Enterprise

Enterprise Concept: Enterprise is a specific kind of organization that is characterized by the fact that its ultimate aim is its profits maximization…

Enterprise Concept

Enterprise is a specific kind of organization that is characterized by the fact that its ultimate aim is its profits maximization; ultimately, in a company all the other goals are in reality ways used to maximize profits. In the case of a public company, the ultimate aim can be slightly different and be more associated to social profitability goals.

Enterprise classification

Companies can be classified in several ways being the most common its juridical form, its equity property, its size and still the sector to which belongs.

Classification as to juridical form: depending on the countries, the most common companies’ juridical forms are the following:

  • Society by shares: in societies by shares the equity is represented by shares, each one of which allocated to a certain partner;
  • Anonymous society: in this type of societies the equity is represented by shares, which are not allocated to specific shareholders;
  • Limited partnership: society that is characterized by the existence of two types of partners: general partners and limited partners;

Classification as to its equity property: the most usual distinction is between public and private companies:

  • Public companies: companies whose equity is detained by the Staten or by institutions directly controlled by him;
  • Private companies: companies whose equity is detained by individual people or by private institutions;
  • Mixed equity companies: companies whose equity is simultaneously detained by the State and private entities.

Classification as to the size: the companies’ classification as to the size is different between countries but is generally associated to magnitudes such as business volume or employees number. In the Portuguese case is used the European classification:

  • Microenterprise: company with less than 10 employees, a business volume inferior to 2 million Euros and a balance also inferior to 2 million Euros;
  • Small Business: company with less than 50 employees, business volume inferior to 10 million Euros and a balance also inferior to 10 million Euros;
  • Medium Business: company with less than 250 employees, business volume inferior to 50 million Euros and a balance also inferior to 43 million Euros;
  • Big Company: company with magnitudes superior to the presented before.

Classification as to the sector to which belongs: this type of classification has to do with the activity developed. The main division is between the primary sector, secondary sector and third sector:

  • Primary sector: includes the activities directly related with the exploitation of primary resources, namely agricultures, fishing, farming and mining;
  • Secondary sector: refers to the transformation activities and includes industrial and construction activities and public works;
  • Third sector: includes the activities related with services and with commerce, distribution and transports.
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