Tuesday, April 1, 2014

What are the primary activity of business?

What are the primary activity of business?
the sole purpose of a business is to generate a profit/make money.
Legally business can be broken into 'for profit' vs. 'non profit'.
for profit - shareholders value/profit, earnings, making a buck. If a business is not generating profit, it will cease to exist as a business.

'non profit' - not driven by ownership rather managed around central problem/purpose.

for profit companies are owned by shareholders. shareholders can act 'hostile' and acquire as many shares as they can afford to purchase. (i.e. one person could control the majority voting interests). shareholders hire an executive director/president. some times they approve specific budgets/strategic plans.

non profits are managed ('owned') by membership, with no threat of hostile take over as all memberships (regardless of dollar value) carry the same weight in voting interests.

A business is an entity able to make/buy/sign contracts, carry credit, and a like. Most Security of States will issue a Certificate when a business is incorporated (created, born). The IRS will give you a free EIN which will be 10 digits long. the certificate looks similar to a birth certificate, the EIN to a Social Security Number).

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