Basic forms of ownership

A business (also called firm or an enterprise) is a legally recognized organizational entity designed to provide goods and/or services to consumers. A business needs a market. A consumer is an essential part of a business. Businesses are predominant in capitalist economies, most being privately owned and formed to earn profit to increase the wealth of owners. 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. Notable exceptions include cooperative businesses and state-owned enterprises. Socialistic systems involve either government, public, or worker ownership of most sizable businesses.

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. 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. However, the exact definition of business, like much else in the philosophy of business, is a matter of debate.

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.
Contents


* 1 Basic forms of ownership
* 2 Classifications
* 3 Organization
* 4 Management
* 5 Government regulation
o 5.1 Organizing a business
o 5.2 Commercial law
o 5.3 Capital
o 5.4 Intellectual property
o 5.5 Exit plans
* 6 See also
* 7 External links
* 8 Notes and references

Basic forms of ownership

Although forms of business ownership vary by jurisdiction, there are several common forms:

* Sole proprietorship: A sole proprietorship is a business owned by one person. The owner may operate on his or her own or may employ others. The owner of the business has total and unlimited personal liability of the debts incurred by the business.

* Partnership: A partnership is a form of business in which two or more people operate for the common goal of making profit. Each partner has total and unlimited personal liability of the debts incurred by the partnership. There are three typical classifications of partnerships: general partnerships, limited partnerships, and limited liability partnerships.

* Corporation: A business corporation is a for-profit, limited liability entity that has a separate legal personality from its members. A corporation is owned by multiple shareholders and is overseen by a board of directors, which hires the business's managerial staff.

* Cooperative: Often referred to as a "co-op business" or "co-op", a cooperative is a for-profit, limited liability entity that differs from a 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. Cooperatives are fundamental to the ideology of economic democracy.

For a country-by-country listing of legally recognized business forms, see Types of business entity.

Classifications
Wall Street, Manhattan is the location of the New York Stock Exchange and is often used as a symbol for the world of business.[citation needed]

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:

* 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. See also: Franchising
* 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 is generally considered to be the North American Industry Classification System, or NAICS. The equivalent European Union list is the NACE.

Organization
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Advertisement of Victoria's Secret. Advertisement is an important aspect of business.


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):

Human Resources
Typically responsible for hiring, firing, payroll, benefits, etc.
Finance
responsible for managing the enterprises financial resources[1]

Budgeting and forecasting
planning how the enterprise wants things to happen
Cash and treasury management
ensuring the enterprise has money when it's needed
Accounts payable and receivable
ensuring the enterprise receives what it's owed and pay what it owes
Tax planning/filing and reporting
meeting obligations to the government
Risk management
ensuring the enterprise doesn't get surprised by something unfavorable
External and internal (management) reporting
providing visibility into the enterprise for those who need it through financial reporting and other types of reporting

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

Operations 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.