Business

Posted in Finance, Accounting and Economics Terms, Total Reads: 656
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Definition: Business

Business refers to the activity of production/purchase/sale of goods or services. Such activities can be industrial, commercial or professional.

Business can be carried out for profit (like Microsoft, HP, Oracle and more organizations) or as a non profit organization (as in the case of cooperatives, Social welfare organizations, etc.

Example:

You buying clothes from Pantaloons is example of a business where Pantaloons is into the retail business of selling merchandise. You are the buyer and Pantaloons is the seller. You pay money in exchange for the good (the clothes you bought) to satisfy your need of covering your body. Pantaloons is operating for profit in this case.

Business involves the following

1) Exchange of Goods of services

Between

2) Buyers and Sellers

with the intention of

3) Satisfying human needs and wants

with each party subjected to

4) Risk and uncertainty

They can be aimed at generating

5) Profits

Or act as

Non Profit Organisations

A business can be owned as

1)       Sole Proprietorship, i.e. , owned by one person

2)      Partnership, i.e. , owned by two or more people

3)        Corporation, i.e. , separate legal entities which can be publicly or privately owned

4)      Cooperative, i.e. , collection of members operating for profir or not for profit

Business can be classified according to activities and each classification can have numerous organizations functional in that domain.

Some examples of business classifications would be Banking, Manufacturing, Agriculture, Mining etc

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