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What is Business?
Definition and explanation
Business is any legal activity with the aim of earning profit. For more briefing Business is
an Economical

Business, Transaction

Activity, in which a Businessman do regular production and distribution of goods and

services to satisfy human wants. The regular production and sale of goods undertaken
with an objective of earning profit and acquiring wealth through the satisfaction of human
wants is called business.

Business
Business should be define by its function. If you know functions of business so definitely
you will understand it.

FEATURES OF BUSINESS
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The characteristics or features of business are discussing in following points

functions of business, business, Commerce, Transaction

Exchange of goods and services: –

All activities are directly or indirectly concerned with the exchange of goods and services
for money or money’s worth.

Deals in numerous transactions: –

It is another feature. The exchange of goods and services is a regular feature. A
businessman regularly deals in a number of transactions in order to sale his products or
services and also to earn profit.

Profit is the main objective: –

The business is carried on with the intension of earning profit. The profit is a reward with
the services of a businessman.

Business skills for economic success: –

Anyone cannon run ait, to be a good businessman, he/she needs to have good qualities
and skills. A businessman needs experience and skill to run a it. If our businesses are
successful so that our economy will also increase.
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Buyer and seller: –

Every transaction has minimum two parties that are buyer and seller. Business is
nothing but a contract or an agreement between buyer and seller.

Connected with production: –

That activity should be connect with production of goods and services. In this case, it
called as industrial activity. Industry may be primary or secondary.

Marketing and distribution of goods: –

All activity may be concerned with marketing or distribution of goods. Here it called as
commercial activity. The distribution is in the form of:-

a) Producer to wholesaler to retailer to consumer.

b) Producer to retailer to consumer.

c) Producer to consumer.

d) Producer through agent to wholesaler to retailer to consumer.

Deals in goods and services: –

All those activities may be deal with Goods or Services to earn profit.
Goods may be divided into the following categories which are given as under;

Consumer goods: –

Goods which are used by final consumer for consumption are called consumer goods.

For example: TV, Soaps, Rice, shampoo, etc.

Producer Goods: –

Goods used by producers for further productions are called producers goods.
For Example: Machinery, Furniture, Equipment, etc.

Like the Khazana Sugar Mill in Pakistan gets the Sugar can from all over Pakistan and
after processing on these Sugar cans they produces sugar…. As you have seen that
they buy goods for further processing to produce another product.
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Services are intangible but can be exchanged for value like providing transport,
Warehousing, and Insurance services etc.

To satisfy human wants: –

The businessman also desires to satisfy human wants. By producing and supplying
various commodities, businessman try to promote consumer’s satisfaction.

Social obligations: –

Modern businesses is serious oriented. Modern businessman are

conscious of their social responsibility. Today’s it is serious-oriented rather than profit-
oriented.

Forms of Business
There are different forms of business which are given as under;

Sole Proprietorship: –

A Sole Proprietorship, also known as a Sole Trader. This form is owns by one person.
The owner operates all activities alone and may hire employees. A sole proprietor has
unlimited liability for all obligations incurred by the company. All assets of the company
belong to a sole proprietor including, Computer, Infrastructure, any inventory
manufacturing equipment, retail fractures as well as any real property owned by the sole
proprietor.

Partnership: –

A partnership is a business owned by two or more than two persons who are agreed to
share the profit of the business carried by all or any one of them working for all. In
partnership each partner has limited liability for the debts incurred by the company.
The three most prevalent types of partnerships are;

1. General Partnership.
2. Limited Partnership.
3. Limited Liability Partnership.

Corporation: –
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The owners of a corporation have limited liability and the business a separate legal
personality from its owners. Corporations can either be Government owned or private
owned. They can organize either for profit or as nonprofit organizations. A private
owned, for Profit Corporation is owned by its shareholders, who select board of directors
to manage the organization or sometimes hires skilled managers from the outside to
manage it.

Cooperative: –

A cooperative is a limited liability business that can organize as for-profit or for not-for-
profit. A cooperative differs from a corporation in that it has members, not shareholders,
and they share decision making authority. Cooperatives are typically classified as either
consumer cooperatives or worker cooperatives.

Franchises: –

A franchise is a system in which entrepreneurs purchase the right to open and run a
business from a longer cooperation. Franchising in the United States in wide spread and
is a major economic power house. One out of twelve retail businesses in the United
States are franchised and eight million people are employed in a franchised business.

A company limited by guarantee with a share capital: –

A hybrid entity, usually used where the company is formed for non-commercial
purposes, but the activities of the company are partly funded by investors who expects a
return. This type of company may no longer formed in the UK, although provisions still
exist in law for them to exist.

An unlimited company with or without a share capital: –

A hybrid entity, a company where the liability of members or shareholders for the debts
(if any) of the company are not limited. In this case doctrine of veil of incorporation does
not apply.

NOW THE QUESTION RISES THAT WHO IS A BUSINESSMAN

Businessman
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The person who do regular production and sale of goods undertaken with an objective of
earning profit and acquiring wealth through the satisfaction of human wants is
called businessman.

Businessman
All of us need food, clothing and shelter. We also have many other wants or household
requirements which has to be satisfy in our daily life. We met these requirements from
the shopkeeper. The shopkeeper gets these from the wholesaler. The wholesaler gets
from the manufacturers. The shopkeeper, the wholesaler, the manufacturer are doing
business and therefore, they are BUSINESSMAN