Classification Of Companies, With Explanation And Examples
Currently, we live in times of frenetic (and complex) economic activity, where major decisions and trends are made by companies at a global level and to a lesser extent at a local level. The classification of companies is a way of ordering and organizing the commercial sector to establish good financial development in modern societies. In the case of Spain, which is what interests us, the administrative framework is to a certain extent complex.
Thus, It is important to take into account the classification of existing companies in the legal-economic order, dependent on the State Ministry of Finance, which is the competent and public regulatory body of the Spanish economy. This is not a minor issue, since poor management or registration of the type of company we want to establish can determine its future, which can lead to both success and failure.
A company is a productive unit made up of a number of people and/or shareholders with the ultimate objective of exploiting a given economic activity to the maximum Depending on their nature, companies can take different forms that we will detail in the following points.
1. Classification of companies according to their legal form
Next, we will make a list of the most common companies taking into account the legal form.
1.1. Self-Employed Entrepreneur
This type of company is exclusively individual in nature. It does not have partners, it does not have an organizational structure other than the personal one The individual decides, manages, organizes and determines the capital that he can contribute to generate economic activity.
1.2. Public Limited Company (SA)
This type of company is probably the most common at the national level. A public limited company is made up of a specific share capital, an amount agreed upon by the shareholders that comprise the company. The way in which the company is managed is through the election of a general director or manager, chosen from among the shareholders and renewable on a temporary basis. The minimum capital to contribute is €60,000 gross.
1.3. Limited Company (SL)
Within the classification of companies, companies take different forms. The limited company is designed to promote the creation of small and medium-sized companies, which is usually another of the most common forms of business incorporation. The minimum capital is €3,000 gross, with a maximum of 5 partners.
1.4. Cooperative Society
Cooperative societies are especially common within the primary sector. That is, agriculture, fishing and livestock. Members join the cooperative voluntarily, as well as leave in the same way. The main objective of this association is enhance the knowledge and resources of different companies to obtain a common objective/benefit The capital to be contributed will be decided in the company’s constituent statutes.
This type of company is one of those that has aroused the most interest in recent years. The most interested sector is the technical-legal sector. That is, professionals who work in the legal sector, builders, computer engineers and surveyors, among others. Furthermore, almost 90% of small businesses opt for this modality as an association between freelancers and professionals in the same sector.
2. Depending on the size of the company
This point turns out to be another fundamental pillar when deciding the final type of company. Let’s look at the different classifications according to the size that is represented by the number of workers, mainly.
2.1. Micro companies
They do not exceed ten employees on staff, including the founder of the company. They can become organizations with potential if invested in them, considering innovative ideas with a vision for the future. Here we find entrepreneurs and start-ups
2.2. Small company
In small businesses we have one of the most common models when it comes to establishing an entity of this type. Of all the classifications, it is the most common. It usually has between 10 and 50 workers , a family business or one of highly trusted friends who invest capital from their own resources or savings. Bars, restaurants, fashion stores, etc.
23. Medium-sized company
She is the mother of all those that make up this list. They fall under the label of “SMEs”, small and medium-sized companies that make up a large part of the economy of any country. With a minimum of 60 workers and maximums that range between 300 and 400, they are solid structures and highly economically successful.
It is clearly the riskiest bet. They normally have no less than 300 employees, a complex and structured organization, and their final objective is to internationalize the product offered. The luxury sector is a good example of what a great company is : jewelry, watchmaking, automotive sector, restaurant franchise, etc.
3. Classification of companies according to their capital
Finally, the origin of capital is a common resource for classifying companies, which are basically 3 types. Let’s see.
3.1. Private capital
All the investment and financial resources deposited come from the effort that each individual at a particular level contributes to the constitution of the company. As is evident, The objective is to achieve maximum profit with the capital invested
3.2. public capital
Contrary to what happens in the previous point, public capital companies are subsidized by money (tax collection) from the State coffers to develop economic activities that aim to provide services to ordinary citizens. In this case, profitability or profits are not sought.
3.3. Mixed capital
These types of companies are very common in societies or countries of the so-called Welfare State model. The country in question aims to offer specific services to reach the maximum number of inhabitants possible. However, in some cases public investment is not enough and private entities are used to finance the project. The health sector (public hospitals) and teaching (universities) draw heavily on this type of capital.
