Types of Companies

This document provides an overview of different types of companies, including micro businesses, small businesses, medium-sized businesses, and large businesses. It also discusses the characteristics of each type of company and how they operate. Additionally, the document explores various organizational structures and their impact on business productivity. Finally, it includes a PESTLE analysis of a company, examining the political, economic, sociocultural, technological, environmental, and legal factors affecting the business. Study material on types of companies is available at Desklib.

Types of Companies
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
SECTION 1......................................................................................................................................3
SECTION 2......................................................................................................................................5
SECTION 3......................................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
Companies have formed businesses which have become popular in all these years.
Development in companies has made creation of new kinds of companies. Companies are
basically divided on the basis of some factors like members, control and liabilities. In simpler
words company is that form of organisation which is formed by law. It is defined as association
of individuals, formed to perform activities and tasks, have legal existence that is separated from
members and it has a common seal (Gherhes, Vorley and Brooks, 2020).
MAIN BODY
SECTION 1
There are different type of companies which work differently and uniquely as they have
incorporated with different motives and purposes. Some of the companies include micro
business, small business, medium size business and large size business. They are explained
below with their definition and characteristics.
Micro Business
Micro businesses are type of businesses that do activities on a quite small scale. The scale
is defined according to the number of personnel, capital and total sales and profit (Linton, J.D.
and Solomon, 2017). Some of the examples of micro business operating in UK are: Issoria,
Castle Hill Fire Protection Ltd and Manton Cards.
Characteristics of micro business
 Ownership: Micro businesses have the same person as manager and owner. They have
very limited number of employees.
 Market reach: The reach of micro business is local, it deals with local customers and
resources.
 Life span: The nature of operations are very dynamic, their creation and dissolution are
very rapid.
 Administration: The people are not professional, they are basically family members.
Small Business
Small business is privately owned sole proprietorships, partnerships or corporations
which have few employees and have lower revenue as compared to regular sized corporation.
These businesses are defined as small because they are applicable for applying support and
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assistance from government and are qualified for policies of taxes depending on industry and
country (Cribb, Miller and Pope, 2019). Examples of small business are: Davison Canners,
Fourex etc.
Characteristics of small business
 Ownership: Small businesses normally have single owner so they hire limited number of
employees because they work with limited capital and resources.
 Limited reach: The operations of small businesses operate in a very restricted area. They
are shops located in local location and in one area.
 Flexibility: As their operations are limited they are able to change with the changes
happening constantly and suddenly.
 Resources: Small businesses use local resources that are easily available. They use
natural resources efficiently with limited wastes.
Medium Size Business
Medium sized business refers to the business which have employees and capital more
than small and micro business. In this employees and owners are also different (Purnomo,
Suryana and Sari, 2018).
Some medium size businesses are: Verdant Leisure, Captify, John Good shipping and many
more.
Characteristics of medium size business
 Ownership: In medium sized business owners and managers are different. And they
have employees in large number.
 Location: The location of operating activities and tasks of business are fixed. They
operate in single place because their activities are done in large scale.
 Transactions: For the transactions for doing activities and operations they prefer bank
with higher formalities because amounts are high.
 Administration: For doing administration activities medium size business take
assistance and advice from professionals.
Large Size Business
Large size business is an organisation which operates in a very large scale and they have
employees more than 250 employees. The revenue generated by these organisations are very
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large in amount. Some examples of large size business are: HH Global, Acturis, Utilita Energy
etc.
Characteristics of Large size business
 Ownership: In large size business owners are different. It also have board of directors
and have employees in large numbers.
 Life span: In this type of business they do not change their operations quickly and
frequently because their operation are very complex in nature.
 Administration: It has different employees and managers for every department and for
administration department they recruit professionals.
 Market reach: They involve in doing business locally and internationally as they are
involved in trading globally around the world.
SECTION 2
There are other businesses like sole trader business, public limited liability business,
partnership limited liability business and cooperative. They are explained below with their
definition and characteristics.
Sole trader business
Sole trader is also called sole proprietorship, in simpler words it is defined as
arrangement of business in which a single person owns and runs operations of a business.
Characteristics of a sole trader business
 It is owned by one person. The sole trader is responsible for contributing in needed
capital.
 The liability of owner is unlimited because they are responsible for paying debts of
business from self owned property.
 A sole proprietor is free from intervention of government as there are no legal formalities
needed for management and incorporation.
Partnership
Partnership refers to the relation between individuals who have made decision to share
profits to carry out the business activities by all or any one of them acting for every partner.
Examples of business are: Addleahaw Goddard, Farrer & Co etc.
Characteristics of a partnership
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 In the partnership business there is an existence of agreement among the partners who
have decided to take out business.
 The profit earned is shared by partners according to their capital invested in the business.
 To form a partnership business there is a need of minimum two members.
 The liability of partners are unlimited they have to pay according to their share in the
business.
Limited liability business
A limited liability business refers to the structure where owners are not liable liabilities
and debts of a company. It is a hybrid company which combines the characteristics of
partnership as well as sole proprietorship.
Characteristics of limited liability business
 Limited liability company has separate entity from its members.
 The liability of of the members, managers and employees are limited.
 Operations and documentation work are very simple and keeping records are less.
Public limited liability business
A public limited business is a company which provides shares to the public. It simply
means that these members from public could be shareholders of business. It involves activities
related to legal needs.
Characteristics of public limited liability business
 The shareholders and officers are not liable to pay debts of a company. So they have
limited liability.
 The shares of public limited business are offered to the public. Shares can easily be sold
and bought without any rigid restrictions.
 These companies are owned by shareholders but they have no or minimum involvement.
Cooperative
Cooperative is a private business which is controlled and owned by the persons who use
their goods, services or supplies. It vary in sizes of membership and type.
Characteristics of cooperative
 The finances are contributed by members of cooperative through buying shares.
 The cooperative is also organised by the basis of unlimited and limited liability.
 The cooperatives uses capital to do the work in the interest of community and members.
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SECTION 3
Organisational structure refers to the system which outlines the particular activities are
moved in a direction to attain the objectives and goal of a company. This structure has
responsibilities, roles and rules. It provides the channel how information is flowing between the
different level of a company (Al-kfairy, Khaddaj and Mellor, 2019). There are different
organisational structure which are explained below and how they affect the productivity of a
business.
 Functional Structure: It is a structure which breaks the activities of a company on the
basis of expertise and specialisation of employees or workforce. Basically it divides the
organisation into departments like sales, production, marketing and other operational
departments. By dividing the work according to its nature helps in achieving the target
without wasting resources and time. Through this organisations maximise their
productivity without having any issues and problems in operations. M&S may use this
structure to make clarity among employees related to their jobs and responsibilities.
 Divisional Structure: It is structure which is mostly used by large companies which
have many units. This method is preferred so that team with leaders can be made
according to the projects, subsidiaries or products they operate. Mainly it is used for
organisations which have many products line. It assists in operating every unit of
company with their own president. It clearly showcase the duties that need to be
performed by employees. M&S can use this structure and appoint leaders in every
departments which reduces the pressure at one unit and focus on increasing the
productivity.
 Flatarchy Structure: It is a type of structure which is mostly by new start-ups. It simply
means this structure flattens the chain of command and hierarchy and provides a lot of
autonomy to workforce. It helps in making and implementing decisions very fast at the
workplace of an organisation. It improves the productivity of organisations by fast
implementation which helps in achieving targets of production, sales and marketing. It
increases the effectiveness and efficiency of organisations.
 Matrix Structure: It is a kind of structure which is least used by organisations. This
matrix employees across various departments, divisions and superiors. Personnel who are
working in matrix companies might have responsibilities in marketing and sales.
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PESTLE ANALYSIS
The PESTEL analysis helps in addressing political, technological, environmental,
legal and economic issues affecting the business operating in United Kingdom (Nene and Pillay,
2019).
 Political: Marks & Spencer is a brand which its existence in different countries. The
trade agreements of EC's has various benefits to company which has assisted company to
reduce the costs of sourcing. Their products are able to travel in multiple countries
without any taxes and tariffs because of EU market. The company believes in
maintaining good relationship with requirement of government because it is necessary
for success of organisation. If government thinks of increasing tax then it would have
negative impact on sale of goods and products of M&S.
 Economic: An increase in rates of inflation negatively affects the manner M&S operates
in the particular economy's high price for their goods and services. But UK has great
finances which assists in maintaining inflation rate low. This helps in forming strategies
to align providing good quality products and services.
 Sociocultural: M&S is providing trendy products according to the need of youth, older
generation and other people. These changes keep changing according to the needs and
requirements of people present in the market. So it becomes necessary for organisations
to convert these requirements and needs of customers into an opportunity for a business.
 Technological: M&S is using advanced technology to make their different processes
very easily and fast. The latest technology helps in increasing the experience of a
customers with the company. The company is adopting technological advancements
which have reduced the manual process. It has provided flexibility and simplification in
business operations
 Environmental: Marks & Spencer is adopting all the laws and practices which do not
create negative impact on environment like natural resources. They are using their own
policy which is known as Green Policy that assists in communities, planet and well being
of people.
 Legal: The legislations do not remain constant in a country. M&S involves in organising
training sessions which keep employees updated about health and other updates. M&S is
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adopting Health and Safety at Work Act, 1974 to take steps to keep health of employees
significant.
CONCLUSION
From the above given information it has been concluded that there are different type of
companies which have different requirements to incorporate and operate. There also various
organisational structures that assists in increasing the effectiveness and efficiency of a business.
The various external factors have great impact towards the productivity of business.
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REFERENCES
Books and Journals
Gherhes, C., Vorley, T. and Brooks, C., 2020. The “additional costs” of being peripheral:
developing a contextual understanding of micro-business growth constraints. Journal of
Small Business and Enterprise Development.
Linton, J.D. and Solomon, G.T., 2017. Technology, innovation, entrepreneurship and the small
business—technology and innovation in small business. Journal of small business
management. 55(2). pp.196-199.
Darsono and et. al, 2019. Strategic policies for small and medium businesses in marketing
through e-commerce. Entrepreneurship and Sustainability Issues. 7(2). p.1230.
Tuaeva, L.A., Dzilikhova, L.F. and Tadtaeva, V.V., 2016. Current issues of effective interaction
between small and large businesses. Экономика и предпринимательство. (4-1),
p.960.
Cribb, J., Miller, H. and Pope, T., 2019. Who are business owners and what are they doing? (No.
R158). IFS Report.
Purnomo, D.S., Suryana, Y.S. and Sari, D., 2018. The effect of business partnership and
innovation management to business performance of business units of multiplay provider
In Indonesia. Academy of Strategic Management Journal. 17(2). pp.1-12.
Nene, S. and Pillay, A., 2019. An investigation of the impact of organisational structure on
organisational performance. Financial Risk and Management Reviews. 5(1). pp.10-24.
Al-kfairy, M., Khaddaj, S. and Mellor, R.B., 2019. Computer modelling reveals the optimal
development for the organisational structure of business clusters. International Journal
of Knowledge-Based Development. 10(3). pp.249-275.
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