Q.Distinguish between business, profession and employment with suitable examples.
Business, profession, and employment are the three distinct modes of earning a livelihood, and they can be distinguished on several grounds.
Mode of establishment: A business (for example, a grocery shop or a manufacturing unit) is set up by the owner's own decision, subject to any registration the law requires. A profession (for example, a doctor's clinic or a chartered accountant's practice) requires membership of the relevant professional body and, often, a practising certificate. Employment (for example, a bank clerk or a factory worker) begins with an appointment letter and a contract of service with an employer.
Capital investment: Business requires capital that varies with the scale of operation -- large for a factory, small for a roadside stall. A profession needs only limited capital, mainly for an office and equipment. Employment requires no capital investment at all from the employee.
Reward: A business owner earns profit, which is uncertain and can even be a loss in a bad year. A professional earns a fee, largely fixed by their own judgement of the service given. An employee earns a salary or wage, fixed in advance and not tied to whether the employer's business makes a profit or a loss.
Risk: The business owner bears the full risk of the venture personally. A professional bears a limited risk (of losing clients, or of professional liability). An employee bears no financial risk from the employer's business at all.
Qualification: No minimum qualification is generally prescribed for starting a business. A profession demands specialised knowledge and a recognised qualification. Employment requires whatever qualification the employer prescribes for that specific post.
Transfer of interest: A business can usually be sold or transferred to someone else. The personal skill behind a profession cannot be transferred, even though the practice itself may, to a limited extent, be handed over. A job cannot be transferred by an employee to another person at all.
Business, profession, and employment differ in mode of establishment, capital needed, nature of reward, degree of risk, qualification required, and transferability -- business is capital-and-profit based, profession is qualification-and-fee based, and employment is contract-and-salary based, with no capital or risk on the employee's part.
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