The word commerce denotes all those processes which helps to break barriers between producers and consumers. It embraces all those activities which are necessary to bring the goods from the place of origin to the place of consumption. It consists a part of business and possesses the following characteristics:
- It is an economic activity because it is undertaken to earn profit. The purchase of goods by a consumer is not included in commerce because it is a non-economic activity whereas the purchase of goods by a trader is included in commerce because it is an economic activity.
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- It involves exchange of goods and services for profit.
- The primary objective is to earn profit.
- It involves creation of time and place utility for the products.
- It consists of regular transaction and, therefore, an isolated transaction is not included in commerce.