The 5 types of main business organization

The types of business organization can be classified according to several factors; according to their legal status, size (number of members and employees), economic activity, origin of capital, sector of the economy, among others.

The commercial organization or company is the axis of the economic activity of most of today’s societies. It is one of the means by which human activity is sustained, since the company allows the satisfaction of the needs of all individuals (Economic, 2009).

The company is a social and economic unit for profit, which depends entirely on economic capital, human capital and resources to survive.

This must have an address that allows it to be more efficient according to the needs of the market. Its main objective must be to serve the common good.

No commercial organization is structured, it requires the intervention of several individuals to be managed. This management finally determines the type of company being established and its most representative characteristics.

Classification of types of business organization

– According to its legal form

Business organizations are divided as follows according to their legal form:

Limited partners

They are commercial organizations that have two different types of partners. Some partners participate in the company’s management and have full responsibility for the company (collective partners), and other partners do not participate in the company’s management and their responsibility is partial according to the capital they contribute (limited partners).

Collective society

It is the type of business organization that belongs to more than one individual. Members have an obligation to respond without limit with their assets.


They are commercial organizations that are not for profit and seek the welfare of their members.


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Single person

It is the type of business organization that belongs to a single person. This single partner must respond unlimitedly with their belongings, in case any individual is harmed by the company’s decisions (Hernandez, 2017).

Limited liability company

It is a type of commercial organization in which partners are responsible for responding only with the capital they initially contributed, but not with their assets.

Anonymous society

They are organizations where liability is limited to contributed assets. Company owners are those who bought shares or bonds owned by the company.

– According to your size

Commercial organizations are divided as follows, according to their size:

Micro enterprise

These are business organizations that have a workforce made up of a maximum of 10 workers.

Usually they belong to just one person and their owner usually works for the company as well.

Their annual turnover is low and they do not affect the way the market behaves much. They are companies with few teams and technological development, and their production processes are mainly done by hand.

Small business

It is the type of organization that has a minimum of 11 employees and a maximum of 49. They are profitable and independent institutions, with limited financial resources and little intensive activity in terms of capital. They don’t particularly specialize in a line of work.

Medium business

These are organizations that have a minimum of 50 workers and a maximum of 250. Due to their size, they usually have specialized areas and a union. Workers have well-defined responsibilities.

Big company

It is the type of organization that employs more than 250 workers. It usually has its own facilities, has large sales, is divided by specialized areas and also has a union.


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It is the type of company that can request loans and credits of great value, since its financial activity is important (Circe, 2017).

– According to the economic sector

Business organizations are divided as follows, according to the sector of the economy to which they belong:

Primary sector

These are companies that are mainly dedicated to the extraction of raw materials. They use basic technical tools and systems.

Secondary sector

They are organizations dedicated to the transformation of raw materials extracted by companies in the primary sector. They use medium complexity processes to perform their functions.

Tertiary sector

This type of organization is not limited to physical tasks, but also to the execution of intellectual tasks and technological development.

– According to the origin of the capital

Business organizations are divided as follows, according to the source from which their capital comes:


They are business organizations in which the capital that constitutes them comes from individuals.


They are business organizations that depend on state capital investment to survive. They can be local, regional or national.


They are business organizations that depend on the contribution of capital, both by the State and by private entities (Classifications, 2017).

– According to the interaction of its members

Business organizations are divided as follows, according to the way their members interact with each other:


They are highly structured organizations, in which the way individuals interact is legitimately regulated.

There are corporate activities, functions, departments and a hierarchical structure defined and endorsed within the limits of local law.

It is a type of static and conservative organization, in which the participants agree to comply with the existing formal documents and the contract they signed when they entered the institution.


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It is the type of commercial organization whose dynamics are more flexible. Behaviors, interpersonal relationships and interactions between individuals that occur in the company’s day-to-day activities are more open and flexible.

These types of organizations are generally flexible, spontaneous and constantly evolving. Its members are generally creative young people, whose behavior is regulated by parameters and general agreements.

Generally, informal organizations use some parameters and references from formal organizations and adapt them according to their needs.

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