Business definition
The word business has multiple definitions. It refers to organisations that exchange goods or services for money with the goal of making a profit on the transaction. If this profit is returned to owners the business is known as a for-profit business, while not-for-profits invest all profit in achieving stated goals or improving infrastructure. Some businesses are state-owned. Most businesses are typically owned privately although large, strong organisations may be listed on the stock market and owned by ‘public’ in that anyone is free to buy shares in the company. The word business is derived from the word ‘busy’ i.e. business is productive activity.
Businesses are a major source of economic growth, which stems predominantly from an increase in productivity. One of the major goals for organisations is an increase in productivity, achieved through multiple ways including the introduction of efficient technology.
The word business also means the vertical industry in which organisations operate e.g. ‘the music business.’ It can also be used in compound form to describe the sum of activity operating in a particular vertical e.g. agribusiness.
The operation of businesses is defined by commercial law, as is the structure of business ownership. ‘Corporations’ are one of the most common types of business – these are defined by limited liability of the owners in that the corporation has its own separate legal identity. This is a concept known as corporate personhood and is controversial. Other forms of business structure include cooperatives, partnerships and sole proprietorships.
