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• Types of businesses

  • Size
  • Geographical spread
  • Industry sector
  • Legal structure
• Classification of businesses by Size

  Small, medium, or large based on number of employees, number of owners, market share, and legal structure
• Geographical spread


  Local businesses serve a restricted area with limited products, tend to be small to medium in size. National businesses operate within one country, cover a wider area, and may expand product range. Global businesses, known as Transnational Corporations (TNCs), have headquarters in one country and owned businesses in other countries
• Classification of businesses by Industry sector

  Primary sector includes businesses related to natural resources like farming, mining, fishing, and forestry. Secondary sector uses primary market products to produce finished or semi-finished goods. Tertiary sector provides services like retail, healthcare, and banking. Quaternary sector involves information and knowledge transfer services. Quinary sector includes traditional home-based activities, tourism, and hospitality
• Legal structure of businesses

  Unincorporated businesses are sole traders or partnerships where the owner and business entity are the same. Incorporated businesses are separate legal entities that continue to exist regardless of owner changes
• Public companies have Ltd after the name, while private companies have Pty Ltd
• Sole traders are a sole trader or partnership where the business owner and the business entity are the same. When the owner dies the business ceases to exist.
• Incorporated businesses are where the business becomes a separate legal entity, i.e., the business exists in its own right and will continue to exist regardless of what happens to the owners or shareholders.
• Sole trader


  • A business owned and operated by one person.
  • The owner provides finance, makes decisions and takes all responsibility for the operation of the business.
  • This structure carries unlimited liability for the business owner.
• Partnerships


  • Generally owned and operated by 2 to 20 people except in some specific businesses for example medical practitioners and accountants.
  • Similar to sole traders
  • Partners have unlimited liability.
  • Agreement can be verbal, in writing or implied.
• Limited liability


  • The amount of money a shareholder can lose is the amount they paid for their shares.
  • In financial dealings directors may be asked for personal guarantees.
  • The letters Ltd will (Public) appear after the business name
  • Can be a private or public company
• Limited liability – Proprietary (private) company


  • The most common company structure in Australia
  • Usually has between 2 and 50 private shareholders
  • Usually small to medium-sized businesses
  • Shares only offered to people the business wishes to be part owners or directors
  • Shares can only be sold to people when approved by directors
  • Shares are not listed or sold on the ASX
  • Proprietary Limited (Pty Ltd) appear after the business name.
• Government enterprises


  • Government owned and operated
  • Also known as government business enterprises (GBEs)
  • Typically large
  • Often referred to as public sector businesses
• Franchises


  • An agreement where a person buys the right to use a business name and distribute the goods or services of an existing business
• Factors influencing choice of legal structure: The size of the business. Most businesses start out small however as they grow and expand the needs of the business can change often requiring more complex legal structures.