What is Business?
The dictionary definition of a business is “a private commercial enterprise having regular productive or distribution operations.” A business is also defined as an individual, partnership, syndicate, syndicated body, or association that engages in any trade or activity for profit.” A business can be for-sale, owned by the members of an institution, or privately owned by an individual or group of individuals acting as representatives of other individuals. Businesses have grown by leaps and bounds over the past century, with new industries springing up almost daily as technology and economic conditions change. Although it is not uncommon to start a small business without any financial investment, it is always advisable to conduct thorough research on the type of business you wish to engage in, its market potential, legal aspects, and risks associated with the business.
Many new businesses incorporate as sole proprietors; others incorporate as partnerships, limited liability companies (LLCs), and corporations. A sole proprietorship is the most basic form of business organization, meaning that the sole proprietor controls the assets of the business, and all of the other owners share in the business’s profits, loss, and value. Partnerships are two or more people who own shares in a business and have the right to minority shares in the business.
A corporation is a separate entity from its shareholders and members. Unlike a sole proprietorship, a corporation must have some corporate assets to protect its assets in the event of bankruptcy. A corporation also requires meetings at regular intervals, which are generally held at a regularly scheduled board meeting, to discuss and make decisions concerning business operations. The biggest difference between a partnership and a corporation is that a corporation is considered a legal entity separate from its owners and shareholders, although there is no requirement that the corporation is publicly traded.