Types of Business - Obson/MicroSim-GUI GitHub Wiki

Definitions

If we regard a business as a legal entity that employs one or more people to carry out some task and pays them an agreed amount—called a 'wage'—for doing so, we may distinguish three main types of business:

1. Government-supported, non-commercial
2. Government-supported, commercial or partly commercial
3. Wholly commercial

A wholly government-supported business is one that is entirely funded by the government and does not rely for funds on selling its goods or services. Examples are the Civil Service, the NHS, and Parliament itself.

Government-supported commercial businesses are partly funded by the government, but also sell goods or services to raise funds which contribute to their operations. The balance between the two types of funding is generally determined by the government, which may decide that a supported business has to make a commercial profit. Examples are 'nationalised' industries, such as, in the past, British Rail and more recently, Royal Bank of Scotland.

A wholly commercial business receives no funds from the government except, possibly, as a customer. Most businesses are of this type, ranging from single-person (sole-trader) concerns, in which the owner is also the business's only employee, to huge corporations employing thousands of people.