Types of businesses and their main characteristics

The term business can be defined as an activity that is carried out for profit or to obtain another series of benefits. As a general rule, said action is associated with the production and sale and purchase of products and services. There are many types of businesses and many ways to classify them. However, the most common is to differentiate the types of businesses based on the economic activity they carry out, the right company or the size of the company.

Types of businesses according to their economic activity

One of the most common classifications is to differentiate companies according to their sector or the economic activity they carry out:

  • Primary sector. Dedicated to obtaining raw materials. This sector is made up of economic activities such as agriculture, livestock, fishing or mining.
  • Secondary sector. In which all businesses of both industrial and construction are included. These types of companies are characterized by being in charge either of the extraction of raw materials or the transformation of these materials into processed products. Also, this type of companies are very varied and can be subdivided in turn into different types, such as wine, food, steel or textile industrial.
  • Third sector. Within this category, companies dedicated to the service or trade sector can be distinguished.
    • Services. Those that are focused on providing customers with a service or an intangible asset. Within this category, companies that provide social, legal, IT or transport services can be distinguished.
    • Commercial companies are those dedicated to the purchase and sale of material goods. There are very varied shops, depending on the type of product with which they trade so that one can speak of food shops, household appliances, clothing or even second-hand shops.

Types of Businesses based on their legal form

It is also frequent to differentiate the types of companies based on the legal form in which it has been incorporated. There are different types of companies according to this condition; however, here, we will only highlight the six most common:

  • Individual businessman. That person who decides to undertake an economic activity on his own. Unlike the other forms, it must respond to its debts with its assets.
  • Limited society. This type of company is made up of one or more partners who contribute money or goods to the company, up to a minimum of 3,000 euros. Their liability is limited, and the capital of this type of company is divided into participations, according to the contributions made.
  • New Company Limited Company. It is an SL designed to be established in 48 hours, with little processing. It has limited the number of partners, which cannot be more than five and the capital to contribute, between approximately 3,000 and 120,000 euros.
  • Anonymous society. The big difference between SA and SL is the minimum capital required, of just over 60,000 euros. Also, SA is divided into shares, which can be sold freely.
  • Labour companies. The main characteristic of these companies is that most of the company property belongs to the workers. In this case, no worker can have more than 33% of the capital, and the group of non-working partners cannot have more than 49% of the capital.
  • The ownership of these companies belongs to the workers. Its purpose is to guarantee employment. They can hire permanent staff, but cannot exceed 10% of the members.

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Types of negotiations according to their size

Another of the most used classification models is based on its size, that is, the volume of employees it has and the income it invoices.

  • Great company. Large companies are all those companies with more than 250 workers.
  • Medium business. Medium-sized companies must meet three requirements: on the one hand, the number of workers cannot be less than 51 nor greater than 250. Also, their turnover cannot exceed 50 million euros, nor their annual balance of 43 million euros.
  • Small business. These types of companies are characterized by having between eleven and fifty workers. Also, according to current regulations, to be considered as a small company, neither its billing nor its balance can exceed ten million euros.
  • Microenterprise. Provided that the number of permanent workers in the company is less than ten and their turnover must be less than two million euros.

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