Introduction
When classifying businesses into groups, there are four main methods of business classification. Legal structure, Size, Industry and Location are four main characteristics about a business that help us classify them into groups. Within them are all the different types of classifications that these businesses fall under, for example in the characteristic Legal Structure, there is sole trader, partnership, government enterprise and private and public company.
Legal Structure
When starting up a business there stands a choice of which legal structure the business will be, some can even change as they progress. There are a number of different structures that differ in many important aspects. The most common are, sole trader, partnership, private company, public company and government enterprise. The aspects that vary between the business structures are, taxation, liability, risk control, expense and formality.
Sole Trader
One of the most common forms of businesses in Australia are sole traders. This is where there is only one owner who can either work within the business, selling their trade and can hire employees to help them out, or simply hire managers and employers to work for them, although this is an expense on the income. The responsibilities for the entire business, the employees and liabilities which are unlimited, all lie with the sole owner. The expense and pressure of owning your own business can be stressful for some and a huge risk, but it does reap rewards like income, freedom in choices and decision making and very rewarding when you can sell your trade or talent to others knowing you achieved it on your own. Some examples of sole trading business are, trades like plumbers/electricians, retailers like butchers or florists and services like accountants or dentists.
Partnership
This type of business structure is where there is more then one owner sharing the workload, profits, risks and responsibility of owning a business....