Different types and forms of businesses

Business is an entity with produces goods and services with the help of its resources in exchange for money.

The essential purpose of running a business is to earn some profit. If the goal of any organization is not to make a profit, it cannot say to be a business organization.

There are different types and forms of business organizations. There are three types of businesses which are service businesses, merchandising activities, and the manufacturing industry.

Service business

Service businesses are responsible for providing intangible products (which have no physical form) to their customers to earn the profit. The firms which run such types of companies produce different types of professional skills, advices, and expertise.

For example, hair salon schools, banks, and many more are famous examples of such businesses.

Merchandising business

Merchandising business usually buys products from another organization at wholesale prices and sells them at retail prices to their customers and earns a profit.

In this type of business, the original state of the product remains the same. Grocery stores, distributors, and many more are examples of the kinds of companies.

Manufacturing business

Such types of businesses are responsible for making final products from raw materials. This type of enterprises purchase raw material or products from other companies and convert them into final and new products.

These types of businesses combine different types of raw material, labor, and additional costs altogether and manufacture final products.

Then their final products are sold to customers, and in return, they enjoy the profit.

Hybrid Business

It involves different types of companies that may classify into more than one type of business.

For example, are students combine different kinds of products and ingredients and offer a meal to its customers.

Forms of businesses

Sole proprietorship, partnership, and cooperation are three forms of business.

Sole proprietorship

A single person owns this type of business and responsible for the loss or profit of the company. Even the business is accountable for the entire investment. The owner of the company faces unlimited liability, which means that in the case of loss, creditors are allowed to gain personal business assets. These types of businesses are at a small level.


It is the second form of business in which two or more than two persons contribute and starts a business. All partners are responsible for the loss and profit of the company depending upon their share or contract. The liability in this type of business is unlimited if the partnership is general. In a public connection, creditors cannot go after the business owners of the company.


This type of business has separate legal identity from its owners. Owners of the businesses purchase shares of the company. In this type of business, owners enjoy limited liability with limited involvement in the industry and operations. The number of owners in this type of business can be unlimited, depending on the size and number of shares. This type of marketing has a different personality from its owners; in case of loss, creditors cannot go for the shareholders.

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