Business
A business (also known as a company, enterprise, and firm) is a legally recognized organization
designed to provide goods or services, or both, to consumers, businesses and governmental
entities. Businesses are predominant in capitalist economies. Most businesses are privately
owned. A business is typically formed to earn profit that will increase the wealth of its owners
and grow the business itself. The owners and operators of a business have as one of their main
objectives the receipt or generation of a financial return in exchange for work and acceptance of
risk. Notable exceptions include cooperative enterprises and state-owned enterprises. Businesses
can also be formed not-for-profit or be state-owned.
The etymology of "business" relates to the state of being busy either as an individual or society
as a whole, doing commercially viable and profitable work. The term "business" has at least
three usages, depending on the scope — the singular usage (above) to mean a particular company
or corporation, the generalized usage to refer to a particular market sector, such as "the music
business" and compound forms such as agribusiness, or the broadest meaning to include all
activity by the community of suppliers of goods and services. However, the exact definition of
business, like much else in the philosophy of business, is a matter of debate and complexity of
meanings.
Commercial law
Most commercial transactions are governed by a very detailed and well-established body of rules that
have evolved over a very long period of time, it being the case that governing trade and commerce was
a strong driving force in the creation of law and courts in Western civilization.
As for other laws that regulate or impact businesses, in many countries it is all but impossible to
chronicle them all in a single reference source. There are laws governing treatment of labor and
generally relations with employees, safety and protection issues (Health and Safety), anti-
discrimination laws (age, gender, disabilities, race, and in some jurisdictions, sexual orientation),
minimum wage laws, union laws, workers compensation laws, and annual vacation or working
hours time.
In some specialized businesses, there may also be licenses required, either due to special laws
that govern entry into certain trades, occupations or professions, which may require special
education, or by local governments. Professions that require special licenses range from law and
medicine to flying airplanes to selling liquor to radio broadcasting to selling investment
securities to selling used cars to roofing. Local jurisdictions may also require special licenses and
taxes just to operate a business without regard to the type of business involved.
Some businesses are subject to ongoing special regulation. These industries include, for example,
public utilities, investment securities, banking, insurance, broadcasting, aviation, and health care
providers. Environmental regulations are also very complex and can impact many kinds of
businesses in unexpected ways.
Capital
When businesses need to raise money (called 'capital'), more laws come into play. A highly complex set
of laws and regulations govern the offer and sale of investment securities (the means of raising money)
in most Western countries. These regulations can require disclosure of a lot of specific financial and
other information about the business and give buyers certain remedies. Because "securities" is a very
broad term, most investment transactions will be potentially subject to these laws, unless a special
exemption is available.
Capital may be raised through private means, by public offer (IPO) on a stock exchange, or in
many other ways. Major stock exchanges include the Shanghai Stock Exchange, Singapore
Exchange, Hong Kong Stock Exchange, New York Stock Exchange and Nasdaq (USA), the
London Stock Exchange (UK), the Tokyo Stock Exchange (Japan), and so on. Most countries
with capital markets have at least one.
Business that have gone "public" are subject to extremely detailed and complicated regulation
about their internal governance (such as how executive officers' compensation is determined) and
when and how information is disclosed to the public and their shareholders. In the United States,
these regulations are primarily implemented and enforced by the United States Securities and
Exchange Commission (SEC). Other Western nations have comparable regulatory bodies. The
regulations are implemented and enforced by the China Securities Regulation Commission
(CSRC), in China. In Singapore, the regulation authority is Monetary Authority of Singapore
(MAS), and in Hong Kong, it is Securities and Futures Commission (SFC).
As noted at the beginning, it is impossible to enumerate all of the types of laws and regulations
that impact on business today. In fact, these laws have become so numerous and complex, that
no business lawyer can learn them all, forcing increasing specialization among corporate
attorneys. It is not unheard of for teams of 5 to 10 attorneys to be required to handle certain kinds
of corporate transactions, due to the sprawling nature of modern regulation. Commercial law
spans general corporate law, employment and labor law, healthcare law, securities law, M&A
law (who specialize in acquisitions), tax law, ERISA law (ERISA in the United States governs
employee benefit plans), food and drug regulatory law, intellectual property law (specializing in
copyrights, patents, trademarks and such), telecommunications law, and more.
In Thailand, for example, it is necessary to register a particular amount of capital for each
employee, and pay a fee to the government for the amount of capital registered. There is no legal
requirement to prove that this capital actually exists, the only requirement is to pay the fee.
Overall, processes like this are detrimental to the development and GDP of a country, but often
exist in "feudal" developing countries.
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FLINT NICOLO C. TRONO
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