TYPES OF COMPANIES AND THEIR CHARACTERISTICS (COMPLETE CLASSIFICATION) - DUDAS - 2025

The types of companies are the different classes of companies that exist for your choice when you are forming a company. Each type has its own characteristics, advantages and disadvantages.

One of the first challenges new entrepreneurs face is deciding what type of business to register. Although there are several different types, choosing one in particular should not be difficult.

A business entity is a structure that, through the use of economic resources, provides products or services to customers in exchange for money or other products. Business organizations come in different types and in different forms of ownership.

Entrepreneurs who start their own business will sustain the economy. Therefore, it is important to know the most common types of companies.

The correct choice will depend on your own interests and needs. It is recommended to contact an attorney, accountant, or financial advisor to determine which structure is best suited for a business.

Types of companies according to their legal form

Exclusive property

It is a company owned by a single person. It is easy to set up and it is also the least expensive of all forms of property.

The liability of the owner is unlimited. That is, if the business is unable to pay a debt, the business's creditors can claim the owner's personal property.

Society

It is a business owned by two or more people who contribute resources to the entity. The partners divide the profits of the business among themselves.

In general partnerships, all partners have unlimited liability. In limited partnerships, creditors cannot take the personal assets of the partners.

Corporation

It is a business organization with a separate legal personality from its owners. Ownership is represented by shares.

Shareholders enjoy limited liability, but have limited participation in the operations of the company. The board of directors, elected by the shareholders, controls the operational activities.

Limited liability company

They are hybrid forms of business with characteristics of both a corporation and a partnership. Although it is not considered a corporation, the owners enjoy limited liability. You can choose to tax yourself as a sole proprietorship, partnership, or corporation.

Franchises

It is a system where entrepreneurs buy the rights to open and run a business from a larger corporation. It is very widespread with great economic potential.

Cooperative

It is an organization owned by a group of individuals that operates for their mutual benefit. The people who make up the group are called members.

For example, water and electricity cooperatives (utilities), bank cooperatives, and housing cooperatives.

According to its size

Although there are different classification criteria, the most general is to take the number of employees.

Micro-enterprise

It has a maximum of ten workers, and also a total asset or annual turnover volume of less than $ 2 million. It can be administered by a single professional.

Little

They have between 11 and 49 workers, in addition to a total asset or turnover of less than $ 10 million. It tends to grow more markedly than microenterprises.

Median

They have between 50 and 500 workers, in addition to total assets or a turnover of less than $ 50 million. They have a larger structure, with differentiated departments.

Big

The number of staff exceeds 500 workers. They can be developed as multinationals based in different countries. They are businesses with international expansion.

According to your activity

Service

They provide intangible products, without a physical form. They offer professional skills, experience, advice and other similar products as well.

Commercialization

They sell a product without changing its shape. They buy products at the wholesale price and sell them at the retail price. They are known as "buying and selling" businesses. They make a profit by selling the products at prices higher than their purchase costs.

Manufacture

They buy products with the intention of using them as raw materials to make a new product. Therefore, there is a transformation of the purchased products.

Raw materials, labor, and overhead are combined in your production process.

According to ownership of capital

Public

They have the contribution of the State. They have a social purpose, since they cover important needs by offering a public service.

Its main objective is to build the common good through entities with a social character. They have this nature because they are not profitable for private investment. Its greatest influence is in areas such as education and health.

Private

Your investment capital does not come from a public source. They are managed by private entrepreneurs. They must also comply with state obligations, such as paying taxes.

Mixed or semi-public

They essentially show a composition of the two previous types. For example, the company may have public resources, although internal management is private.

According to its scope

Internal trade

It refers to the purchase and sale of products within the geographical limits of a country. These companies can be local, regional or national in scope.

Foreign trade

It consists of the exchange of goods and services between organizations that operate in two or more countries. They are called transnationals or multinationals.

According to search for profitability

Lucrative

They are for profit. In addition to seeking social profitability, they also pursue economic profitability.

Non-profit

Its main purpose is not to seek financial gain, but to use its earnings for charitable purposes. It is tax exempt, but you must meet certain special rules.

According to number of owners

One-person

In this type of company, total ownership corresponds exclusively to a single individual.

Corporate

The owners that make them up are two or more individuals who associate in order to develop a common activity.

According to economic sectors

Primary sector

This sector is mainly related to natural resources. For example, the agricultural sector (agriculture and livestock) and the extraction sector (mining, oil and fishing).

Secondary sector

This sector is related to industries in general, which refer to the manufacture of products.

Third sector

This sector is related to the provision of all kinds of services and commerce in general.

According to its relationship with other companies

Independent

It refers to those that do not maintain any type of link or relationship with other companies.

Linked without dependency relationship

The equity participation is greater than 10%, but less than 50%. In them there is a link, but there is no dependency relationship because there is no absolute control.

Controllers and controlled

The controlling companies have more than 50% of the capital of another company, intervening in the decisions and control of the same. The controlled companies are dependent, because control, capital and decisions are in the hands of others.

According to the origin of its capital

Foreign companies

The capitals that make it up come from other countries.

National companies

The capitals that comprise it belong to local owners of the country.

Legal forms by country

- Mexico

Society in collective name

It emphasizes the commitment of the partners for the duties that the company undertakes. The liability of each partner will be limited, joint and several and subsidiary to all partners. The company name will be designated with the names of one or all of the partners, accompanied by "and company".

Simple limited partnership (S. in CS)

Two types of partners are coordinated: limited partners, who establish their commitment according to their contributions, and limited partners, who have an unlimited obligation.

Limited partnership by shares (S. en C. por A.)

It is formed with one or more limited partners with unlimited liability and with one or more limited shareholders who are only required to pay for their shares.

Stock company (SA)

The owners are based on a contribution to the capital stock through shares or titles. The shareholders or owners do not solve the affairs of the company with their personal assets, but with the total amount of capital that they have contributed.

Limited liability company (S. de RL)

The obligation is limited to the capital contributed. In the event that debts are obtained, the personal capital of the partners will not be answered. It arose to eliminate the claims and limitations of the corporation.

Cooperative Society (SC)

It is a company with a variable designation of initial capital, made up of contribution visas. At least five people are involved.

Web page

Web portal of the Mexican government for the procedures of a company: gob.mx/tuempresa

- Colombia

Sole proprietorship

As an entity it is different from who creates it. Part of its assets are used for capital. It must be constituted through a document at a Notary or the Chamber of Commerce.

Simplified joint stock companies (SAS)

It can be made up of one or more people. The partners will only respond for the amount they have contributed and the corporate purpose may be undetermined.

Collective society

There needs to be great trust between the partners, because they themselves can manage or delegate to a third party. For its constitution, no maximum or minimum amount of capital is required.

Stock company (SA)

It is made up of five or more partners, who only respond for the amount of their contributions. The capital is made up of shares of the same value. At the time of constitution, the authorized capital, the subscribed (not less than 50% of the authorized) and paid (greater than 33% of the subscribed) must be indicated.

Limited liability company (Ltda.)

It must have a minimum of two partners and a maximum of 25 partners, taking responsibility according to their actions. The commitment of the partners will be unlimited and supportive.

Simple limited partnership (S. en C.)

It is made up of at least one managing partner and one or more capitalist or limited partners. The managers manage the company and the limited partners contribute with the capital.

Limited partnership by shares (SCA)

It is made up of one or more managing partners and at least five capital partners. The obligations and responsibility of the partners is the same as in the simple limited partnership. The capital is represented by shares of equal value.

Web page

Ministry of Industry and Commerce of the government of Colombia: Unique business and social registry: rues.org.co

- Venezuela

Society in collective name

It is made up of two or more people looking for a profit. The administration run it themselves.

Simple limited partnership

It is a company of a personal nature that is characterized by the coexistence of collective partners.

Personal or unipersonal signature

It is made up of a single person, who acquires the right to use a commercial name and thus be awarded the functions that any company would perform. Only the person responds to any obligation with third parties.

Anonymous company

The capital is divided into negotiable shares and is made up of shareholders' contributions. They are only liable for the value of their shares.

Anonymous Societies

The social obligations have the guarantee of a specific capital. The partners do not respond to the debts of the company with their personal assets, but only up to the amount of capital contributed.

Limited partnerships by shares

The shares represent the capital stock. The liability of the shareholders is limited by the amount of their shares.

Stock companies with authorized capital (SACA)

Once the authorized capital has been approved and the increase in share capital has been analyzed, it will go from subscribed capital to authorized capital through new shares, without exceeding the authorized capital limit.

Public limited companies registered with open capital (SAICA)

They are public limited companies, duly authorized by the National Securities Commission.

Limited liability companies (SRL)

The capital is divided into non-negotiable participation quotas. For a partner to be able to sell them, the approval of the other partners is required. Their liability is limited to the capital contributed by each partner.

Cooperative societies

They are not commercial. They are grouped for the purpose of carrying out an economic-social activity, thus the principle of solidarity prevailing.

Web page

Autonomous registry and notary service portal: saren.gob.ve

- Peru

Individual Company with Limited Liability (EIRL)

It is made up of a single person. The responsibility of the company is limited to its assets, the capital corresponding to the assets of the company being different from that of the owner. It can only execute operations within the national territory.

Closed Stock Company (SAC)

The liability of the company is limited to its assets. It can be constituted with a minimum of two partners and a maximum of twenty.

All the partners that make up the company make up the General Meeting of Shareholders. You can choose to have a board of directors made up of at least three members.

If any partner leaves the company, they will have to sell their shares, leaving the other partners with the preference over those shares.

Limited Liability Commercial Company (SRL)

It can be constituted with a minimum of two partners and a maximum of twenty. The capital of the partners is called participations.

If any partner leaves the company, the process of transferring their participation must be carried out before a notary.

Sociedad Anónima (SA)

You can have a minimum of two partners, the maximum being unlimited. The company's liability is limited to its assets and it is also required to assign a board of directors.

Open Stock Company (SAA)

It must have at least 750 shareholders, where 175 or more must own more than 35% of the total capital. The company's liability is limited to its assets.

A public offering of shares must have been made. There is an obligation to assign a board of directors and also a management.

Web page

Unique digital platform of the Peruvian State: gob.pe

- Spain

Individual or self-employed entrepreneur

It is any person who performs an activity on a regular basis and on his own account, for profit. It does not require a legal minimum of capital and its liability is unlimited.

Civil society

It refers to when several individuals share the capital, in order to distribute the profits. The partners can be capitalists or industrialists.

Collective society

All partners meet under the same company name. They are committed to participating proportionally according to existing rights and obligations.

Simple limited partnership

Similar to the partnership, but the types of partners have different responsibilities, each contributing something.

The general partners put the work and capital, responding to the debts. Limited partners contribute only capital, limiting their responsibility to that contribution. It is regulated by the Commercial Code.

Limited liability company

The capital is divided into shares that are accumulative, indivisible and constituted by contributions from the partners, who respond only with their contributed capital. The minimum capital is 3,000 euros.

Anonymous society

The capital is divided into shares, which are made up of the contributions made by the partners. These do not respond to debts arising personally. The minimum capital is 60,000 euros.

Limited partnership by shares

The capital is made up of the contributions of the partners. However, at least one partner manages the partnership, responding to debts personally.

Cooperative Society

When several people come together to carry out a business activity. Its structure and operation is based on democracy. The capital is fixed in the statutes.

Society of professionals

Joint exercise of some professional activity, where it is necessary to have a university degree and be enrolled in a professional college. It is regulated by laws 2/2007 and 25/2009.

Web page

Government of Spain. Ministry of Industry, Commerce and Tourism: ipyme.org

References

1. Accounting Verse (2020). Types and Forms of Business. Taken from: accountingverse.com.
2. Andrea Kinnison (2019). The Seven Most Popular Types of Businesses. Taken from: volusion.com.
3. Maite Nicuesa (2016). Four types of companies according to their size. Entrepreneurs. Taken from: businesswomandos.com.
4. Maite Nicuesa (2017). Types of companies according to their capital. Entrepreneurs. Taken from: businesswomandos.com.
5. The Entrepreneur's Website (2020). Classification of organizations. Taken from: lawebdelemprendedor.com.ar.
6. Cepefodes (2020). Learn about the types of companies in Peru and their characteristics. Taken from: cepefodes.org.pe.
7. Oscar Saavedra (2017). Types of companies in Colombia. Entrepreneurs School. Taken from: school-emprendedores.alegra.com.
8. Present-24 (2020). Classes and Types of Companies in Venezuela. Taken from: actuality-24.com.
9. Oscar Saavedra (2017). Types of company names in Mexico. Entrepreneurs School. Taken from: school-emprendedores.alegra.com.
10. Management (2020). Types of companies that exist in Spain, which one best suits the characteristics of your business? Taken from: gestion.org.