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Business

2007 Schools Wikipedia Selection. Related subjects: Business

   Wall Street, Manhattan is the location of the New York Stock Exchange
   and is often used as a symbol for the world of business.
   Enlarge
   Wall Street, Manhattan is the location of the New York Stock Exchange
   and is often used as a symbol for the world of business.

   In economics, business is the social science of managing people to
   organize and maintain collective productivity toward accomplishing
   particular creative and productive goals, usually to generate revenue.

   The etymology of "business" refers to the state of being busy, in the
   context of the individual as well as the community or society. In other
   words, to be busy is to be doing commercially viable and profitable
   work.

   The term "business" has at least three usages, depending on the scope —
   the general usage (above), the singular usage to refer to a particular
   company or corporation, and the generalized usage to refer to a
   particular market sector, such as "the record business," "the computer
   business," or "the business community" -- the community of suppliers of
   goods and services.

   The singular "business" can be a legally-recognized entity within an
   economically free society, wherein individuals organize based on
   expertise and skills to bring about social and technological
   advancement.

   With some exceptions, (such as cooperatives, non-profit organizations
   and (typically) government institutions), in predominatly capitalist
   economies, businesses are formed to earn profit and grow the personal
   wealth of their owners.

   In other words, 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 their work — that is, the expense of time, energy, and
   money.

   However, the exact definition of business is disputable as is business
   philosophy; for example, most Marxists use " means of production" as a
   rough synonym for "business." Socialists advocate either government,
   public, or worker ownership of most sizable businesses.

Types of businesses

   There are four main types of business unit:

   Single Proprietorship: a business owned by one person. The owner may
   operate on their own or may employ others.

   Partnership: A partnership is a form of business in which two or more
   people operate for the common goal of making profit.

   Private Limited Company (Ltd): a small to medium sized business that is
   often run by the family or the small group who own it.

   Public Limited Company: a business with limited liability, a wide
   spread of shareholders and in the UK, a share capital of over £50,000.
   Commercial Street, Bangalore. India
   Enlarge
   Commercial Street, Bangalore. India

   There are many types of businesses, and, as a result, businesses can be
   classified in many ways. One of the most common focuses on the primary
   profit-generating activities of a business, for example:
     * 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.
     * 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. Organizations ranging
       from house decorators to consulting firms to restaurants and even
       to entertainers are types of service businesses.
     * 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.
     * 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.
     * Utilities produce public services, such as heat, electricity, or
       sewage treatment, and are usually government chartered.
     * Real estate businesses generate profit from the selling, renting,
       and development of properties, homes, and buildings.
     * Transportation businesses deliver goods and individuals from
       location to location, generating a profit on the transportation
       costs

   There are many other divisions and subdivisions of businesses. 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 equivalent
   European Union list is the NACE.

Limited and Unlimited Liability

   Unlimited Liability: a situation in which owners of a business are
   liable for all the debts that the business may incur.

   Limited Liability: a situation in which the liability of the owners of
   a business is limited to the full paid-up value of the share capital.

Organization

   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):

   Finance and control
          typically responsible for bookkeeping, financial reporting,
          financial controls and the raising of the capital necessary to
          run the business. See also Accounting

   Human Resources
          typically responsible for hiring, firing, payroll, benefits,
          etc.

   Marketing and sales
          responsible for selling the business' goods or services to the
          customer and for managing the relationships with the customer

              Marketing
                      typically responsible for promoting interest in, and
                      generating demand for, the business' products or
                      services, and positioning them within the market

              Sales
                      finding likely purchasers and obtaining their
                      agreement (known as a contract) to buy the business'
                      products or services

   Production/service
          makes the product or delivers the service

              Production
                      produces the raw materials into the delivered goods,
                      if they require processing

              Customer service
                      supports customers who need help with the goods or
                      services

   Procurement
          responsible for acquiring the goods and services necessary for
          the business. Sometimes organized as:

              Strategic sourcing
                      determines the business' needs and plans for
                      acquiring the necessary raw materials and services
                      for the business

              Purchasing
                      processes the purchase orders and related
                      transactions

   Research and Development
          tests to create new products and to determine their viability
          (e.g. pilot plants)

   Information Technology
          manages the business' computer and data assets

   Communications/Public Relations
          responsible for communicating to the outside world

   Administration
          provides administrative support to the other departments (such
          as typing, filing, etc)

   Internal Audit
          an independent control function typically accountable to the
          Board of Directors for reporting on the proper functioning of
          the other departments

   Management is sometimes listed as a "department" but typically refers
   to the top level of leadership within the business regardless of their
   functional role.

Business and government

   The Bank of England in Threadneedle Street, London, England.
   Enlarge
   The Bank of England in Threadneedle Street, London, England.

   Most legal jurisdictions specify the forms that a business can take,
   and a body of commercial law has developed for each type. Some common
   types include partnerships, corporations (also called limited liability
   companies), and sole proprietorships.

Organizing a Vehicle

   The major factors affecting how a business is organized are usually:
     * The size and scope of the business, and its anticipated management
       and ownership : A smaller business is more flexible, larger
       businesses or those with wider ownership or more formal structures,
       will usually tend to be organized as partnerships or (more
       commonly) corporations. In addition a business which 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 certain ways.
     * Limited liability : corporations, and limited liability
       partnerships, protect their owners from business failure, and are
       treated as separate entities, whereas an unincorporated business or
       person working on their own is usually not so protected.
     * 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 more or less information public
       (or reported to relevant authorities), and may be bound to comply
       with different rules and regulations.

   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, as the case may be, 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 simple (USA: general) partnership. The terms of a partnership will be
   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:
    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 which treat small corporations
       differently than 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. In order to "go public" (sometimes called IPO) -- which basically
       means to allow a part of the business to be owned by a wider range
       of investors or the public in general -- you must organize a
       separate entity, which is usually required to comply with a tighter
       set of laws and procedures. Most public entities are corporations
       that have sold shares, but increasingly there are also public LLCs
       that sell units (sometimes also called shares), and other more
       exotic entities as well (for example, REITs in the USA, Unit Trusts
       in the UK). However, you cannot take a general partnership
       "public."

Commercial Law and Other Regulation

   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.

   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.

Capital

   When business need to raise money (called ' capital'), more laws come
   into play. 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. 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. 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. 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.

Intellectual property

   Businesses often have important " intellectual property" that needs
   protection from competitors in order to stay profitable. This could
   require patents or copyrights or preservation of trade secrets. Most
   business 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.

Business and management

   The study of the efficient and effective operation of a business is
   called management. 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.

Exit plans

   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.

   Retrieved from " http://en.wikipedia.org/wiki/Business"
   This reference article is mainly selected from the English Wikipedia
   with only minor checks and changes (see www.wikipedia.org for details
   of authors and sources) and is available under the GNU Free
   Documentation License. See also our Disclaimer.
