For other uses, see Business (disambiguation).

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Companies law
&ompan Business
Sole proprietorship
Partnership
('eneral (imited ((P)
&orporation
&ooperati)e
United States
S corporation & corporation
((& (((P Series ((&
*ela+are corporation
,e)ada corporation
-assachusetts business trust
UK / Ireland / Commonwealth
(imited compan
(b shares b guarantee
Public Proprietar)
.nlimited compan
&ommunit interest compan
uropean Union / !
S/ S&/ SP/ //I'
"elated areas
Contract Civil procedure
) 0 d 0 e
1 #usiness (also called a compan$, enterprise or firm) is a legall recogni2ed
organi2ation designed to pro)ide goods and3or ser)ices to consumers.
456
Businesses are
predominant in capitalist economies, most being pri)atel o+ned and 7ormed to earn
pro7it that +ill increase the +ealth o7 its o+ners and gro+ the business itsel7. The o+ners
and operators o7 a business ha)e as one o7 their main ob8ecti)es the receipt or generation
of a financial return in e9change 7or +or# and acceptance o7 ris#. ,otable e9ceptions
include cooperati)e enterprises and state:o+ned enterprises. Businesses can also be
7ormed not:7or:pro7it or be state:o+ned.
The etmolog o7 ;business; relates to the state o7 being bus either as an indi)idual or
societ as a +hole, doing commerciall )iable and pro7itable +or#. The term ;business;
has at least three usages, depending on the scope < the singular usage (abo)e) to mean a
particular compan or corporation, the generali2ed usage to re7er to a particular mar#et
sector, such as ;the music business; and compound 7orms such as agribusiness, or the
broadest meaning to include all acti)it b the communit o7 suppliers o7 goods and
ser)ices. =o+e)er, the e9act de7inition o7 business, li#e much else in the philosoph o7
business, is a matter o7 debate.
Contents
4hide6
5 Basic 7orms o7 o+nership
2 &lassi7ications
> -anagement
o >.5 ?e7orming State /nterprises
@ 'o)ernment regulation
o @.5 Argani2ing
o @.2 &ommercial la+
o @.> &apital
o @.@ Intellectual propert
o @.B /9it plans
B See also
C ,otes and re7erences
D /9ternal lin#s
Basic forms of ownership
1lthough 7orms o7 business o+nership )ar b 8urisdiction, there are se)eral common
7ormsE
Sole proprietorship% 1 sole proprietorship is a business o+ned b one person.
The o+ner ma operate on his or her o+n or ma emplo others. The o+ner o7
the business has personal liabilit o7 the debts incurred b the business.
&artnership% 1 partnership is a 7orm o7 business in +hich t+o or more people
operate 7or the common goal +hich is o7ten ma#ing pro7it. In most 7orms o7
partnerships, each partner has personal liabilit o7 the debts incurred b the
business. There are three tpical classi7ications o7 partnershipsE general
partnerships, limited partnerships, and limited liabilit partnerships.
Corporation% 1 corporation is a limited liabilit entit that has a separate legal
personalit 7rom its members. 1 corporation can be organi2ed 7or:pro7it or not:
7or:pro7it. 1 corporation is o+ned b multiple shareholders and is o)erseen b a
board o7 directors, +hich hires the business$s managerial sta77. In addition to
pri)atel:o+ned corporate models, there are state:o+ned corporate models.
Cooperative% A7ten re7erred to as a ;co:op;, a cooperati)e is a limited liabilit
entit that can organi2e 7or:pro7it or not:7or:pro7it. 1 cooperati)e di77ers 7rom a
corporation in that it has members, as opposed to shareholders, +ho share
decision:ma#ing authorit. &ooperati)es are tpicall classi7ied as either
consumer cooperati)es or +or#er cooperati)es. &ooperati)es are 7undamental to
the ideolog o7 economic democrac.
For a countr:b:countr listing o7 legall recogni2ed business 7orms, see Tpes o7
business entit.
Classifications
"all Street, -anhattan is the location o7 the ,e+ For# Stoc# /9change and is o7ten used
as a smbol 7or the +orld o7 business.
There are man tpes o7 businesses, and because o7 this, businesses are classi7ied in
man +as. Ane o7 the most common 7ocuses on the primar pro7it:generating acti)ities
o7 a businessE
1griculture and mining businesses are concerned +ith the production o7 ra+
material, such as plants or minerals.
Financial businesses include ban#s and other companies that generate pro7it
through in)estment and management o7 capital.
In7ormation businesses generate pro7its primaril 7rom the resale o7 intellectual
propert and include mo)ie studios, publishers and pac#aged so7t+are companies.
-anu7acturers produce products, 7rom ra+ materials or component parts, +hich
the then sell at a pro7it. &ompanies that ma#e phsical goods, such as cars or
pipes, are considered manu7acturers.
?eal estate businesses generate pro7it 7rom the selling, renting, and de)elopment
o7 properties, homes, and buildings.
?etailers and *istributors act as middle:men in getting goods produced b
manu7acturers to the intended consumer, generating a pro7it as a result o7
pro)iding sales or distribution ser)ices. -ost consumer:oriented stores and
catalogue companies are distributors or retailers. See also: Franchising
Ser)ice businesses o77er intangible goods or ser)ices and tpicall generate a
pro7it b charging 7or labor or other ser)ices pro)ided to go)ernment, other
businesses or consumers. Argani2ations ranging 7rom house decorators to
consulting 7irms to restaurants and e)en to entertainers are tpes o7 ser)ice
businesses.
Transportation businesses deli)er goods and indi)iduals 7rom location to location,
generating a pro7it on the transportation costs
.tilities produce public ser)ices, such as heat, electricit, or se+age treatment,
and are usuall go)ernment chartered.
There are man other di)isions and subdi)isions o7 businesses. The authoritati)e list o7
business tpes 7or ,orth 1merica is generall considered to be the ,orth 1merican
Industr &lassi7ication Sstem, or ,1I&S. The e!ui)alent /uropean .nion list is the
,1&/.
Commercial law
-ost commercial transactions are go)erned b a )er detailed and +ell:established bod
o7 rules that ha)e e)ol)ed o)er a )er long period o7 time, it being the case that
go)erning trade and commerce +as a strong dri)ing 7orce in the creation o7 la+ and
courts in "estern ci)ili2ation.
1s 7or other la+s that regulate or impact businesses, in man countries it is all but
impossible to chronicle them all in a single re7erence source. There are la+s go)erning
treatment o7 labor and generall relations +ith emploees, sa7et and protection issues
(AS=1 or =ealth and Sa7et), anti:discrimination la+s (age, gender, disabilities, race,
and in some 8urisdictions, se9ual orientation), minimum +age la+s, union la+s, +or#ers
compensation la+s, and annual )acation or +or#ing hours time.
In some speciali2ed businesses, there ma also be licenses re!uired, either due to special
la+s that go)ern entr into certain trades, occupations or pro7essions, +hich ma re!uire
special education, or b local go)ernments. Pro7essions that re!uire special licenses range
7rom la+ and medicine to 7ling airplanes to selling li!uor to radio broadcasting to selling
in)estment securities to selling used cars to roo7ing. (ocal 8urisdictions ma also re!uire
special licenses and ta9es 8ust to operate a business +ithout regard to the tpe o7 business
in)ol)ed.
Some businesses are sub8ect to ongoing special regulation. These industries include, 7or
e9ample, public utilities, in)estment securities, ban#ing, insurance, broadcasting,
a)iation, and health care pro)iders. /n)ironmental regulations are also )er comple9 and
can impact man #inds o7 businesses in une9pected +as.
/stablishing and -aintaining /thical Standards o7 Beha)ior in a Small Business
/ntrepreneurs and small business o+ners +ield great in7luence in determining the ethical
philosophies o7 their business enterprises. /mploees o7ten 7ollo+ the lead o7 the o+ner
in e9ecuting their duties and attending to their responsibilities, so it is incumbent on the
o+ner to establish a +or# en)ironment that embraces moral standards o7 beha)ior. There
are e9ceptions to this, o7 courseG dishonest and unethical emploees sometimes +or# in
other+ise ethical companies, 8ust as honest and ethical +or#ers can be 7ound in
organi2ations +ith a pre)ailing culture o7 duplicit and sel7ishness. But a business o+ner
or manager +ho +ishes to establish an ethical mind set in his or her compan can help
the cause b being proacti)e.
Business e9perts and ethicists ali#e point to a number o7 actions that o+ners and
managers can ta#e to help steer their compan do+n the path o7 ethical business
beha)ior. /stablishing a statement o7 organi2ational )alues, 7or e9ample, can pro)ide
emploees<and the compan as a +hole<+ith a speci7ic 7rame+or# o7 e9pected
beha)ior. Such statements o77er emploees, business associates, and the larger
communit ali#e a consistent portrait o7 the compan$s operating principles<+h it
e9ists, +hat it belie)es, and ho+ it intends to act to ma#e sure that its acti)ities do)etail
+ith its pro7essed belie7s. 1cti)e re)ie+s o7 strategic plans and ob8ecti)es can also be
underta#en to ma#e certain that the are not in con7lict +ith the compan$s basic ethical
standards. In addition, business o+ners and managers should re)ie+ standard operating
procedures and per7ormance measurements +ithin the compan to ensure that the are
not structured in a +a that encourages unethical beha)ior. 1s Ben H Ierr$s Ice &ream
7ounders Ben &ohen and Ierr 'reen7ield stated, ;a )alues:led business see#s to
ma9imi2e its impact b integrating sociall bene7icial actions into as man o7 its da:to:
da acti)ities as possible. In order to do that, )alues must lead and be right up there in a
compan$s mission statement, strateg and operating plan.;
Finall, and most importantl, business o+ners and managers lead b e9ample. I7 a
business o+ner treats emploees, customers, and competitors in a 7air and honest manner
<and suitabl penali2es those +ho do not per7orm in a similar 7ashion<he or she is 7ar
more li#el to ha)e an ethical +or# 7orce o7 +hich he or she can be proud. ;It is per7ectl
possible to ma#e a decent li)ing +ithout compromising the integrit o7 the compan or
the indi)idual,; +rote business e9ecuti)e "illiam ?. =olland. ;Juite apart 7rom the issue
o7 rightness and +rongness, the 7act is that ethical beha)ior in business ser)es the
indi)idual and the enterprise much better in the long run.;
Indeed, some business o+ners and managers argue that ethical companies ha)e an
ad)antage o)er their competitors. Said &ohen and 'reen7ield, ;consumers are used to
buing products despite ho+ the 7eel about the companies that sell them. But a
)aluesled compan earns the #ind o7 customer loalt most corporations onl dream o7<
because it appeals to its customers on the basis o7 more than a productK. The li#e ho+
doing business +ith 4a )alues:led compan6 ma#es them 7eel.;
ethics
The science o7 human dutG the bod o7 rules o7 dut dra+n 7rom this scienceG a
particular sstem o7 principles and rules concerning dut, +hether true or 7alseG rules o7
practice in respect to a single class o7 human actionsG as, political or social ethicsG
medical ethics.
The completeness and consistenc o7 its moralit is the peculiar praise o7 the ethics
+hich the Bible has taught.
/thics is the science o7 moralit or the sstematic stud o7 moral rules and principles.
The term ;moralit; re7ers to rules +hich prescribe the +a people ought to beha)e and
principles +hich re7lect +hat is ultimatel good or desirable 7or human beings. In
classical Ie+ish sources there is no term +hich corresponds to ;ethics; or ;moralit; in
this sense. The modern =ebre+ +ord musar, +hich is used toda 7or this purpose, +hile
7ound in the Bible (Pro). 5E8), means ;rebu#e; or ;chastisement.; =o+e)er, the primar
sources o7 Iudaism, the Bible and rabbinic literature, undoubtedl contain an elaborate
moral code and the rudiments o7 an ethical theor.