In the business world, companies are classified into different categories according to various criteria that allow us to better understand their structure and operation. This classification is useful both for owners and shareholders as well as for investors, analysts and the general public. In this article, we will explore the different ways in which companies can be classified, with examples that illustrate each type of classification.
According to their size
One of the most common ways to classify companies is according to their size. This classification is generally based on the number of employees, annual revenue, or asset value. Businesses are usually divided into microbusinesses, small businesses, medium-sized businesses, and large businesses.
Example:
A microbusiness can be an individual or family business with fewer than 10 employees, such as a store. of neighborhood. On the other hand, a large company is a multinational corporation with thousands of employees and operations in several countries, such as Coca-Cola or Toyota.
According to its legal form
Another way of classifying companies is according to their legal form, that is, how they are legally constituted. The most common forms of businesses include corporations, limited liability companies, sole proprietorships, and cooperatives.
Example:
A corporation, such as Microsoft, is a company whose shareholders have liability limited. A sole proprietorship, such as a craft store, is owned and managed by a single person.
According to its sector of activity
Businesses can also be classified according to the sector in which they operate. that operate. Some of the most common sectors include technology, healthcare, education, retail, manufacturing, and financial services.
Example:
A company in the technology sector, such as Apple is dedicated to the manufacture and sale of electronic products. While a company in the health sector, such as Pfizer, specializes in the research and development of medicines.
According to their purpose
Companies can also be classified according to their purpose or mission. Some companies seek to maximize their economic benefits, while others have social or environmental objectives. These companies are often known as for-profit companies, social companies or sustainable companies.
Example:
A for-profit company, like Google, has the main objective of generating profits for its shareholders. On the other hand, a social enterprise, like TOMS, donates a pair of shoes for every pair sold. And a sustainable company, like Patagonia, focuses on the production of environmentally friendly clothing.
According to its origin of capital
Another way to classify companies is according to their origin of capital. Companies can be classified as public, private, mixed or non-profit companies, depending on who owns and finances the organization.
Example:
A public company, such as Petrobras, It is publicly traded and owned by public shareholders. A private company, like Cargill, is owned by private individuals or groups. A joint venture, such as Renault-Nissan, has both public and private capital. And a nonprofit organization, like the Red Cross, is funded through donations and grants.
In conclusion, business classification is critical to understanding the diversity and complexity of the business world. Each type of classification offers a unique perspective on how companies organize, operate, and achieve their objectives. By knowing these classifications and examples, we can appreciate the variety of companies that exist and how they contribute to the economy and society in general.