Business Studies · Ch 1 — Business, Trade and Commerce
Comparison of Business, Profession and Employment
1.2.3
Comparison of Business, Profession and Employment
Economic activities are of three major types — Business, Profession and Employment. Telling them apart is a core distinction in the CBSE Class 11 Business Studies syllabus, and they can be compared on several bases, as summarised in the table below:
| Basis of comparison | Business | Profession | Employment |
|---|---|---|---|
| Mode of establishment | The entrepreneur's own decision, plus any legal formalities that are needed | Membership of a professional body and a certificate of practice | An appointment letter and a service agreement |
| Nature of work | Providing goods and services to the public | Rendering personalised, expert services | Performing work as per the service contract or rules of service |
| Qualification | No minimum qualification is necessary | The qualifications, expertise and training prescribed by the professional body are a must | The qualification and training prescribed by the employer |
| Reward or return | Profit earned | Professional fee | Salary or wages |
| Capital investment | Required according to the size and nature of the business | Limited capital needed for establishment | No capital required |
| Risk | Profits are uncertain and irregular; risk is present | Fees are generally regular and certain; some risk | Fixed, regular pay; little or no risk |
| Transfer of interest | Possible, with some formalities | Not possible | Not possible |