1. Topic 1 Nature of business TYPES OF BUSINESSES CHAPTER TWO
© Cambridge University Press 2012

2. Business classification
A business can be classified according to:
its size
its legal structure
the industry sector it is in
its location.

3. The legal structure of a business
The legal structure of a business refers to how the ownership of the business is registered. There are seven main types of legal structure:
sole trader
partnership
private company
public company
company limited by guarantee
cooperative
trust.

4. The legal structure of a business (cont.)
When classifying a business according to industry sector, there are five classifications:
primary
secondary
tertiary
quaternary
quinary.

5. The legal structure of a business (cont.)
The classification of a business according to its size is determined by the Australian Bureau of Statistics:
Large – is a manufacturing organisation with 200 or more employees or a non-manufacturing organisation with over 20 employees.

6. The legal structure of a business (cont.)
Small – is a manufacturing organisation with fewer than 100 employees or a nonmanufacturing (service-based) organisation with 20 or fewer employees.
Micro – is an organisation with a workforce of five or fewer employees.

7. The legal structure of a business (cont.)
Businesses can also be classified according to whether they are owned and operated by the government (public sector businesses) or by a private group of individuals (private sector businesses).

8. National and global business
A further way to classify businesses is based on whether they are local, national or global. This method examines where the business is based and in which country its goods are manufactured.