A business is defined as a commercial entity or organization, usually defined in the corporate world as an entity or person that engages in commercial, technological, or other productive activities. In business, a company is any legal entity organized for the purpose of conducting business. In other words, a business could be any body corporate or association, which has an objective of creating wealth or earning profits for its owners through the conduct of business. A business is also commonly defined as the concerted efforts and hard work of many people to produce and sell products and services for gain.
There are various types of business. Every kind has several characteristics unique to it. Each has its own mode of production, procedures, levels of development, management style, location, and targets for expansion. In addition, there are three main articles of business: personal property, corporate property, and partnership. All other business-related articles are subsidiary elements of these three main articles.
In corporate law, business can take different forms. A partnership is a type of business where two or more people become related by a legal contract, which includes risks and rewards. Partnerships can also be family businesses, wherein one or both parents are shareholders. Family businesses are oftentimes incorporated as limited liability companies (LLCs).
The main article of each type of business structure is profit. In both family businesses and partnerships, profit is determined by the amount of money generated by the venture over time. For instance, in a partnership, profit is usually made through the dividends paid out by the partners. The value of the equity tends to fluctuate between investors.
Businesses can be further categorized into two main subsets: corporations and businesses. A corporation, unlike a partnership, is a separate legal entity from its owners. Although corporations are recognized as legal entities in many countries, in the United States they are treated like partnerships. A corporation may control another company through stock ownership, loans, and leases. They are not legally considered a single entity because they are not controlled by one person.
Many corporations are publicly held companies. A corporation can have an unlimited number of owners, but all of the same stock. A limited liability corporation (LLC) is a hybrid entity that combine the best features of a corporation and sole proprietorship but protects the owners’ rights to use and manage the company themselves. Limited liability partnerships (LLPs) are similar, except that they are formally registered as partnerships and are therefore only limited by their agreements and not by the nature of the corporation.
Service businesses include the services that are performed directly for customers. The most common service businesses are doctors, dentists, lawyers, and others. A main article of business for these types of businesses is providing health care and/or dental services.
A main article of business is any enterprise engaged in producing and distributing raw materials. This includes farms, factories, and quarries. Other major industries commonly classified as a main article of business are transportation, petroleum, chemicals, food processing, real estate, and financial activities such as banking and insurance.
Many people confuse the difference between a partnership and a corporation. In a partnership, two or more people own the business; the partnership does not have its own identity separate from the individuals. In a corporation, there is only one owner who makes all decisions. A sole proprietorship, on the other hand, has only one owner and is actually considered a partnership.
Partnerships and corporations share certain traits. They both have owners; the partnership has an indefinite period of ownership; a corporation never has any definite ownership limit and can be owned by anyone; and a partnership is considered to be a business owned by all of the partnership’s stakeholders. Unlike sole proprietorships, partnerships have limited liability. However, a partner can ruin the business just as a sole proprietor could. There are many ways to hurt a partnership; the partnership can be directly related to the product or service it provides or it can be indirectly related.
One way to hurt a partnership is if one of the partners puts the business into receivership. Receivership allows a receiver to seize all of the partners’ personal property and personal assets, but the partnership still has limited liability. This means that the partnership will be responsible for the debts of the receivership, including the payments that have not been received by the company. If the receivership is due to the inability of the business to continue operations, then the partnership has no legal rights to the profits of the business. The business will be open to any legal claims from the receiver.
Another way to harm a business entity is to allow one partner to control the use of the assets. Assets are rarely used for anything but their direct financial gain, so a partner who takes control of the business’s money is often used as a resource. A partner who takes control of the business’s accounts books is often used as well. Although the account books of a corporation are generally protected from the same type of actions, they are rarely used for profit. An account book can also be used as collateral for loans that are needed for a corporation.
