Therefore, it consists to quick decision
making process.
Small business- These businesses generally have more than 25 employees and less than
100 employees. They basically produce local products and directly sell it to their end customers
without involving intermediaries. Marshfield Bakery is the example of small business in UK
which has 85 employees.
Characteristics of small business-
 They fulfil the customer needs and wants of purchasing local and traditional products.

 Small business has fewer turnovers. Therefore the salaries of their employees are less.
This will impact upon hiring skilled employees. They are unable to hire skilled
employees because they are unable to provide high amount of salaries to their employees.
Medium size business- These businesses has more than 100 employees and less than
250 employees. These are the businesses whose main aim is to expand their business
internationally (Thorlakson, de Zegher and Lambin, 2018). There is enough number of
employees to form departments in organisations. Hence, they have different departments like
marketing department, HR department, Finance department and many others.
Characteristics of medium size business-
 They can hire skilled employees according to requirement of their departments.
 They are usually considered as fast growing business for UK’s economy.
Large size business- These are the businesses which has more than 250 employees.
These businesses have its branches in different countries to perform their operational functions.
They earn large amount of profit and they hire skilled employees and even experts for their
business functioning. They produce goods in bulk. Morrison is the example of large sized
business.
Characteristics of Large size business-
 They have modern and advance technology to produce their products.
 They play an important role in increasing reputation of country by expanding their
business worldwide.
Task 2
Types of companies and their characteristics
Sole trader- These are the companies which is owned and handled by a single person.
This is also called one employee company where all decisions and business activities are done by
the single person (Beckerich, Benoit and Delaplace, 2019). Ma bakery is a sole trader bakery in
UK which is owned by single person.
Characteristics of sole proprietorship-
 They are having unlimited liability which means the owner of this company have to pay
its debt even by selling their personal property.

 Finance and funds is arranged by its owner alone and profit and loss will be shared by the
owner alone.
Partnership- These are companies which are formed by two or more owners. Here,
owners come in partnership by partnership document to form a single business. All decisions and
business activities are shared among partners. Investment in business is also shared among all
partners. Marks and Spenser is a famous company which is formed after the partnership of
Thomas Marks and Michael Spenser.
Characteristics of partnership-
 Profit and loss are shared by partners in the same ration in which they invested in
business (Lim and Pope, 2020).
 All decisions are taken after agreeing of every partner and it has unlimited liability. Their
partners have to pay companies debt even by using their personal property.
Limited liability business- These businesses are same as partnership business and sole
proprietorship business but the only difference is that partnership and sole trader business has
unlimited liability and limited liability business as its name suggests, it has limited liability
which means its owners are not supposed to sell or use their personal property to pay their
company’s debt. Anderson Enterprises is UK based IT company which is a limited liability
company.
Characteristics of LLB-
 Owner of this business can enjoy limited liability feature.
 They can hire employees according to their skills and requirements of companies.
Public limited liability business- These are the companies who offer and sell their
shares to general public and their shareholders together decide that who will be involved in board
of directors and who will be not. All decisions are made by board of directors which is appointed
after voting system by their shareholders (Johansson and et. al., 2019). It is compulsory for
Public limited companies to mention ‘PLC’ at the end of their company name. Associated British
Foods Plc is the example of Public Limited Company.
Characteristics of PLC-
 Their members can enjoy the limited liability feature of these companies.
 They have many employees that they can manage their business functioning by having
departments and each department is supervised by supervisor.

Cooperatives- These are the companies which is generally opened for the benefit of
weaker section of people by providing them goods and services at lowest cost (Mijatovic,
Maricic and Horvat, 2019). Here, the customers are only the members who invested in this
business. Board of directors are also elected by the members only. Central government co-
operative is the example of cooperative business
Characteristics of Cooperatives-
 Their products and services are only used by their members and no outsider is allowed to
use the products of cooperatives rather than their members. In case someone is interested
in cooperative company’s products then that individual has to become its member first.
 It is formed by lower section of people. Hence, it requires low investment as compared to
other businesses.
Task 3
Organisational structure and their impact upon business productivity
Functional organisational structure- Here employees are grouped according to their
skills and knowledge. Same skilled employees are grouped into same departments and other
skilled employees are grouped into another department. For example marketing skilled
employees are employed in marketing department only and financial skilled employees are
employed in financial department only (Yang, Dolar and Mo, 2018). Each department is
assigned with supervisor who looks the performance of employees. This organisational structure
helps in increasing employee’s performance and overall productivity of company because same
tasks and activities are distributed according to the talents and skills of people. Hence, they can
perform with full specialization and can achieve organisational goal on time. In context of
Morrison, they follow this organisational structure because their employees are grouped into
department wise and they are having a manager in each department who looks after their
assigned departments performance and productivity. Here, employees are hired according to the
skills they have to fulfil vacant job position related to department.
Divisional organisational structure- Here, employees are grouped in a similar group
to achieve a single project. Here, those people are grouped whose skills are required to complete
a given project or task. It is not necessary that each employee has same skills and talents. They
may have different skills but they are grouped together to just completion of a given project

(Faria and et. al., 2020). It is useful to achieve organisational goal by increasing productivity
because it consist to form group after analysing project characteristics that what type of skills it
required to complete the project then companies grouped employees and a variety of skills will
help each other to complete the project on time.
PESTEL analysis and their impact upon business performance
Political factors- It covers tax rates, government regulations, political; stability and
many others. In context of UK, they are having political stability and they have few government
restrictions on the trades of UK based companies. Hence, it is beneficial for Morrison to export
their goods and services easily to other countries and helps in expanding their business. On the
other hand they have high corporate taxes which are around 19% and their government is
planning to have 25% corporate tax for the companies of UK which directly impacted upon the
business by reducing their retained earning which they receive after paying taxes while paying
high taxes.
Economical factors- It cover unemployment rate, inflation rate, corruption rate, growth
of economy and many other factors (Lam and Wong, 2018). In context of UK, they are known
by their good economical growth. They have good infrastructure at their country which helps
companies to increase their production and serve to customers easily. Due to Covid 19 Pandemic
their unemployment rate raises up which is not beneficial for their economy as well as for many
companies. Due to these companies face problem to find skilled employees and this directly
reduces the performance of companies.
Social factors- These factors include attitude, purchasing power, beliefs, values and
many more of population of a country. In context of UK, their population is having high standard
of living and they spend their income to develop their life standards. This is beneficial for
Morrison to charge little high for offering qualitative products. On the other hand there are many
strikes held in UK due to discrimination of skin colour, religion, looks and many others.
Therefore it is important for Morrison to convey their messages in their promotions without
pointing out any specific religion of skin toned people.
Technological factors- It include modern and advanced technology in the economy
(Sprague, 2018). UK is popular for their technological condition in whole world because they

have advanced and modern technology. This is beneficial for Morrison to produce their goods in
low cost with high quality and by saving their time. All this happen with good technology of UK.
Environmental factors- These factors include climate, tourism rate, pollution control,
temperature and many other environmental factors. In context of UK, they are having good
tourism rate due to their better condition of climate and weather and arrival of more tourist will
help the Morrison to gain more customers. On the other hand UK is facing many problems
related to their air pollution and they are suffering 8% deaths due to lungs diseases every year
due to air pollutants available in their air to breath. This is hazardous for the health of Morrison’s
employees.
Legal factors- These are the legal laws and rules and regulation of a country which is
made by their government to maintain discipline in their country (Xu and Li, 2020). In context of
UK, they are having some strict employment laws like safety laws which states that safety
measures must be taken by every company to protect the health of their employees like they are
supposed to provide helmets, gloves and other safety kits to their employees who is working in
manufacturing department with machines and tools. Another law is minimum wage law which
states that there should be minimum wage fixed for their employees and if any company found to
provide below this fixed wage rate then they are going to punished by the law. There are many
other laws in UK and all these laws are beneficial for Morrison to perform their business
activities in proper discipline.
Conclusion
From the above information it is concluded that there are various types of companies
and they are identified with the number of employees and the features of the companies. There
are many organisational structures which tell that how company works and it also analyse the
impact of organisational structure on employee’s performance. It is also concluded that PESTEL
analysis is done to identify external factors of a company and it has impact upon productivity and
performance of company.

References
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