A business, also known as a corporation, is defined under the law as an independent entity or organized entity having its own specific legal framework. It exists for the benefit of all the members of the organization. A business may be a sole proprietor, partnership, corporation, or any other form. A business is also commonly defined as the organised efforts and activities of people to make and sell various products and services to generate profit. Any kind of business, irrespective of the nature of its activity, can be considered a business, if it meets the basic requirements of being a business.
Every business should have a set of strategies or tactics to maximize its potentials for generating profits. There are many different aspects of a business that come under the purview of a business strategy. For example, marketing strategy refers to the overall approach used by a business to sell its goods or services to customers. It also includes the creation of a brand name and the manner in which it gets its name recognized by consumers. This enables a business to gain market share or keep a share of the market through advertising and branding. A good marketing strategy is therefore the cornerstone of a business that aims to earn profits.
A business strategy also incorporates aspects such as research and development, sales and marketing, distribution, financial aspects such as budgeting, administration, and staff management, and the societal need for the goods and services offered by businesses. There are several dimensions or aspects that constitute a business strategy. All these dimensions are necessary to ensure that a business generates profits and operates efficiently over the long-term. These necessities are essential in ensuring that people are not deprived of the opportunities provided by businesses.
Many businesses exist today where at least one of the partners is a corporation. Such businesses are called corporations, because they are governed by general laws like the US Private Property Law. In most cases, these companies are owned by one partner while there are some that are run by one shareholder. One important advantage of incorporating a company is that it does away with the requirement for two shareholders at the helm. This makes it easier for businesses to expand their operations since there are no restrictions to how many partners can be added to the company.
In countries where there are no restrictions on the number of partners a business can have, many businesses choose to incorporate themselves. They do this so that they can avoid paying taxes on the profits they make and be able to claim their income tax benefits accordingly. However, it should be noted that tax benefits are only available for corporations that carry on trading. For other types of businesses, like sole proprietorships, there are no such benefits and the need to pay taxes arises. Therefore, when choosing a business strategy to incorporate one’s self, one should ensure that it is limited to trading.
Limited partnerships come under the umbrella of partnerships. When a person enters into a partnership, it often includes limited liability. With limited liability, partners are only liable for their own debts and not for those of the partnership.
Limited partnerships also offer flexibility in business debts. A partner can opt to close its doors once its time comes. However, the profits from the partnership will still be subject to taxation. If a partner quits the partnership, the partners will still have limited liability for all of the business debts of the partnership. This can help ensure that the partners continue to contribute to the profits of the partnership after they quit.
Finally, there are limited liability partnerships (LLPs). An LLC is just a form of corporation but instead of being controlled by shareholders, it is owned by the partners. It is therefore, completely separated from the business and has its own board of directors who determine the day to day activities of the LLC. Like partnerships, an LLC has the ability to create endless possibilities for generating profits through dynamic operations. However, an LLC will only generate profits if the partners to follow through and make their full monthly payments to the LLC.