Answer / vinaykumar205

A business (also called a company, enterprise or firm) is a
legally recognized organization designed to provide goods
and/or services to consumers.[1] Businesses are predominant
in capitalist economies, most being privately owned and
formed to earn profit that will increase the wealth of its
owners and grow the business itself. 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
includecooperative enterprises and state-owned enterprises.
Businesses can also be formed not-for-profit or bestate-
owned.
The major factors affecting how a business is organized are
usually:
 The size and scope of the business, and its
anticipated management and ownership. Generally a smaller
business is more flexible, while 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 that wishes to raise
money on astock 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 in certain ways.
 Limited liability. Corporations, limited liability
partnerships, and other specific types of business
organizations protect their owners or shareholders from
business failure by doing business under a separate legal
entity with certain legal protections. In contrast,
unincorporated businesses or persons working on their own
are 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 or a partnership (either formed with or
without limited liability). 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 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 general partnership. The terms of
a partnership are 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. 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."

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