What are the Types of Business
Before starting a new business, you should know about the different types of business entities. As you know that business is an activity of Trading Goods or providing services for the sole motive of to earn profit. It serves the considerable assortment of our needs in the public eye.
Types of business Entities by Ownership
- Sole Proprietorships
It is the simplest and easiest form of business, Which did not required any partner and legal formalities for starting the business. Every single person can start with an idea by investing money and run as one man show. Simple example of these types of business are common in our society, Like a store, a shop of hair dresser, retailer, wholesaler, Doctor, Advocate. Here one person come into trade with one’s investment or skill (Providing Services for profit motive). No legal formation requirement means, one need not any deed, registration to local authority, does not required any permission from government, tax authorities. Sole proprietorships Characteristics are simple one.
Usually it have a limited area of working and the growth and development is limited as compare to Partnership or Companies. Proprietor play within its skills, finance and area.
- Partnership is the most common types of businesses. In this form at least two partners come into the point for starting a business for the purpose of earning profit. There are multiple types of Partnership . It can be registered or non registered. Usually people works without registering the firm and work together. Partnership Deed Helps for defining the rights, duties and liabilities of all types of partners.
- Joint Stock Company
Types of Business Entities by Activity
- Trading: This Type of Business is relate only trading, buying finished goods from one place and sell to others and get profit. Like super stores. In this kind of business owners are not producing the goods.
- Manufacturing: Some organization producing the goods and sell into the market. They are not selling others products but selling after producing self.
- Services: Business is not only trading or manufacturing the products and selling into the market. But by providing services you can also do the business. Like software houses, Accounting, Tax Services. Here you need to hire the skilled staff specific to your business objective and providing facilities to the customer. In return you charged the services charges.
- Franchising, Some companies are selling their point of sale for the better coverage of business. Like McDonald, KFC, Telecom companies, they are providing facilities to the business partners to come and join their business and get profit share.
- Multinational company: Like, Coca Cola, Pepsi they are not operating in one country. They have business in multiple countries. These are the call multinational company. They may direct operate in the other countries or get business partner in country with specific terms and conditions.