Comprehensive Report on Different Types of Business Organizations

This report provides a comprehensive overview of different types of business organizations, ranging from micro and small businesses to large-scale enterprises. It delves into the structures and operations of various company types, including sole proprietorships, partnerships, limited liability businesses, public limited liability businesses, and cooperatives. The report highlights the advantages and disadvantages associated with each structure, offering insights into their formation, management, and financial aspects. Furthermore, the report explores the impact of organizational structure on business productivity and analyzes external factors affecting business performance through a PESTLE analysis, considering political, economic, social, technological, legal, and environmental factors. The report concludes with a summary of the key findings and references supporting the analysis.

Types of Companies

INTRODUCTION...........................................................................................................................3
SECTION 1.....................................................................................................................................3
Different types of companies and how they work.......................................................................3
SECTION 2.....................................................................................................................................4
Different companies from sole traders to cooperatives and Limited Liability Partnerships.......4
Section 3:.........................................................................................................................................5
Different business structures and external factors affecting business.........................................5
3.1 Identification of different organizational structures and explaining how does organisational
structure affect business productivity..........................................................................................5
3.2 How different external factors affect the performance of a business – PESTLE Analysis...7
CONCLUSION................................................................................................................................8
REFRENCES...................................................................................................................................9

INTRODUCTION
Management is the process by which different aspects of business is been understood in
more effective manner. Such process makes management of work in an organization don in more
efficient way. It is helpful in leading over controlling various processes which makes planning,
decision making, organizing, leading, motivating and makes controlling possible within an
organization. Also human resource and finances is been managed in lawful manner. This lead
over achieving goals and objectives set by an organization. Scope of management is wider which
covers different factors. The organization taken in this report is Sainsbury. The report covers
about various things based upon various kinds of business organization. Also explanation is been
provided in relation over different organizations with their advantages and disadvantages. In the
end of the file PESTLE analysis is covered which is based over analyzing of facts based on
external factors impacting business and its growth.
SECTION 1
Different types of companies and how they work
 Micro or Small business: These are those business organizations based upon operating
over limited business operations which is conducted at lower level. Such organization is
privately owned organization with very less strength. Micro or small business operates
only with 50 employees and not more than that. In this organization BPO and customer
service centers are involved with content writing organizations.
 Medium size business: This business organization has been made over forming of
business which is of medium nature. Medium organization operates with more then 100
staff but less than 1000. Also the main aim of this organization is to earn [profit with
stability within a particular market.
 Large size business: Such business organizations is been formed through following
proper legislation formed by an organization. Under this organization strength of

employees is more than 1000. They establish themselves within market on large
parameter which makes sustainability attained for them in market.
SECTION 2
Different companies from sole traders to cooperatives and Limited Liability Partnerships
 Sole trader business: This is one of the most commonly formed business organization
which is been used for doing business run by one person. In this organization all
responsibility hold by single person known as sole proprietor. The owner of business
takes all profit and loss on himself. Also holds no liability regarding tax or any rule.
Since these organizations are very easy to be established and is been formed without any
complex process and also lengthy documents is not required. In this organization only
HMRC number is required for starting the trade and name is been decided over
commencing business.
 Partnership: These are those business organizations that is been formed with the help of
two persons over agreement formed between them. In this business organization common
motive of partnership is to earn profit and revenue from the business. All the liability
about business is been handled by partners over the amount invested by them. Partnership
is been developed mainly over agreement of partnership. In this no complex mechanism
exists over forming it only HMRC number is required and agreement is formed when
licensing id involved within it.
 Limited liability business: This organization has been making business organizations
and is been rebated within the tax payment. Thus liability is also limited according to
investment done by partner. Also the working environment is hybrid in nature which
helps in making both corporate and partnership characteristics exists within it.
 Public limited liability business: These are those organizations that have been selling
its shares in public. In this organization multiple owners is involved which makes them
liable over any kind of things involved within business. In this shareholders and owner
are different which makes functioning of such process very complex in nature. Then its

formation process is very lengthy and time consuming since lot of documents are
involved within it. In this various kinds of signature is to be taken of all owners and funds
is been arranged through government institution, bank loans, issue of share in market.
Various kinds of financial institution invest within it for providing fund. Management of
these organizations is been done by both owners and shareholders. In this organization
process is very complex in nature and takes time within decision making.
 Cooperative: These organizations are private in nature and do not distribute its shares in
public. In this organization is considered as separate part from its directors who are
appointed over performing functions n behalf of owner. All responsibility is been handled
by managers and shareholders working for an organization. Also this organization makes
funding to be arranged in through credit cards, loans and banks which make funds
arranged more easily. The process of formation of the organization includes selecting of
directors through proper process which makes organization aspect functioned in
appropriate manner. In order to establish such organization various kinds of documents is
require to be submitted which includes address, name and headquarters information
which is sent for verification to Companies House. This makes process of incorporation
completed smoothly and effectively.
Section 3:
Different business structures and external factors affecting business
3.1 Identification of different organizational structures and explaining how does
organisational structure affect business productivity
Sole proprietorship: This organization has been making an individual handle various
kinds of aspects which is covered by the owner of the business. Under it funds is been arranged
by the owner through personal contacts or with the help of friends and family. Management of
this organization is don with the help of owner of business. Further certain advantages and
disadvantages have been explained as follows:
Advantages of sole proprietorship:
 It is easy to establish and no complex process is involved within it.
 Also finances included are very less in order to set up such organization.

Disadvantages of sole proprietor:
 Liability is upon the owner of the business and all debts is been handled by sole
proprietor.
 Tax of self employment has to be paid by the owner.
Partnership: These firms is based upon two individual partners coming together in order
to form a firm. All partners is responsible for management activities of firm. It involves
various liabilities over partners in order to run firm. Funds is been arranged with the help of
partners and there sources. In this liability in relation to business lies over partners and all
responsibility with the business is been hold by them and partners requires to run the firm by
themselves. General partnership is simple partnership and in limited liability investment
done by an partner defines about liability of an person.
Advantages:
 Formation process is less complex in nature and does not involve any kind of
documentation don.
 In this kinds of business funds arrangement is don with effectiveness which increases
chances of getting resources.
Disadvantages of partnership
 Partnership liability is very limited
 Harmony lacks and dispute can lead over making partnership collapse.
Private Company: Such organization handles all its work with the help of directors and
funding is been arranged with the help of loans from banks, equity and also from raising fund
through crowd funding. All work related to management is don with the help of directors that has
been appointed over making work done in more effective manner. Further certain advantages and
disadvantages has been explained as follows:
Advantages of Private Company are
 It makes separate legal entity formed which makes owner separated from
organization.
 Also perpetual succession occurs which means companies existence does not get
impacted.

Disadvantages of Private Company
 Process of getting it register is very long
 Also complicated procedure which becomes time consuming.
Public Company: These are those organizations which makes selling of share to public and
funds is been arranged through taking loans over any kind of government organization. In
this management of organization is don through shareholders and owners.
Advantages of Public Company
 Capital is raised only with the help of issuing of shares.
 Financial sources arranged easily through financial institutions.
Disadvantages of Public Company
 Directors appointed have different aims and objectives which make complexity take
place within working of an organization.
 Control is lost upon business due to multiple ownership existing.
The above advantages and disadvantages have been explained in relation over various
kinds of business organization present within world. This structure of business impacts sole
proprietorship in a way that fund generation can be difficult at times that hampers growth of sole
business. In partnership dispute taking place between partners makes dissolution of firm possible
creating insecurity for doing business. In relation to corporate organization at times it becomes
difficult for directors to perform work which increases illegal activity in business. Then in public
limited organization collapse takes place which makes sustainability of such organization
impacted.
3.2 How different external factors affect the performance of a business – PESTLE
Analysis
 Political Factors: These factors is based over that kind of business organization which is
outcome of policies formed by government over making an organization operate within
there framework. If policies formed ovre tax increases then organization like Sainsbury
would suffer selling of its products.
 Economic Factors: These factors are based upon economic factors which are based over
unemployment, import and export rate. It is dependent over factors like unemployment,

import and export rate. Such factors directly affects profit making of an organization and
if these are not kept in mind them organization like Sainsbury would not be able to
generate profit.
 Social Factors: The factors are based over customs and trade which occurs within
society. It uses trends and makes preferences of customers understood. Sainsbury if not
able to understand trends then it would not be able to expand itself in proper manner.
 Technological Factors: They are based upon technological changes taking place within
society. In this an organization like Sainsbury by using latest technology increases
chances of making delivery faster and effective with more efficiency.
 Legal Factors: These are those factors which has been making various kinds of laws and
regulation applied in more organized manner. It is to be applied by organization like
Sainsbury over avoiding any kind of legal trouble.
 Environmental Factors: These factors are based upon those rules and regulations which
has been formed over protecting environment. In this organization like Sainsbury makes
environment protection attained which attracts more customers.
CONCLUSION
From the above discussion it can be concluded that business organizations are those
organizations which has been operating in order to do business with more efficiency. Such
organizations perform different functions. In this file different kinds of organization is covered
which makes businesses performed in various manner. Under the file small, medium and large
scale business has been taking place which makes operations of business performed at different
levels. In these file different organizations is explained with kits formation process. Also there
advantages and disadvantages is been covered. PESTLE analysis is covered which makes impact
of external factors understood on business.

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