Types of Business Entities
An entity is a body or a thing. In a business sense, a type of business.
A business entity is any organisation engaged in the production of goods and
services.
There are some common features between all business entities. These include
 legal structure
 public/private sector
 industry sector
 international and transnationals
1. Legal Structure
Unincorporated businesses are where the owner and the business entity are
one and the same. They have unlimited liability. They include sole traders and
partnerships.
Unlimited Liability means that the owner of the business is personally
responsible for the debt incurred (gained) by the business.
Incorporated businesses are those that are a separate legal entity from the
owner/s. They have limited liability. They include private and public companies.
Limited liability means the owners/shareholders are not personally responsible
for the debt incurred (gained) by the business.
2. Private/Public
Private refers to a business that is owned and operated by private investors.
Public business entities refer to anything that is funded and operated by the
government.
Privatisation is the process whereby the government sells public assets
(businesses owned by the government) to the private sector through the sale of
shares on the Stock Exchange (eg Telstra, Qantas)
3. Industry Sector
Primary Industry
Secondary Industry
Tertiary Industry
Quaternary
Industry
Quinary
Industry
Primary industry includes all those businesses in which production is directly
associated with natural resources eg wood, coal, gas, forestry, mining, growing
crops
Secondary industry involves taking a raw material and making it
(manufacturing) into a finished or semi-finished product. Eg manufacturing of
motor vehicles, house construction, TV
Tertiary industry involves performing a service for other people. There are two
sections to this Quaternary and quinary industry.
Quaternary industry includes services that involve the transfer and processing
of information and knowledge. Eg education, IT, banking, real estate, office work,
film, theatre
Quinary Industry includes all services that have traditionally been performed at
home. Eg gardening, cleaning, unpaid work, home based work (eg craft, pottery),
professional provision of domestic services (eg food, drink, restaurant, child care,
hotel)
4. International/Transnational
International business is one which produces it products in only one country
and exports them to overseas markets.
Transnational (multinational) corporation (TNC) is a large business with a
home base in one country operating partially or wholly owned businesses in
other countries.