The categorization of companies is fundamental to understanding the structure of today’s global market.
The global economy is composed of a diverse and dense network of companies, each unique in its own way. However, by classifying companies, they can be grouped into more general categories, which facilitates the analysis and understanding of the business environment. In this sense, the two main dimensions used to classify companies are size and sector of activity.
Classification according to size and sector
The classification according to size is probably the most intuitive and also one of the most widely used in economic and administrative disciplines. In general terms, companies are divided into micro, small, medium, and large companies. Microenterprises, for example, are those that employ fewer than 10 people and have an annual balance sheet of less than 2 million euros. Small companies employ between 10 and 50 workers, with an annual balance sheet of up to 10 million euros. Medium-sized companies, in turn, have between 50 and 250 employees and an annual balance sheet of less than 50 million euros. Finally, large companies have more than 250 employees and generally exceed 50 million euros in annual turnover.
The sector of activity is also a relevant criterion for classifying companies. According to the Mexican Ministry of Economy, the main categories are industrial, construction, commercial, and service companies. Industrial companies are engaged in the process of transforming raw materials into finished products. Trading companies deal with the purchase and sale of products without changing their form. For their part, construction companies carry out construction works. And finally, service companies provide services without producing material goods.
Other classifications
In addition to the above dimensions, there are other important classifications that reflect different aspects of the companies. For example, according to their geographical scope, local, island, regional, national, and multinational companies can be distinguished. There are also family businesses, and these are those in which the majority of the ownership belongs to one or more families, and some members of the family also participate in their management. Ownership is another relevant classification, as a company can be private (100% privately owned), public (owned by the government or a public entity), or mixed (combines public and private ownership). Finally, the legal form of a company also varies, including types such as sole proprietorship, community, joint-stock company, and limited liability company.
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Source: Tipos de empresas
