A method for defining XML-based models of logical type hierarchies, business objects and sub-objects, business object operations, enumerations and reusable structures and field-sets. The method defines an optimal, yet extensible, structure of the object models to simplify the modeling process by capturing the most essential elements of the model and inferring any additional information, such as relationship between objects, during the process of generating code, database scripts or other system artifacts from the model. Methods of generating a relational model and a presentation data model from such a business object model.