An Overview of Business Structure and the Benefits of Company Management
A business is defined as any company or other entity organized for profit, commercial, or administrative purposes. Businesses may be either for-profit or non-profitable organizations that carry out to meet a social objective or further an environmental cause. There are different types of businesses: manufacturing, trading, procurement, service, intellectual property, and production and distribution.
Manufacturing refers to the process of creating and producing useful goods and services, including those that are used on the market. A manufacturing enterprise, for instance, can produce, build, and maintain the products required by another firm to satisfy its customers. In this case, production must be geared to meeting customer requirements, including price, quality, reliability, and durability of the final product. While it can also involve the transfer of knowledge, development of new processes, and allocation of resources to carry out operations. Production of tangible items requires a different set of concepts and business activities than what is required when dealing with services.
Trade includes all purchases and sales of goods and services done in return for money. It can include transactions between producers, suppliers, and consumers. Business activities that involve the movement of products and information between individuals, such as sales and purchases, create the potential for gaining profits. Income is derived from these activities by the payer, referred to as the creditor, who receives a certain amount of money for lending his money to the business. The lending party can be a person, an institution, or a group. For the creditor, the gain comes from the interest and dividends paid by the borrower.
Producers, on the other hand, take advantage of their inputs and produce goods or services that meet a demand. The demand may come from customers, governments, and other agencies. Production can take place in a physical environment or in a virtual setting. Physical production includes the production of tangible goods and services, while the production of services involves the production of the means to deliver those goods and services. Every business entities have separate accounting and administrative procedures depending on their type and size.
Within a business structure, there are three categories: public, private, and hybrid. Public businesses are governed under federal and state laws. Hybrid businesses combine aspects of public and private structures to create their unique benefit and service model. Hybrid businesses offer many opportunities to businesses looking to capitalize on emerging technological developments and the Internet.
A main function of a corporation is to ensure its shareholders are properly compensated and that distribution of goods and services takes place in accordance with the laws and regulations. Corporations are made up of the members of the board of directors and managers. The company owns assets, such as real property and equipment, but only those assets that are owned directly by the corporation. All income and profits go towards making shareholders’ equity more profitable and reducing corporate debts.