Classification of companies, with explanation and examples

Today we live in times of hectic (and complex) economic activity, where major decisions and trends are set by companies at a global level and at a local level to a lesser extent. The classification of companies is a way of ordering and organizing the commercial sector to establish a good financial development in modern societies. In the case of Spain, which is the one that 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 Ministry of Finance of the State, which is the competent and public regulatory body of the Spanish economy. This is not a minor issue, because poor management or registration of the type of company we want to establish can determine its future, which can lead us to both success and failure.

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What is a company?

A company is a productive unit made up of a number of people and / or shareholders

with the ultimate goal of fully exploiting a given economic activity. 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. Autonomous 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. Sociedad Anónima (S.A.)

This type of company is probably the most common nationwide. A public limited company is composed of a specific capital stock, an amount agreed 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 (S.L.)

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 unsubscribe 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 constituent statutes of the company.

1.5. Civil society

This type of company is one of the ones that has aroused the most interest in recent years. The most interested sector is the technical-legal. That is, professionals who are dedicated to the legal sector, builders, computer engineers and surveyors among others. In addition, almost 90% of small companies choose this modality as an association between freelancers and professionals in the same sector.

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2. According to the size of the company

This point turns out to be another fundamental pillar when deciding the final type of company. Let's see 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 workers on the payroll, including the founder of the company. They can become organizations with potential if they are invested in them, considering innovative ideas with a vision of 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 setting up an entity of this type. Of all the classifications, it is the most common. It usually has between 10 to 50 workers, a family business or trustworthy friends who invest capital from their own resources or savings. Bars, restaurants, fashion store, etc.

2.3. Medium-sized company

She is the mother of all 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 a maximum of between 300 and 400, they are solid structures and of great economic success.

2.4. Big enterprises

It is clearly the riskiest bet. They normally have no less than 300 employees, a complex and structured organization, and their ultimate goal is the international product offered. The luxury sector is a good example of what a great company is: jewelery, watches, automotive sector, restaurant franchise, etc.

3. Classification of companies according to their capital

Finally, the origin of the capital is a common resource for the classification of 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 the maximum profit with the invested capital.

3.2. Public capital

Contrary to what happens in the previous point, public capital companies are subsidized by money (recapture of taxes) from the State coffers to develop economic activities that aim to provide services to the citizen of a foot. In this case, profitability or profit is 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 the teaching sector (universities) draw heavily on this type of capital.

Bibliographic references:

• Handy, C. (2005). Understanding Organizations. London: Penguin Books.
• Morgenstern, J. (1998). Organizing from the Inside Out. Oxford: Owl Books.