Types of businesses and their main characteristics

The term business can be defined as an activity that is carried out for a lucrative purpose or with the purpose of obtaining another series of benefits. As a general rule, this activity is associated with the production and purchase and sale of products and services. There are many types of businesses and many ways to classify them, although the most common is to differentiate the types of business depending on the economic activity of the company, the legal 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 develop:

  • Primary sector. Dedicated to obtaining raw materials. This sector is made up of economic activities such as agriculture, livestock, fisheries or mining.
  • Secondary sector. In which all businesses of both industrial and construction are included. These types of companies are characterized by being responsible for the extraction of raw material, or for the transformation of these materials into processed products. Also these types of companies are very varied and can be subdivided in turn into different types, such as wine, food or steel textile industry.
  • Third sector. Within this category, companies dedicated to the services or commerce sector can be differentiated.
    • Services . Those that are focused on providing customers with a service or intangible asset. Within this category, companies that provide social, legal, computer 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 you can talk about food stores, appliances, clothing or even second-hand stores.

Business Types according to their legal form

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

  • Individual entrepreneur . That person who decides to undertake an economic activity on their own. Unlike other forms, he has the obligation to respond to his debts with his own assets.
  • Limited society. This type of companies is made up of one or more partners who contribute money or goods to the company, up to a minimum of 3,000 euros. Its responsibility is limited and the capital of this type of companies is divided into shares, according to the contributions made.
  • New Company Limited Company. It is an SL thought to be constituted in 48 hours, with hardly any procedures. It has limited the number of partners, which cannot exceed five and the capital to contribute, between approximately 3,000 and 120,000 euros.
  • Anonymous society. The big difference between the SA and the SL is the minimum capital required, of just over 60,000 euros. In addition, SA is divided into shares, which can be sold freely.
  • Labor societies The main characteristic of these companies is that most of the ownership of the company belongs to the workers. In this case, no worker can have more than 33% of the capital, and all non-working partners cannot own 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 partners.

Types of negotiation according to its size

Another of the most used classification models is based on their size, that is, the volume of employees they have and the income they invoice.

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