Types of Business Associations | ENTRE Institute Reviews

 

The definition of a business can mean many different things. Basically a business is defined by an entity or corporation organized for the purpose of conducting business. Most businesses are for-profit enterprises, but there are also some non-profitable for-profits that serve a social purpose. A business can also be an individual or partnership organized for the same business purpose. There are even two basic types of business that are considered to be part of the business world.

Manufacturing businesses are enterprises that produce physical products for human consumption such as food, automobiles, and manufactured goods. The major components of manufacturing businesses include the manufacturing production process, the supply chain, and the storage or logistics system for the production processes. Most of these businesses are either owned by the manufacturing facility itself or by one or more entities owned by the manufacturer. A manufacturing business typically sells its goods directly to consumers or through a distribution network.

In order to understand the modern business environment, one must recognize that there are five key elements involved in every business firm. These elements include production and distribution of goods and services, marketing, advertising and sales, and financial management. Modern business firms face increasingly difficult challenges in each of these five areas because of advancing technology, globalization, and complex business relationships. A firm's success in any one of these five realms becomes crucial to its overall success.

A business strategy is designed to achieve long term profits and minimize losses. In today's business environment, business strategies are constantly evolving as advances are made in technology, globalization, and customer satisfaction. The five elements listed above are all important in creating a successful business strategy. In addition, these five crucial elements are at the foundation of virtually every business.

In business planning, strategies are often used to create a long range view and predict future profitability. This planning serves as a guideline for developing and implementing business plans, as well as serving as an outline for managing finances. Business strategies are often used to attract customers and generate profits. Additionally, they are used to retain existing customers and obtain new ones. A well-developed business plan will use a variety of marketing strategies, financial management techniques, and innovative methods to attract clients and acquire new customers.

A legal structure or corporate shield allows corporations and other businesses the ability to limit their personal liability and owns assets. Corporations can have their own board of directors, shareholders, and managers. A business plan will address many complex issues regarding a company's legal structure. One of these issues is establishing the legal structure of the company. Most businesses begin with either a partnership or limited liability company (LLC). Limited liability companies are able to carry a lower tax burden than partnerships and corporations, making them popular for many businesses looking to save money on tax obligations.

The other consideration for a business structure is protecting valuable assets such as real estate, patents, and information. Companies are able to limit their personal liabilities through vehicles such as partnerships or corporations. These vehicles are often used to protect intellectual property such as trademarks, trade secrets, and software. They are also used to limit their personal debts to the amount that is deductible from their income taxes.

There are many types of business associations including limited-liability companies, general partnerships, and limited liability partnerships (LLPs). Limited-liability companies are businesses that own a sole proprietorship or corporation. General partnerships are formed between two or more business owners who own stock in a company. Limited liability partnerships (LLPs) are formed between business owners who each own a small portion of the company. Many businesses also choose to be incorporated as a corporation for the legal protection afforded to them by most state laws.