Comprehensive Overview: Types of Companies and Business Structures

This report defines and analyzes various types of companies, including micro-businesses, small businesses, medium-sized businesses, and large-sized businesses, detailing their characteristics and operational aspects. It further explores different business structures, such as sole traders, partnerships, limited liability businesses, public limited liability businesses, and cooperatives, highlighting their key features and examples. The report also delves into business structures, comparing functional and divisional approaches, and examines the impact of both external (political, economic, social, technological, environmental, and legal) and internal factors on business performance, utilizing PESTLE analysis to provide a comprehensive overview. The report provides an in-depth understanding of the business landscape, offering insights into company types, structures, and the factors influencing their success.

Types of companies

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Types of companies.....................................................................................................................3
Companies from sole traders to cooperatives and Limited Liability Partnerships......................5
Business structure and external as well as internal factors..........................................................7
REFERENCES..............................................................................................................................10

INTRODUCTION
The main objective of this report is to define different types of company. There are different
types of companies which are engaged in various activities and functions are micro business,
limited liability business, sole trader, corporation and many more provides various products and
services to customers in order to fulfil their all needs and demands. Fulfilment of needs and
demands of customers leads employees towards growth and development. Business is the entity
which is incorporates with lows and conduct various activities in order to gain goals and
objectives of higher profitability. In this report different type of companies their characteristics
and examples are discussed. Apart from that functional and divisional business structure and
PESTLE analysis is covered in this project report.
TASK
Types of companies
Micro business:
Micro business is referred as the small sized business that is run by the few numbers of
employees who are responsible for organisational operations and activities. These businesses are
incorporated with less investment and engage less than 10 employees. It is basically family-
owned business that have potential to develop as well as these business plays important role to
maintain the economic viability in the various part of UK specially in the region of urban
societies (Dicko, Khemakhem and Zogning, 2019). Micro business face various challenges
because of their business size, capacity and limited resources. Vermont is the micro business
contains less than five employees.
Characteristics:
 Micro business serves to the smaller market area as it provides organisational products
and services to limited area. Mostly it provides their services in rural township areas.
 Micro business contain less number of employees that conduct all operational activities
of organisation (Fabijan, 2018). As business are small in size so they generate the smaller
revenue than other businesses.
 Micro businesses are situated in limited area of locations and having small offices in
which all operational activities are conducted.
Small business

Small businesses are defined as the private owned, corporation organisations and in
which all business functions are performed by the less number of employees as well as they earn
less revenue than other business. As it contains 10-49 employees who perform all operational,
management and other business activities. These businesses are mostly situated in the rural areas
and contribute effective role in growth and development of respective economy and satisfy
customers needs and demands through providing better quality products and services (Halrynjo
and Blair-Loy, 2018). The example of small business can be architectural firms, local bakery,
private owned restaurants.
Characteristics:
 All functions and activities of small business are performed and controlled by the owner
and they are labour intensive in nature as there are less use of technological factors. It
mostly depends upon manpower to conduct all business functions.
 Ownership of small business in the hand of single owner who have power on all business
operations. As it is also known as the sole-proprietorship business as well.
Medium sized business:
Medium-sized businesses are incorporated by the Company Act 2006 and it consist up to
250 employees that run all business operation and activities which is more then any small sized
business. The develop and growth of medium business are higher than the smaller business. If
business gains higher revenue than it starts retaining some portion of capital for the purpose of
hiring, maintaining building and installation of machineries as well as technologies (Medda,
2020). It builds the bridge between small and large businesses. Examples of medium sized
business in UK is Crawford Healthcare that contains 130 employees and Plan.com and Hunter
MacDonald.
Characteristics:
 Medium-sized business operates business operations in local areas as well as provides
better quality products and services to customers in order to attain higher profitability
objectives.
 All business functions and activities are conducted by the few numbers of employees
who are not enough skilled as well as experienced. So, the business has unorganised
labour.
Large size Business:

Large-sized business covers large market share as well as contains more than 500
employees who shares their profitability that is higher than other organisations. Business
contributes in the growth and development of economy through utilising the latest technology
and innovations. Large business has larger network that covers high domestic market as well as it
have its branches in other countries (Park, 2018). HSBC Holdings is the example of large-scale
business in the United Kingdom. Large business has the higher funding, profitability and
effective brand image among all customers.
Characteristics:
 Large sized business has the complex management hierarchy as well as great volume of
business communications and provides high employment in the economy.
 The business conducts their organisational activities in larger market share and generates
higher revenue.
 It includes high number of employees with having various skills, capabilities and
competencies who performs all functions in quite efficient manner.
Companies from sole traders to cooperatives and Limited Liability Partnerships
Sole-trader business:
The sole-trader business is referred as the business that which is start and run by the
single owner who have all rights and responsibilities to perform all organisational functions and
activities appropriately. Owner take all decision regarding operations and the business has their
own identity which is different from owner (Peillex and Comyns, 2020). The whole set-up is
established by the single person so, he enjoy the profits on the other hand, bear all losses and
other debts. Some examples of sole trader business are booking business, computer repair
business, catering company and home healthcare.
Characteristics:
 Sole trader business includes ease of setup and it contains nominal cost, unlimited
liabilities as well as simple to conduct all business functions.
 The owner has all rights and duties to run business in effective manner. All organisational
decisions are taken by the owner and the business have limited resources and investment.
Partnership:
Partnership is the written arrangement between two or more people. All the profits and
losses are distributed among all partners on the ratio of their investment or if there is no

agreement them profits are allocated in equal ratio. There are some examples of partnership are
Warner Bros, McDonalds and Twitter. Partnership is based on the legal agreement that contains
all information.
Characteristics:
 The major characteristic of partnership is the unlimited liability as all partners are liable
for the business arrears and responsibilities. Minimum number of partners are two to
build the partnership firm.
 In partnership, partners transfer their shares to other person through mutual approval of
all partners. All organisational decisions are taken by the all partners.
Limited liability business:
It is referred as the organisation in which respective owner is not responsible for arranging
business debts and liabilities from the personal assets and properties. Limited liability business
contains the characteristics of partnership, corporation and sole trader as well (Potter, 2019). It is
the popular form of business in which individual operates the smaller companies that contains
minimum risk level as there are no rules are established by the government. Examples of limited
liability business are Westinghouse, Blockbuster and Anheuser-Busch.
Characteristics:
 Limited liability business consists their separate existence from the respective owner as
well as it is flexible and simple to establish.
 Owner has limited liability and all business m embers are responsible for settle business
losses and debts up to their investment amount.
Public limited liability business:
It is the public owned business which is regulated by the government. It offers different
share to the public directly for the purpose of selling and purchasing. Public limited liability
business is termed as the voluntary association incorporated by it members who have their legal
existence and limited liability as well (Rau, 2020). All these businesses are listed in stock
exchange where all shares of business are being traded legally. Barclays and M&S is the
example of public limited likability business.
Characteristics: Business have its legal as well as separated identity from their shareholders.

 The shareholders of public limited liability business are free to transfer their share to
others in public.
Cooperative:
Cooperatives are referred as the entity that is owned as well as run by all representative members
who are meet to share defined profits as well as other benefits in pre-determined ratio. It is
people-centred organisation which is conduct all activities and functions to accomplish all social
and cultural needs. It is run and administered by the persons who takes all its services.
Cooperatives are determined as the legal body and unincorporated association (Schönsleben,
2018). The main objective is to provide better services to their users. Weaver Street Market and
Ocean Spray are some example of cooperatives business.
Characteristics:
 It includes fiscal concessions, democratic management, develop human values and
protect consumers as well.
Business structure and external as well as internal factors
Functional business structure: It is most comment as well as effective structure of business
that separates all business functions within various departments in the bases of different
functions. In all functional divisions proper job roles and responsibilities are defined in well
structured manner. There are various groups are formulated according to employee’s specialized
area. Business takes various advantages to functions structure as it facilitates the business by
enhancing their performance level and profitability. In this structure all job-related
responsibilities are clarifies and all division are able to take quick and proper decisions and
whole work is allocated among staff members as per their capabilities and competencies that
improves their performance and productivity. On the other hand, there is lack of proper
communication, understanding and flexibility that impacts on employee productivity adversely.
Divisional business structure: In this divisional business structure whole organisational work is
divided in different divisions that contains all business activities and resources in order to
perform all functions effectively. This business structure is suitable for the growing and
expanding business in which employees works as the separated company (Si, Liang and Wang,
2019). It enhances the profitability and productivity of business and facilitates to attain all
organisational objectives quickly and properly. There are proper line of ownership that provide

flexibility to take all decisions appropriately. On the other hand, if all roles are not defined in
clear manner that in affect the profitability of business.
External and internal factors affect performance of business:
PESTLE analysis:
The PESTLE analysis referred as the tool as well as technique which facilitates
organisation to examine all internal as well as external aspects appropriately to conduct all
business activities efficiently and develop suitable business plans. It helps the business to
evaluate all current marketing trends conditions and builds and execute these plans accordingly
for attaining defined goals. All external factors are mentioned below:
Political factors: Different government interventions and procedure that impacts the
business effectively. If tax rates are enhanced by the respective government that affects on the
activities of import and export of different goods and services from other countries (Smirnova,
and Zavertiaeva 2017). On the other hand, political instability and stability are the aspects that
affect business performance effectively.
Economic factors: Economic factors effect and influence operational activities of
business there are various factors are included such as inflation rates, interest rates and economic
growth. If inflation rates vary than it affects the demand in market.
Social factors: As there are different social factors that includes different beliefs and
attitudes of population health consciousness and age distribution that affect business in various
manner. Demand of customers fluctuated that impacts on business performance effectively.
Technological factors: There are different technological factors such as advancements,
automation and innovations are implemented by the business that helps than to reduce cost as
well as enhance profit. Organisation can attain the objective of growth through implementing
technological factors.
Environmental factors: Environmental factors is important of growth and development
of business (Pestle analysis,2021). If business examine all environment terms and conditions
properly than the impact of corban footprints is reduced.
Legal factors: Government have imposed different laws and legislations that are
executed by the business in order to ensure the effective functioning of performance. There are
different legislations such as consumer laws, labelling laws and employment legislations are
formulated that effects business performance.

CONCLUSION
As per above report, it can be concluded that businesses are incorporated for the purpose of
gaining profit through providing better quality products and services. There are various type of
companies that contains different characteristics and perform various functions. As the business
conducts various functions that are important for growth and development of economy. There are
various organisational culture that help to run business in efficient manner.

REFERENCES
Books and Journals
Dicko, S., Khemakhem, H. and Zogning, F., 2019. Political connections and voluntary
disclosure: the case of Canadian listed companies. Journal of Management and
Governancep.p.1-26.
Fabijan, A., and et. al.,2018. Experimentation growth: Evolving trustworthy A/B testing
capabilities in online software companies. Journal of Software: Evolution and
Process. 30(12). p.e2113.
Halrynjo, S. and Blair-Loy, M., 2018. Women in boards: Does their presence matter for the
gender diversity of executive positions in the companies? And can we rely on the
existing explanations?. Leadership Excellence and Gender in Organizations. 2(7). p.1.
Medda, G., 2020. External R&D, product and process innovation in European manufacturing
companies. The Journal of Technology Transfer. 45(1). pp.339-369.
Park, K. C., 2018. B the Change: Social Companies, B Corps, and Benefit Corporations.
Peillex, J. and Comyns, B., 2020. Why do financial companies adopt the United Nations
Principles for Responsible Investment?. Accounting Auditing Control. 26(1). pp.79-117.
Potter, B., and et. al.,2019. Keeping it private: financial reporting by large proprietary companies
in Australia. Accounting & Finance. 59(1). pp.87-113.
Rau, S., 2020. With Great Reliance Comes Great Responsibility: The Role of Technology
Companies during Covid-19.
Schönsleben, P., 2018. Integral logistics management: operations and supply chain management
within and across companies. CRC Press.
Si, C., Liang, Y. and Wang, S., 2019. Termination of supply chain strategic collaboration and
market value: evidence from Chinese listed companies. International Journal of
Modelling in Operations Management. 7(4). pp.297-317.
Smirnova, A. S. and Zavertiaeva, M. A., 2017. Which came first, CEO compensation or firm
performance? The causality dilemma in European companies. Research in International
Business and Finance. 42. pp.658-673.
Online:
Pestle analysis.2021 [online] through :< https://pestleanalysis.com/what-is-pestle-analysis/>