Business Enterprise

A business (enterprise) is an organization that creates products/services to sell on the market with the goal of making a profit for its owners. Such enterprises are formed when an entrepreneur sees an opportunity to create a product or service in order to obtain a profit (create value in excess of the costs involved).

Such an organization is made up of individuals who serve in various roles as entrepreneurs, managers, owners (shareholders), laborers (employees), etc.

These roles in larg organizations may be further subdivided under the principle of division of labor to gain further efficiencies through increased specialization (employees can be R&D, accounting, distribution, marketing, administration, line staff, etc.), or as in the case of a single-owner business (sole proprietorship), the owner may serve in all the various roles.

The business may be in the form of a corporation (trust) that operates under a condition of limited liability in regard to its shareholders. Limited liability means a shareholder’s liability is limited to no more than the capital invested in a business.


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