A business is defined as a legally registered company or business enterprise that engages in commercial, industrial, and/or professional activities for profit. In Canada, businesses can either be for-profit enterprises or non-profitable ones that conduct primarily to meet a social purpose or further a social cause, among others. To facilitate assessment of the type of business, a candidate should have, the following information must be considered:
First, it is crucial to understand that businesses are different from corporations. While both engage in commercial activity for profit, a corporation may form as a separate legal entity from its owners, carry on its own functions, and own assets. Business, on the other hand, is a relationship between an entity and individuals or groups who own it. Here are some of the key takeaways to help candidates to discern which type of entity they should incorporate.
A corporation is formed as a legal entity by-product of a law that came about in Canada in 2021. That law states that individuals can form corporations for all intents and purposes provided that the corporations are managed and operated for profit. Businesses must follow a similar route to the formation of a corporation. However, unlike corporations, there is no limit on the number of shareholders a business can have. However, unlike corporations, all shareholders gain voting rights.
Non-profit or “social” businesses differ in several ways from corporations. They can focus on providing goods or services directly, or providing goods or services that serve a social purpose. Some examples include food services, nonprofits that focus on improving the environment, art galleries, and community buildings. These types of businesses may also incorporate to create a non-for profit, for-profit company. Many colleges and universities set up such non-for-profits to further their social mission.
Businesses must set business objectives. They then go about trying to realize their business objectives. Business objectives may be to provide products or services that solve a problem, to find a solution to a problem, or to teach people about a problem. In the last example, business goals could be to generate revenue, reduce costs, or improve the quality of life. Objectives can be relative or specific.
Organizational and functional management is vital to operating smoothly. It ensures that companies are able to provide products or services that meet their objectives. Additionally, it ensures that businesses are organized and operate as efficiently as possible. Operating without proper organizational and functional management can cause business problems and hinder profits.