One must know many things while discussing the difference between profession and business. In this article, we have listed out the key differences between business and profession. Please have a look at it below.
Meaning of Business
Business is defined as either trade, profession, or occupation that involves the production and sale of services or goods in exchange for either profit or non-profit. Sometimes the profit gained through trade can be something other than money. It can be any benefit that is accepted by a business entity.
Forms of Business
Any business can be categorized into three legal forms:
Objective of Business
Business objective defines the goals and long-term vision of any organization. As per the traditional concept, the critical objective of any business is only to earn profit in exchange for goods and services. On the other hand, as per the modern concept, the key objective of any business is to satisfy the customer, which yields more profits in the long run.
Meaning of Profession
As per the Income Tax Act, there is no specific definition for the profession. However, a profession means a group pursuing the same activity, skill, or art. They adhere to the ethical standards set by the company and exercise their skills in the interest of other organizations.
Characteristics of Profession
Some popular characteristics of a profession are:
- Ethically bound
Objective of Profession
The profession’s objective is to adhere to ethical standards and utilize the skills for the organization’s benefit. The objective in a profession can be both short-term and long-term.
Difference Between Business and Profession
- The key objective of a profession is to offer services, while the key objective of a business is to make profits.
- The meaning of business is either an occupation, trade, or commercial activity that involves the exchange of profits for a trade. On the other hand, the meaning of profession is an economic activity where a person requires particular skills and knowledge to apply in an occupation.
- As per the legal requirements, a person can establish a company on his initiative. On the other hand, it is mandatory to have specialization in skill and a certificate of practice to render the services.
- A business requires a lot of capital to establish. On the other hand, a profession is flexible in terms of investment.
- Anyone can start their own business, irrespective of their educational qualification. On the other hand, expertise, training, and specialized skill is needed for a profession.
- Transfer of interest is possible in business. For example, you can transfer a business from the father to the son. On the other hand, transfer of interest is not possible in a profession.
- A profit and loss statement is maintained in the case of a business. On the other hand, income and expenditure accounts are maintained in a profession.
- The reward for a business is known as profit. The reward for the profession is called professional fees.
- In business, there is no code of conduct. In the case of a profession, a code of conduct is set by the professional bodies.
After going through the above key points, it is clear that business and profession are different. Business is established with a primary focus on earning profits, while the key objective of a profession is to render services.