According to research, the origin of the word “business” means the state of being busy either as an individual or society, doing commercially viable and profitable work. A business is also known as an organization designed to provide goods, services, or both to consumers. There are many different types of business organizations, some are outlined below:
A sole proprietorship is also referred to as a sole trader or simply a proprietorship. This type of business unit is generally owned and run by one individual. The owner receives all profits and has unrestricted responsibility for any losses and debts that may occur, (this also includes taxation). Tradesmen; such as plumbers, electricians, handymen etc. all come under the term sole trader. People working from home, setting up small web-based companies are also included.
Other types of businesses are Partnerships. Partnerships are made up of solicitors, accountants etc; an advantage of a partner is that the work load can be shared, along with the business ideas. There tends to be more flexibility with the organization of work rotas, sickness and holiday allowance etc. Partners also keep their capital.
Companies are owned by shareholders that each contributes a supply of money into a central fund. Companies also exist where the business is owned by multiple individuals. This money is then used to provide a core sum of finance, which is then added to by borrowing and other forms of finance. Directors tend to run the company on behalf of shareholders who receive a share of the profits as dividends. Examples include Argos, Polestar and Cadbury.
Another Business type is Franchises. Franchises allow an individual or group to buy the rights to a trade and use that name to trade under. They are licensing arrangements and some well known franchise brands are – Subway, Baskin Robins and Perfect Pizza, to name but a few.