Corporations and International Business
A business is simply defined as a legally registered entity or organization engaged in business. Most businesses are either for-profit or non-for-profit organizations that operate on a public aid or social responsibility basis to meet a charitable purpose or further an important social cause. Some people may also use the term “business” to describe an individual or company that sells a product or provides services. The most common example of a business would be a corporation, but there are other examples as well. One could also use the term “employment” to describe an employee working under another person’s employment agreement.
Small and medium businesses in many countries throughout the world are considered small businesses. Large corporations have identified opportunities throughout the world and strategically plan to open up new markets in foreign countries to create a diversified revenue stream. In doing so, they not only take advantage of a particular niche market but also attract the services or products of other companies in that country. While doing so, many businesses do not realize how much the international market is worth. For instance, while doing business in China might mean lower overhead costs due to a lack of government controls over labor and licensing, the same principles applied to a local economy where labor is more highly regulated will be used for international expansion.
Corporations are most often seen as firms or entities that carry out specific tasks, such as manufacturing or trading but in reality there are many different classifications within these broad business categories. A corporation can be incorporated in a variety of ways depending on the nature of the business in question and the existing body of commercial law in that country. Some corporations are limited liability partnerships (LLPs), which allow shareholders to retain direct ownership of the business and benefit from the profits made through the corporation. Others are limited liability companies (LLCs), which allow limited liability for third party debts and liabilities. Still others are partnerships, which allows two or more people to operate the same business as joint owners without creating a single entity.