Company classification

Company classification

At the end of the article, my objective is for you to learn the classification of companies and why it is useful for you to know the different ways in which companies cánido be grouped.


I hope you find it useful.

Why are companies classified?

Each company presents different characteristics, since they are dedicated to different activities and have a different size.

Therefore, it is fair to think that a company with 10 employees, whose business activity is focused on advertising, is managed differently than a company with 1000 employees that is dedicated to the production of cars… Right?

Do you think that a small company that sells sweets has the same administration as a multinational company? The most logical answer is no, in fact regardless of the size, according to the business activities that are carried out, it is possible that a company requires more or less functional areas.

Therefore, not all companies and certainly not all organizations have the same organizational structure.

Thus, in order to better understand the operation of a company and thus be able to apply an appropriate form of administration, it is useful to group companies into groups that share common characteristics.

In other words, a classification of the companies will be made in order to better study the companies.

What is the classification of companies?

Well, possibly it has already become clear to you, but I am going to give you a very fácil example so that it is even clearer what the classification of companies consists of.

Imagine that you are at school and the teacher is going to separate the students into different groups.

To do so, the teacher asks them what her favorite color is.

Depending on the color you like, you will belong to a certain group.

Well, in the previous case the teacher is using a certain criteria to be able to separate the students into groups.

In this case, the criterion that has been taken is the favorite color of each student.

In the case of the way in which companies are classified, the same thing happens.

What is done is to take a certain criterion that allows to group all the companies that have afín characteristics into homogeneous groups. Of course they are not going to be grouped by the color they like the most, but by size, activity, legal form, etcétera.

Ways in which companies are classified

Companies could be classified using many different criteria, but the most common criteria or the most common forms are as follows:

  • Size of the company.
  • Activity.
  • Geographic scope.
  • Capital ownership.
  • Legal form.

Classification of companies according to size

A company, with respect to its size, cánido be classified into:

  • Micro.
  • Small.
  • Median.
  • Big.

How do I know if a company is micro or large? In order to know to which category each company belongs, different cambiantes are used that allow us to group each company into one of the aforementioned categories.

The cambiantes most used as support to classify companies according to their size are the number of employees, annual turnover or profits.

Now, then I am going to share a table that will give you the ranges that are usually used.

SizeNumber of workers
microenterprise Less than 10 workers (0 – 9)
Small From 10 to 49 workers
Median From 50 to 249 workers
Big More than 250 workers

Now, if you want something a little more specific, we are going to use the information provided by the Official Gazette of the Federation (06/30/2009) and we cánido see that the classification of companies according to their size (according to the number of workers) is as follows:

Now, to know if a company falls into the category of micro, small, medium or large company, the following elabora is used:

Classification of companies according to their ámbito

The truth is that you already know this classification, since in primary school they came to talk about it.

A company perro be classified into sectors as follows:

  1. Primary.
  2. Secondary.
  3. Tertiary.

ring a bell? I bet so, however I will remind you a little more.

Primary campo companies

The companies belonging to the primary ámbito are those that use natural resources (extract) and do not use any productive process that transforms said resources into a new product.

Some examples are:

  • Cattle raising.
  • Fishing.
  • Agriculture.
  • Mining.

As you cánido see in the examples above, these are companies that use natural resources to make a profit by selling their products, but do not use any transformation process.

For example, fishermen sell everything they caught, but they sell it as is.

Secondary ámbito companies

Secondary ámbito companies are those that transform inputs into new finished products.

Therefore, any company that emplees a production process could entrar the category of industrial company.

Tertiary campo companies

We could say that they are all those that do not fall into the two previous categories, that is, service companies.

That is why it hurts to refer to it as the service campo.

Some examples of the service campo are:

  • Accounting offices.
  • Law firms.
  • SEO positioning services.
  • Cleaning companies.
  • Catering services.
  • Transport companies.

Classification of companies according to their activity

In some books you perro find that the classification of companies according to the activity is: primary, secondary and tertiary campo.

However, in other books you cánido find that the classification of companies according to their activity is as follows:

  • Commercial.
  • Industrial.
  • Services.

I am going to talk to you about both because you perro get to hear talk about companies in the secondary ámbito, as you are going to get to hear about industrial companies.

Therefore, it is not bad that you know about both classifications.

Trading companies

They are organizations whose main activity consists of buying and selling.

Therefore, commercial companies do not need to alter the inputs through a transformation process.

A store or a stationery store are examples of this type of company.

Industrial business

They are organizations that take natural resources (inputs) and transform them into new products.

Therefore, industrial companies do occupy productive processes.

The companies that develop cars or the same phone that you have are examples of industrial companies.

service companies

As their name indicates, they are companies whose finished product is not a tangible product, but rather an intangible product.

Classification of companies according to ownership of capital

This criterion for classifying companies refers to who owns the factors of production.

Therefore, it perro be classified into two or three:

  • Private property.
  • Public ownership.
  • Mixed.

privately owned companies

In this type of company, the factors of production are owned by individuals who come together in order to fulfill a certain purpose.

publicly owned companies

They are companies where the factors of production belong to the government (government entities or dependencies).

joint ventures

As their name indicates, they are those whose factors of production belong partially to individuals and to the state.

Classification of companies according to their geographical area

According to its scope or geographical scope, a company cánido be classified into:

  • Local.

  • Regional.
  • Nationals.
  • International.
  • multinationals.

local businesses

As their name indicates, they are the companies that cover less territory, since they carry out their activities in a certain locality.

Therefore, they do not reach a large number of people.

regional companies

We have already begun to expand territory and we perro say that local companies carry out their activities in several localities.

National companies

In this case, we already have companies that satisfy the needs of a certain product (products) in a certain country.

Therefore, it already covers the entire national territory of the country in which the company was born.

International companies

As its name indicates, in this case, the companies have already broken with the territorial limits that exist between countries and are capable of exporting their products to different countries.

It should be noted that international companies cánido be seen as exporting companies, that is, the operations are carried out in the country of origin and the product is then distributed to the countries where they are trading.

Multinational companies

In this case, we already have companies that have an international presence, however, in this case they do carry out production activities in different countries.

Therefore, we cánido say that they are companies that have subsidiaries in other countries (it is not that they only export).

Classification of companies according to their legal form

For a company to carry out its business activities, it has to adapt to the different legal regulations that each country has in terms of tarea, security, tax, etcétera.

Therefore, each company will select, according to its needs, the category that is most convenient for it.

The classification of companies according to their legal form usually varies from one country to another, depending on the legislation to which said country is subject.

In the case of México, we cánido see the classification according to the legal form in the General Law of Commercial Companies.

The LGSM in its first article indicates the commercial companies recognized by law, which are:

  • Company in collective name.
  • Fácil limited partnership.
  • Limited liability company.
  • Anonymous society.

  • Company limited by shares.
  • Cooperative Society.
  • Simplified joint depósito company.

The truth is that talking about each of the commercial companies in this article would lengthen it too much.

Therefore, I consider that it is better that I talk about each one in separate articles.

We hope you liked our article Company classification
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