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Jahnvi Singh Parihar
Communication Skills, Educational Technology & Operations Expert
Asked a question last year

What is corporate sector?

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Manonita Rathore
Gig economy and behaviour &soft skills Expert

A business sector meaning pertains to the distinctions made between businesses. These distinctions are made according to industry or sector. There are multiple ways to classify businesses by sector. Some economists like to divide businesses according to corporate, nonprofit, and government organizations.

More often, the economy is divided into three sectors: the primary, secondary, and tertiary sectors. The only problem with this classification system is that it precludes the fourth sector, including government agencies and agencies that are government-controlled.

Business sectors are responsible for production. In fact, it's not so much a sector as a process that creates resources for production.

Production is the underlying process that combines resources and creates a valuable commodity or service. Usually, production involves a physical transformation of materials. For example, bauxite ore, iron ore, petroleum, and silicate sand are all used to create a high-powered automobile.

Jahnvi Singh Parihar
Communication Skills, Educational Technology & Operations Expert

The business sector or corporate sector is the part of the economy made up by companies. It is a subset of the domestic economy, excluding the economic activities of general government, of private households, and of non-profit organizations serving individuals. In economics, the business sector or corporate sector also called simply "Business" - is the part of the economy made up by companies.

Corporations are owned by their stockholders (shareholders) who share in profits and losses generated through the firm's operations, and have three distinct characteristics

(1) Legal existence: a firm can (like a person) buy, sell, own, enter into a contract, and sue other persons and firms, and be sued by them. It can do good and be rewarded, and can commit offence and be punished.

(2) Limited liability: a firm and its owners are limited in their liability to the creditors and other obligatory only up to the resources of the firm, unless the owners give personal-guaranties.

(3) Continuity of existence: a firm can live beyond the life spans and capacity of its owners, because its ownership can be transferred through a sale or gift of shares.