Definition: A business is a case where an organization or entity engages in commercial activities to make money or advance a cause. Commercial activities include buying or selling goods or services or producing and selling goods. Advancing a cause includes social activities, charitable events, etc.
A business can have commercial and non-commercial purposes.
A business with commercial intent has goals and resources to achieve the goals. They have an organizational structure and legal framework to carry out business activities. Their purpose is to serve the market and earn profit.
All businesses with commercial intent must report their earnings to the Internal Revenue Service (IRS) in the USA.
A business can have non-commercial intent. The goal of these businesses is to advance a cause, and therefore they are also known as not-for-profit. Examples of these businesses are charities, social service organizations, political parties, educational institutes, etc.
Types of Businesses
A business can be of the following types:
- Corporation: A corporation is a group of companies or a large company authorized to act as a single entity.
- LLC: LLC stands for Limited Liability Company. It is a business structure in the USA that protects owners from personal responsibility for business, its debts, and liabilities. An LLC is a hybrid legal entity with characteristics of a corporation, a partnership, or sole proprietorship.
- Partnership: A partnership is a legal relationship between two or more people for trading or business purposes. Here, each party contributes resources and shares the profits and losses.
- Sole Proprietorships or Solopreneur: This is the simplest form of business structure. Here the business is run and owned by a single individual.
Examples of Businesses
Some popular examples of successful businesses are:
- Amazon
- Apple
- eBay
Summary
Businesses are a key part of society and the economy. They provide products, services, and jobs to individuals. A country cannot survive without businesses, and if provided with a friendly environment, businesses can help grow countries.