company is a organization that carries out economic activities for commercial purposes, through the production and sale of goods or services.
Also known as business activity, a company is engaged in the sale, production and purchase of goods or services.
One of the main objectives of a company is economic gain, the generation of profit that results from the service provided or the product sold.
Companies also aim to achieve certain results, which are projected as goals to be achieved, in accordance with the company's main mission. To achieve results and make a profit, the company must follow a previously defined strategic plan.
The person responsible for managing the operation of the company is the entrepreneur. He manages the management and operation of the company in the market, with the help of employees. To fulfill this task, the entrepreneur needs to know the managerial and administrative processes, such as result analysis and resource management.
In these tasks, it is common for the entrepreneur to have the help of an administrator, a professional specialized in planning, organizing and evaluating business results.
The 3 fundamental elements of a company
Companies are formed by three elements or resources:
- materials: includes raw material, machinery, technology and all the logistics necessary for the company to function;
- humans: entrepreneurs, administrators and employees who occupy positions and perform functions in the company. Customers, consumers and suppliers are also part of this category;
- financial: money for investments, purchase of raw materials, payment of employees and payment of taxes.
What are the types of companies?
There are five types of companies: individual micro-entrepreneur, sole proprietor, limited liability individual company, simple partnership and business partnership.
1. Individual microentrepreneur (MEI)
The individual microentrepreneur is the only partner company and can hire a single employee. Also, he cannot have affiliates of the business.
This type of company was created to fit the self-employed professionals who work with service provision. In this classification, these self-employed people are transformed into small business owners.
The annual billing limit of an individual microentrepreneur must not exceed R$ 81,000.
2. Individual Entrepreneur (EI)
the individual entrepreneur work alone, without being part of a society. He carries out the company's activity on his behalf, only with his investments. Companies without partners that sell products or services are examples of individual entrepreneurs.
An important characteristic of the individual entrepreneur is the company's liability, which is unlimited. This means that the entrepreneur will be able to use company assets or personal property to fulfill obligations (such as labor debts and outstanding payments).
To be an individual entrepreneur, the annual turnover cannot exceed 360 thousand reais.
3. Individual limited liability company (EIRELI)
EIRELI is also a company formed by a single partner. In this business type, the partner is not liable for the company's debts with his personal assets. Any debts or payments must be made with the company's capital.
To register this company, the entrepreneur must have a minimum capital equivalent to one hundred minimum wages and the annual turnover does not have established limits.
It can be used to market and produce goods and services and also to represent professionals working as self-employed persons.
Read more about the meaning of EIRELI.
4. simple society
The simple society must be formed by no. at least two partners, which will have unlimited patrimonial responsibility. Therefore, the partners may have to fulfill financial obligations with personal assets, in addition to business capital.
This type of company is used to provide services in various specialties (called intellectuals), such as: doctors, lawyers, engineers and artists in general.
The annual revenue of a simple society cannot exceed R$4.8 million.
5. Business company
Business companies are formed by at least two partners, which are responsible for the financial responsibilities only with the company's capital, in proportion to the value of their shares.
Partners will only be required to pay debts with personal equity in special cases, such as labor debts or tax debts.
Business societies can be used in many fields of activity, such as providing services and selling goods, but they cannot commercialize intellectual and autonomous activities.
They must operate in the form of a limited liability company (Ltda.) or a corporation (S/A). The limited liability company has a simpler operation and the company's capital is divided among the partners, in the form of shares.
The joint-stock company is a little more complex and has the company's capital divided into shares, which can be purchased even by people who are not part of the company (shareholders).
See more details about limited society and anonymous society.
What is the difference between public and private companies?
Companies can also be classified as public, private or mixed. This classification takes into account the origin of the company's capital.
- public company: are companies that have capital invested by the state and provide services linked to state activity. Therefore, they are also administered by the State. Examples: Post Office and Caixa Econômica Federal;
- private company: are companies that have private capital and are managed by their owners, such as companies that sell products and services in general.
- mixed company: are companies with mixed capital (capital invested by the State and private capital). Petrobras and Banco do Brasil are two mixed capital companies.
What are the business sectors?
The classification of business sectors follows the company's area of activity:
- primary sector: formed by companies that perform activities of exploration of natural resources or sale of raw materials to companies in other sectors. Fishing and agriculture are examples of activities in this sector;
- secondary sector: this sector includes companies that manufacture industrialized products and sell to consumers, such as the clothing, food and technology industries.
- tertiary sector: consists of companies operating in the area of commerce, sale of products or provision of services. Commerce in general and self-employed professionals are examples of activities in the tertiary sector.
See more about the meaning of tertiary sector.
