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Business is the activity of making one's living or making money by producing or buying and selling products (such as goods and services). Simply put, it is "any activity or enterprise entered into for profit." Having a
business name A trade name, trading name, or business name is a pseudonym used by companies that do not operate under their registered company name. The term for this type of alternative name is a "fictitious" business name. Registering the fictitious name with ...
does not separate the business entity from the owner, which means that the owner of the business is responsible and liable for debts incurred by the business. If the business acquires debts, the creditors can go after the owner's personal possessions. A business structure does not allow for corporate tax rates. The proprietor is personally taxed on all income from the business. The term is also often used colloquially (but not by lawyers or by public officials) to refer to a
company A company, abbreviated as co., is a legal entity In law, a legal person is any person A person (plural people or persons) is a being that has certain capacities or attributes such as reason, morality, consciousness or self-consciousness ...

company
. A company, on the other hand, is a separate legal entity and provides for
limited liability Limited liability is a legal status where a person's financial liability Liability may refer to: Law * Legal liability, in both civil and criminal law ** Public liability, part of the law of tort which focuses on civil wrongs ** Product liabi ...
, as well as
corporate tax A corporate tax, also called corporation tax or company tax, is a direct tax Though the actual definitions vary between jurisdictions, in general, a direct tax is a tax imposed upon a person or property as distinct from a tax imposed upon a tran ...
rates. A company structure is more complicated and expensive to set up, but offers more protection and benefits for the owner.


Forms

Forms of business ownership vary by
jurisdiction Jurisdiction (from Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of the ...
, but several common entities exist: * Sole proprietorship: A
sole proprietorship A sole proprietorship , also known as a sole tradership, individual entrepreneurship or proprietorship, is a type of enterprise owned and run by one person and in which there is no legal distinction between the owner and the Types of business ent ...
, also known as a sole trader, is owned by one person and operates for their benefit. The owner operates the business alone and may hire
employees Employment is a relationship between two parties, usually based on contract A contract is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agreement. A contract is le ...

employees
. A sole proprietor has unlimited
liability Liability may refer to: Law * Legal liability, in both civil and criminal law ** Public liability, part of the law of tort which focuses on civil wrongs ** Product liability, the area of law in which manufacturers, distributors, suppliers, retai ...
for all obligations incurred by the business, whether from
operating cost Operating costs or operational costs, are the expenseExpenditure is an outflow of money Image:National-Debt-Gillray.jpeg, In a 1786 James Gillray caricature, the plentiful money bags handed to King George III are contrasted with the beggar whose ...
s or
judgment Judgement (or US spelling judgment) is also known as ''adjudication Adjudication is the legal process by which an arbiter or judge A judge is a person who wiktionary:preside, presides over court proceedings, either alone or as a part of a ...
s against the business. All
asset In financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such a ...
s of the business belong to a sole proprietor, including, for example, a computer infrastructure, any
inventory Inventory (American English) or stock (British English) refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilisation. Stock management, Inventory management is a discipline primarily about spe ...
,
manufacturing Manufacturing is the creation or production Production may be: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products (g ...
equipment, or
retail Retail is the sale of goods In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (e ...

retail
fixtures, as well as any
real property In England, English common law, real property, real estate, realty, or immovable property is land which is the property of some person and all structures (also called Land improvement, improvements or Fixture (property law), fixtures) integra ...
owned by the sole proprietor. * Partnership: A
partnership A partnership is an arrangement where parties, known as business partnerA business partner is a commercial entity with which another commercial entity has some form of alliance. This relationship may be a contract A contract is a legally bin ...

partnership
is a business owned by two or more people. In most forms of partnerships, each partner has unlimited liability for the debts incurred by the business. The three most prevalent types of for-profit partnerships are
general partnership A general partnership, the basic form of partnership under common law, is in most countries an association of persons or an unincorporated company with the following major features: *Must be created by agreement, proof of existence and estoppel. ...
s,
limited partnership A limited partnership (LP) is a form of partnership A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, business ent ...
s, and
limited liability partnership A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore can exhibit elements of partnership A partnership is an arrangement where parties, ...
s. * Corporation: The owners of a
corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal ...

corporation
have
limited liability Limited liability is a legal status where a person's financial liability Liability may refer to: Law * Legal liability, in both civil and criminal law ** Public liability, part of the law of tort which focuses on civil wrongs ** Product liabi ...
and the business has a separate
legal personality In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by its b ...
from its owners. Corporations can be either government-owned or privately owned, and they can organize either for profit or as
nonprofit organization A nonprofit organization (NPO), also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in contrast with an entity that o ...
s. A privately owned, for-profit corporation is owned by its
shareholder A shareholder (in the United States often referred to as stockholder) of a is an or (such as another , a , a or ) that is registered by the corporation as the legal owner of of the of a or . Shareholders may be referred to as members of a ...
s, who elect a
board of directors A board of directors is a group of people who jointly supervise the activities of an organization An organization, or organisation (English in the Commonwealth of Nations, Commonwealth English; American and British English spelling diffe ...
to direct the corporation and hire its managerial staff. A privately owned, for-profit corporation can be either
privately held A privately held company, private company, or close corporation is a corporation not owned by the government, non-governmental organizations and by a relatively small number of shareholders or company members, which does not offer or trade its com ...
by a small group of individuals, or
publicly held A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in O ...
, with publicly traded
shares In financial markets A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities include stocks and bonds, raw materials and precious metals, which are known ...
listed on a
stock exchange A stock exchange, securities exchange, or bourse is an Exchange (organized market), exchange where stockbrokers and stock trader, traders can buy and sell security (finance), securities, such as share (finance), shares of stock, Bond (finance), ...
. * Cooperative: Often referred to as a "co-op", a
cooperative A cooperative (also known as co-operative, co-op, or coop) is "an association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned ".consumer cooperatives or
worker cooperative A worker cooperative is a cooperative A cooperative (also known as co-operative, co-op, or coop) is "an association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-o ...
s. Cooperatives are fundamental to the ideology of
economic democracy Economic democracy is a socioeconomic philosophy that proposes to shift decision-making power from corporate managers and corporate shareholders to a larger group of public stakeholders that includes workers, customers, suppliers, neighbours ...
. *
Limited liability companies A limited liability company (LLC) is the US-specific form of a private limited company A private limited company is any type of business entity in Privately held company, "private" ownership used in many jurisdictions, in contrast to a Pub ...
(LLC), limited liability partnerships, and other specific types of business organization protect their owners or shareholders from
business failure__NOTOC__ Business failure refers to a company ceasing operations following its inability to make a profit (accounting), profit or to bring in enough revenue to cover its expenses. A profitable business can fail if it does not generate adequat ...
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 as protected. * Franchises: A
franchise Franchise may refer to: Business and law * Franchising, a business method that involves licensing of trademarks and methods of doing business to franchisees * Franchise, a privilege to operate a type of business such as a cable television pro ...
is a system in which entrepreneurs purchase the rights to open and run a business from a larger corporation. Franchising in the United States is widespread and is a major economic powerhouse. One out of twelve retail businesses in the United States are franchised and 8 million people are employed in a franchised business. * A
company limited by guarantee In British, Irish and Australian company law Corporate law (also known as business law or enterprise law or sometimes company law) is the body of law governing the rights, relations, and conduct of persons, companies, organizations and b ...
: Commonly used where companies are formed for non-commercial purposes, such as clubs or charities. The members guarantee the payment of certain (usually nominal) amounts if the company goes into insolvent liquidation, but otherwise, they have no economic rights in relation to the company. This type of company is common in
England England is a that is part of the . It shares land borders with to its west and to its north. The lies northwest of England and the to the southwest. England is separated from by the to the east and the to the south. The country cover ...

England
. A company limited by guarantee may be with or without having
share capital __NOTOC__ A corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; ...
. * A
company limited by shares A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a mixture of both, with a specific objective. Company members share a common ...
: The most common form of the company used for business ventures. Specifically, a limited company is a "company in which the liability of each shareholder is limited to the amount individually invested" with corporations being "the most common example of a limited company."Black's Law and lee Dictionary. Second Pocket Edition. Bryan A. Garner, editor. West. 2001. This type of company is common in
England England is a that is part of the . It shares land borders with to its west and to its north. The lies northwest of England and the to the southwest. England is separated from by the to the east and the to the south. The country cover ...

England
and many English-speaking countries. A company limited by shares may be a **
publicly traded company A public company, publicly traded company, publicly held company, publicly listed company, or public limited company A public limited company (legally abbreviated to PLC or plc) is a type of public company under United Kingdom company law, som ...
or a **
privately held company A privately held company or private company is a company which does not offer or trade its company stock (share (finance), shares) to the general public on the stock market exchanges, but rather the company's stock is offered, owned and traded or ...
* A company limited by guarantee with a share capital: A hybrid entity, usually used where the company is formed for non-commercial purposes, but the activities of the company are partly funded by investors who expect a return. This type of company may no longer be formed in the UK, although provisions still exist in law for them to exist. * A
limited liability company A limited liability company (LLC) is the US-specific form of a private limited company A private limited company is any type of business entity in Privately held company, "private" ownership used in many jurisdictions, in contrast to a Pu ...
: "A company—statutorily authorized in certain states—that is characterized by limited liability, management by members or managers, and limitations on ownership transfer", i.e., L.L.C. LLC structure has been called "hybrid" in that it "combines the characteristics of a corporation and of a partnership or sole proprietorship". Like a corporation, it has limited liability for members of the company, and like a partnership, it has "flow-through taxation to the members" and must be "dissolved upon the death or bankruptcy of a member". * An
unlimited company An unlimited company or private unlimited company is a hybrid company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a mix ...
with or without a share capital: A hybrid entity, a company where the liability of members or shareholders for the debts (if any) of the company are not limited. In this case, the doctrine of a veil of incorporation does not apply. ''Less common types of companies are:'' * Companies formed by letters patent: Most corporations by letters patent are '' corporations sole'' and not companies as the term is commonly understood today. * : Before the passing of modern companies legislation, these were the only types of companies. Now they are relatively rare, except for very old companies that still survive (of which there are still many, particularly many British banks), or modern societies that fulfill a quasi-regulatory function (for example, the
Bank of England The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the Kingdom of England, English Government's banker, and still one of the bankers for t ...

Bank of England
is a corporation formed by a modern charter). * Statutory companies: Relatively rare today, certain companies have been formed by a private statute passed in the relevant jurisdiction. Note that "Ltd after the company's name signifies limited company, and PLC (
public limited company A public limited company (legally abbreviated to PLC or plc) is a type of public company A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a whose ownership is organized ...
) indicates that its shares are widely held." In legal parlance, the owners of a company are normally referred to as the "members". In a company limited or unlimited by shares (formed or incorporated with a share capital), this will be the
shareholder A shareholder (in the United States often referred to as stockholder) of a is an or (such as another , a , a or ) that is registered by the corporation as the legal owner of of the of a or . Shareholders may be referred to as members of a ...
s. In a company limited by guarantee, this will be the guarantors. Some offshore jurisdictions have created special forms of
offshore company The term "offshore company" or "offshore corporation" is used in at least two distinct and different ways. An offshore company may be a reference to: * a company, Corporate group, group or sometimes a division thereof, which engages in offshoring ...
in a bid to attract business for their jurisdictions. Examples include " segregated portfolio companies" and restricted purpose companies. There are, however, many, many sub-categories of types of company that can be formed in various jurisdictions in the world. Companies are also sometimes distinguished into
public companies A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whet ...
and
private companies A privately held company, private company, or close corporation is a corporation not owned by the government, non-governmental organizations and by a relatively small number of shareholders or company members, which does not offer or trade its com ...
for legal and regulatory purposes. Public companies are companies whose shares can be publicly traded, often (although not always) on a
stock exchange A stock exchange, securities exchange, or bourse is an Exchange (organized market), exchange where stockbrokers and stock trader, traders can buy and sell security (finance), securities, such as share (finance), shares of stock, Bond (finance), ...
which imposes listing requirements/ Listing Rules as to the issued shares, the trading of shares and a future issue of shares to help bolster the reputation of the exchange or particular market of exchange. Private companies do not have publicly traded shares, and often contain restrictions on transfers of shares. In some jurisdictions, private companies have maximum numbers of shareholders. A
parent company A parent company is a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a mixture of both, with a specific objective. ...
is a company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors; the second company being deemed as a subsidiary of the parent company. The definition of a parent company differs by jurisdiction, with the definition normally being defined by way of laws dealing with companies in that jurisdiction.


Classifications

*
Agriculture Agriculture is the science, art and practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary Image:Family watching television 1958.jpg, Exercise trends, Increases in sedentary behaviors su ...

Agriculture
, such as the domestication of fish, animals, and livestock, as well as
lumber Lumber, also known as timber, is wood Wood is a porous and fibrous structural tissue found in the stems and roots of tree In botany, a tree is a perennial plant with an elongated Plant stem, stem, or trunk (botany), trunk, sup ...
,
oil An oil is any nonpolar chemical substance A chemical substance is a form of matter In classical physics and general chemistry, matter is any substance that has mass and takes up space by having volume. All everyday objects that can b ...
and
mining Mining is the extraction of valuable mineral In geology and mineralogy, a mineral or mineral species is, broadly speaking, a solid chemical compound with a fairly well-defined chemical composition and a specific crystal structure that occu ...
businesses that extract natural resources and raw materials, such as
wood Wood is a porous and fibrous structural tissue found in the stems and roots of tree In botany, a tree is a perennial plant with an elongated Plant stem, stem, or trunk (botany), trunk, supporting branches and leaves in most species. ...

wood
,
petroleum Petroleum, also known as crude oil and oil, is a naturally occurring, yellowish-black liquid A liquid is a nearly incompressible In fluid mechanics or more generally continuum mechanics, incompressible flow (isochoric process, isoc ...

petroleum
,
natural gas Natural gas (also called fossil gas; sometimes just gas) is a naturally occurring hydrocarbon In , a hydrocarbon is an consisting entirely of and . Hydrocarbons are examples of s. Hydrocarbons are generally colourless and hydrophobic wit ...

natural gas
,
ore ore – psilomelane Psilomelane is a group name for hard black manganese oxides including hollandite and romanechite. Psilomelane consists of hydrous manganese Manganese is a chemical element Image:Simple Periodic Table Chart- ...

ore
s, plants or
mineral In geology and mineralogy, a mineral or mineral species is, broadly speaking, a solid chemical compound with a fairly well-defined chemical composition and a specific crystal structure that occurs naturally in pure form.John P. Rafferty, ed. (2 ...

mineral
s. *
Financial services Financial services are the economic services provided by the finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of mone ...
businesses include
bank A bank is a financial institution Financial institutions, otherwise known as banking institutions, are corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), stat ...

bank
s,
brokerage firm A broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be conf ...
s,
credit union A credit union, a type of financial institution similar to a commercial bank, is a member-owned financial cooperative, controlled by its members and operated on a not-for-profit basis. Credit unions generally provide services to members simila ...
s,
credit cards#REDIRECT Credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's promise to the card issuer to pay them for the amounts plus the o ...
,
insurance companies Insurance is a means of protection from financial loss. It is a form of risk management Risk management is the identification, evaluation, and prioritization of risk In simple terms, risk is the possibility of something bad happening. ...
,
asset In financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such a ...
and investment companies such as
private-equity firm A private-equity firm is an investment management Investment management is the professional asset management of various securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument ...
s,
private-equity fund A private-equity fund is a collective investment scheme used for making investments in various equity (and to a lesser extent debt) securities according to one of the investment strategies associated with private equity. Private equity funds are t ...
s,
real estate investment trust A real estate investment trust (REIT) is a company that owns, and in most cases operates, income-producing real estate. REITs own many types of commercial real estate, including office building, office and apartment buildings, warehouses, hospitals ...
s,
sovereign wealth fund A sovereign wealth fund (SWF), sovereign investment fund, or social wealth fund is a state-owned investment fund that invests in real and financial assets such as stocks, Bond (finance), bonds, real estate, precious metals, or in alternative inve ...
s,
pension fund A pension fund, also known as a superannuation fund in some countries, is any plan, fund, or scheme which provides pension, retirement income. Pension funds typically have large amounts of money to invest and are the major investors in listed an ...
s,
mutual fund A mutual fund is a professionally managed investment fund An investment fund is a way of investment, investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group such as reducing the ri ...
s,
index fund An index fund (also index tracker) is a mutual fund A mutual fund is a professionally managed investment fund An investment fund is a way of investment, investing money alongside other investors in order to benefit from the inherent advantages ...
s, and
hedge fund A hedge fund is a pooled investment fund Image:Financial info.jpg, The values and performance of collective funds are listed in newspapers. An investment fund is a way of investment, investing money alongside other investors in order to benefit ...
s,
stock exchange A stock exchange, securities exchange, or bourse is an Exchange (organized market), exchange where stockbrokers and stock trader, traders can buy and sell security (finance), securities, such as share (finance), shares of stock, Bond (finance), ...
s, and other companies that generate profits through investment and management of
capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distinction between the letters that are in larger uppercase or capitals (or more formally ''majuscule'') and smaller lowercase (or more formally ''minusc ...
. *
Entertainment Entertainment is a form of activity that holds the attention and interest In finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creatio ...
companies and
mass media Mass media refers to a diverse array of media Media may refer to: Physical means Communication * Media (communication), tools used to deliver information or data ** Advertising media, various media, content, buying and placement fo ...
agencies generate profits primarily from the sale of
intellectual property Intellectual property (IP) is a category of property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of ...
. They include
film studio A film studio (also known as movie studio or simply studio) is a major entertainment company or motion picture company that has its own privately owned studio A studio is an artist or worker's workroom. This can be for the purpose of acting, arc ...
s and
production house Production may be: Economics and business * Production (economics)Production is a process of combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (output). It is the act of creating a ...
s, mass media companies such as
cable television network Cable television is a system of delivering television Television (TV), sometimes shortened to tele or telly, is a telecommunication medium used for transmitting moving images in monochrome (black and white), or in color, and in two o ...
s, online
digital media Digital media means any media (communication), communication media that operate with the use of any of various encoded machine-readable data formats. Digital media can be created, viewed, distributed, modified, listened to, and preserved on a di ...
agencies,
talent agencies Talent has two principal meanings: * Talent (measurement) The talent was a unit of weight that was introduced in Mesopotamia at the end of the 4th millennium BC, and was normalized at the end of the 3rd millennium during the Akkadian-Sumer phase. ...
,
mobile media The notion of making media mobile can be traced back to the “first time someone thought to write on a tablet that could be lifted and hauled – rather than on a cave wall, a cliff face, a monument that usually was stuck in place, more or less for ...
outlets,
newspapers A newspaper is a periodical Periodical literature (also called a periodical publication or simply a periodical) is a category of serial Serial may refer to: Arts, entertainment, and media The presentation of works in sequential segments ...
,
book A book is a medium for recording information Information is processed, organised and structured data Data (; ) are individual facts, statistics, or items of information, often numeric. In a more technical sense, data are a set of v ...
and
magazine publishing A magazine is a periodical literature, periodical publication which is printing, printed in Coated paper, gloss-coated and Paint sheen, matte paper. Magazines are generally published on a regular schedule and contain a variety of content (media ...

magazine publishing
houses. * Industrial
manufacturers Manufacturing is the creation or production Production may be: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products (g ...
produce
products Product may refer to: Business * Product (business), an item that serves as a solution to a specific consumer problem. * Product (project management), a deliverable or set of deliverables that contribute to a business solution Mathematics * Produc ...
, either from
raw material A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished Product (business), products, energy, or intermediate materials that are feedstock for future finis ...
s or from component parts, then export the finished products at a profit (accounting), profit. They include tangible good (economics), goods such as Automotive industry, cars, bus manufacturing, buses, Medical device manufacturing, medical devices, Glass manufacturing, glass, or aircraft manufacturing, aircraft. * Real estate businesses sell, invest, construct and develop real property, properties, including land, residential homes, and other buildings. * Retailers, Wholesaling, wholesalers, and distribution (business), distributors act as middlemen and get goods produced by manufacturers to the intended consumers; they make their profits by marking up their prices. Most stores and catalog companies are distributors or retailers. * Transportation businesses such as Railway company, railways, airlines, Shipping industry, shipping companies that deliver goods and individuals to their destinations for a fee. * Sport industry, Sports organizations are involved in producing, facilitating, promoting, or organizing any activity, experience, or business enterprise focused on sports. They make their profits by selling goods and services that are sports related. * Utilities produce public services such as water, electricity, waste management or sewage treatment. These industries are usually operated under the charge of a public State-owned enterprise, government. * Tertiary sector of the economy, Service businesses offer intangible goods or services and typically charge for labor or other services provided to government, to consumers, or to other businesses. Interior decorators, beauticians, hair stylists, make-up artists, tanning salons, laundromats, dry cleaners, and pest controllers are service businesses.


Activities


Accounting

Accounting is the measurement, processing, and communication of financial information about economic entity, economic entities such as businesses and
corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal ...

corporation
s. The modern field was established by the Italians, Italian mathematician Luca Pacioli in 1494. Accounting, which has been called the "language of business", measures the results of an organization's economic activities and conveys this information to a variety of users, including investors, creditors, management, and Regulatory agency, regulators. Practitioners of accounting are known as accountants. The terms "accounting" and "financial reporting" are often used as synonyms.


Finance

Finance is a field that deals with the study of investments. It includes the dynamics of
asset In financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such a ...
s and Liability (financial accounting), liabilities over time under conditions of different degrees of uncertainty and risk. Finance can also be defined as the science of money management. Finance aims to price assets based on their risk level and their expected rate of return. Finance can be broken into three different sub categories: public finance, corporate finance, and personal finance. Activities also include budgeting, forecasting and lending money, and is defined as the management of money.


Manufacturing

Manufacturing is the production of merchandise for use or sale using Wage labour, labour and machines, tools, chemical and biological processing, or formulation. The term may refer to a range of human activity, from handicraft to High tech manufacturing, high tech, but is most commonly applied to Industry (manufacturing), industrial production, in which
raw material A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished Product (business), products, energy, or intermediate materials that are feedstock for future finis ...
s are transformed into finished goods on a large scale.


Marketing

Marketing is defined by the American Marketing Association as ''"the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large."'' The term developed from the original meaning which referred literally to going to a market to buy or sell goods or services. Marketing tactics include advertising as well as determining product pricing. With the rise in technology, marketing is further divided into a class called digital marketing. It is marketing products and services using digital technologies.


Research and development

Research and development refer to activities in connection with corporate or government innovation. Research and development constitute the first stage of development of a potential new service or product. Research and development are very difficult to manage since the defining feature of the research is that the researchers do not know in advance exactly how to accomplish the desired result.


Safety

Injuries cost businesses billions of dollars annually. Studies have shown how company acceptance and implementation of comprehensive safety and health management systems reduce incidents, insurance costs, and workers' compensation claims. New technologies, like wearable safety devices and available online safety training, continue to be developed to encourage employers to invest in protection beyond the ":wikt:canary in a coal mine, canary in the coal mine" and reduce the cost to businesses of protecting their employees.


Sales

Sales are activity related to selling or the number of goods or services sold in a given time period. Sales are often integrated with all lines of business and are key to a companies' success.


Management

The efficient and effective Business operations, operation of a business, and study of this subject, is called management. The major branches of management are finance, financial management, marketing management, organizational studies, human resource management, strategic management, manufacturing, production management, operations management, service management, and information technology management. Owners may manage their businesses themselves, or employ managers to do so for them. Whether they are owners or employees, managers administer three primary components of the business' value: financial resources, capital (tangible resources), and human resources. These resources are administered in at least six functional areas: legal contracting, manufacturing or service production, marketing, accounting, financing, and human resources.


Restructuring state enterprises

In recent decades, states modeled some of their
asset In financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such a ...
s and enterprises after business enterprises. In 2003, for example, the People's Republic of China modeled 80% of its state-owned enterprises on a company-type management system. Many state institutions and enterprises in China and Russia have transformed into joint-stock companies, with part of their shares being listed on public stock markets. Business process management (BPM) is a holistic management approach focused on aligning all aspects of an organization with the wants and needs of clients. BPM attempts to improve processes continuously. It can, therefore, be described as a "process optimization process". It is argued that BPM enables organizations to be more efficient, effective and capable of change than a functionally focused, traditional hierarchical management approach.


Organization and regulation

Most legal
jurisdiction Jurisdiction (from Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of the ...
s specify the forms of ownership that a business can take, creating a body of commercial law for each type. The major factors affecting how a business is organized are usually: * The size and scope of the business firm and its structure, management, and ownership, broadly analyzed in the theory of the firm. 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 corporations or (less often) partnerships. In addition, a business that 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 in certain ways. * 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 less or more information public (or report it to relevant authorities) and may be bound to comply with different rules and regulations. * Control and coordination requirements. In function of the risk and complexity of the tasks to organize, a business is organized through a set of formal and informal mechanisms. In particular, contractual and relational governance can help mitigate opportunism as well as support communication and information sharing. Many businesses are operated through a separate entity such as a corporation or a partnership (either formed with or without limited liability). 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
shareholder A shareholder (in the United States often referred to as stockholder) of a is an or (such as another , a , a or ) that is registered by the corporation as the legal owner of of the of a or . Shareholders may be referred to as members of a ...
s, 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 Legal liability, 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 that person owns it directly or through a formally organized entity. Depending on the business needs, an adviser can decide what kind is proprietorship will be most suitable. 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 that treat small corporations differently from 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. # "Going public" through a process known as an initial public offering (IPO) means that part of the business will be owned by members of the public. This requires the organization as a distinct entity, to disclose information to the public, and adhering to a tighter set of laws and procedures. Most public entities are corporations that have sold shares, but increasingly there are also public Limited liability company, LLC's that sell units (sometimes also called shares), and other more exotic entities as well, such as, for example,
real estate investment trust A real estate investment trust (REIT) is a company that owns, and in most cases operates, income-producing real estate. REITs own many types of commercial real estate, including office building, office and apartment buildings, warehouses, hospitals ...
s in the US, and unit trusts in the UK. A general partnership cannot "go public".


Commercial law

A very detailed and well-established body of rules that evolved over a very long period of time applies to commercial transactions. The need to regulate trade and commerce and resolve business disputes helped shape the creation of law and courts. The Code of Hammurabi dates back to about 1772 BC for example and contains provisions that relate, among other matters, to Freight transport, shipping costs and dealings between merchants and brokers. The word "corporation" derives from the Latin ''corpus'', meaning body, and the Maurya Empire in Iron-Age India accorded legal rights to business entities. In many countries, it is difficult to compile all the laws that can affect a business into a single reference source. Laws can govern the treatment of labour and employee relations, Health and Safety Executive, worker protection and safety, discrimination on the basis of age, gender, disability, race, and in some jurisdictions, sexual orientation, and the minimum wage, as well as Trade union, unions, worker compensation, and working hours and leave. Some specialized businesses may also require licenses, either due to laws governing entry into certain trades, occupations or professions, that require special education or to raise revenue for local governments. Professions that require special licenses include law, medicine, piloting aircraft, selling liquor, radio broadcasting, selling investment securities, selling used cars, and roofing. Local jurisdictions may also require special licenses and taxes just to operate a business. Some businesses are subject to ongoing special regulation, for example, Public utility, public utilities, investment securities, banking, insurance, broadcasting, aviation, and health care providers. Environmental regulations are also very complex and can affect many businesses.


Capital

When businesses need to raise money (called
capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distinction between the letters that are in larger uppercase or capitals (or more formally ''majuscule'') and smaller lowercase (or more formally ''minusc ...
), they sometimes offer Security (finance), securities for sale. Capital may be raised through private means, by an initial public offering or IPO on a
stock exchange A stock exchange, securities exchange, or bourse is an Exchange (organized market), exchange where stockbrokers and stock trader, traders can buy and sell security (finance), securities, such as share (finance), shares of stock, Bond (finance), ...
, or in other ways. Major stock exchanges include the Shanghai Stock Exchange, Singapore Exchange, Hong Kong Stock Exchange, New York Stock Exchange and NASDAQ (the USA), the London Stock Exchange (UK), the Tokyo Stock Exchange (Japan), and Bombay Stock Exchange (India). Most countries with capital markets have at least one. Businesses that have gone public are subject to regulations concerning their internal governance, such as how executive officers' compensation is determined, and when and how information is disclosed to shareholders and to the public. 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. The regulations are implemented and enforced by the China Securities Regulation Commission (CSRC) in China. In Singapore, the regulatory authority is the Monetary Authority of Singapore (MAS), and in Hong Kong, it is the Securities and Futures Commission (SFC). The proliferation and increasing complexity of the laws governing business have forced increasing specialization in corporate law. It is not unheard of for certain kinds of corporate transactions to require a team of five to ten attorneys due to sprawling regulation. Commercial law spans general corporate law, employment and labor law, health-care law, securities law, mergers and acquisitions, tax law, employee benefit plans, food and drug regulation, intellectual property law on copyrights, patents, trademarks, telecommunications law, and financing. Other types of capital sourcing include crowdsourcing on the Internet, venture capital, bank loans, and debentures.


Intellectual property

Businesses often have important "
intellectual property Intellectual property (IP) is a category of property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of ...
" that needs protection from competitors for the company to stay profitable. This could require patents, copyrights, trademarks, 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 treaty, treaties concerning intellectual property, and thus companies registered in these countries are subject to national laws bound by these treaties. In order to protect trade secrets, companies may require employees to sign noncompete clauses which will impose limitations on an employee's interactions with stakeholders, and competitors.


Trade union

A trade union (or labor union) is an Political organisation#Labour unions, organization of workers who have come together to achieve common goals such as protecting the integrity of its trade, improving safety standards, achieving higher pay and benefits such as health care and retirement, increasing the number of employees an employer assigns to complete the work, and better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members (wikt: rank and file, rank and file members) and negotiates Labour and employment law, labor contracts (collective bargaining) with employers. The most common purpose of these associations or unions is "maintaining or improving the conditions of their employment". ch. I This may include the negotiation of wages, work rules, complaint procedures, rules governing hiring, firing, and promotion of workers, benefits, Occupational safety and health, workplace safety and policies.


See also


References


External links

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