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5 Basic Types of Business Every Entity Can Relate To

There could be an infinite number of ways to do business, in fact, everything is business if you glance through it carefully. If we were to consider the types of business on the basis of their ” Working – I e what do they sell or provide in terms of services ” Then I’m afraid we all run out of storage in this world because every new second brings a new possibility. Thanks to this group what we know as the ” Entrepreneurs “, this hunt the new business opportunities every second, making it impossible to account for the types of business on the basis of their working.

However, we can classify them according to the management or ownership, at the CEO level. Out there, there are 5 different types of business. Each one having its own set of norms, let’s dive in each of these.

1- Non Profit

non profit type of business

Nonprofit businesses are those who don’t use the profit for personal causes, they use it for charitable causes. A common example of such an organization is NGO (Non-Government Organization) which are set up to bring out a certain positive outcome in society. These type of business models don’t imply a personal benefit in terms of money but they do bring personal benefit in terms of peace of mind.

2- Sole Proprietorship

types of business ownership

What most of the people dream, most of the people are and most of the people start as is this model of business. It falls in the type of business ownership. The whole business whether it’s a local shop or a groundbreaking magazine hit, it belongs to the single person and it’s their property. This type of business is perfect for the small scale businesses, more preferably for the startups as there is unlimited liability and the business owner is free to do whatever they like with their business.

3- Corporation

corporations types of business

This type of business is a bit different from the above mentioned ones. This is not a single owner business, it’s owned by the shareholders. Among those share holders there is a board of directors who is responsible for all the decisions regarding all the aspects of a company. This type of business involves some advanced companies which are multi national. Corporations are not easy to set up like the Sole Proprietor company or a Non Profit company. These require time and effort. These usually bring out huge revenues and profits.

4- Partnership

partnership types of business

Partnership is yet another easy to deploy method of business. It’s ideal for the companies seeking to survive the breath taking competition. In Partnership, the business model unlike the sole ownership, now has multiple owners. This results in multiple streams of investments and ideas however these partnerships are also prone to bad decisions as there are multiple minds going over a single matter. However, the partner ship is ideal for a small scale business or a startup.

5- Limited Liability Company ( LLC )

LLC types of business

The last type of business in this list is this LLC ( Limited Liability Company ). The business analysts see LLC as a hybrid model of business which is neither treated fully as a corporation nor as partnership. It is a mixed type of business in this regard as it has the qualities of both of the corporation and the LLC. Unlike corporation which has a board of directors, the LLC has a team of it’s members who carry out different tasks. You may head to your lawyer for understanding the taxing mechanism for a LLC as it differs.

These were the 5 basic types of business which are widely dominating the world today. No matter what kind of advanced and expanded business it is, it’s always gonna relate to these 5 basic types of business

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