Types of businesses and their main characteristics

The term business can be defined as an activity that is carried out for profit or for the purpose of obtaining another series of benefits. As a general rule, this activity is associated with the production 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 based on the economic activity they carry out, the legal society 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, fishing or mining.
  • Secondary sector. In which all businesses of both an industrial and construction nature are included. These types of companies are characterized by being in charge of either the extraction of raw materials, or the transformation of these materials into manufactured products. Also these types of companies are very varied and can be subdivided into different types, such as industrial textile, wine, food or steel.
  • Third sector. Within this category, companies dedicated to the services or commerce sector can be distinguished.
    • Services . Those that are focused on providing customers with a service or intangible good. Within this category, companies that provide social, legal, computer or transport services can be distinguished.
    • Commercial companies are those dedicated to the sale of material goods. There are very varied shops, depending on the type of product with which they trade, so we can talk about food stores, electrical appliances, clothing or even second-hand stores.

Types of Businesses according to their legal form

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

  • Individual entrepreneur . That person who decides to undertake an economic activity on their own. Unlike the rest of the forms, it has the obligation to respond to its debts with its own 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 shares, according to the contributions made.
  • New Company Limited Company. It is an SL designed to be constituted in 48 hours, with hardly any formalities. The number of partners is limited, which cannot be more than five and the capital to contribute, between 3,000 and 120,000 euros approximately.
  • Anonymous society. The big difference between the SA and the SL is the minimum capital required, of just over 60,000 euros. In addition, the SA is divided into shares, which can be sold freely.
  • Labor companies. The main characteristic of these companies is that most of the property of the company belongs to the workers. In this case, no worker can have more than 33% of the capital, and the set of non-worker 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 it cannot exceed 10% of the partners.

Types of negotiation according to their size

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

  • Great 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. Furthermore, their turnover cannot exceed 50 million euros, nor their annual balance 43 million euros.
  • Small business . This type of company is characterized by having between eleven and fifty workers. In addition, according to current regulations, to be considered a small business, neither its turnover nor its balance can exceed ten million euros.
  • Micro-enterprise . Provided that the number of permanent workers in the company is less than ten and its turnover must be less than two million euros.

I hope our this article will be very helpful for you.