Types of Companies

In a globalized, free-market society, there are a countless numbers of companies open for business, but, they can be classified into a relatively small number of types of companies.  They can be divided in a number of different ways, and we'll try to address a few of those here.

At the most basic, universal level, there are three types of companies that are clearly distinct and separate in how they make their money:  Services, retailers, and manufacturers.

• Service Companies - Service companies are engaged in providing a specific service - as opposed to a product - to their customers.  While many companies focus on supplying great customer service, this does NOT necessarily mean they fall into the "service" category.  A service company is specifically selling the service, whereas customer service might only be tangential to the product being sold.  A service could cover any number of things, from an airline flight to a housecleaning company to a barbershop.  The product sold is not a material product, but, rather, an experiential product.  It is the action that is being bought.
• Retail Companies - Also known as merchandisers, the retailer makes their money off of selling a material product.  They are providing and selling the material product in a specific venue, where the customer may come and purchase the material good.  They may be a grocery store, a shoe store, a hardware store, or a gun store, as long as they are providing a product that is materially taken home and used by the customer, they are are retail company.
• Manufacturers - A manufacturer could be working in tandem with a retail company, but they are making their money from something else entirely.  Their main business is the production of a certain good.  They make their money by providing the material to the retail or service provider.  So while Delta Airlines is in the service business, Boeing is the manufacturer who is selling them their jets.  The manufacturer is concerned with procuring the raw goods, recreating them into their product, and then selling that product to either a retailer, a service company, or another manufacturer.  For the latter example, one company may be drilling for oil, and, once that oil is drilled, they then sell it to an oil refinery, who distills the oil into gasoline, petroleum, and propane.  The refinery then sells it to a distributor, or a retailer, who makes their money off of selling the final product.  A single company, like Exxon or BP, however, may be vertically integrated so that they control all the steps of the process, like the extraction, the refinement, and the selling of the final product.  This would mean they are both the manufacturers and the retailers.  

You can also divide types of companies by the way they are organized or their legal structure.  Here are some examples:

• Corporation - a corporation is probably the most prominent type of company in the modern world.  The main purpose of a corporation is to set the corporation as separate from the people, investors, and workers that make up its parts so that, if the corporation goes under, it is the corporation itself that fails and not the people.  This protects investors and workers from going into debt afterwards, and it is called limited liability.  It differs from any business in which a certain person or group of people takes on all liability should the company fail.
• Cooperative - A cooperative, or co-op, is a type of company that is organized so that all workers have a democratic say in the decisions of the company.  This differs from most corporations and businesses in that an upper management isn't designated this responsibility.  Another defining characteristic is that all the workers have an owners share in the business, so have a stake in its survival.  Cooperatives tend to be focused on egalitarian objectives, so it is not unusual, for example, for an assembly line worker to make the exact same amount as a CEO.
• Conglomerate - a conglomeration is a type of company that combines two or more companies into a larger entity.  The purpose of doing this is to diversify the company's portfolio, which makes it a more stable investment, as it is less dependent on a single one of its parts.  
• Partnership - a partnership is a type of company that, unlike a corporation, places the full responsibility of a company on several partners or owners.  Should the company go under, these owners will not have the limited liability protection of the corporation, and they will take on the debt.  The main perk to forming a partnership rather than a corporation is that tax laws are less stringent, and thus the partners make more money.
• Holding Companies - Holding companies don't easily fit into the above three types of companies easily, because they don't provide any actual products.  Their main purpose is to hold shares of stock in other companies, and, by doing so, make money.  This makes them closer to a service than anything else, but their main function is to make money for their owners and investors.
• Subsidiary - A subsidiary is a type of company that is controlled by another company or legal entity.  Oftentimes it is associated with state ownership.  A subsidiary is controlled by the separate entity in theory, but has a different name and doesn't operate directly beneath that company as a part of its usual operations.
• Non-profit organization - A non-profit organization is designed with the purpose of furthering its aims to achieve some purpose, rather than with the purpose of making money.  This doesn't mean that there is not a flow of money through a non-profit organization, because the organization may still sell some service or product, it simply means that the surplus money left over after the employees have been paid and miscellaneous costs have been covered goes back into the company itself, rather than is distributed among owners and shareholders.  Often, these organizations are charitable in nature, so any money that does NOT go back into the company is donated to a specific cause.

There are countless other types of companies ranging from the complex to the simple, but the above list covers a large chunk of them.  There are many, many different ways to make money, and businesses know how to adapt so they can maximize their efficiency at doing so.