BUSINESS

Business Principles

Business Principles

Introduction

The aim of this paper is to understand various business principles, in particular to understand the roles of business, legal structures and varying activities, how macro and micro economic factors affect the business. Assess the needs to stakeholders and the relationships they have with the business, apply a theoretical framework on existing brands and lastly understand the communication skills required in businesses.

Discussion

Roles of Business

After the onset of the recession businesses have experienced serious difficulties in being able to cope with the changes taking placed within the environment. The most crucial aspect of business is understanding the role of a business. The most significant role of business is to grow their companies and by growing their companies businesses also help the economy grow. Businesses also create jobs in the market which helps raise the standard of living. The role of business is to take advantage of the emerging economies. The role of a business is to be environmentally aware and play their part in protecting the earth.

Legal structures of businesses

Businesses have the following legal structures; however every business has a different structure based on the kind of business and the nature of work. The legal structure of a business implies towards how the business operates, shares in profits and loss, how tax is paid and many more. Based on the factors the following are the major kinds of legal business structures:

Sole Proprietor

An individual who runs an incorporated business by himself, such options are straight forward, the owner is taxed, a sole proprietor is liable for all debts and losses however he also has complete ownership of all profits.

Partnership

A partnership is an association between two or more people, which is formulated for the purpose of conducting a business. Partnerships can either be general partners or limited partners. General partners are fully liable for the losses and debt whereas limited partners are only limited to the extent of their investment (IRS, 2012).

Incorporated companies

Incorporated businesses follow the principle of separate legal person, the profit and losses are the company's and it has its own losses and debts. There are 4 further classifications of incorporated companies namely:

Private Limited by shares

Every member's liability is based on the unpaid amount on shares they hold.

Private company limited by guarantee

Every member's liability is limited to the amount which they have agreed to pay to the company's assets.

Private limited company

The member's liability has no limits

Public limited company

A company might offer its shares to the public.

Major activities of a business

Some of the major activities businesses perform include:

Buying goods and services

Selling goods and services

Storing merchandise

Handling finances and maintain a record

Extending credit to customers

Providing quality services to customers

Packaging goods

Dealing with customer complaints and feedback

Resources needed by business

Every business requires a number of resources to remain ahead in the competitive businesses market some of the major resources needed are: A strong plan of action, working capital, knowledge about the business in order to be able to predict and adapt to changes, customers, an infrastructure where they can operate, staff and employees, legal paper ...