A business (also called a firm or an enterprise) is a legally recognized organization An organization is a social arrangement which pursues collective goals, which controls its own performance, and which has a boundary separating it from its environment. The word itself is derived from the Greek word ὄργανον (organon [itself derived from the better-known word ἔργον ergon - work; deed - > ergonomics, etc]) meaning designed to provide goods In economics, a good is any object or service that increases utility, directly or indirectly. It should not to be confused with the adjective "good", as used in a moral or ethical sense. A good that cannot be used by consumers directly, such as an "office building" or "capital equipment", can also be referred to as a and/or services A service is the non-material equivalent of a good. Service provision has been defined as an economic activity that does not result in ownership and is claimed to be a process that creates benefits by facilitating either a change in customers, a change in their physical possessions, or a change in their intangible assets to consumers Consumer is a broad label that refers to any individuals or households that use goods and services generated within the economy. The concept of a consumer is used in different contexts, so that the usage and significance of the term may vary.[1] Businesses are predominant in capitalist The central axiom of capitalism is that the best allocation of resources is achieved through consumers having free choice, and producers responding accordingly to meet consumer demand. This contrasts with centrally planned economies, in which the state directs what shall be produced. Capitalists believe that privatization of state-provided economies An economy is the realized economic system of a country or other area. It includes the production, exchange, distribution, and consumption of goods and services of that area. The study of different types and examples of economies is the subject of economic systems. A given economy is the end result of a process that involves its technological, most being privately owned and formed to earn profit In economics, economic profit is the difference between a company's total revenue and its opportunity costs. It is the increase in wealth that an investor has from making an investment, taking into consideration all costs associated with that investment including the opportunity cost of capital that will increase the wealth Wealth is an abundance of valuable material possessions or resources. The word is derived from the old English wela, which is from an Indo-European word stem. An individual, community, region or country that has an abundance of such possessions or resources is called wealthy of its owners and grow the business itself. The owners and operators of a business have as one of their main objectives the receipt or generation of a financial return When the return on capital is greater than the cost of capital , the company is creating value; when it is less than the cost of capital, value is destroyed in exchange for work Work or Work Package in project management is the amount of effort applied to produce a deliverable or to accomplish a task or a group of related tasks defined at the same level in the WBS and acceptance of risk Risk is a concept that denotes the precise probability of specific eventualities. Technically, the notion of risk is independent from the notion of value and, as such, eventualities may have both beneficial and adverse consequences. However, in general usage the convention is to focus only on potential negative impact to some characteristic of. Notable exceptions include cooperative A cooperative is defined by the International Co-operative Alliance's Statement on the Co-operative Identity as an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise. It is a business organization owned and businesses and state-owned enterprises A government-owned corporation, state-owned enterprise or government business enterprise is a legal entity created by a government to undertake commercial or business activities on behalf of an owner government. There is no standard definition of a government-owned corporation or state-owned enterprise (SOE), although the two terms can be used. Socialist Socialism refers to any one of various theories of economic organization advocating state or cooperative ownership and administration of the means of production and distribution of goods, and a society characterized by equal opportunities/means for all individuals with a more egalitarian method of compensation based on the full product of the systems involve either government agencies, public, or worker ownership of most sizable businesses.
The etymology For languages with a long written history, etymologists make use of texts in these languages, and texts about the languages, to gather knowledge about how words were used at earlier stages, and when they entered the languages in question. Etymologists also apply the methods of comparative linguistics to reconstruct information about languages that of "business" relates to the state of being busy either as an individual or society as a whole, doing commercially viable Viable formed new years eve 2003 and experienced the true viable writing process for the first time the following summer in a good friend's sweltering 3rd storey loft. Members consist of ex member of Chatham high school band Second Fall, and 1 ex member (Dave Fox) of London band Tubularcube. Curiously enough Hodge and Fox had been part of a failed and profitable work. The term "business" has at least three usages, depending on the scope — the singular usage (above) to mean a particular company In the United States, a company is a corporation—or, less commonly, an association, partnership, or union—that carries on an industrial enterprise." Generally, a company may be a "corporation, partnership, association, joint-stock company, trust, fund, or organized group of persons, whether incorporated or not, and any receiver, or corporation A corporation is a legal entity separate from the persons that own it. In British tradition it is the term designating a body corporate, where it can be either a corporation sole or a corporation aggregate (involving more persons). In American and, increasingly, international usage, the term denotes a body corporate formed to conduct business, and, the generalized usage to refer to a particular market sector The term market sector is used in economics and finance to describe a set of businesses that are buying and selling such similar goods and services that they are in direct competition with each other. Analysts divide the stock market itself into market sectors so that shares of companies that are in direct competition are listed alongside each, such as "the music business" and compound forms such as agribusiness Within the agriculture industry, agribusiness is widely used simply as a convenient portmanteau of agriculture and business, referring to the range of activities and disciplines encompassed by modern food production. There are academic degrees in and departments of agribusiness, agribusiness trade associations, agribusiness publications, and so, or the broadest meaning to include all activity by the community of suppliers of goods and services. However, the exact definition of business, like much else in the philosophy of business The philosophy of business considers the fundamental principles that underlie the formation and operation of a business enterprise; the nature and purpose of a business, for example, is it primarily property or a social institution; its role in society; and the moral obligations that pertain to it. The subject is important to business and, is a matter of debate.
Business Studies Business studies is the name of an academic subject taught at higher level in Australia, Canada, Hong Kong, India, Ireland, New Zealand, South Africa and the United Kingdom , as well as at university level in many countries. Its study combines accounting, economics, finance, marketing and organisational behaviour, however these topics are taught, the study of the management Management in all business and human organization activity is simply the act of getting people together to accomplish desired goals and objectives. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and of individuals to maintain collective productivity Productivity refers to metrics and measures of output from production processes, per unit of input. Labor productivity, for example, is typically measured as a ratio of output per labor-hour, an input. Productivity may be conceived of as a metrics of the technical or engineering efficiency of production. As such quantitative metrics of input, and to accomplish particular creative and productive The noun product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce (prə doos' or -dyoos') from the Latin prōdūce(re), (to) lead or bring forth. Since 1575, the word "product" has referred to anything produced. Since 1695, the word has goals (usually to generate profit), is taught as an academic Academia, Acadème, or the Academy are collective terms for the community of students and scholars engaged in higher education and research subject in many schools.
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Basic forms of ownership
Although forms of business ownership vary by jurisdiction Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility, there are several common forms:
- Sole proprietorship: A sole proprietorship A sole proprietorship also known as a sole trader, or simply proprietorship is a type of business entity which is owned and run by one individual and where there is no legal distinction between the owner and the business. All profits and all losses accrue to the owner . All assets of the business are owned by the proprietor and all debts of the is a business owned by one person. The owner may operate on his or her own or may employ others. The owner of the business has total and unlimited personal liability In the most general sense, a liability is anything that is a hindrance or puts an individual at a disadvantage. Although the term has very particular definition in the realm of finance, it is also used in non-finance contexts. The word liability may also refer to individual or an attribute or a component that puts a team or group at a disadvantage of the debts incurred by the business.
- Partnership: A partnership A partnership is a type of business entity in which partners share with each other the profits or losses of the business. Partnerships are often favored over corporations for taxation purposes, as the partnership structure does not generally incur a tax on profits before it is distributed to the partners (i.e. there is no dividend tax levied) is a form of business in which two or more people operate for the common goal of making profit. Each partner has total and unlimited personal liability of the debts incurred by the partnership. There are three typical classifications of partnerships: general partnerships Partnerships have certain default characteristics relating to both the relationship between the individual partners and (b) the relationship between the partnership and the outside world. The former can generally be overridden by agreement between the partners, whereas the latter generally cannot be, limited partnerships A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners , there are one or more limited partners (LPs). It is a partnership in which only one partner is required to be a general partner, and limited liability partnerships A limited liability partnership is a partnership in which some or all partners (depending on the jurisdiction) have limited liability. It therefore exhibits elements of partnerships and corporations. In an LLP one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from that of a.
- Corporation: A business corporation A corporation is a legal entity separate from the persons that own it. In British tradition it is the term designating a body corporate, where it can be either a corporation sole or a corporation aggregate (involving more persons). In American and, increasingly, international usage, the term denotes a body corporate formed to conduct business, and is a for-profit, limited liability Limited liability is a concept whereby a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership with limited liability. In other words, if a company with limited liability is sued, then the plaintiffs are suing the company, not its owners or investors. A shareholder in a entity that has a separate legal personality A legal person, also called juridical person or juristic person, is a legal entity through which the law allows a group of natural persons to act as if they were a single composite individual for certain purposes, or in some jurisdictions, for a single person to have a separate legal personality other than their own. This legal fiction does not from its members. A corporation is owned by multiple shareholders A mutual shareholder or stockholder is an individual or company that legally owns one or more shares of stock in a joint stock company. A company's shareholders collectively own that company. Thus, the typical goal of such companies is to enhance shareholder value and is overseen by a board of directors A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. The body sometimes has a different name, such as board of trustees, board of governors, board of managers, or executive board. It is often simply referred to as "the board.", which hires the business's managerial staff.
- Cooperative: Often referred to as a "co-op business" or "co-op", a cooperative A cooperative is defined by the International Co-operative Alliance's Statement on the Co-operative Identity as an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise. It is a business organization owned and is a for-profit, limited liability entity that differs from a corporation in that it has members, as opposed to shareholders, who share decision-making authority. Cooperatives are typically classified as either consumer cooperatives A consumers' cooperative is a cooperative business owned by its customers for their mutual benefit. It is a form of free enterprise that is oriented toward service rather than pecuniary profit. It is a retail outlet owned and operated by consumer. The customers or consumers of the goods and/or services the business provides are often also the or worker cooperatives A worker cooperative is a cooperative owned and democratically controlled by its worker-owners. This control may be exercised in a number of ways. In 'pure' forms of worker co-operative, all shares are held by the workforce with no outside or consumer owners, and each member has one voting share. In practice, control by worker-owners may be. Cooperatives are fundamental to the ideology of economic democracy Economic democracy is a socioeconomic philosophy that suggests transfer of decision-making authority from a small minority of corporate shareholders to the larger majority of public stakeholders. While there is no single definition or approach, all theories and real-world examples of economic democracy are based on a core set of fundamental.
For a country-by-country listing of legally recognized business forms, see Types of business entity There are many types of business entity defined in the legal systems of various countries. These include corporations, partnerships, sole traders and other specialized types of organization. Some of these types are listed below, by country.
Classifications
Wall Street Wall Street is a street in Lower Manhattan, New York City, New York, United States. It runs east from Broadway to South Street on the East River, through the historical center of the Financial District. It is the first permanent home of the New York Stock Exchange; over time Wall Street became the name of the surrounding geographic neighborhood, Manhattan Manhattan is one of the five boroughs of New York City, located primarily on Manhattan Island at the mouth of the Hudson River is the location of the New York Stock Exchange The New York Stock Exchange is a stock exchange located at 11 Wall Street in lower Manhattan, New York City, New York, USA. It is the largest stock exchange in the world by United States dollar value of its listed companies' securities. As of October 2008, the combined capitalization of all domestic NYSE listed companies was US$10.1 trillion and is often used as a symbol A symbol is something such as an object, picture, written word, sound, or particular mark that represents something else by association, resemblance, or convention. For example, a red octagon may stand for "STOP". On maps, crossed sabres may indicate a battlefield. Numerals are symbols for numbers for the world of business.There are many types of businesses, and, as a result, businesses are classified in many ways. One of the most common focuses on the primary profit-generating activities of a business:
- Agriculture Agriculture refers to the production of food and goods through farming and forestry. Agriculture was the key development that led to the rise of civilization, with the husbandry of domesticated animals and plants creating food surpluses that enabled the development of more densely populated and stratified societies. The study of agriculture is and mining Mining is the extraction of valuable minerals or other geological materials from the earth, usually from an ore body, vein or seam. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock salt and potash. Any material that cannot be grown through agricultural processes, or businesses are concerned with the production of raw material, such as plants or minerals.
- Financial Finance is the science of funds management. The general areas of finance are business finance, personal finance, and public finance. Finance includes saving money and often includes lending money. The field of finance deals with the concepts of time, money and risk and how they are interrelated. It also deals with how money is spent and budgeted businesses include banks and other companies that generate profit through investment and management of capital.
- Information businesses generate profits primarily from the resale of intellectual property and include movie studios, publishers and packaged software companies.
- Manufacturers produce products, from raw materials or component parts, which they then sell at a profit. Companies that make physical goods, such as cars or pipes, are considered manufacturers.
- Real estate businesses generate profit from the selling, renting, and development of properties, homes, and buildings.
- Retailers and Distributors act as middle-men in getting goods produced by manufacturers to the intended consumer, generating a profit as a result of providing sales or distribution services. Most consumer-oriented stores and catalogue companies are distributors or retailers. See also: Franchising
- Service businesses offer intangible goods or services and typically generate a profit by charging for labor or other services provided to government, other businesses or consumers. Organizations ranging from house decorators to consulting firms to restaurants and even to entertainers are types of service businesses.
- Transportation businesses deliver goods and individuals from location to location, generating a profit on the transportation costs
- Utilities produce public services, such as heat, electricity, or sewage treatment, and are usually government chartered.
There are many other divisions and subdivisions of businesses. The authoritative list of business types for North America is generally considered to be the North American Industry Classification System, or NAICS. The equivalent European Union list is the NACE.
Management
The study of the efficient and effective operation of a business is called management. The main branches of management are financial management, marketing management, human resource management, strategic management, production management, service management, information technology management, and business intelligence.
Government regulation
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Most legal jurisdictions specify the forms of ownership that a business can take, creating a body of commercial law for each type.
Organizing
The major factors affecting how a business is organized are usually:
- The size and scope of the business, and its anticipated management and ownership. Generally a smaller business is more flexible, while larger businesses, or those with wider ownership or more formal structures, will usually tend to be organized as partnerships or (more commonly) corporations. In addition a business which wishes to raise money on a stock market or to be owned by a wide range of people will often be required to adopt a specific legal form to do so.
- The sector and country. Private profit making businesses are different from government owned bodies. In some countries, certain businesses are legally obliged to be organized certain ways.
- Limited liability. Corporations, limited liability partnerships, and other specific types of business organizations protect their owners from business failure by doing business under a separate legal entity with certain legal protections. In contrast, unincorporated businesses or persons working on their own are usually not so protected.
- Tax advantages. Different structures are treated differently in tax law, and may have advantages for this reason.
- Disclosure and compliance requirements. Different business structures may be required to make more or less information public (or reported to relevant authorities), and may be bound to comply with different rules and regulations.
Many businesses are operated through a separate entity such as a corporation, limited partnership or limited liability company. Most legal jurisdictions allow people to organize such an entity by filing certain charter documents with the relevant Secretary of State or equivalent and complying with certain other ongoing obligations. The relationships and legal rights of shareholders, limited partners, or members are governed partly by the charter documents and partly by the law of the jurisdiction where the entity is organized. Generally speaking, shareholders in a corporation, limited partners in a limited partnership, and members in a limited liability company are shielded from personal liability for the debts and obligations of the entity, which is legally treated as a separate "person." This means that unless there is misconduct, the owner's own possessions are strongly protected in law, if the business does not succeed.
Where two or more individuals own a business together but have failed to organize a more specialized form of vehicle, they will be treated as a general partnership. The terms of a partnership are partly governed by a partnership agreement if one is created, and partly by the law of the jurisdiction where the partnership is located. No paperwork or filing is necessary to create a partnership, and without an agreement, the relationships and legal rights of the partners will be entirely governed by the law of the jurisdiction where the partnership is located.
A single person who owns and runs a business is commonly known as a sole proprietor, whether he or she owns it directly or through a formally organized entity.
A few relevant factors to consider in deciding how to operate a business include:
- General partners in a partnership (other than a limited liability partnership), plus anyone who personally owns and operates a business without creating a separate legal entity, are personally liable for the debts and obligations of the business.
- Generally, corporations are required to pay tax just like "real" people. In some tax systems, this can give rise to so-called double taxation, because first the corporation pays tax on the profit, and then when the corporation distributes its profits to its owners, individuals have to include dividends in their income when they complete their personal tax returns, at which point a second layer of income tax is imposed.
- In most countries, there are laws which treat small corporations differently than large ones. They may be exempt from certain legal filing requirements or labor laws, have simplified procedures in specialized areas, and have simplified, advantageous, or slightly different tax treatment.
- To "go public" (sometimes called IPO) -- which basically means to allow a part of the business to be owned by a wider range of investors or the public in general -- you must organize a separate entity, which is usually required to comply with a tighter set of laws and procedures. Most public entities are corporations that have sold shares, but increasingly there are also public LLCs that sell units (sometimes also called shares), and other more exotic entities as well (for example, REITs in the USA, Unit Trusts in the UK). However, you cannot take a general partnership "public."
Commercial law
Most commercial transactions are governed by a very detailed and well-established body of rules that have evolved over a very long period of time, it being the case that governing trade and commerce was a strong driving force in the creation of law and courts in Western civilization.
As for other laws that regulate or impact businesses, in many countries it is all but impossible to chronicle them all in a single reference source. There are laws governing treatment of labor and generally relations with employees, safety and protection issues (OSHA or Health and Safety), anti-discrimination laws (age, gender, disabilities, race, and in some jurisdictions, sexual orientation), minimum wage laws, union laws, workers compensation laws, and annual vacation or working hours time.
In some specialized businesses, there may also be licenses required, either due to special laws that govern entry into certain trades, occupations or professions, which may require special education, or by local governments. Professions that require special licenses range from law and medicine to flying airplanes to selling liquor to radio broadcasting to selling investment securities to selling used cars to roofing. Local jurisdictions may also require special licenses and taxes just to operate a business without regard to the type of business involved.
Some businesses are subject to ongoing special regulation. These industries include, for example, public utilities, investment securities, banking, insurance, broadcasting, aviation, and health care providers. Environmental regulations are also very complex and can impact many kinds of businesses in unexpected ways.
Capital
When businesses need to raise money (called 'capital'), more laws come into play. A highly complex set of laws and regulations govern the offer and sale of investment securities (the means of raising money) in most Western countries. These regulations can require disclosure of a lot of specific financial and other information about the business and give buyers certain remedies. Because "securities" is a very broad term, most investment transactions will be potentially subject to these laws, unless a special exemption is available.
Capital may be raised through private means, by public offer (IPO) on a stock exchange, or in many other ways. Major stock exchanges include the New York Stock Exchange and Nasdaq (USA), the London Stock Exchange (UK), the Tokyo Stock Exchange (Japan), and so on. Most countries with capital markets have at least one.
Business that have gone "public" are subject to extremely detailed and complicated regulation about their internal governance (such as how executive officers' compensation is determined) and when and how information is disclosed to the public and their shareholders. In the United States, these regulations are primarily implemented and enforced by the United States Securities and Exchange Commission (SEC). Other Western nations have comparable regulatory bodies.
As noted at the beginning, it is impossible to enumerate all of the types of laws and regulations that impact on business today. In fact, these laws have become so numerous and complex, that no business lawyer can learn them all, forcing increasing specialization among corporate attorneys. It is not unheard of for teams of 5 to 10 attorneys to be required to handle certain kinds of corporate transactions, due to the sprawling nature of modern regulation. Commercial law spans general corporate law, employment and labor law, healthcare law, securities law, M&A law (who specialize in acquisitions), tax law, ERISA law (ERISA in the United States governs employee benefit plans), food and drug regulatory law, intellectual property law (specializing in copyrights, patents, trademarks and such), telecommunications law, and more.
In Thailand, for example, it is necessary to register a particular amount of capital for each employee, and pay a fee to the government for the amount of capital registered. There is no legal requirement to prove that this capital actually exists, the only requirement is to pay the fee. Overall, processes like this are detrimental to the development and GDP of a country, but often exist in "feudal" developing countries.
Intellectual property
Businesses often have important "intellectual property" that needs protection from competitors for the company to stay profitable. This could require patents or copyrights or preservation of trade secrets. Most businesses have names, logos and similar branding techniques that could benefit from trademarking. Patents and copyrights in the United States are largely governed by federal law, while trade secrets and trademarking are mostly a matter of state law. Because of the nature of intellectual property, a business needs protection in every jurisdiction in which they are concerned about competitors. Many countries are signatories to international treaties concerning intellectual property, and thus companies registered in these countries are subject to national laws bound by these treaties. The treaties themselves are not intellectual property.
Exit plans
Businesses can be bought and sold. Business owners often refer to their plan of disposing of the business as an "exit plan." Common exit plans include IPOs, MBOs and mergers with other businesses. Businesses are rarely liquidated, as it is often very unprofitable to do so.
See also
- Main list: List of business topics
| Business and economics portal |
| Wikipedia:Books has a book on: Business |
Notes and references
- ^ Sullivan, arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pp. 29. ISBN 0-13-063085-3. http://www.pearsonschool.com/index.cfm?locator=PSZ3R9&PMDbSiteId=2781&PMDbSolutionId=6724&PMDbCategoryId=&PMDbProgramId=12881&level=4.
External links
Find more about Business on Wikipedia's sister projects: Definitions from WiktionaryTextbooks from Wikibooks Quotations from Wikiquote Source texts from Wikisource Images and media from Commons News stories from Wikinews
Learning resources from Wikiversity- Better Business Bureau US & Canada
- Business Current Events Open Directory
- Doing Business project - World Bank/IFC
- OECD Business Demography Statistics
Categories: Business
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Q. A friend of mine once told me that I can set up a LLC business address in Nevada and I should do so for tax reasons. However, I don't live in Nevada. Can it be done? Are there really benefits? Is it better to do it in Nevada, Wyoming or Delaware?
Asked by unknown - Sun May 31 08:42:41 2009 - - 1 Answers - 0 Comments
A. It's quite easy, to do as long as you have a resident agent in Nevada. It must be, because I live in the UK and have registered a business in Wyoming. Go online to the Secretary of State for Nevada, he/she is responsible for all business registrations. Their website will tell you what you need to do, and how much it costs to register the company name, usually $100.
Answered by gu1nn355 - Sun May 31 11:20:49 2009
