Various business activities may be classified into two broad categories — industry and commerce.

• The industry refers to economic activities, which are connected with the conversion of resources into useful goods. Industry is used for activities in which mechanical appliances and technical skills are involved. These include activities relating to producing or processing of goods, as well as, breeding of animals.

• Commerce includes two types of activities, viz., (i) trade and (ii) auxiliaries to trade. Buying and selling of goods are termed as trade. Auxiliaries to trade and include transport, banking, insurance, communication, advertisement, packaging and warehousing. Commerce provides the necessary link between producers and consumers. It embraces all those activities, which are necessary for maintaining a free flow of goods and services.