What Is a Business?

A business is a legal entity in which people engage in business together. In a normal business, individuals work together to either make and sale goods or services to others. Other individuals also purchase the goods and services offered by the business.

Business owners are the ones who hire employees for specific work in order to produce goods or services. However, there are certain situations when the company does not employ any employees but owns a vast amount of real estate that it needs to rent out. The owner of the company is considered the company owner because he personally liable for all debts of the company, even if the company itself is not in operation.

A sole proprietorship or a corporation is different from a business in the way that a sole proprietorship is not considered a valid form of business for tax purposes, even though the business is formally closed. With the IRS, sole proprietorships and corporations are treated as forms of unincorporated businesses. However, these businesses can still enjoy some tax benefits, so businesses engaged in conducting trade through a storefront are advised to retain their legal forms of company instead of using the individual filing method.