Commercial StudiesICSE Class 9 · Commercial and Business Activities

Business Characteristics, Industry and Commerce, Types of Industry and Non-profit Organisations (ICSE Class 9 Commercial Studies)

Updated 17 October 2026 · Fact-checked

Business is an economic activity carried on regularly to earn profit by satisfying wants, with risk, capital and a buyer-seller relationship. It has two branches: industry (production) and commerce (distribution). Industry is primary (extractive and genetic), secondary (manufacturing and construction) or tertiary (services). Non-profit organisations serve society and do not distribute surplus.

Primary industry takes from nature, secondary processes it, and tertiary serves both: mine to steel plant to railway.

Illustration drawn for QuestionBuddy.

Understand Business Characteristics, Industry and Commerce, Types of Industry and Non-profit Organisations

Characteristics of business. (1) economic activity; (2) production or purchase and sale of goods and services; (3) regular dealings (an isolated sale of an old bicycle is not business); (4) profit motive; (5) risk and uncertainty; (6) satisfaction of human wants; (7) capital; (8) buyer-seller relationship; (9) social responsibility.

Industry and commerce.

	Industry	Commerce
Concern	production, extraction, processing, manufacturing	distribution of goods: trade and aids to trade
Utility created	form utility	place and time utility and more
Examples	mining coal, making cars, building houses	wholesaler, bank, transport

Industry produces; commerce distributes; each needs the other.

Classification of industry.
1. Primary: directly from natural resources.

Extractive: mining, fishing, hunting, quarrying, lumbering, oil.
Genetic: nurseries, poultry farms, cattle breeding, fish hatcheries, sericulture.

2. Secondary: process the output of primary industries.

Manufacturing: cotton into cloth, sugarcane into sugar, iron ore into steel.
Construction: roads, bridges, buildings, dams, canals.

3. Tertiary (service): transport, banking, insurance, warehousing, communication, advertising.
Chain: mine (primary) → steel plant (secondary) → railway (tertiary).

Non-profit organisations (NPOs). Set up to serve members or society (education, health, sports, culture, religion, charity, welfare), not to earn profit for owners; surplus is used for objectives; income from donations, subscriptions, grants, fees. Examples: charitable hospitals and schools run by trusts; sports clubs; libraries; the Indian Red Cross Society; NGOs; resident welfare associations.

Worked rule. A business making goods for sale = industry; a business moving or selling them = commerce.

Draw-and-label checklist. A tree of business → industry (primary, secondary, tertiary) and commerce (trade, aids to trade).

Business Characteristics, Industry and Commerce, Types of Industry and Non-profit Organisations: key facts

Business divisions: Business = Industry | plus Commerce; Two parts.
Industry types: Primary extractive, genetic
Secondary manufacturing, construction
Tertiary services; Three types, five sub-types.
Commerce: Commerce = Trade
plus Aids to trade
Aids: transport, banking, insurance, warehousing, advertising, packaging; Aids: transport, banking, insurance, warehousing, advertising, packaging.

Primary	extractive, genetic
Secondary	manufacturing, construction
Tertiary	services

Business Characteristics, Industry and Commerce, Types of Industry and Non-profit Organisations in real life

The idea, met in an everyday situation. Answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

From cotton field to shop shelf

Suppose cotton is grown on a farm, spun and woven into cloth in a mill, and the cloth is transported and sold in a shop.

Classify each stage.

Try it first, then show the solutionSolution

Growing cotton: primary (genetic).
Making cloth: secondary (manufacturing).
Transport and sale: tertiary / commerce.

Answer: Primary, secondary, tertiary.

Memory hook: Grow, make, move.

A hospital run by a trust

Suppose a trust runs a hospital that charges low fees and spends its surplus on new equipment, with no profits paid to the trustees.

What kind of organisation is it?

Try it first, then show the solutionSolution

It serves society and uses its surplus for its objectives.
It is a non-profit organisation.

Answer: A non-profit organisation.

Memory hook: Surplus stays inside.

Tricks to remember Business Characteristics, Industry and Commerce, Types of Industry and Non-profit Organisations

Short memory aids. Say each one aloud once, then use it on a question the same day.

PST
Primary, Secondary, Tertiary.
Use it when: Order.
Extract and Genetic
Primary: take out (extractive) or breed (genetic).
Use it when: Primary types.
Industry makes, commerce moves
I makes; C carries and sells.
Use it when: Industry versus commerce.

Business Characteristics, Industry and Commerce, Types of Industry and Non-profit Organisations: solved examples

Ordered from board level to HOTS. Try each one before you open the solution.

Example 1: Which industry uses another's output · 1 mark · MCQBoard level

Which of these industries uses the output of primary industries as its raw material?
(a) fishing (b) a sugar mill (c) lumbering (d) quarrying

Try it first, then show the solutionSolution

A sugar mill turns sugarcane into sugar: a secondary (manufacturing) industry.

Answer: (b) a sugar mill.

Example 2: Chain of industries · 4 marks · Short answerHarder board level

A tea estate grows tea, a factory processes it into packets, and a transport company carries it to shops. Classify each activity and name a service that helps the whole chain.

Try it first, then show the solutionSolution

Growing tea: primary (genetic) (1 mark).
Processing into packets: secondary (manufacturing) (1 mark).
Transport: tertiary (1 mark).
Banking or insurance helps the chain (1 mark).

Answer: Primary; secondary; tertiary; banking or insurance as aids.

Example 3: Is it business · 3 marks · Case-basedHOTS / competency

Suppose Rohan sells his old scooter once and Kavita buys goods daily to sell in her shop. (a) Which is a business activity? (b) Which characteristic decides this? (c) Name two other characteristics Kavita's activity shows.

Try it first, then show the solutionSolution

(a) Kavita's shop (1 mark).
(b) Regularity of dealings (1 mark).
(c) Profit motive and risk (any two) (1 mark).

Answer: (a) Kavita's. (b) Regularity. (c) Profit motive and risk.

Example 4: Unit cost in manufacturing · 3 marks · Short answerHarder board level

A factory spends Rs 2,40,000 on raw materials and Rs 60,000 on wages to make 1,500 shirts. It sells them at Rs 240 each. (a) Find the cost per shirt. (b) Find the profit per shirt and the total profit.

Try it first, then show the solutionSolution

(a) Total cost = 2,40,000 + 60,000 = Rs 3,00,000; per shirt = 3,00,000 ÷ 1,500 = Rs 200 (1 mark).
(b) Profit per shirt = 240 − 200 = Rs 40 (1 mark).
Total profit = 40 × 1,500 = Rs 60,000 (1 mark).

Answer: (a) Rs 200. (b) Rs 40 per shirt; Rs 60,000 in all.

Example 5: Business or NPO · 3 marks · Short answerBoard level

A private tuition centre charges fees and keeps the surplus as the owner's income, while a trust-run school charges fees but spends its surplus on teachers and buildings. Classify each and state two differences.

Try it first, then show the solutionSolution

The tuition centre is a business; the trust-run school is a non-profit organisation (1 mark).
Business aims at profit for the owner; an NPO serves society (1 mark).
The business keeps its surplus as income; the NPO uses it for its objectives (1 mark).

Answer: Business versus NPO; profit motive versus service; surplus kept versus used for objectives.

Where students lose marks in Business Characteristics, Industry and Commerce, Types of Industry and Non-profit Organisations

The slips examiners see most often, and what to write instead.

Mistake: Calling construction a primary industry
Construction is a secondary industry.
Wrong working
Building a bridge is primary.
Right working
Construction industries are secondary.
Do this: Primary = nature; secondary = processing and building.
Usually costs: 1 mark.
Mistake: Treating an isolated sale as business
Business needs regular dealings.
Do this: Check regularity.
Usually costs: 1 mark.
Mistake: Saying an NPO distributes its surplus
The surplus is used for its objectives.
Do this: Surplus stays inside.
Usually costs: 1 mark.

Exam tips

Memorise nine characteristics.
Draw the industry tree.
Use example chains for tertiary services.
Separate industry from commerce clearly.

Practice questions on Business Characteristics, Industry and Commerce, Types of Industry and Non-profit Organisations

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

Q1 · 1 mark · MCQBoard level
A fish hatchery that breeds fish for sale is a:
(a) tertiary industry (b) construction industry (c) genetic industry (d) manufacturing industry
Hint
Rears living organisms.
Answer
(c) genetic industry.
Q2 · 2 marks · Short answerBoard level
Name two extractive and two genetic industries.
Hint
Mining, fishing; nurseries, hatcheries.
Answer
Extractive: mining, fishing (also hunting, quarrying, lumbering). Genetic: nurseries, poultry farms (also cattle breeding, fish hatcheries, sericulture).
Q3 · 3 marks · Short answerHarder board level
A company drills for oil, another refines it into petrol and a third runs tankers that deliver the petrol to pumps. Name the type of industry or business activity of each and say which belong to industry and which to commerce.
Hint
Extractive, manufacturing, transport.
Answer
Drilling is a primary (extractive) industry; refining is a secondary (manufacturing) industry; tankers are a tertiary service, an aid to trade, so part of commerce. The first two are industry and the third is commerce.
Q4 · 2 marks · Short answerHarder board level
Suppose a bakery's output rises from 500 loaves to 800 loaves a day, but the bakery can sell only 300 loaves because it has no delivery vans. Which part of business is lacking, and what does this show about industry and commerce?
Hint
Distribution.
Answer
Commerce (transport and distribution) is lacking. Production alone is not enough: goods must also reach customers, which shows each part of business depends on the other.
Q5 · 3 marks · Case-basedHOTS / competency
Read and answer.
Suppose a public library run by a trust receives Rs 50,000 in donations and Rs 30,000 in grants, spends Rs 65,000 on books and staff, and puts the rest into a fund for new books.
(a) Find the surplus. (1)
(b) What kind of organisation is it? (1)
(c) How is the surplus used? (1)
Hint
80,000 minus 65,000.
Answer
(a) 50,000 + 30,000 − 65,000 = Rs 15,000. (b) A non-profit organisation. (c) Kept for its objectives (new books), not distributed.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1.What are the two types of business activity?Show answer
Industry and commerce.
2.Name a genetic industry.Show answer
Poultry farming.
3.Name a tertiary industry.Show answer
Transport or banking.
4.What is form utility?Show answer
Utility created by changing raw materials into useful goods.
5.Give an NPO example.Show answer
Indian Red Cross Society.

Business Characteristics, Industry and Commerce, Types of Industry and Non-profit Organisations: frequently asked questions

Is farming primary?

Raising plants and animals for sale is a genetic industry, a primary one.

Is mining a primary or a secondary industry?

Mining is an extractive industry, a kind of primary industry.

Can an NPO charge fees?

Yes, fees can be an income source, but the surplus is used for its objectives.

Does business need capital?

Yes, some money must be invested.