What Is a Business?

A business is defined as an organization or enterprising entity engaged in

commercial, industrial, or professional activities. Businesses can be for-profit
entities or they can be non-profit organizations that operate to fulfill a charitable
mission or further a social cause.
The term "business" also refers to the organized efforts and activities of individuals
to produce and sell goods and services for profit. Businesses range in scale from a
sole proprietorship to an international corporation. Several lines of theory are
engaged with understanding business administration including organizational
behavior, organization theory, and strategic management.
 A business is defined as an organization or enterprising entity engaged in
commercial, industrial, or professional activities.
 Businesses can be for-profit entities or non-profit organizations.
 There are various forms of a business, such as a limited liability company
(LLC), a sole proprietorship, a corporation, and a partnership.
 Businesses can range from small operations operating in one industry to
large operations operating in many industries around the world.
Understanding a Business
Generally, a business begins with a business concept (the idea) and a name.
Depending on the nature of the business, extensive market research may be
necessary to determine whether turning the idea into a business is feasible and if
the business can deliver value to consumers. The business name can be one of the
most valuable assets of a firm; careful consideration should thus be given when
choosing it. Businesses operating under fictitious names must be registered with
the state.
Businesses most often form after the development of a business plan, which is a
formal document detailing a business's goals and objectives, and its strategies of
how it will achieve the goals and objectives. Business plans are almost essential
when borrowing capital to begin operations.
It is also important to determine the legal structure of the business. Depending on
the type of business, it may need to secure permits, adhere to registration
requirements, and obtain licenses to legally operate. In many countries,
corporations are considered to be juridical persons, meaning that the business can
own property, take on debt, and be sued in court.
Business Structures
Many businesses organize themselves around some sort of hierarchy or
bureaucracy, where positions in a company have established roles and
responsibilities. The most common structures include sole proprietorships,
partnerships, corporations, and limited liability companies (LLC), with sole
proprietorships being the most prevalent.
A sole proprietorship, as its name suggests, is a business owned and operated by a
single natural person. There is no legal separation between the business and the
owner; the tax and legal liabilities of the business are thus that of the owner.
A partnership is a business relationship between two or more people who join to
conduct business. Each partner contributes resources and money to the business
and shares in the profits and losses of the business. The shared profits and losses
are recorded on each partner's tax return.
A corporation is a business in which a group of people acts together as a single
entity; most commonly, owners of a corporation are shareholders who exchange
consideration for the corporation's common stock. Incorporating a business
releases owners of the financial liability of business obligations; however, a
corporation has unfavorable taxation rules for the owners of the business.
For this reason, a relatively new (first available in Wyoming in 1977 and other
states in the 1990s) business structure, a limited liability company (LLC), is
available; this structure combines the pass-through taxation benefits of a
partnership with the limited-liability benefits of a corporation.
Business Sizes
Business sizes range from small owner-operated companies, such as family
restaurants, to multinational conglomerates such as General Electric. Larger
businesses may issue corporate stock to finance operations. In this case, the
company is publicly traded and has reporting and operating restrictions.
Alternatively, smaller businesses may operate more independently of regulators.
Business Industries
A company may describe its business by communicating the industry in which it
operates. For example, the real estate business, advertising business, or mattress
production business are industries in which a business can exist. Because the term
“business” can be interchanged with day-to-day operations as well as the overall
formation of a company, the term is often used to indicate transactions regarding
an underlying product or service. For example, ExxonMobil transacts business by
providing oil.

What Is Commerce?
Commerce is the conduct of trade among economic agents. Generally, commerce
refers to the exchange of goods, services, or something of value, between
businesses or entities. From a broad perspective, nations are concerned with
managing commerce in a way that enhances the well-being of citizens, by
providing jobs and producing beneficial goods and services.
KEY TAKEAWAYS
 Commerce has existed from the early days of human civilization when
humans bartered goods to the more complex development of trade routes
and corporations.
 Today, commerce refers to the macroeconomic purchases and sales of goods
and services by organizations.
 Commerce is a subset of business that focuses on the distribution aspect of
business as opposed to the production side.
 The buying or selling of a single item is known as a transaction, whereas all
the transactions of that item in an economy are known as commerce.
 Commerce leads to the prospering of nations and an increased standard of
living, but if left unchecked or unregulated, it can lead to negative
externalities.
 E-commerce is a variant of commerce in which goods are sold electronically
via the Internet.
Understanding Commerce
Commerce has existed from the moment humans started exchanging goods and
services with one another. From the early days of bartering to the creation of
currencies to the establishment of trade routes, humans have sought ways to
exchange goods and services and build a distribution process around the process of
doing so.
Today, commerce normally refers to the macroeconomic purchases and sales of
goods and services by large organizations at scale. The sale or purchase of a single
item by a consumer is defined as a transaction, while commerce refers to all
transactions related to the purchase and sale of that item in an economy. Most
commerce is conducted internationally and represents the buying and selling of
goods between nations.
It is important to note that commerce does not have the same meaning as
"business," but rather is a subset of business. Commerce does not relate to the
manufacturing or production process of business but only the distribution process
of goods and services. The distribution aspect encompasses a wide array of areas,
such as logistical, political, regulatory, legal, social, and economic.
Implementation and Management of Commerce
When properly managed, commercial activity can quickly enhance the standard of
living in a nation and increase its standing in the world. However, when commerce
is allowed to run unregulated, large businesses can become too powerful and
impose negative externalities on citizens for the benefit of the business owners.
Many nations have established governmental agencies responsible for promoting
and managing commerce, such as the Department of Commerce in the United
States.
Large organizations with hundreds of countries as members also regulate
commerce across borders. For example, the World Trade Organization (WTO) and
its predecessor, the General Agreement on Tariffs and Trade (GATT), established
rules for tariffs relating to the import and export of goods between countries. The
rules are meant to facilitate commerce and establish a level playing field for
member countries.
The Rise of E-Commerce
The idea of commerce has expanded to include electronic commerce in the 21st
century. E-commerce describes any business or commercial transaction that
includes the transfer of financial information over the Internet. E-commerce, unlike
traditional commerce between two agents, allows individual consumers to
exchange value for goods and services with little to no barriers.
E-commerce has changed how economies conduct commerce. In the past, imports
and exports conducted by a nation posed many logistical hurdles, both on the part
of the buyer and the seller. This created an environment where only larger
companies with scale could benefit from export customers. Now, with the rise of
the Internet and e-commerce, small business owners have a chance to market to
international customers and fulfill international orders.
Companies of all shapes and sizes can engage in international commerce. Export
management companies help domestic small businesses with the logistics of
selling internationally. Export trading companies help small businesses by
identifying international buyers and domestic sourcing companies that can fulfill
the demand. Import/export merchants purchase goods directly from a domestic or
foreign manufacturer, and then they package the goods and resell them on their
own as an individual entity, assuming the risk but taking higher profits.

What is the difference between Business and Commerce?

• Commerce and business are words with similar meaning, but they also differ
from one another.
• While business can be an entity, commerce refers to trade and trade-related
activities.
• Commerce focuses on buying and selling part of a business whereas there is
much more to a business than just buying and selling.
• The difference between these two terms is also reflected in the relative
importance of the courses of commerce and business. Whereas a student studying
commerce is just a simple management graduate, a student studying business holds
a professional degree that opens doors of many more opportunities.
• When it comes to Bachelor of Commerce degree, the study is focused on the
wider commercial and economical environment. Then, the Bachelor of Business
focuses on the way individual businesses and organizations operate. As you can
see, to run a business, having a business degree is more suitable.
• A business holds many activities such as planning, advertising, selling, buying,
marketing, accounting and supervising manufacturing, etc. Commerce, which
mainly focuses on buying and selling, is a part of each and every one of these
activities that make a business. As a result, commerce comes under business.
• When it comes to business, there are several types of businesses based on the
structure. They are sole trader, partnership, trust, and company. One cannot say
that such variations exist when it comes to commerce.