Economy

Company

Company - What it is, definition and concept | 2021

A company is an organization of people and resources that seek to achieve an economic benefit with the development of a particular activity. This productive unit can have a single person and must seek profit and achieve a series of objectives set in its training.

Often the creation or formation of companies responds to the need to cover a service or a need in a given environment and through which there is the possibility of benefiting. For this, the entrepreneur  or the group of entrepreneurs gathers the economic and logistical resources necessary to be able to face this business challenge and meet the objectives that are set and making use of the so-called productive factors : labor, land and capital.

The conceptual world of the company is quite broad, with the possibility of classifying business projects according to a large number of criteria, such as the nature of their activity, their organization chart or their size.

Types of incorporation of a company

There are different types of company incorporation. It can be individual when it is made up of a single person, in the form of  a public limited company  or limited liability company , following the cooperative scheme and many other variants existing in the current economic environment.

Company sector

On the other hand, each company must be framed in a certain sector if the type of activity carried out in the economy is taken into account, distinguishing between companies of:

  • Primary sector : Agricultural labor or the mining industry.
  • Secondary sector : Dedicated to the construction sector. The manufacturing industry transforms the products of the primary sector.
  • Tertiary : Dedicated to the service sector. For example, banks, insurance companies or the police.

Size of the company

With regard to size, as has been said, there is the possibility of forming companies starting from a single member or worker. This would be the case for individual companies. Already going up in figures, we can find the “small and medium-sized companies” or  SMEs. Finally, we would have large companies with a large number of workers on the payroll and high figures in their business volumes.

Taking into account its number of components, different forms of business structures can be found and the way in which the functions and powers of the company are distributed throughout its organization chart.

Business power

Taking into account the origin of the company or its ownership, we can differentiate the so-called private companies, if they belong to individuals, or public, if they are controlled or regulated by public powers or belonging to State institutions.

Alternatively, it is possible to find examples in business life of joint ventures that meet both characteristics and are jointly owned by public authorities and private agents.

Comment here