Business Areas, Objectives, and Company Types
Basic Areas of Activity
Supply and Production Area
The primary function of this area is to manage the supply of raw materials in the most advantageous way for the company, considering both physical and economic conditions. It also controls the entire process of transforming these materials into finished products, sometimes including the storage of these products for sale.
Financial Area
Personnel responsible for this area are concerned with obtaining and managing the financial resources the company needs to develop its activities. This includes the study, selection, and implementation of investments.
Administrative Area
This area mainly deals with the management of all administrative documents (accounting, legal, etc.) that enable the proper functioning of the entity and the development of procedures necessary for its activity.
Commercial Area
This area encompasses both the study of market needs and the selection of the most convenient ways to introduce and sell the product or service. It involves implementing appropriate marketing policies, and other related activities.
Personnel or Human Resources Area
This area’s role encompasses all aspects of the people working in the company. It involves managing human resources in the most convenient way, avoiding potential disputes, fostering motivation, and so on.
Company Objectives
Economic Objectives
- Maximize profits
- Business growth
- Increased productivity
Social Goals
- Create jobs
- Stabilize the unemployment rate
- Increase the level of industrialization
- Protect the environment
Requirements for Objectives
- Must be known by all members of the organization
- Must be precise
- Must be realistic
Classification of Companies According to Legal Nature
Partnerships
In partnerships, the most important aspect is the partners themselves – the people who make up the company, manage it, and contribute capital. Examples include general partnerships and limited partnerships.
Capitalist Societies
In capitalist societies, the most important aspect is the capital contributed by each partner, regardless of who contributes it. Examples include limited liability companies, corporations, and labor corporations.
The Sole Proprietorship
A sole proprietorship is an organization of capital and labor designed to produce goods or services for the market, exercised by one person.
Requirements for Employers
- Legal capacity to act
- Be an adult or emancipated minor
- Exercise activity on a regular basis
- Act in one’s own name
Key Features of a Sole Proprietorship
- Company Name: Must be available and will be the brand name.
- Minimum Capital: Determined by the need for initial expenses.
- Capital Disbursement: Fully paid from the company’s inception.
- Liability: Unlimited liability.
- Registration: Registration in the commercial register is not compulsory but advisable.
The Corporation
The corporation is a social or collective entrepreneur. It can be defined as a contract in which a meeting of persons, property, or industry occurs to obtain a profit. Once incorporated and registered in the Register, it has full legal personality in all its acts and contracts. This results in several consequences:
- The company will have patrimonial autonomy and separation of liability.
- The object of the company is the objective pursued by the social enterprise and cannot be contrary to morality or public order, besides being lawful and practicable. The bylaws must necessarily explain the nature of this primary activity.
For the constitution of a corporation, it is required to grant a deed and register it in the Register; otherwise, it would be considered a private contract between the partners.