The classification of companies occurs according to different criteria, which make it easier to make comparisons between them; either because of their different results, the way in which they are managed, their economic activity, their size, among others.
In this article we are going to tell you about the importance of the classification of companies, since they were born to meet the needs of today’s society and it is essential to know how they are grouped and under what criteria.
Think of business rankings like a map on a journey: to know where you want to go, you first need to know where you are located, who is nearby to help you, and who will interact with you along the way.
If you are thinking of starting a business successfully in Argentina, take note and find out how your company will be classified.
When you know what classification your business belongs to, don’t hesitate to venture into the online world with your own virtual store. Take advantage of them and offer your potential customers an easy-to-use and secure sales channel.
What is the classification of companies?
The classification of companies is about using specific criteria to locate the different businesses within the branches of the industry, as well as the type of activities they carry out and the results they can obtain from them.
The most common way in which companies are classified is according to their economic activity, legal constitution, size, geographic scope and origin of their capital.
It is key to understand companies as ecosystems, since, in addition to the criteria to distinguish them, the interaction that you are going to have with other actors is a fundamental piece in their analysis.
Understanding this classification of organizations will allow you to have a relationship with the environment so that it works optimally.
Why is it important to know the classification of companies?
Knowing the classification of a company allows, among other things, to define the type of financing that the enterprise needs, find the sources of that investment and identify the requirements to interact with government agencies.
This differentiation is also key when requesting and activating everything that has to do with research, development, entertainment, etc. services.
As an extra benefit, locating the exact classification of a company allows partners and investors to better communicate its current status within the commercial landscape, this facilitates the process of explaining it and how it is expected to evolve.
💡 And speaking of evolution, for a business to be sustained over time, its profitability must be guaranteed. To take firm steps and achieve this goal, we invite you to read our exclusive guide with ideas and tips on profitable businesses:
How are companies classified?
There are different criteria for classifying companies. The most important are the following:
- Economic activity
- legal constitution
- Size
- Geographic scope
- Origin of capital
Let’s look at each classification in detail. 📝
According to your economic activity
Primary
The companies that belong to this sector are responsible for carrying out activities that are related to the raw material and obtaining it, for example, agriculture and forest exploitation.
Secondary
On the other hand, there are companies that belong to the secondary sector, which are generally responsible for transforming raw materials and goods into services that can reach the customer directly.
Tertiary
These companies handle the trading of goods and the . For example, the entire tourism field, transport and commerce.
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According to its legal constitution
Individual or sole proprietorship
These companies are owned by a single person rather than a group of individuals.
Corporate
Unlike the individual, these companies are known as companies and are made up of groups of two or more people.
according to its size
Micro
They are businesses that have a maximum of 5 workers.
Small
They are companies that have between 6 and 50 workers.
Median
Companies that comprise between 51 and 200 workers.
Great
Finally, large companies are those that have more than 200 workers.
According to its geographical scope
local businesses
They are the ones that serve a predetermined location, usually the place where the company was born.
regional companies
Those in charge of supplying the high demand for a product or service in specific regions or provinces of the country.
National companies
They are the businesses that have a presence throughout the Argentine territory.
International companies
They are responsible for offering their products and services in different parts of the world.
According to the origin of the capital
Private businesses
They are for-profit organizations that belong to private investors.
Public enterprises
They are created with the purpose of offering the population of a country free basic goods and services; These organizations are not for profit, they are generally constituted by the government and they can continue operations thanks to the payment of taxes.
Joint ventures
These are those constituted by government capital, in addition to private investors.
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Classification of companies: examples to help you
As we have seen so far, the classification of companies is varied. Now, to dispel all your doubts about how organizations are classified, we leave you some examples of companies and to which group they belong.
Company Economic activity Legal constitution Size Geographical scope Origin of capital The romantic ones (Clothing) Secondary and tertiary Individual or sole proprietorship Micro Regional Private Cinépolis (Cinema & streaming) Tertiary Corporate Large International Private Coca-Cola (Beverages) Secondary and tertiary Corporate Large International Private
💡 Learn more: I found out what they are in this article on our blog.
What is the purpose of classifying companies?
The objective of classifying companies is to segment and differentiate their contributions to trade, measure their participation in the economy, as well as their growth rates.
In short, by sorting companies into segments, we can better understand how they work and what they bring to the table.
In addition, to you how it allows you to locate your company within the industry, to know in a concrete way the criteria to participate in different commercial areas, their demands and requirements.
At present, due to the , the number of companies that originate within Argentina has increased and this allows the economy to diversify and the interaction between them is favored.
This diversity causes companies to be classified in a more punctual and specific way, allowing this same differentiation to respond to all the demands of the business world.
Is there a classification of companies in Argentina?
For legal purposes and the formation of commercial companies, the six most common types of companies in Argentina are:
- Limited companies (SA)
- Company in collective name (SNC)
- Cooperative societies (SC)
- Limited liability company (SRL or SL)
- Company limited by shares (SCA)
- (SAS)
If you want to know the legal characteristics of each one, we recommend this article about them in Argentina.
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conclusion
Knowing the classification of companies will allow you to locate yours within the commercial landscape and discover what the criteria are for interacting with different players within the industry, such as the government, your competitors or potential partners within your segment.
Now that you have the necessary knowledge to classify your business, it’s time to boost it! start to . It’s easy, fast and requires no technical knowledge.
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