A business (also known as company, enterprise, or firm) is a legally recognized organization designed to provide goods, services, or both to consumers or tertiary business in exchange for money. Businesses are predominant in capitalist economies, in which most businesses are privately owned and typically formed to earn profit that will increase the wealth of its owners. The owners and operators of private, for-profit businesses have as one of their main objectives the receipt or generation of a financial return in exchange for work and acceptance of risk. Businesses can also be formed not-for-profit or be state-owned.
Basic forms of ownership
Although forms of business ownership vary by jurisdiction, there are several common forms:
• Sole proprietorship: A sole proprietorship is a for-profit business owned by one person. The owner may operate on his or her own or may employ others. The owner of the business has unlimited liability for the debts incurred by the business.
• Partnership: A form of for-profit business owned by two or more people. In most forms of partnerships, each partner has unlimited liability for the debts incurred by the business. There are three typical classifications of partnerships: general partnerships, limited partnerships, and limited liability partnerships.
• Corporation: Can be either public or private in nature. A public company is often listed on the stock exchange and typically has unlimited liability. Privately owned companies have limited liability and are often signified by the term "Pvt Ltd". The relevant jurisdiction normally specifies the rules of incorporation, whether rules are replaceable, who is responsible for making decisions and how the directing mind of the company may be elected. In South Africa private companies can also take the form of being a closed corporation.[2]. Corporate entities have a legal personality and can enter into transactions and agreements as if they were natural persons.
• Cooperative: Often referred to as a "co-op", a cooperative is a limited liability entity that can be organized for-profit or not-for-profit. A for-profit cooperative differs from a for-profit corporation in that it has members, as opposed to shareholders, who share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives.
Types of businesses might include:
Agriculture and mining businesses are concerned with the production of raw material, such as plants or minerals.
• Financial businesses include banks and other companies that generate profit through investment and management of capital.
• Information businesses generate profits primarily from the resale of intellectual property and include movie studios, publishers and packaged software companies.
• Manufacturers produce products, from raw materials or component parts, which they then sell at a profit. Companies that make physical goods, such as cars or pipes, are considered manufacturers.
• Real estate businesses generate profit from the selling, renting, and development of properties, homes, and buildings.
• Retailers and Distributors act as middle-men in getting goods produced by manufacturers to the intended consumer, generating a profit as a result of providing sales or distribution services. Most consumer-oriented stores and catalogue companies are distributors or retailers. See also: Franchising
• Service businesses offer intangible goods or services and typically generate a profit by charging for labor or other services provided to government, other businesses, or consumers
• Transportation businesses deliver goods and individuals from location to location, generating a profit on the transportation costs
Management
The efficient and effective operation of a business, and study of this subject, is called management. The main branches of management are financial management, marketing management, human resource management, strategic management, production management and operation management.
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