BMP3002 - Business in Practice: A Report on Types of Companies

This report provides an overview of various types of companies, including micro, small, medium, and large businesses, detailing their definitions, characteristics, and examples. It explores different company forms such as sole traders, partnerships, limited liability companies, public limited companies, and cooperative businesses, outlining their legal processes and characteristics. The report also identifies different organizational structures like hierarchical and functional structures, discussing their benefits and drawbacks. Finally, it uses PESTLE analysis to explain the impact of political, economic, social, technological, and legal factors on business organizations, using Unilever as a case study. This analysis highlights how these external factors influence a company's operations, profitability, and market position. Desklib provides a platform for students to access similar solved assignments and past papers for academic assistance.

Types of Companies
TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
SECTION 1......................................................................................................................................3
Explaining definition, characteristics and example of different type of business organization:. 3

SECTION 2......................................................................................................................................5
Explaining different companies including sole trader, partnership and other business
organization:................................................................................................................................5
SECTION 3......................................................................................................................................7
Identifying different type of organizational structure:.................................................................7
Explaining different external factors that impact company using PESTLE analysis in the
business organisation:..................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Business is one of the most common term in today's era of entrepreneurship, providing
goods and service and meeting demand of customer is function of business. There are different
type of business, small scale business which means local shops or restaurant whereas medium
scale means deal in country and fulfil demand nationwide and large scale business is those
organisations who deal in international market and allow country to attract foreign investment in
the country. This study is based on Unilever, this company is one of the largest retail super
market that have wide range of product that rule the market. This report will discuss different
type of business and will discuss forms of business including sole trader and partnership. At last
this report will discuss organisational structure and external factors that impact company.
MAIN BODY
SECTION 1
Explaining definition, characteristics and example of different type of business organization:
Micro Small Medium and large
Definition micro businesses are
those organisations
who deal in local
market and have less
than 10 employees,
these type of business
not mainly impact
business world but
have great contribution
in the betterment of
the economy (Brown,
Liñares-Zegarra and
Wilson, 2018). Micro
businesses focus on
small market, and they
avoid marketing, this
small businesses are
privately owned by
sole trader who deal in
local market, these
businesses are well-
established and fulfil
demand of large
customer area (Burns
and Dewhurst, 2016).
Small business have
fewer employee for
example a well-
established firm have
more than 25
employees and
generate over $1
medium and large
scale business
organisation are one of
the most important
thing for an nation,
this simply means
large scale businesses
deal in foreign market
and contribute
effectively in the
betterment of the
economy (Colli and
Colpan, 2016). Large
scale business focus
on international
market because they

simply means owner
themselves run these
corner shop with
family member or
fewer employee.
million, there are
many cases where
micro businesses have
turned into small
business, and they
turned into large
enterprise.
already have achieved
success in local market
where micro and small
businesses struggle to
survive.
Characteristics  Micro
businesses
have lower
profitability
but have long
term business
process allow
owner to
generate profit
in slow
manner.
 Fewer
employees
with ability to
manage
business and
small task
including
selling and
buying raw
material, these
are family
member or
owner
 Ownership of
small business
lies in the hand
of sole trader
but they can
perform
partnership
with friends
and family to
boost business
growth.
 Management
of such
organisation is
controlled by
owner they
provide salary
to worker and
do not have
proper human
resource
management.
 Flexibility is
key element of
 Medium and
large scale
businesses are
internation
firm that have
access to
different nation
market, these
businesses
have
permission to
deal in
different
country and
fulfil demand
of customer.
 There is no
single owner of
large scale
businesses,
there must be
partners or
shareholder
who invested

themselves.
 Micro
businesses
contribute
actively in the
betterment of
the UK
economy with
almost 21%
turn over
including every
sector.
small
businesses, this
simply means
sudden
changes in
market do not
mainly impact
small business
but can
completely
shut them
down.
in the company
and enjoying
surplus profit.
 Large scale
business
employee more
than 200
people and
earn up to $200
million and
actively
contribute in
the betterment
of the
economy.
Example Mantons Card is one
of the best example of
micro business, this
retail company provide
product and service to
meet demand of local
customer.
Pentland Group is one
of the best example
when focusing one
small businesses, this
company have wide
range of product and
fulfil demand on
national level.
Unilever is one of the
largest retail giant in
the world with wide
range of popular brand
and fulfil demand of
every type of customer
across every nation of
the world (Jose,
2021).
SECTION 2
Explaining different companies including sole trader, partnership and other business
organization:
Sole trader:

Sole trader are single owner of the firm and have no partnership with any other third person,
these type of business are common and found in every economy. Sole trader deal in small scale
and do not need any legal process to run an business in the country, these type of business owner
enjoy profit alone and bear losses. Sole proprietorship is most successful type of business Sole
trader: organisation that can survive any market condition and avoid any kind of conflict that
might impact owner and their wealth.
Legal process: sole trader or sole proprietorship business do not need any legal registration, they
can operate in market until and unless they provide food products, then they will need Food
Safety licence (Allen, Kraakman and Khanna, 2021). Sole trader have to send self assessment tax
return to HMRC (Her Majesty's Revenue Custom) and need to apply for National insurance
number to set business in the UK.
Partnership:
Partnership is another successful type of business firm that allow sole trader to perform
partnership with investor who will be investing their wealth and expertise in the business.
Partnership can be performed legally or without any legal process, it is highly recommended for
sole trader to have legal partnership that will push government to sole any issue that will impact
business (Shin, Park and Park, 2019). Partnership is complex type, partners might earn surplus
profit but they will going to face conflict in the future.
Legal process: there is not legal process to form a partnership business in the UK, although both
partnership can perform legal formation where they will be safe and become stable. Legal
process may include choosing legal company and nominating a partner and need to register with
HMRC to make partnership legal.
Limited liability business:
Limited liability business are large scale business organization who work as corporation,
LLC have certain benefit as compared to any other type of business (Bayern, 2016). Owner are
often called member that enjoy surplus profit and become safe from any kind of impact on
personal liability in the business. Private limited company are separate business entity that work
as separate legal person and keep member\ safe from any kind of impact on their personal
liability.

Legal process: legal process to form limited liability business in the UK is very simply, but LLC
do not exit in the UK. However, this type of businesses are less and do not mainly part of
business structure of the country.
Public limited company:
Public limited company is one of the most common type of business structure in the UK,
PLC is available in the country and process same as other type business (DuFour and Reeves,
2016). In this type, owner or partner make business as separate legal entity that allow partners to
relax and enjoy surplus profit and avoid those negative impact for example losing of personal
assets or liability. There are more benefit of PLC as compared to any other forms of business
because member owns share and become shareholder.
Legal process: there is legal process of setting Public limited company, sole trader or partnership
need to provide initial public offering to general public and need to allot shares for finance
purpose. PLC need to register their director and company secretary under Companies Act, need
to provide MOA and other legal document.
Cooperative business:
Cooperative businesses is one of the important and common type of business structure,
this simply means those non-profit organization who focus on betterment of the society and work
cooperatively with government to solve major issue of the society.
Legal process: to set up cooperative business in the UK, member need to establish a steering
committee that have control over the organization and its process. Cooperative businesses are
supported by government, and they promote them to bring betterment of the society.
SECTION 3
Identifying different type of organizational structure:
Hierarchical organization structure:
Hierarchical organisation structure: this pyramid shape organisation chart or structure is
one of the most common and most beneficial for the business (Ahmady, Mehrpour and
Nikooravesh, 2016). From CEO to worker, every person have their own roles and responsibility
which they need to complete and report to upper authority. Hierarchical structure is mostly used
by large scale business organisation who have multiply purposes and need stability. There are
certain benefit of hierarchical organisation structure, these are:

 Hierarchical structure provide clear direction to employee, they know what task they
have to perform and to whom they need to inform, this way they can increase their
effectiveness and allow company to become productive.
 Schwieger and et.al., 2016Employee's in hierarchical structure often remain motivated as
management of these type of firms are perfect and there is no chance of any complexity
which allow company to be more productive.
Functional organization structure:
Functional organization structure: functional organization structure is similar to
hierarchical but power and responsibility are often divided into different part. This type of
structure is adopted by those business organisation who focus on innovation and have demand of
skilled worker (Schwieger and et.al., 2016). This is one of the most common type of structure
mainly found in entrepreneurial business, employee in this structure face power against right this
which impact their effectiveness and allow company to perform lower impacting their
productivity. There are certain benefit, these are:
 Functional organisation structure allow employee to enjoy power but with great
responsibility, employee often stay motivated and perform more effectively to boost
company's performance.
 Every department of this type of business structure have their own power to influence
company's growth, this structure encourage specialization and focus on internal strength
of the business organisation.
Explaining different external factors that impact company using PESTLE analysis in the business
organisation:
PESTLE analysis:
Political factor: political factors is one of the most important external factor for every business
organization as government its policy impact company. UK government took certain decision
which impacted Unilever, for example after Brexit, new retail policy is been implemented
effecting profitability of the company. After COVID-19 impact, government have introduced
new guideline to stop spread of virus and banned retail store which directly impacted
performance of the company.
Economical factor: economic factors are some another important factor that business need to
consider, this simply means unstable economy of the UK after COVID-19 impacted every sector

including retail sector. There is high inflation in the economy which rapidly increased prices of
raw material impacted operation process of then Unilever. Apart from this, labour marker
condition after COVID-19 have give rise to wages and salary which increased cost for Unilever.
Social factor: social factor means customer and their behaviour in the market this simply means
after COVID-19, spending capacity of customer have decreased which directly affected sales of
the company. Unilever is one of those company who focus on product they offer which means
form strong marketing, they have regain their position in the market. This company understand
social factor and act accordingly.
Technology factor: technology factor is crucial for business, change in industrial technology
means company have to adopt new and fastest technology. Unilever is one those company who
have latest and fastest technology which allow them to lead the market, this company have both
soft and hardware technology allowing them to become stable in the market.
Legal factor: legal factor means government and legal procedure, every company have to adopt
all legal factor to fairly deal in the market. It is very important for Unilever to keep eye on
changing legal process of government after COVID-19. This company have faced huge issue
when they avoid legal factor, Unilever is following every guideline but they need to complete
their legal procedure.
Environmental factor: environmental factors are some of the most common but most important
as well, this simply means company have to meet all requirement of government as well as
customer. Unilever have faced issue in sustanilibilty, government and customer Unilever to
manufacture eco friendly product and use paper bags to pack their product. The UK government
have announced to band plastic bags to avoid impacting nature.
CONCLUSION
This report has discussed business and its importance in era of entrepreneurship. Later
this report has discussed definition, difference and characteristics of micro business, small
business and medium and large scale business. Later this report has discussed definition
characteristics and legal process of forms of business including sole trader, partnership, limited
liability and public limited and cooperative business structure. Later this report has discussed
different organisational structure and explained each structure with benefit. At last this report has
discussed PESTLE analysis to understand external impact on the business organisation.

REFERENCES
Books and journals
Ahmady, G.A., Mehrpour, M. and Nikooravesh, A., 2016. Organizational structure. Procedia-
Social and Behavioral Sciences, 230, pp.455-462.
Allen, W.T., Kraakman, R. and Khanna, V.S., 2021. Commentaries and cases on the law of
business organization. Wolters Kluwer.
Bayern, S., 2016. The implications of modern business–entity law for the regulation of
autonomous systems. European Journal of Risk Regulation, 7(2), pp.297-309.
Brown, R., Liñares-Zegarra, J.M. and Wilson, J.O., 2018. What happens if the rules change? The
impact of brexit on the future strategic intentions of UK SMEs. The Impact of Brexit on
the Future Strategic Intentions of UK SMEs (March 1, 2018).
Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Macmillan
International Higher Education.
Colli, A. and Colpan, A.M., 2016. Business groups and corporate governance: Review,
synthesis, and extension. Corporate Governance: An International Review, 24(3),
pp.274-302.
DuFour, R. and Reeves, D., 2016. The futility of PLC lite. Phi Delta Kappan, 97(6), pp.69-71.
Jose, J., 2021. Analyzing the necessity and impacts of organizational culture on the performance
of Unilever UK Ltd (Doctoral dissertation, Dublin, National College of Ireland).
Schwieger and et.al., 2016. Hierarchy concepts: classification and preparation strategies for
zeolite containing materials with hierarchical porosity. Chemical society
reviews, 45(12), pp.3353-3376.
Shin, N., Park, S.H. and Park, S., 2019. Partnership-based supply chain collaboration: Impact on
commitment, innovation, and firm performance. Sustainability, 11(2), p.449.
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