Java has two kinds of exceptions:

1. Checked exception: handled from java.lang.Exception but not java.lang.RuntimeException.

2. Unchecked exception: handled from java.lang.RuntimeException thrown by JVM.

EJB has two kinds of exceptions:

1. System   Exception :   is   an   unchecked   exception produced   from java.lang.RuntimeException.   An EJBException is an unchecked exception, which is started from java.lang.RuntimeException.

2. Application Exception : is generic to an application and thrown because of violation of business rules. An Application Exception is a checked exception that is either described by the bean developer and does not import java.rmi.RemoteException.

A  System  Exception  is  given  by  the  system  and  is  not  recoverable. Because the System Exceptions are unpredictable when they occur, the EJB container is the only one responsible for trapping the System Exceptions. The container usually wraps any RuntimeException in RemoteException, which subsequently puts thrown to the caller. In addition to intercepting System Exception the container can give the errors.