Historically, the term business referred to activities or interests. By extension, the word became, as recently as the 18th century, synonymous with “an individual commercial enterprise”. When referring to activities, the terms business and industry sometimes appear interchangeable. Thus a fisherman might say either that he is in the “fishing business”, which is a bit colloquial or that he works in the “fishing industry”, which sounds somewhat formal. The word “trade” may serve as an equivalent of both “business” and “industry”.
People establish business in order to perform economic activities. With some exceptions, such as non-profit organizations and institutions of the government, businesses exist to product profit. In other words, the owners and operators of a business have receiving or generating a financial return for their time, effort and capital as one of their main objectives.
One can classify businesses in many different ways. In recent years, service businesses have become increasingly popular. They offer intangible products and typically have different, usually smaller, capital requirements than manufacturers. Distributors need smaller funds than manufacturers.
Most laws specify the forms that a business can take, and a body of commercial law has been developed for each type. Some common types include partnerships, corporations, also called limited liability companies, and sole ownerships.
