Types of Companies and Business Structures

This report explores the different types of companies and business structures, including small business, micro business, medium scale industries, large scale industries, sole trader business, partnership, limited liability business, public limited liability business, and cooperative. It explains how these companies work and their characteristics. The report also discusses different business structures like hierarchical structure, matrix structure, functional structure, and divisional structure. Additionally, it examines the impact of political, economic, social, technological, legal, and environmental factors on businesses.

TYPES OF THE
COMPANY

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
TASK 1 ...........................................................................................................................................3
Different types of companies and how they work......................................................................3
TASK 2............................................................................................................................................5
Business Structure ......................................................................................................................6
PESTLE ANALYSIS..................................................................................................................7
CONCLUSION ...............................................................................................................................8
REFRENCES...................................................................................................................................9
Books and Journal.......................................................................................................................9

INTRODUCTION
The aim of this report to examine about the different types of company. A company is a
legal entity which is developed or defined by a group of people to involve the person and
activities in order to run and direct the business. In other term a company is an entity which is
made by team of association in order to operate, perform together so that they can achieve their
aims and objectives (Abrell and Karjalainen, 2017) . This report is going to explain about the
types of companies and what are external factors that create impact on the organisation in
regards of growth and improvement.
TASK 1
Different types of companies and how they work
Small Business:
Small business is owned sole proprietorships, corporation, partnership which have less
number of workers and less revenue. Small business operates on a small scale and produce and
manufacture the goods and services at a very small level (Winterbottom, 2016). Small level
industries include guest house, bakeries and many more. In this small business range is fifteen
workers under the work act. The number of employees are 10 to 50 in small organisation and the
turnover is above £2 million and less than £10 million.
Characteristics of small business
 They are much flexible because they acquired quickly to several factors which
play a huge role in routine management of the company.
 The owner of the small scale industries are much profit motive or profit
conscious. They always make their efforts and trying to make or keep high
margin in the pricing.
 This is set by the one man means the activities and operations of the company is
carried out by the of director.
Micro Business
Micro business refereed to small scale business in that the number of the workers is less
than 9. The turnover of the organisation is very less. Micro business is going through with
several challenges and issues. As they have few resources and low financial stability in the
industries. They have to face the problems in context of acquiring the bank loans because of the

less financial backup. Example of micro business is canteen, art and craft shops, trading stores,
food business and many more. In micro business the numbers of the employees are under 9. In
the range of the workers are under nine. The turnover is less than £2 million in micro business
organisation.
Characteristics of Micro business:
 They have small market area as compared to larger private business. They serve single
communities like convenience outlet in a rural township.
 Micro business prefers to coordinate or setup as sole proprietors and limited liabilities
company.
 They have less revenue and profitability as compared to large scale industries.
Medium Scale industries:
Medium size business considered or include maximum 250 employees in the company.
They are the one whose own amounts go down under certain limits (Beck and Lenhardt, 2019).
Medium size business considered as larger than small business and smaller than large scale
industries. There are few examples of medium scale industries leather goods, manufacturing,
Talcum powder production and Aluminium door and window manufacturing. The employees in
medium scale industry is among 50 to 250. The turnover is above £10 million and is less than
£50 million.
Characteristics of Medium Scale industries
 Medium scale industries operate their company independently means they have freedom,
they are not depending on any company or any person.
 They are bound with minimum or limited resources and they have few external supports
as compared to large scale industries. External supports are like share holders, stake
holders and many more.
Large Scale Industries
Large scale industries advert to huge quantity of power and they have large number of
employees in the company. They required large amount of capital investment in order to operate
the business at very huge scale. These company also follows and operated on international level
for operating their business. There are example of large scale industries and these are steel
industries, textile industries, auto mobiles industries and many more. In large scale industries

the range of workers is more than 250 individuals and large scale industries have an average of
$7 million in annual receipts.
Characteristics of Large scale industries
 They develop and generate capital and basic products that includes chemicals, machines
and instruments.
 They are much effective and capable of generating funds in order to do investigation and
development for new technologies and trends.
 They purchase and buy the goods in bulk because of heavy requirements in the market.
TASK 2
Sole trader business
Sole trader business advert to, when the individuals run their business or organisation by
their own. The owner of the company is only responsible for their losses and profit. They
maintain and manage full control on their business. They retain entire profitability of the
business. On the basis of the government policies, 76% of British business are sole traders. They
alternatively known or called the self employed in UK.
Characteristics of Sole trader business
 They have unlimited liabilities means when the assets of the business are not sufficient to
pay off all the organisation debts than the owner of the business have to pay from their
own.
 They enjoy all entire profit as they are the owner of the company so they have rights to
enjoy all the benefits of their hard work.
 They have freedom of work and capability of quick decision.
Example: The company Warehouse. salons, general stores, sweet shops, small retailers and
many more.
Partnership
Partnership is an agreement among two or more individuals in order to see the operations
of the business and share the profits and losses of the business. In partnership, the members of
the company share all profit and liabilities of the business (Bichurova and Yordanova-Dinova,
2018). There are several types of partnership on basis of objectives, on the basis of tenure, on
the basis of nature and on the basis of legality.
Characteristics of Partnership

 The liabilities of every partner for the business is unlimited. The creditors of the business
have rights to retrieve the organisation debts from the personal property.
 They have no private or separate entity.
Example: Levis and Pinterest, Red Bull and Go pro.
Limited Liability business:
Limited liability business is a business framework in the U.S. Where the organisation is
not personally susceptible for the organisation debts or liabilities. They are crossed entities which
combine the features of a corporation with partnership. In this The organisation or business is a
separate entity.
Characteristics of Limited Liability business:
 They have limited liabilities to their members of the company. In that where partners of
the company may obligated for the activities and action of the other partner.
 Forming an Limited liability business and the documents which are required are much
simple.
 This is most effective method to start a business or any company.
Example: Offshore company LLC . LLC stand for Limited Liability business
Public limited liability business:
Public limited liability business is a type or kind of business which share a limited
liability to the public which is general (Hakim and Sugianto, 2018). They have the capabilities to
increase financial stability by sharing capital. The shareholders which are present in the company
have limited liabilities. This also helps them to gain more opportunities. Example British
petroleum company limited. The business having a small numbers of shareholders like 50
shareholders in United Kingdom.
Characteristics of public limited liability business
 They increase the capital by public issues of shares, this is the most effective and
advantageous feature of public limited liability business.
 They cater or provide expansions and growth opportunities to the company.
 The liabilities of the members are limited in this.
Cooperative

Cooperative is a private organisation that is managed by the one person who apply their
goods and services. This also cover membership size so that they meet and reach with the goals
and objectives of the members.
characteristics of cooperative
 They have limited interest on the capital and they have equal rights and actions voting.
 They are very service motive because their main objectives of catering resources and
goods.
Example: Grocery Co-ops are well known example of cooperative. there few more examples and
that is Central England Co-operative, Heart of England Co-operative Society.
TASK 3
Business Structure
Business structure provide and give particular structure to a company so that they can
manage and make the environment of the company organised. There are mainly few kinds of
organisational structure matrix structure, Flat structure, functional structure and divisional
structure and many more (Jones and Wang, 2019). The Sainsbury company follow the
hierarchical structure in order to control the employees and staff of the organisation according to
levels. In this each level is the duty of the above level of the organisation. They also adopted
matrix structure because it is much flexible and also this give permission to the company to
acquired and adopt different conditions of the company. As McDonald company use divisional
struture in order to run their business. In this kind of structure the business is divided into
Components which are responsibilities based on operations needs. As apple follows functional
Structure because the workers of the company are also called as Unitary organizational form and
that is state as function organisation.
PESTLE ANALYSIS
Pestle analysis is refers to political, economic, social, technological, legal and
environmental factors. These are the external factors which create impacts on the company in
both ways as positive or negative. So the concept of pestle analysis helps or support the company
to identify the external factors so that they can achieve growth and get more opportunities for the
company and also help them to avoid the threats and barriers from the company which is related
to external factors.

Political Factors: As Sainsbury is retailing company which are working on international
level so it is much influenced by the Political factors because in several countries the political
and government is not stable so that have to face several issues and challenges regarding norms
and laws. As they have to adopt all the norms and requirement of each nation so these may create
impact on the company in order to achieve and develop themselves. As the government of the
UK nation is stable so in that case it create positive impact because they have stable rules and
policies so that they can run or direct their business with stable rules and polices. There is
stability in the political condition of UK and that helps Sainsbury's to operate effectively and
achieve the goals and objectives.
Economic Factors: These factors are those that engage all the factors which create
impacts on the economy of the nation or economy of the business. As the company Sainsbury
operated on multinational level so they have to face several issues which is connected to demand
and supply of the goods, policies which is connected to taxes and other modification in the
economy (Ko, Ting and Fujita, 2019). The country UK is a much dependent on the economy so
this may affect the company. Sainbury's is investing in country that are developing that will help
them to grow. This will also help in economic growth of the country.
Social Factors: The modification and alterations in the trends of socialism the
requirements for the goods has been increasing in the nation so this affects the business and
create opportunities for them. The another factor is the individuals become much conscious
about their health issues so this can create negative impact on the company towards their growth
and development. Sainsbury's identifies the needs and wants of customers and serve them as per
the requirements. It helps the company to earn more profits.
Technological Factors. Due to changes in trends and taste of the consumers, it is become
much required and important for the company to become more innovative and creative in the
market in order to achieve and get more opportunities for the company. They have to face some
issues regarding adopting the new techniques because for adopting new techniques online
business and one day delivery of the goods and for the implementation of the techniques they are
required to hired more skilled and innovative employees in the company (Roshchanka and
Evans, 2016). These things create impact on the cost and on HRM team of the company. In
relation to technology they provide online selling option to its customers and grab the
opportunity of online selling.

Legal Factors: The norms and rules which are made by the government can also create
impact on the financial stability of the company. The laws like minimum pays of the employees,
regarding their health and safety (Shahin, Barati and Geramian, 2017). The major impacts of
legal factor are as they are operating on international level so every countries have different laws
and policies to operate the business. So adopting all the policies and followed them is create
effects on them. There are few negative impacts on the company which is related to minimum
pays in that if the company is suffering from any losses in that case too they have to pay the
salary or wages to their employees. The positive aspect of legal factors is because of these
factors the workers of the company feel more secure and safe.
Environmental Factors: The company Sainsbury is working on minimising their egress
ion of carbon by 60% so that they can handle the pressure of the government in order to maintain
the environment of the country. The company understands the importance of working in the
environment sustainable way. As it helps to create a strong and positive image of business in
front of customers.
These are the factors which create impact on the company while operating on different
nations and expanding their business.
CONCLUSION
From the above mentioned report, it has been concluded that There are various types of
company in order to operate and start the business. As every kind of business has their own
characteristics and advantage in order to grow and develop. Moreover, there several business
structure also which is adopted by the management team of the company in order to manage and
maintain the structure and environment of the company. This report is conduct a pestle analysis
in order to identify the negative and positive impacts of external factors on the company.

REFRENCES
Books and Journal
Abrell, T. and Karjalainen, T.M., 2017. The early stage of internal corporate venturing:
Entrepreneurial activities in a large manufacturing company. Journal of enterprising
culture, 25(01), pp.1-30.
Beck, D. and Lenhardt, U., 2019. Consideration of psychosocial factors in workplace risk
assessments: findings from a company survey in Germany. International Archives of
Occupational and Environmental Health, 92(3), pp.435-451.
Bichurova, I. and Yordanova-Dinova, P., 2018. Company innovation policy and
strategy. Knowledge International Journal, 28(5), pp.1517-1520.
Hakim, L. and Sugianto, S., 2018. Determinant profitability and implications on the value of the
company: Empirical study on banking industry in IDX. International Journal of
Economics and Financial Issues, 8(1), p.205.
Jones, S. and Wang, T., 2019. Predicting private company failure: A multi-class analysis. Journal
of International Financial Markets, Institutions and Money, 61, pp.161-188.
Ko, Y.C., Ting, Y.Y. and Fujita, H., 2019. A visual analytics with evidential inference for big
data: case study of chemical vapor deposition in solar company. Granular
Computing, 4(3), pp.531-544.
Roshchanka, V. and Evans, M., 2016. Scaling up the energy service company business: market
status and company feedback in the Russian Federation. Journal of Cleaner
Production, 112, pp.3905-3914.
Shahin, A., Barati, A. and Geramian, A., 2017. Determining the critical factors of radical
innovation using an integrated model of fuzzy analytic hierarchy process-fuzzy Kano
with a case study in Mobarakeh steel company. Engineering Management
Journal, 29(2), pp.74-86.
Winterbottom, A., 2016. Hybrid knowledge in the early East India Company world. Springer.