Decoding Business Types: A Guide to Their Forms, Examples, and Key Distinctions
There are four main types of businesses, determined by who starts them and how they're set up. Discover what these business categories are and delve into their details right here.
In the rapidly changing business world, understanding the different types of businesses is essential for entrepreneurs and anyone interested in the business sector. Whether you are planning to start a new business or simply want to expand your knowledge about the business world
Let's find out how many types of business models there are and what they include, along with the main types of enterprises that exist today, so you have a comprehensive understanding and can apply this knowledge in practice.
Table of Contents
- What are the types of business models?
- What are the business types of SMEs?
- How are business types classified in accounting and bookkeeping?
- KGP Online Payment Solutions: Convenient, Secure for All Business Sizes
- Frequently Asked Questions (FAQs)
- Summary of Various Business Types in 2025
What are the types of business models?
The types of businesses can be classified according to the founders and how the entity is established, regardless of whether they transact in cash or use online payment systems. The main purpose of these classifications is for commercial registration, proper bookkeeping, and accurate financial record-keeping. Here’s how businesses are categorized:
1. Single Proprietorship
Single proprietorship is a type of small business started and funded by one person, who has full authority in managing, operating, and running the business. The owner may hire employees to help. Examples include online businesses, grocery stores, restaurants, etc.
2. Partnership
Partnership refers to a business entity registered with at least two people providing capital and establishing the business together, with clear agreements on capital contributions and profit sharing among founders. Management roles can be assigned to any partner as agreed. By law, partnerships are divided into two types:
- Ordinary Partnership This is where all partners are jointly liable for unlimited business debts. Registration is optional, but if registered, it is considered a juristic person and must have “juristic person” at the end of the partnership name.
- Limited Partnership Divided into two categories:
- Limited Liability Type where partners are only liable up to the amount of their capital contributed, and cannot use their names as part of the partnership name.
- Unlimited Liability Type where partners are liable for all debts without limit and have access to the business's financial management.
3. Company
A company is a business entity with three or more partners, and by law, there are two main types:
- Private Company Limited (Corporation) This type requires at least three investors or founders. Shares cannot be purchased by the general public. Each share must have a minimum value of 5 baht, and at least 25% of each share’s value must be paid up at the beginning. Shareholders are only liable up to the amount of their shares.
- Public Company Limited (Public Corporation) This requires at least 15 shareholders, and shares can be offered to the public, allowing anyone to become a shareholder based on the proportion purchased. Shares can also be traded on the stock market.
What are the business types of SMEs?
Many people may wonder, what is an SME? SME or Small and Medium Enterprises are small to medium-sized businesses that usually have limited assets and employees, often funded by the founder’s own capital. However, SMEs play a vital role in driving the country’s social and economic development. Here are the main types of SME businesses:
- Trading Businesses These SMEs are involved in wholesale and retail trading, as well as importing and exporting products. Examples include department stores, food export businesses, fashion retail businesses, etc.
- Service Businesses These SMEs do not sell products but provide services, such as beauty salons, hotels, tourism businesses, health-related businesses, etc.
- Manufacturing Businesses These SMEs manufacture products for sale, covering industries, agriculture, and mining, such as frozen food factories, beverage factories, and paper manufacturing plants.
How are business types classified in accounting and bookkeeping?
In accounting and bookkeeping, business types are usually classified according to their business activities. The main types are as follows:
1. Service Firm
Service firms are established to provide services to customers in various fields without the involvement of products. These businesses focus solely on services, such as hotels, tourism, beauty salons, skilled labor, internet services, etc.
2. Manufacturing Firm
Manufacturing firms transform raw materials into finished goods for sale to customers or for export to other businesses for further distribution. Examples include processed food factories, snack factories, beverage factories, auto parts manufacturers, etc.
3. Merchandising Firm
Merchandising firms are businesses that distribute goods to customers. The goods can be sourced from other businesses, but must not be altered or processed. Examples include convenience stores, distributors, department stores, online retailers, or e-Commerce businesses.
KGP Online Payment Solutions: Convenient, Secure for All Business Sizes
If you own an online trading business and want a fast, secure, and accurate payment solution, we recommend the payment service via Meta Pay from KGP. It allows you to trust every transaction, conveniently request payments from customers instantly via Messenger after billing, and close sales quickly—no more confusion switching between apps, no more wrong account numbers or fake payment slips. Plus, you have a variety of payment channels to choose from.
Frequently Asked Questions (FAQs)
How are SMEs and Startups different?
What is a Startup? A Startup is a newly established business with high growth potential, focusing on broad market expansion and becoming a large business in the future. Funding typically comes from investors who want to be part of the business.
This is different from SMEs, which are small to medium-sized businesses that already exist in the market, growing steadily over time and focusing on generating returns in the future. SME funding usually comes from the owner's own capital or from bank loans.
Summary of Various Business Types in 2025
Business types are classifications to categorize and facilitate effective business operations. How many types of businesses are there? Based on the method of establishment, business types can be divided into four forms: single proprietorship, partnership, company limited, and state enterprise. Entrepreneurs should understand their business type for proper commercial registration. There is also a classification by type of product or service: service businesses, merchandising businesses, and manufacturing businesses.
In 2025, online business types are rapidly growing in popularity. Facilitating customer convenience is a key to increasing your sales. We recommend KGP, a payment service that makes selling products as easy as a tap, with an online payment system through Meta Pay on Messenger that supports payments via banking apps, credit cards, debit cards, and QR code—providing security for both buyers and sellers.
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References
1. Government Business Service Center. (2016). 2. Defining Business Types. bizportal.go.th
https://bizportal.go.th/th/Home/Article/2
2. Wiriya Boonmalert. (n.d.). Classification of Business Types. ssru.ac.th
https://ssru.ac.th/content-rank/29.pdf
3. Public Relations Department. (n.d.). Types of SME Businesses. prd.go.th
https://www.prd.go.th/th/content/category/detail/id/31/iid/242629
4. Suratthani Rajabhat University. (n.d.). Chapter 1: General Knowledge about Accounting. sru.ac.th
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