1.2 Business Structure

2026 Syllabus Objectives

By the end of this topic, you should be able to explain and apply:

  1. The primary, secondary, tertiary and quaternary sectors and businesses within those sectors
  2. The public and private sectors and businesses within those sectors
  3. The reasons for and consequences of the changing relative importance of these sectors
  4. The main features of different types of business ownership: sole traders, partnerships, private limited companies, public limited companies, franchises, co-operatives, joint ventures and social enterprises
  5. The appropriateness of different types of business ownership
  6. The concepts of unlimited liability and limited liability and their importance
  7. The advantages and disadvantages of changing from one type of business ownership to another

Section 1: The Four Sectors of Industry

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Every business in the economy can be placed into one of four sectors depending on what it does.

The Primary Sector

The primary sector includes all businesses that extract or harvest raw materials directly from the earth, sea, or air. These businesses are at the very beginning of the production process — they collect the ingredients that other businesses will use.

Examples of primary sector activities:

  • Farming and agriculture (growing crops, raising livestock)
  • Mining (extracting coal, gold, iron ore)
  • Fishing
  • Forestry (cutting down trees for timber)
  • Oil and gas extraction

Important note: In less developed (poorer) countries, a large portion of the workforce works in the primary sector, especially in farming. This is often because those countries lack the technology or infrastructure to develop manufacturing or service industries.

The Secondary Sector

The secondary sector includes all businesses that take raw materials and process or manufacture them into finished goods or semi-finished products. They take something from the primary sector and turn it into something new.

Examples of secondary sector activities:

  • Car manufacturing (using steel and rubber to build vehicles)
  • Oil refining (turning crude oil into petrol)
  • House building and construction
  • Food processing (turning wheat into bread)
  • Clothing manufacturing

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