There are three main types of business:
(1) Service Business:
A service type of business provides intangible products. Service type firms offers professional expertise, skills, advice and other similar products.
(2) Trading/Merchandising Business:
This type of business buys the products at wholesales prices and sells the same as retail prices. They are known as "buy and sales" businesses. They make profit by selling the products at prices higher than their purchasing costs.
(3) Manufacturing Business:
Unlike a merchandising business, a mnaufacturing business buys products with the intention of using them as raw materials in making a new product.
Forms of Business:
These are the basic forms of business organizations:
(1) Single or Sole Proprietorship:
A sole proprietorship is a business owned by only one person. It is easy to setup and is the least costly among all forms of ownership.
(2) Partnership:
A partnership business owned by two or more persons who contributes resources into the entity and divide the profits of the business among themselves.
(3) Joint Stock Company:
A joint stock company is a business organization that has a separate legal personality form its ownership. Ownership is a stock corporation is represented by shares of stock.
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