What Is a Business?

A business is usually defined as any entity or organization engaged in commercial, corporate, or professional activity for profit. Companies may be either for-profit or non-profitable entities that conduct business to meet a social or charitable objective or further a personal purpose. For example, a restaurant may be both a for profit operation and a non-for profit membership organization. In either case, the business establishes a unique relationship with customers.

For-Profit Organisations: Many people are starting new businesses every day. Many of these businesses are being run by other people who wish to share in the business’s profits. For example, restaurant owners may open restaurants within existing restaurants, or work through a franchise system. Other types of businesses may receive support from a number of different groups to ensure a consistent revenue stream. Examples of some of these groups include: schools, hospitals, communities, sports teams, nonprofit organizations, the government, and corporations.

Non-Profit Organisations: Similar to for-profit businesses, non-profit organisations are also in need of funding to sustain their operations. Unlike for-profits, however, non-profits do not have a specific social need to exist. Instead, most of them exist to fulfil a societal need. Examples of this type of organization include: soup kitchens, hospitals, charities, and churches.

Private Non-Profit Corporations: Unlike for-profit corporations, businesses can operate in the same manner as a non-Profit organization, provided that they meet the requirements laid out by the Canadian Presence Act. The Canadian Presence Act states that individuals operating non-profitable corporations must register and obtain a certificate of Registration of Non-Profit Organization. This certification allows businesses to apply for grants from the Canadian Government. Businesses must also demonstrate their ability to effectively promote Canadian culture and participate in community events. Examples of these activities include: sponsorship of events such as musical festivals, art exhibitions, and film festivals.

Sole proprietorship: A sole proprietorship is often used when a business and only one owner exist. Examples of sole proprietorships are: partnerships, corporations, partnerships, limited liability partnerships and sole proprietor rental companies. Similar to the corporation, each sole proprietorship must have its own legal entity. However, unlike a corporation, a sole proprietorship does not have to register its ownership or make annual reports to the Office of the Superintendent of Companies (OSC). Instead, the shareholders of a sole proprietorship will make all decisions related to the company.

Type of Business: For small businesses that generate little to no profits, the best option is a C corporation. These are corporations that are registered as private companies and have limited liability. Although they have limited liability, unlike partnerships and sole proprietorships, they still have to make a profit. For instance, a C corporation may be able to deduct a portion of their income tax from their corporate profit. On the other hand, a partnership would be taxed as a personal transaction, so the profit would be taxed separately.

You may also like