Legal definition of the word business

The Bell group, instead of being driven from the field, were at once lifted to a higher level in the business world.

Most of them were well- known business men—the Bradleys, the Saltonstalls, Fay, Silsbee, and Carlton.

There was a spirit of confidence and enterprise; and the next step, clearly, was to create a business organization.

Vail, took his seat as General Manager in a tiny office in Reade Street, New York, and the building of the business began.

Bell invented the telephone; Watson constructed it; Sanders financed it; Hubbard introduced it; and Vail put it on a business basis.

The new General Manager had, of course, no experience in the telephone business. Neither had any one else.

So, just as Amos Kendall had left the post office service thirty years before to establish the telegraph business, Theodore N.

«We have the only original telephone patents,» he wrote; «we have organized and introduced the business, and we do not propose to have it taken from us by any corporation.» To one agent, who was showing the white feather, he wrote:

For you to acknowledge that you cannot compete with his influence when you make it your special business, is hardly the thing.

‘But surely this is not the way to do the business,’ Arthur Clennam could not help saying.

‘When the business is regularly before that Department, whatever it is,’ pursued this bright young Barnacle, ‘then you can watch it from time to time through that Department.

How my lords then made a Minute, number five thousand one hundred and three, whereby they resigned the business to the Circumlocution Office.

On this page, you’ll find the legal definition and meaning of Business, written in plain English, along with examples of how it is used.

What is Business?

History and Definition of Business

Business activities can be traced back to ancient civilizations, where trades and transactions were conducted through bartering. As time passed, the concept of currency was introduced, and money became the standard medium of exchange. Today, business is a vital aspect of the global economy, and it is defined as an activity undertaken for the purpose of making a profit or adding wealth to a person or entity by resorting to financial transactions in order to get a margin of profit on such transactions.

In simpler terms, a business can be described as an organization that sells goods or services to customers in exchange for money. This organization can take on several legal forms such as a corporation, partnership, sole proprietorship, or a limited liability company.

Examples of Business

1. A small business owner selling handmade candles at a local farmer’s market
2. A multinational corporation such as Apple Inc. selling electronic devices worldwide
3. A sole proprietor offering pet grooming services out of their home
4. A partnership between two lawyers offering legal services to clients
5. An online retailer selling clothing and accessories through their website

Legal Terms Similar to Business

1. Enterprise: A business organization engaged in industrial or commercial activities, especially for profit.
2. Commerce: The activity of buying and selling goods and services, especially on a large scale.
3. Industry: A particular form of commercial or economic activity that involves the manufacturing of goods and services.

Today’s business world may be summed up in one word: change. Not just any change, but rapid change. Businesses today are discovering that in order to remain profitable and competitive, they must be more responsive to client needs than ever before. This is true not only for large corporations such as Apple, Nike, and Whole Foods but also for smaller businesses such as your local hardware or grocery store. They are all affected by the quickly changing business environment. The term “business” has so many definitions and applications that we could nearly argue it applies to everything. Throughout this article, we will look at the business definition, the numerous functions, roles, features, and strategies of the business, keeping in mind that business is everywhere, just like the air we breathe!

A business can be defined as any organization or any other entity involved in commercial, professional, charitable, or industrial operations. It can be a for-profit or a non-profit entity, and it may or may not exist independently of the people/person running it.

We can alternatively define business as any activity that provides goods or services to customers for a profit. A business’s goods include tangible items such as cars, televisions, and soda. A service is defined as an action or work done for monetary reward. Haircuts, hotel stays, and roller-coaster rides are examples of services.

What is Business Environment?

It’s similar to our natural surroundings in some ways: it’s all around us but not always obvious. Technology, competitors (other businesses), advertising, laws, consumer needs, and money are all part of it. Companies must be able to forecast, react, and adapt to changes in various factors of the business environment, just as seasons and weather do. Those who do not comply risk becoming stranded in the rain or cold and battling to survive.

Despite the fact that the environment in which businesses operate is constantly changing, the fast pace of change creates unique difficulties and opportunities for businesses today. Consider this: in the 1950s, the average life span of a Fortune 500 corporation (the largest business we know) was more than 60 years. A Fortune 500 corporation’s life expectancy is now less than 20 years.

To get a sense of how quickly and dramatically things have changed, consider something that most Americans do on a regular basis: getting a prescription filled. You would have taken a written prescription from your doctor to your local drugstore and handed it to the pharmacist a few decades ago. While you waited for it to be filled, you could have read magazines or shopped the store for other products, such as shampoo or a greeting card. When your name was called, you most likely paid with cash or a check. All of these transactions occurred during typical business hours, which are Monday through Friday, 9 a.m. to 5 p.m.; larger pharmacies may have been open for a few hours on Saturday.

What Is the Process of Starting a Business?

Before you establish a business, be sure you understand what makes a business and any business-related activity. This includes understanding the federal, state, and local regulations that apply to your business. This understanding will assist you in avoiding penalties and fines that could cripple or end your business shortly after it begins. This knowledge will also assist you in developing a solid business plan for a successful entry into the market.

A self-employed person, a business owner, a contractor, or an entrepreneur are all terms used to describe someone who owns and operates a business. However, the terms “business owner” and “entrepreneur” are not often used interchangeably.

Most businesses in the United States register with the government in some manner. Individuals who do business under their own names may not need to register their business with the government, but they may miss out on tax breaks and credits that individuals cannot claim, such as the small business deduction.

Some freelancers, hobbyists, and side hustlers may be astonished to realize they are truly in business and must register their business income, according to how their government defines a business. Organizations like the Internal Revenue Service (IRS) provide a profit test to establish if a person or corporation is operating a claimed business.

Business activity is defined as any action carried out for profit or with the prospect of profit. Selling stuff at a flea market, from the trunk of a car, or on eBay is an example of this.

Business Definition Concept

The essential idea underpinning the business is the business concept. This concept serves as the foundation for the development of the business model, plan, vision, and mission. For example, Uber was founded on the concept of pooling taxi drivers and providing their services on demand under a single brand. This concept served as the foundation for all subsequent business strategies.

Business Goal

The business goal is what drives the business to continue operating and doing its activities in the long run. It is the cause for the business’s existence. While most people believe that profit is the primary goal of every business. Few people have proposed a new underlying goal.

According to the traditional concept, a business exists solely to generate profits by delivering goods and services to clients.

According to the modern concept, the primary goal of every business is customer happiness because this is what generates the highest profits. When the consumer is happy, the business thrives.

Types of Business

Businesses can be classed into four types, however, they are not restricted to these.

#1. Manufacturing

Manufacturing businesses are the ones who create the goods and sell them either straight to the client or through middlemen. Steel mills, plastic factories, and so on are examples of manufacturing businesses.

#2. Service

This sort of business deals with the sale of intangible commodities to customers. Services, unlike real things, cannot be stored or separated from the supplier.

Professional services, knowledge, commission-based promotions, and so forth are all provided by service firms. Salons, colleges, and consulting firms are a few examples.

#3. Merchandising

Merchandising is a middleman business strategy in which a business purchases things from a manufacturer, wholesaler, or other partner and resells them at a retail price. It is commonly referred to as a ‘buy and sell’ business since they generate money by selling their things at a higher price than their cost price.

Grocery stores, supermarkets, and distributors are examples of merchandising businesses.

#4. Hybrid

Hybrid businesses combine the qualities of two or more of the above-mentioned types of businesses. A restaurant, for example, develops its own meals (manufacturing), sells things created by other businesses (merchandising), and provides service to clients (service).

Different Types of Business Ownership

Business ownership has different forms depending on the number of owners, the owners’ accountability, representation, and goals. These are the –

#1. Sole Proprietorship

A sole proprietorship is a business that is owned and operated by a single person. It is simple to set up, use, and register. The proprietor owns all of the business’s profits and is personally liable for all obligations.

The major disadvantage of this business is that the proprietor is subject to unlimited liabilities. This means that if the business’s creditors are unable to pay them, they can go for the owner’s personal assets.

#2. Partnership

When two or more people work together to run a business, they usually form a partnership. Partnerships are classified into two types: broad and limited. A general partnership is similar to a sole proprietorship, but with more than one owner and unlimited responsibility for all owners. Some or all of the participants in a limited partnership have limited responsibility.

#3. Corporation

A corporation is a legal business distinct from the individuals who own or operate it. Shares of stock are commonly used to indicate ownership.

Owners have limited responsibility but they don’t need to be active in the day-to-day operations of the business. A group (board of directors) elected by the shareholders runs the business.

#4. Limited Liability Corporation (LLC)

A limited liability company is a type of business that combines the features of a corporation and a partnership. Because it is not incorporated, it is a partnership, whereas a corporation has limited responsibility for all partners/owners.

#5. Cooperative

A cooperative is a private business organization owned and governed by individuals for the benefit of all. These people are the members, and they profit from the cooperative’s goods and services. Because the cooperative’s principal goal is to give service to all members rather than a return on investment, all members are expected to help operate the business.

Business Size

The size of a business varies. Small businesses are those that are owned and operated by a single person. They are often managed by a single individual or a small group of people. Family restaurants, home-based businesses, clothes, book and publishing companies, dog walking businesses, and those who run trades are examples of these businesses. Profits are often low, but sufficient to sustain operations as long as the business owner(s) can operate in the black.

Mid-sized businesses often generate revenues ranging from $50 million to $1 billion. These enterprises are more established than small businesses, having a workforce ranging from 100 to 999 workers. Fair Isaac, the firm behind FICO, was named the top mid-sized employer in the United States by Forbes in 2021. In 2020, the company had over 4,000 employees and earned $1.295 billion in revenue.

Larger businesses, sometimes known as corporations, employ more than 1,000 people and generate more than $1 billion in revenue. To fund operations, they may issue company stock. Unlike smaller businesses that can operate independently of authorities, the company in this case is publicly traded and subject to specific reporting and operating requirements. Corporations include multinational enterprises such as General Electric and Walmart.
Industries in Business
A company’s business can be described by communicating the industry in which it works. Real estate, advertising, and mattress manufacturing are all examples of industries in which a business can operate.

Because the term business can refer to both day-to-day activities and the overall construction of a company, it is frequently used to refer to transactions involving an underlying product or service. ExxonMobil, for example, does business by providing oil.

Examples of Businesses

Apple

Apple is well-known around the world for its innovative goods, which include personal computers and a variety of smart devices, as well as its services, which include music and video streaming and creation services.

So, Apple founded in 1977 by Steve Jobs and Steve Wozniak, became the first publicly traded business with a market capitalization of $1 trillion. On the Nasdaq, the company’s stock is denoted by the symbol AAPL. As of September 17, 2021, intraday trade was around $145, with the company’s market capitalization reaching $2.42 trillion.

More than two million people are employed by the corporation, including 80,000 direct Apple employees. Suppliers, manufacturers, and others who are supported by the Apple store make up the remaining jobs. In 2020, the firm generated net sales of $274 billion, which were mostly driven by its product segment.

Apple’s success is based on its product line and its capacity to innovate. The corporation focuses on design and quality, both of which were important components of Jobs’ corporate vision. Apple’s products can be utilized under the same operating system, allowing users to sync them together and so saving business costs. Their capacity to design, develop, and promote new goods and services allows them to stay ahead of the competition.

Walmart

Walmart is a multinational corporation and one of the world’s largest retailers. Sam Walton launched the corporation in Arkansas in 1962. It has over 10,500 outlets in over 24 countries and employs over 2.3 million people.

The corporation went public in 1970 and trades under the ticker code WMT on the New York Stock Exchange (NYSE). Walmart stock was trading about $145 per share on September 17, 2021, with a market cap of $405.92 billion.

For the fiscal year 2021, Walmart made $559.2 billion in revenue. This figure was driven by online sales through its eCommerce section, as well as overseas sales, which were mostly reported in Mexico and Canada.

Walmart’s success can be ascribed to a variety of things, including its brand name, pricing, diversification (particularly with the inclusion of its online marketplace), effective supply chain management, and financial strength.

What Is the Best Way to Start a Business?

To start a business, you must first go through a series of processes. Conducting market research, developing a business plan, seeking capital or other forms of funding, selecting a location and business structure, selecting the right name, submitting registration paperwork, obtaining tax documents (employer and taxpayer IDs), and obtaining permits and licenses are all part of this process. It’s also a good idea to open a bank account with a financial institution to help with your day-to-day banking needs.

How Do You Get Started with an Online Business?

With a few exceptions, starting an internet business entails many of the same stages as starting a traditional business.

Before you do anything else, you must conduct market research and create a business plan. After that, choose a name and structure for your business, and then file the necessary paperwork to register your company.

Rather than looking for a real place, select a platform and create a website. Before you launch your business, you need to discover a way to create your target market, whether through traditional marketing or more innovative methods such as social media.

How Do You Create a Business Name?

Your business name should be catchy and relevant to the type of organization you plan to run, as well as something that people will gravitate toward and remember, not to mention associate with you and the items and services you plan to market. Originality is essential. Most importantly, it should not be a name that is already in use by another person. Do a business name search online to determine if it’s available or already registered.

What Is the Process of Writing a Business Plan?

Business plans are vital for running your business and can help you acquire the money you need to get started. You have the option of creating a regular or lean business plan.

A typical business plan is quite detailed and comprehensive. This comprises a synopsis of the company and how it plans to prosper. It also includes information about your market, management, products and services, marketing, and sales estimates.

Lean formats are shorter but still contain important information such as partnership details, summaries of business operations and customer relationships, cost structures, and income streams.

You can discover business plan templates online or create your own.

How Do You Apply for a Business Loan?

Loans are useful for people who do not have the capital to start their own business.

Determine the type of loan you require. You can resort to a traditional lender or an online lender. You might also look into a government-backed loan, such as those available through the Small Business Administration.

Prospective lenders want to see details on paper, regardless of which choice you choose, especially if and when you’re just starting out. Make a copy of your business plan, which should include an outline of your costs and revenue streams.

As a new business owner, make sure you have a strong credit score (because your business isn’t yet up and running), and you may be required to put down some collateral to secure the loan if you’re approved.

Define Yourself by Identifying Your Business Niche

To create a Personal Brand for yourself, you must understand this truth: Who you speak louder than what you do.

The truth is that people gravitate toward one another. There are many entrepreneurs out there with better innovations than you can or will ever have; this is not meant as an insult; it is simply a fact.

People will, however, patronize the business of your own brand, which is you! You may add additional colour, dimension, and expression to your work. They are simply enamoured with what you represent.

Here are a few easy methods to finding your niche:

#1. Identify your hobbies and interests.

Make a list of things that you are interested in and enthusiastic about. This is because there will be hurdles, and only passion, especially as a first-time entrepreneur, will keep you going. Furthermore, if you are uninterested in the subject, you may not be able to find the motivation to persevere.

Some useful hints

• What do you prefer to do in your spare time?
• What do you like to do when you’re not doing it?
• So, what are your favourite subjects to study?
• What organizations or social clubs are you a member of?

#2. Identify problems that can be solved

We will limit these to bullet points that will assist you in identifying and solving problems.

Conduct market research on your intended audience. Go to your target market and ask inquiries to find pain areas.

Look for online and offline forums. Search Quora or find forums similar to your niche, then look at the discussions going on. Similarly, what queries do people have? What are their issues?

Look up keywords. Investigate several keyword combinations using Google Trends and Google AdWords’ keyword planner. This can assist you in obtaining popular search terms relating to those pain points.

#3. Investigate your competitors

To be able to compete effectively with your competitors- those who are already in the niche you want to join, seek for;

Content of poor quality. In a niche where other business owners aren’t providing high-quality, thorough content that serves the audience, it’s simple to outrank them.

There is no paid competition. If you’ve discovered a keyword with relatively high search traffic but little competition and paid advertising, there’s a good chance you’ll find success in that market.

#4. Determine your niche’s profitability.

You should have a good sense of what niche you want to enter by now. At this stage, you should have a good notion of how much money you can make in your speciality. Aside from enthusiasm, money is another motivator.

Also, keep in mind that you do not have to start your business with your own product. You can earn commissions by collaborating with product makers, advertisers, and site owners in your industry while working on your one-of-a-kind solution.

#5. Put your idea to the test

You now have all of the information you need to select a niche, and the only thing left to do is put your idea to the test. Setting up a landing page for pre-sales of a product you’re developing is an easy way to accomplish this. You can then use paid advertising to attract traffic to this page.

How to Define a Business Strategy

It is critical to spend time thinking about your business strategy as you establish and build your business. Consider the business strategy to be your map; it will help you identify the direction of your business and what you want it to look like in the future.
You’ll have the parameters and framework to design your business or growth plan and achieve your business goals if you explicitly define the strategy.

Remember that you cannot be everything to everyone. To compete successfully, you do not need to be the market leader, but you do need to focus on your company’s capabilities to discover a method to separate from other competitors.

Formulating your Business Strategy

Once created, your business strategy establishes priorities for the firm and management team, as well as assists you in attracting and retaining the exceptional employees you require.

Individuals in your firm may focus on different priorities to complete specific tasks, but these objectives should not conflict with the company’s overarching strategic direction.

Your business strategy can be outlined in numerous paragraphs or as a series of strategic declarations. It is a synopsis of how the firm intends to achieve its objectives, meet the expectations of its consumers, and maintain a competitive advantage in the market.

Your business strategy should provide answers to the following questions:

• Why is the corporation in business?
• What is our main point of strength?
• Which customers should we continue to serve and which should we begin to serve?
• Which products/services should we discontinue, continue to offer, or begin to offer?
• Why have we chosen these strategic paths?

Answering these questions will assist you in determining your strategic priorities. After all, you can’t and shouldn’t be everything to everyone.

You don’t have to be the market leader to compete successfully, but you do need to focus on your company’s capabilities to differentiate your business from the competition and assist clients to realize the value you offer, including features and benefits.

What is a business model?

Business models outline the steps a company will take to produce and distribute goods and services while maintaining sufficient margins to stay in operation. The products or services the company will provide, the customers they will be aiming for, the distribution and promotion methods they will use, the sources of income, and the overall cost structure are all spelled out in detail. A company’s longevity and financial success are both enhanced by a solid business plan.

What is a multinational corporation?

Multinational corporations (MNCs) are large businesses with operations in several different nations. These organizations typically have a main office in one country and branches in others. Companies with a global reach can take advantage of variations in consumer demand, wage rates, and government oversight in various jurisdictions. They may also have to deal with issues like bridging cultural gaps and understanding the intricacies of the regulatory landscape.

What is a government business?

A government business is a business that is owned, operated, or controlled by a government. This can include businesses that provide essential services, such as utilities and public transportation, as well as businesses that operate in industries such as manufacturing, retail, and finance. Government businesses may be established to provide services that are not available in the private sector or to support other government objectives.

What is a nonprofit organization?

A nonprofit organization is a type of business that is formed for the purpose of serving a specific social cause or mission, rather than generating profits for owners or shareholders. Nonprofits are usually tax-exempt and rely on donations, grants, and other forms of support to fund their activities. Examples of nonprofit organizations include charities, religious organizations, and advocacy groups.

What is a small business?

Companies that are not part of a larger corporation and are run by their owners are considered small businesses. Companies with less than 500 employees are typically considered small businesses, though this definition can shift depending on the sector and the law. The creation of new products and services, as well as new positions, are often spurred by the activity of small businesses.

In conclusion

Businesses have a critical role in the economy. They offer products and services that may be purchased by both people and businesses. Businesses range in size from tiny to huge, and they operate in a wide range of industries. Business structures also differ, ranging from simple partnerships to large corporations that provide their owners with shareholder stock.

If you want to start your own business, make sure you do your homework and create a business plan. This enables you to raise the funds required to launch your business. If you keep things simple at first, you can come up with an idea that will help you grow your business and reach the same heights as Apple and Walmart.

Business Definition FAQs

What is the main purpose of the business?

A business’s principal goal is to maximize revenues for its owners or stakeholders while preserving corporate social responsibility.

Why do businesses exit?

An exit strategy allows a business owner to reduce or liquidate his ownership of a business while still making a significant profit if the business is successful. If the business fails, an exit strategy (or “exit plan”) allows the entrepreneur to reduce losses.

What is the legal definition of a business?

It is any activity or enterprise entered into for profit.

What does Business Day mean?

The word “business day” refers to Monday through Friday, excluding the legitimate public holidays mentioned in 5 U.S.C.

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This word embraces everything about which a person can be employed. People v. Com’rs of Taxes, 23 N. Y. 242, 244. That which occupies the time, attention, and labor of men for the purpose of a livelihood or profit. The doing of a single act pertaining to a particular business will not be considered engaging in or carrying on the business; yet a series of such acts would be so considered. Goddard v. Chaffee, 2 Allen (Mass.) 305, 79 Am. Dec. 796; Sterne v. State, 20 Ala. 46. Labor, business, and work are not synonyms. Labor may be business, but it is not necessarily so; and business is not always labor. Making an agreement for the sale of a chattel is not within a prohibition of labor upon Sunday, though it is (if by a merchant in his calling) within a prohibition upon business. Bloom v. Richards, 2 Ohio St. 387.

Business means state of being busy or engaged in any work. Any kind of legal activities for the intention to earn profit is called business. The word ‘Business’ is come from the English words ‘Busi+Ness’ that means business is concerned to all human activities with earning profit.

In general sense: In general meaning business is the legal process of production and purchasing and selling to earn profit.

In broad sense: Business is related all kinds of legal works of producing, marketing and exchanging products and services with the intension to earn profit.

From the functional point of view, the business is related to an equation that is as follows:

B= ΣIndustry + ΣCommerce + ΣDirect Service

So business is the form of three types of works such as:

• To produce products and distribute services.
• Purchasing and selling of products and services.
• Related works of producing and marketing the products and services.

Many scholars define the business on many perspectives. Some of these definitions are as follows:

1. Lewis H. Haney Said, “Business may be defined as human activity detected toward producing or acquiring wealth through buying or selling goods.”
2. R. W. Babson said, “Business includes those human activities relating to the production and the distribution of goods, services and ideas with a view to earning profit.”
3. B. O. Wheeler said, “Business is an institution organized and operated to provide goods and services to the society under the incentive of gain.”
4. R. H. Hodgetts said, “Business is an organized approach used by individuals for the purpose of providing goods and services to mankind for a profit.”
5. According to Peter F. Drucker, “Any organization that fulfils itself through marketing of product or service is a business.”
6. According to Urwick and Hunt, “Business is any enterprise which makes, distributes or provides an article or service which other members of the community need and are able and willing to pay for.”
7. B. B. Ghosh said, “Business denotes human activities which produce or acquire wealth through buying or selling of goods.”
8. Prof. Norman Richard Owens said, “Business means an enterprise engaged in the production and distribution of goods for sale in a market or the rendering of services for a price.”
9. According to Prof. Y. K. Bhushan, “Business may be defined as the organized production or sale of goods undertaken with the object of earning profit through the satisfaction of human wants.”
10. According to skinner and Ivancevich, “Business is the exchange of goods, services or money for mutual benefit or profit.”

From the above definitions some characteristics of business can be identified. These are as follows:

1. Business is involved with the intention of earning profit.
2. Business is to increase the wealth and welfare of the society.
3. Business involves in creating the demand and the needs of the human being.
4. Business is to produce and purchase and sell of products and services to the consumers.

At last ere can say that, to fulfill the needs of human, to earn profit, products and services are produced, the produced products are distribute to the consumers or marketing activities and direct and indirect marks related to marketing and all legal economic works are treated as business. From this sense Gloss and Baker said, “Business is basically an activity of people working singly or with other for his purpose of producing and selling the goods or service that our country requires.”

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Business is the practice of making one’s living or making money by producing or buying and selling products (such as goods and services).^[1][2][3][4] It is also «any activity or enterprise entered into for profit.»^[5]

Having a business name 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.^[6] 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, such as a corporation or cooperative.

Corporations, in contrast with sole proprietors and partnerships, are a separate legal entity and provide limited liability for their owners/members, as well as being subject to corporate tax rates. A corporation is more complicated and expensive to set up, but offers more protection and benefits for the owners/members.

Forms

Forms of business ownership vary by jurisdiction, but several common entities exist:

• A sole proprietorship, 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. A sole proprietor has unlimited liability for all obligations incurred by the business, whether from operating costs or judgments against the business. All assets of the business belong to a sole proprietor, including, for example, a computer infrastructure, any inventory, manufacturing equipment, or retail fixtures, as well as any real property owned by the sole proprietor.
• A 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 partnerships, limited partnerships, and limited liability partnerships.^[7]
• Corporations’ owners have limited liability and the business has a separate legal personality from its owners. Corporations can be either government-owned or privately owned, and they can organize either for profit or as nonprofit organizations. A privately owned, for-profit corporation is owned by its shareholders, who elect a board of directors to direct the corporation and hire its managerial staff. A privately owned, for-profit corporation can be either privately held by a small group of individuals, or publicly held, with publicly traded shares listed on a stock exchange.
• A cooperative or co-op is a limited-liability business that can organize as for-profit or not-for-profit. A cooperative differs from a corporation in that it has members, not shareholders, and they share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental to the ideology of economic democracy.
• Limited liability companies (LLC) and other specific types of business organization protect their owners or shareholders from business failure by doing business under a separate legal entity with certain legal protections. In contrast, a general partnership or persons working on their own are usually not as protected.^[8]
• A franchise is a system in which entrepreneurs purchase the rights to open and run a business from a larger corporation.^[9] 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.^[10]
• Company limited by guarantee is 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. A company limited by guarantee may be with or without having share capital.
• A company limited by shares is 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.»^[11] This type of company is common in England and many English-speaking countries. A company limited by shares may be a
  • publicly traded company or a
  • privately held company.
• A company limited by guarantee with a share capital is 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.^[12]
• An unlimited company with or without a share capital is 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:

• Most corporations by letters patent are corporations sole and not companies as the term is commonly understood today.
• Charter corporations were the only types of companies before the passing of modern companies legislation. 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 is a corporation formed by a modern charter).
• Statutory companies are certain companies that have been formed by a private statute passed in the relevant jurisdiction, and are relatively rare today.

«Ltd after the company’s name signifies limited company, and PLC (public limited company) indicates that its shares are widely held.»^[13]

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 shareholders. In a company limited by guarantee, this will be the guarantors. Some offshore jurisdictions have created special forms of offshore company 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 and private companies for legal and regulatory purposes. Public companies are companies whose shares can be publicly traded, often (although not always) on a stock exchange 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 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, such as the domestication of fish, animals, and livestock, as well as lumber, oil, vegetables, fruits, etc.
• Mining businesses that extract natural resources and raw materials, such as wood, petroleum, natural gas, ores, metals or minerals.
• 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.
  • Financial services businesses include banks, brokerage firms, credit unions, credit cards, insurance companies, asset and investment companies such as private-equity firms, private-equity funds, real estate investment trusts, sovereign wealth funds, pension funds, mutual funds, index funds, hedge funds, stock exchanges, and other companies that generate profits through investment and management of capital.
  • Transportation businesses such as railways, airlines, and shipping companies deliver goods and individuals to their destinations for a fee.
  • Utilities produce public services such as water, electricity, waste management or sewage treatment. These industries are usually operated under the charge of a public government.
• Entertainment companies and mass media agencies generate profits primarily from the sale of intellectual property. They include film studios and production houses, mass media companies such as cable television networks, online digital media agencies, talent agencies, mobile media outlets, newspapers, book and magazine publishing houses.
  • 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.
• Industrial manufacturers produce products, either from raw materials or from component parts, then export the finished products at a profit. They include tangible goods such as cars, buses, medical devices, glass, or aircraft.
• Real estate businesses sell, invest, construct and develop properties, including land, residential homes, and other buildings.
• Retailers, wholesalers, and 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.

Activities

Accounting

Accounting is the measurement, processing, and communication of financial information about economic entities^[14][15] such as businesses and corporations. The modern field was established by the Italian mathematician Luca Pacioli in 1494.^[16] Accounting, which has been called the «language of business»,^[17] measures the results of an organization’s economic activities and conveys this information to a variety of users, including investors, creditors, management, and regulators.^[18] Practitioners of accounting are known as accountants. The terms «accounting» and «financial reporting» are often used as synonyms.

Commerce

The process of exchanging goods and services.^[19]

Finance

Finance is a field that deals with the study of money and investments. It includes the dynamics of assets and liabilities over time under conditions of different degrees of uncertainty and risk.^[20]
In the context of business and management, finance deals with the problems of ensuring that the firm can safely and profitably carry out its operational and financial objectives; i.e. that it: (1) has sufficient cash flow for ongoing and upcoming operational expenses, and (2) can service both maturing short-term debt repayments, and scheduled long-term debt payments.
Finance also deals with the long term objective of maximizing the value of the business, while also balancing risk and profitability; this includes the interrelated questions of (1) capital investment, which businesses and projects to invest in; (2) capital structure, deciding on the mix of funding to be used; and (3) dividend policy, what to do with «excess» capital.

Human Resources

Human Resources can be defined as division of business that involves finding, screening, recruiting, and training job applicants.^[21] Human Resources, or HR, is crucial for all businesses to succeed as it helps companies adjust to a fast-moving business environment and the increasing demand for jobs.^[21]

The term «human resource» was first coined by John R. Commons in his novel The Distribution of Wealth. HR departments are relatively new as they began developing in the late 20th century. HR departments main goal is to maximize employee productivity and protecting the company from any issues that may arise in the future. Some of the most common activities conducted by those working in HR include increasing innovation and creativity within a company, applying new approaches to work projects, and efficient training and communication with employees.

Two of the most popular subdivisions of HR are Human Resource Management,^[22] HRM, and Human Resource Information Systems, ^[23]or HRIS. The HRM route is for those who prefer an administrative role as it involves oversight of the entirety of the company. HRIS involves the storage and organization of employee data including full names, addresses, means of contact, and anything else required by that certain company.

Some careers of those involved in the Human Resource field include enrollment specialists, HR analyst, recruiter, employment relations manager, etc.

Manufacturing

Manufacturing is the production of merchandise for use or sale using 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, but is most commonly applied to industrial production, in which raw materials 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.»^[24] 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.^[25] Research and development constitute the first stage of development of a potential new service or product.^[26] 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.^[26]

Safety

Injuries cost businesses billions of dollars annually.^[27] Studies have shown how company acceptance and implementation of comprehensive safety and health management systems reduce incidents, insurance costs, and workers’ compensation claims.^[28] New technologies, like wearable safety devices^[29] and available online safety training, continue to be developed to encourage employers to invest in protection beyond the «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.^[30]

Management

The efficient and effective operation of a business, and study of this subject, is called management. The major branches of management are financial management, marketing management, human resource management, strategic management, production management, operations management, service management, and information technology management. ^[31]

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’s 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.^{[citation needed]}

Restructuring state enterprises

In recent decades, states modeled some of their assets and enterprises after business enterprises. In 2003, for example, China modeled 80% of its state-owned enterprises on a company-type management system.^[32] 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

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.^[who?]

Organization and regulation

Most legal jurisdictions 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.^[34][35] In particular, contractual and relational governance can help mitigate opportunism as well as support communication and information sharing.^[35]

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 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 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:

1. 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.
2. 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.
3. 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.
4. «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 LLC’s that sell units (sometimes also called shares), and other more exotic entities as well, such as, for example, real estate investment trusts 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 shipping costs and dealings between merchants and brokers.^[36] The word «corporation» derives from the Latin corpus, meaning body, and the Maurya Empire in Iron-Age India accorded legal rights to business entities.^[37]

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, 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 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 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), they sometimes offer securities for sale.^[38]

Capital may be raised through private means, by an initial public offering or IPO on a stock exchange,^[39] or in other ways.^[38]

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» that needs protection from competitors for the company to stay profitable. This could require patents, copyrights, trademarks, or preservation of trade secrets.^[40] 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. 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 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.^[41] The trade union, through its leadership, bargains with the employer on behalf of union members (rank and file members) and negotiates labor contracts (collective bargaining) with employers.^[41] The most common purpose of these associations or unions is «maintaining or improving the conditions of their employment».^[42] This may include the negotiation of wages, work rules, complaint procedures, rules governing hiring, firing, and promotion of workers, benefits, workplace safety and policies.

See also

References

External links

Business law is the collection of legal requirements around forming, operating, dissolving, and engaging with a business.

What Is a Business?

«Business» refers to everything that can employ an individual. A business can occupy the labor, attention, and time of a person, for the purpose of earning a profit or livelihood. Engaging in a single act that relates to a specific business isn’t considered to be carrying on or engaging in the business, but a series of acts would be considered as engaging in the business.

Work, business, and labor aren’t synonyms of one another. Although labor can be business, engaging in business isn’t always labor. For example, if you made an agreement to purchase a good on a Sunday, but this is prohibited in the vendor’s business laws, you would be breaking the law. 

What Is a Law? 

A law is a recognized and enforced principle or causal link that, if violated, results in a penalty, such as injury, pain, failure, or loss. Laws are binding rules that relate to the conduct of individuals and businesses and are designed to prescribe obligation or duty and enforce justice. A law is largely derived from formal or custom enactment by someone in power within the area, such as a legislature or a ruler. Laws carry authority and power of the enactor, and anyone who violates them is subject to penalties. 

Laws get their legitimacy from being based on principles that are universally accepted, such as the sovereign power of whoever is enacting them or the justness of each law. Laws describe direct links between the cause and effect of phenomena, often deduced from observations or experiments.

Some examples of the term “law” include:

• Business owners must follow all regulations and laws to avoid fines.
• Vacationers and visitors to other countries should understand and respect local laws.
• Although John wasn’t a lawyer, he knew that the tenant was violating a law and called the police.

Business Law and Legal Definition

Business law, which is also referred to as mercantile or commercial law, is the group of rules that governs the dealings between individuals or companies involved in commercial matters. These laws can be enacted by:

• International or national legislation
• Agreement
• Convention

This branch of law relates to the liabilities, duties, and legal rights of individuals or businesses involved in transactions that relate to merchandising, sales, commerce, and trade. Business law includes private and public laws as part of civil laws.

Business law may govern legal aspects such as:

• Insurance (accident, life, marine, or fire)
• Relationship between principal and agent
• Banking
• Indemnity and guarantee
• Carriage by land or sea
• Partnership

This branch of law also encompasses laws concerning employment and agency, contracts, property, sales, business organizations, commercial paper, and bailments. You might encounter business laws when dealing with creditor and consumer protection, insurance, or will and estate planning. Other examples include managing, starting, buying, or selling a business, managing contractors, and working with employees.

The two main areas of business law are:

• Regulation of bankruptcy, partnership, agency, and company laws for commercial entities
• Regulation of contract laws for commercial transactions

In countries with civil laws, the company laws include statute laws. In countries with common laws, company laws combine statute and equity laws. The two main legal concepts under business law are the theory of limited liability and the idea of legal personality. 

Legal business entities come in all shapes and forms. A sole proprietor singlehandedly bears the responsibilities and risks of operating a business, but they can also take all of the business profits. This type of business owner wouldn’t be held to the same laws that apply to a multi-national corporation or LLC.

When a business is formed as a partnership, the members form an association, allowing them to participate equally in profit-sharing and management. Partners in this type of business formation are also liable for all business debts and legal action in relation to any contracts or other agreements. The owners of a business might choose to appoint an agent, who is an individual who brings their expertise to contractual relationships between businesses and any third parties with which the company interacts.

If you need help with business law definition, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

Business is either an occupation, profession, or trade, or is a commercial activity which involves providing goods or services in exchange for profits.

Profits in business are not necessarily money. It can be a benefit in any form which is acknowledged by a business entity involved in a business activity.

To make things clearer, let us divide the business definition into business entity definition and business activity definition.

A business [entity] is an organisation or any other entity engaged in commercial, professional, charitable or industrial activities. It can be a for-profit entity or a not-for-profit entity and may or may not have a separate existence from the people/person controlling it.

A business [activity] is a commercial activity which involves providing goods or services with a primary motive of earning profits.

Concept Of Business

The business concept is the fundamental idea behind the business. The business model, plan, vision, and mission are developed based on this concept. Uber, for example, was started on the concept of aggregating taxi drivers and providing their services on demand under one brand. Every other business strategy was developed based on this concept.

Objective Of The Business

The business objective is what makes the business go on and conduct its activities in a long run. It is the reason why the business exists. While most of the people argue that profit making is the core objective of every business. Few have come up with the new underlying objective.

According to the traditional concept, business exists only to earn profits by providing the goods and services to the customers.

According to the modern concept, the underlying objective of every business is customer satisfaction as this is what results in most profits. If the customer is satisfied, business excels.

Types Of Business

Businesses can be classified into but are not limited to 4 types. These are –

Manufacturing

Manufacturing businesses are the producers who develop the product and sell it either directly to the customer or the middlemen to conduct sales. Examples of manufacturing businesses are steel factories, plastic factories, etc.

Service

This type of business deals in selling intangible goods to the consumers. Unlike tangible goods, services cannot be stored or separated from the provider.

Service firms offer professional services, expertise, commission-based promotions, etc. Examples include salons, schools, consultancy etc.

Merchandising

Merchandising is a middlemen business strategy where the business buys products from a manufacturer, wholesaler, or other partners, and sells the same at the retail price. It is usually known as a ‘buy and sell’ business as they make profits by selling the products at a price higher than their cost price.

Examples of a merchandising business are grocery stores, supermarkets, distributors etc.

Hybrid

Hybrid businesses have the characteristics of two or more types of businesses explained above. For example, a restaurant develops its own dishes (manufacturing), sells the products like cold drinks which are manufactured by other businesses (merchandising), and provide service to the customers (service).

Forms of Business Ownership

Business ownership comes in many forms based on the number of owners, the liability of the owners, representation, and motives. These are –

Sole Proprietorship

Sole proprietorship is a business owned and operated by a single individual. It is easy to set-up, operate, and register. All the profits of the business belong to the owner and he’s also liable for all the liabilities incurred.

The biggest drawback of this business that the owner faces unlimited liability. This means that the creditors of the business can go after the personal assets of the owner if the business is unable to pay them.

Partnership

When two or more persons join hands to run a business, they usually come into partnership. Partnerships come in two forms – general and limited. A general partnership is like sole proprietorship but with more than one owner where all the owners face unlimited liability. In limited partnerships, some or all of the partners have limited liability.

Corporation

A corporation is a business which has a separate legal identity from the people who own or run it. Ownership is usually represented in the form of shares of the stock.

Owners enjoy limited liability but are not necessarily involved in running the business. The business is operated by a group (board of directors) elected by the shareholders.

Limited Liability Company

A limited liability company is a hybrid form of business which has characteristics of both a corporation and a partnership. A partnership because it is not incorporated and a corporation because all of the partners/owners enjoy limited liability.

Cooperative

Cooperative is a private business organisation owned and controlled by people for their mutual benefits. These people are called members and are benefitted by the goods and services offered by the cooperative. All members are expected to help run the business as the main motive of the cooperative is to provide service to all the members rather than a return on investment.

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