|Corporation · Company|
(General · Limited · LLP)
|S corporation · C corporation|
LLC · LLLP · Series LLC
(By shares · By guarantee)
(Public · Proprietary)
Community interest company
|SE · SCE|
|AB · AG · ANS · A/S · AS · GmbH|
|K.K. · N.V. · OY · S.A. · Full list|
|Limited liability · Ultra vires|
|Business judgment rule|
|Internal affairs doctrine|
|De facto corporation and|
corporation by estoppel
|Piercing the corporate veil|
|Related areas of law|
|Contract · Civil procedure|
In economics, a business (also called firm or enterprise) is a legally recognized organizational entity designed to provide goods and/or services to consumers or corporate entities such as governments, charities or other businesses. Companies law (or the law of business associations) is the field of Law concerning business and other organizations A corporation is a separate legal entity usually used to conduct business Generally a company is a form of Business organization. The precise definition varies For partnership in cricket terminology see List of cricket terms A partnership is a type of Business entity in which partners In the commercial and legal parlance of most countries a general partnership or simply a Partnership, refers to an association of persons or an unincorporated A limited partnership is a form of Partnership similar to a General partnership, except that in addition to one or more general partners (GPs there are A limited liability partnership (abbreviated as LLP) has elements of Partnerships and Corporations. A sole proprietorship, or simply proprietorship ( Benjamen Clark An S corporation or S-corp, for United States federal income tax purposes is a Corporation that makes a valid election to be taxed under Subchapter S of A C corporation (or C corp) is a Corporation in the United States that for Federal income tax purposes, is Taxed under and Subchapter C ( et A limited liability company (abbreviated LLC or LLC) in the law of the vast majority of the United States is a legal form of business Company The limited liability limited partnership (LLLP is a relatively new modification of the limited partnership a form of Business entity recognized under U A Series LLC is a special form of a Limited liability company that provides liability protection across multiple "series" each of which is theoretically protected A Nevada Corporation is a Corporation chartered under the Laws of the U A Massachusetts business trust or MBT is a legal trust set up for the purposes of business but not necessarily in the state of Massachusetts. A limited company in the United Kingdom is a Corporation whose liability is limited by law A private company limited by shares is a type of company incorporated under the laws of England and Wales, Scotland, that of certain Commonwealth countries In British or Irish Company law, a company limited by guarantee is an alternative type of Corporation used primarily for Non-profit A Public Limited Company ( PLC, plc or plc or p l c is a type of Limited company in the United Kingdom or the Republic of Ireland which is A proprietary company is a form of Corporation in Australia that is limited by Shares. A community interest company (CIC is a new type of company introduced by the United Kingdom government in 2005 under The Community Interest Act 2004, designed The European Economic Area ( EEA) came into being on 1 January 1994 following an agreement between member states of European Free Trade Association (EFTAthe The Council Regulation on the Statute for a European Company of the European Union was adopted October 8 2001. TemplateExpert and TemplateExpert-subject, has been modified to include two WikiProjects and Portals (Expert-subject is limited to Aktiebolag (literally " share Company " or " Stock Company " is the Swedish term for " Limited Aktiengesellschaft ('aktsiəngəzεlʃaft abbreviated AG) is a German term that refers to a Corporation that is limited by shares i An ansvarlig selskap is a Norwegian personal responsibility Company model mainly used in small-to-medium businesses which translates directly into "Responsible An Aktieselskab (abbreviated A/S) is the Danish name for a Stock -based Corporation. Aksjeselskap is the Norwegian term for a Stock -based Company. Gesellschaft mit beschränkter Haftung ( GmbH) is a type of legal entity very common in Germany (where it was created in 1892 Austria nl '''''Naamloze Vennootschap''''' (usually abbreviated NV) is the Dutch term for a Public Limited liability Corporation. Osakeyhtiö, literally a " stock company " is the Finnish equivalent of a Limited company ( Ltd or LLC) or Gesellschaft For the art organization see Société Anonyme (art SA generally designates Corporations in various countries mostly those employing There are many types of business entity defined in the legal systems of various countries Corporate governance is the set of Processes customs Policies, laws and institutions affecting the way a Corporation is directed administered or controlled Limited liability is a concept whereby a person's financial Liability is limited to a fixed sum most commonly the value of a person's investment in a company or partnership Ultra vires is a Latin phrase that literally means "beyond the powers" The business judgment rule is an American Case law -derived concept in Corporations law whereby the "directors of a corporation. The internal affairs doctrine is a Choice of law rule in Corporations law. De facto corporation and corporation by estoppel are both terms that are used by Courts to describe circumstances in which a business organization that has The corporate law concept of piercing (lifting the corporate veil describes a legal decision where a shareholder or director of a Corporation is held liable for the The Rochdale Principles are a set of ideals for the operation of Cooperatives. A contract is an exchange of promises between two or more parties to do or refrain from doing an act which is enforceable in a court of law Civil procedure is the body of law that sets out the process that Courts will follow when hearing cases of a civil nature (a " Civil action " as opposed to Economics is the social science that studies the production distribution, and consumption of goods and services. A service is the non-material equivalent of a good. A service provision is an economic activity that does not result in Ownership, and this is what differentiates Consumers refers to individuals or households that use goods and services generated within the economy. Businesses are predominant in capitalist economies, most being privately owned and formed to earn profit to increase the wealth of owners. Capitalism is the Economic system in which the Means of production are owned by private Persons and operated for Profit and where Wealth derives from the old English word "weal" which means "well-being The owners and operators of a business have as one of their main objectives the receipt or generation of a financial return in exchange for work and acceptance of risk. Return on invested capital (ROIC is a financial measure that quantifies how well a company generates cash flow relative to the capital it has invested in its business Work in Project management is the amount of Effort applied to produce a Deliverable or to accomplish a Task (a Terminal element) Risk is a Concept that denotes the precise probability of specific eventualities Notable exceptions include cooperative businesses and state-owned enterprises. A government-owned corporation, state-owned enterprise or government business enterprise is a legal entity created by a Government to undertake commercial Socialistic systems involve either government, public, or worker ownership of most sizable businesses. Socialism refers to a broad set of economic theories of social organization advocating state or collective ownership and administration of the Means of production and distribution
The etymology of "business" relates to the state of being busy either as an individual or society as a whole, doing commercially viable and profitable work. Etymology is the study of the History of Words &mdash when they entered a language from what source and how their form and meaning have changed over time The term "business" has at least three usages, depending on the scope — the singular usage (above) to mean a particular company or corporation, the generalized usage to refer to a particular market sector, such as "the music business" and compound forms such as agribusiness, or the broadest meaning to include all activity by the community of suppliers of goods and services. Generally a company is a form of Business organization. The precise definition varies A corporation is a separate legal entity usually used to conduct business The term market sector is used in Economics and Finance to describe a set of businesses that are buying and selling such similar goods and services In Agriculture, agribusiness is a generic term that refers to the various Businesses involved in Food production including Farming, Seed However, the exact definition of business, like much else in the philosophy of business, is a matter of debate. The philosophy of business considers the fundamental principles that underlie the formation and operation of a business enterprise the nature and purpose of a business for example is
Business Studies, the study of the management of individuals to maintain collective productivity in order to accomplish particular creative and productive goals (usually to generate profit), is taught as an academic subject in many schools. Business studies is the name of an academic subject taught at higher level in Australia Ireland and the United Kingdom (at both GCSE and Management (covering theory practice and scope of management and Manager' (covering the people who manage might help clarify and systematise Productivity in Economics refers to measures of output from production processes per unit of input In Marketing, a product is anything that can be offered to a Market that might satisfy a want or need
Although forms of business ownership vary by jurisdiction, there are several common forms:
For a country-by-country listing of legally recognized business forms, see Types of business entity. There are many types of business entity defined in the legal systems of various countries
There are many types of businesses, and, as a result, businesses are classified in many ways. One of the most common focuses on the primary profit-generating activities of a business:
There are many other divisions and subdivisions of businesses. Transport or transportation is the movement of people and goods from one place to another The authoritative list of business types for North America (although it is widely used around the world) is generally considered to be the North American Industry Classification System, or NAICS. The North American Industry Classification System or NAICS (pronounced) is used by business and government to classify and measure economic activity in Canada, The equivalent European Union list is the NACE.
Most businesses must accomplish similar functions regardless of size, legal structure or industry. These functions are often organized into departments. Common departments include (but are not limited to):
Management is sometimes listed as a "department" but typically refers to the top level of leadership within the business regardless of their functional role. Internal auditing is a profession and activity involved in advising organizations regarding how to better achieve their objectives Management (covering theory practice and scope of management and Manager' (covering the people who manage might help clarify and systematise
The study of the efficient and effective operation of a business is called management. Business operations are those ongoing recurring activities involved in the running of a business for the purpose of producing value for the stakeholders They are contrasted Management (covering theory practice and scope of management and Manager' (covering the people who manage might help clarify and systematise The main branches of management are financial management, marketing management, human resource management, strategic management, production management, service management, information technology management, and business intelligence. The field of finance refers to the concepts of Time, Money and Risk and how they are interrelated In popular usage "marketing" is the promotion of products especially Advertising and Branding However in professional usage the term has a wider meaning of Strategic management is the art science and craft of formulating implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives Manufacturing (from Latin manu factura, "making by hand" is the use of tools and labor to make things for use or sale Information technology management (or IT management) is a combination of two branches of study Information technology and Management. Business intelligence ( BI) refers to technologies applications and practices for the collection integration analysis and presentation of business Information and
Most legal jurisdictions specify the forms of ownership that a business can take, creating a body of commercial law for each type. In Law, jurisdiction (from the Latin ius iuris meaning "law" and dicere meaning "to speak" is the practical Authority Commercial law (sometimes known as business law) is the body of Law which governs Business and commercial transactions
The major factors affecting how a business is organized are usually:
Many businesses are operated through a separate entity such as a corporation, limited partnership or limited liability company. 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. A mutual shareholder or stockholder is an Individual or company (including a Corporation) that legally owns one or more shares of 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 he or she owns it directly or through a formally organized entity.
A few relevant factors to consider in deciding how to operate a business include:
Most commercial transactions are governed by a very detailed and well-established body of rules that have evolved over a very long period of time, it being the case that governing trade and commerce was a strong driving force in the creation of law and courts in Western civilization.
As for other laws that regulate or impact businesses, in many countries it is all but impossible to chronicle them all in a single reference source. There are laws governing treatment of labor and generally relations with employees, safety and protection issues (OSHA or Health and Safety), anti-discrimination laws (age, gender, disabilities, race, and in some jurisdictions, sexual orientation), minimum wage laws, union laws, workers compensation laws, and annual vacation or working hours time. For the European Agency see European Agency for Safety and Health at Work, (OSHA The Health and Safety Executive (HSE is a United Kingdom Non-departmental public body. A trade union or labour union is an organization of workers who have banded together to achieve common goals in key areas such as wages hours and working conditions forming
In some specialized businesses, there may also be licenses required, either due to special laws that govern entry into certain trades, occupations or professions, which may require special education, or by local governments who just want your money. Professions that require special licenses run the gamut from law and medicine to flying airplanes to selling liquor to radio broadcasting to selling investment securities to selling used cars to roofing. Local jurisdictions may also require special licenses and taxes just to operate a business without regard to the type of business involved.
Some businesses are subject to ongoing special regulation. These industries include, for example, public utilities, investment securities, banking, insurance, broadcasting, aviation, and health care providers. Environmental regulations are also very complex and can impact many kinds of businesses in unexpected ways.
When businesses need to raise money (called 'capital'), more laws come into play. In Economics, capital or capital Goods or real capital refers to items of extensive value A highly complex set of laws and regulations govern the offer and sale of investment securities (the means of raising money) in most Western countries. A security is a Fungible, Negotiable instrument representing financial value These regulations can require disclosure of a lot of specific financial and other information about the business and give buyers certain remedies. Because "securities" is a very broad term, most investment transactions will be potentially subject to these laws, unless a special exemption is available.
Capital may be raised through private means, by public offer (IPO) on a stock exchange, or in many other ways. A stock exchange, share market or bourse is a Corporation or Mutual organization which provides "trading" facilities for Stock Major stock exchanges include the New York Stock Exchange and Nasdaq (USA), the London Stock Exchange (UK), the Tokyo Stock Exchange (Japan), and so on. The New York Stock Exchange ( NYSE) is a Stock exchange based in New York City. The NASDAQ (acronym of National Association of Securities Dealers Automated Quotations) is an American Stock exchange. The London Stock Exchange or LSE is a Stock exchange located in London, England. The, or TSE, located in Tokyo, Japan, is the second largest Stock exchange market in the world by market value second only to the New York Stock Most countries with capital markets have at least one.
Business that have gone "public" are subject to extremely detailed and complicated regulation about their internal governance (such as how executive officers' compensation is determined) and when and how information is disclosed to the public and their shareholders. 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.
As noted at the beginning, it is impossible to enumerate all of the types of laws and regulations that impact on business today. In fact, these laws have become so numerous and complex, that no business lawyer can learn them all, forcing increasing specialization among corporate attorneys. It is not unheard of for teams of 5 to 10 attorneys to be required to handle certain kinds of corporate transactions, due to the sprawling nature of modern regulation. Commercial law spans general corporate law, employment and labor law, healthcare law, securities law, M&A law (who specialize in acquisitions), tax law, ERISA law (ERISA in the United States governs employee benefit plans), food and drug regulatory law, intellectual property law (specializing in copyrights, patents, trademarks and such), telecommunications law, and more.
In Thailand, for example, it is necessary to register a particular amount of capital for each employee, and pay a fee to the government for the amount of capital registered. There is no legal requirement to prove that this capital actually exists, the only requirement is to pay the fee. Overall, processes like this are detrimental to the development and GDP of a country, but often exist in "feudal" developing countries.
Businesses often have important "intellectual property" that needs protection from competitors in order for the company to stay profitable. Intellectual property ( IP) is a legal field that refers to creations of the mind such as musical literary and artistic works inventions and symbols names This could require patents or copyrights 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 treaties concerning intellectual property, and thus companies registered in these countries are subject to national laws bound by these treaties. A Treaty is an agreement under International law entered into by actors in international law namely States and International organizations.
Businesses can be bought and sold. Business owners often refer to their plan of disposing of the business as an "exit plan. " Common exit plans include IPOs, MBOs and mergers with other businesses. Initial public offering (IPO, also referred to simply as a "public offering" is when a company issues Common stock or shares to the public for the first A management buyout ( MBO) is a form of Acquisition where a company's existing Managers acquire a large part or all of the company.
This encyclopedia includes over 1600 business and economics articles, so not all appear listed here. This lists some of the main business-related concepts. For more specific topics, look at the various sublists.