The company is a binding contract between two parties (two persons, or entities) or more that provides for the contribution of money or effort, management and distribution of profits and losses equally.
There are companies in which equality is not required so that the share of one party is greater than the other and this is clarified in the articles of incorporation. There are also one-person companies although this is associated with the concept and meaning of the word “company” which is based on partnership.
🔳 Types of companies by type of business operations
1. Service companies:
Service companies provide intangible or intangible products, such as: professional skills, expertise, or consultancy, and examples of service companies are: banks, schools, accounting firms, and law firms.
2. Trading companies:
Commercial companies rely on buying products at the wholesale price and selling them at the retail price, and profit is achieved by selling products at prices higher than their purchase costs, and they sell the product as it is without any change in its form, such as: stores, distributors, and groceries.
3. Industrial companies:
These companies contribute to the manufacture of new products, where raw materials used in the manufacturing process are purchased, and the basic components of this type of companies are: raw materials, workers, production plant, and machines, and the manufactured products are sold to customers and distributors.
4. Mixed companies:
They are companies that can be classified into more than one of the previous types of companies, for example, restaurants are mixed companies, where food and ready meals are manufactured such as manufacturing companies, and cold drinks are also sold such as commercial companies, and attention is paid to maintaining a good level To serve customers and gain customer satisfaction like service companies.
5. Person Companies:
They are called “people companies” because they are based on personal consideration, not financial. Personnel companies are established through the participation of a small number of individuals who are mostly related or friendly, and each partner of the company is trusted by the other partners.
6. Money companies:
They are called “companies of money” because they are based on financial considerations, not people. Rather, fund companies aim to raise capital to partner in business activities.
Each person, before establishing his own company, must research and study the advantages and disadvantages of each type of company, which helps him to select the best types of companies that suit the nature of his activity and his financial and investment conditions, which makes the legal form of the company a real beginning to work and launch in the field of investment and companies law.
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