The company formation procedure can have an incredibly mixed variation of emotions involved ranging from enormous excitement to extreme stress. While the novelty of owning the company and being your own boss is certainly a thing to look forward to, the highly demanding aspects such as registration and looking for financial support can be very pressuring.

With such external aspects of company formation requiring undivided attention, the business owner can easily overlook the internal pieces to the puzzle, mainly features like business structure. The company structure is very important, as it will largely determine the efficiency of corporate operations. There are two company structures: Tall and flat management structures. This blog will talk about the differences between these two structures.

Tall Structure/ Narrow Span of Control

A narrow span of control refers to a management structure whereby less people report directly to the manager. In this case, the manager can simply delegate duties to supervisors or team leaders who will then set tasks among employees. Whenever the employees want to pass a message on to the director, they have to do so through their team leaders. If you are starting a company with different divisions then a tall management structure is more appropriate.

Flat Structure/ Wide Span of Control

A business that adopts a wide span of control will have less ‘team leaders’ and more people can directly report to the director. In this case, the director can take a more hands on approach to operations and be aware of exactly what each employee is doing. The smaller the business you are starting is, the more suited you are to adopting a flat management structure.

Entrepreneurs should put strong emphasis on evenly distributing their attention on all the aspects of company formation. As we discussed earlier, the entire procedure can be daunting and this is why you should seek for professional guidance. At Formations Direct, we offer help with features of company formation including limited registration. Our professionally trained employees are available to guide you throughout the process so feel free to contact us on 0800 085 45 05 for our help.