A business, also called a corporation, is a legal entity consisting of an entity and a board of directors. A business may be sole-proprietor or joint-proprietor. Many small businesses are usually family-run businesses, sometimes consisting of a single proprietorship or small corporation. A businessperson is a person who carries out the responsibilities of an employee and is paid for services rendered. In most jurisdictions, to open a business, there is usually a need for a licensed businessperson, who is an agent of the company and authorized to act on behalf of the company.
Most small businesses in the United States have a director, who serves as the general manager and the president or chief executive officer. The officers may also have other titles such as secretaries, vice-presidents, or accountants. Business owners can hire workers and hire services of sub-contractors. Most businesses employ less than twenty employees. Some businesses employ more than fifty employees. Many large businesses employ hundreds of employees.
A small business, also called a C-corporation, is organized differently from other types of businesses. It has its own articles of organization that define powers and responsibilities, and primary sources of income and assets. A small business normally determines its management system, scope of activity, methods of maintaining financial records, and marketing system, through a written policy. This policy is frequently referred to as the operating agreement. This operating agreement provides detailed information about the nature of the business, including selected characteristics and functions it undertakes, the number of shareholders, and other specified matters.
There are approximately 25 million small businesses in the United States, according to the Small Business Administration. Nearly all of them are considered C-corporations. A C-corporation is a corporation that meets certain requirements related to financial ability, capital and ownership, all specified by the law. A small business may be either a publicly held company or a privately owned business. In either case, a small business is organized as a separate entity from the owner.
According to the Small Business Administration, nearly one in every one hundred and forty small businesses are owned by one person. Nearly seventy percent of small businesses have two to three employees. The proportion of businesses with four to five employees is much lower, at twenty percent. Of small businesses with six to ten employees, only a small percentage have a majority of employees working under the supervision of a manager. Only about five percent of all small businesses have one officer who supervises the operations of all the employees.
Most small business owners rely on an accounting system such as bookkeeping. This includes recording financial transactions, assessing the gain or loss from activities, and drawing conclusions related to the business. A bookkeeper usually does not handle the cash or accounts receivable of the small business. Instead, the cashier draws cash from an account that contains enough funds to cover all purchases and sales during the period of reporting.
As business growth and the need for employees to grow, the requirement for workers also increases. Generally, when employees begin working for the small business they are hired on a temporary basis, usually for a day or less. The length of employment for most employees of small businesses is usually between one and ten years. To establish a record of employment, most small businesses use a form called an Employer’s Certification and Affirmation. This document contains the information that a business needs to verify the number of hours each employee has worked, their qualifications, and whether they have passed any training courses.
Because there are so many requirements for businesses to become licensed and remain in operation, the government has set standards for these businesses. At a minimum, all businesses filing a report of proprietor must take an approved national test that tests both business knowledge and managerial competency. Business owners may also be required to submit proof of financial status and a statement that they are members of the Small Business Administration’s Standards Council. Finally, all small firms must establish a payment system that will allow them to collect federal income taxes. All documentation about these requirements should be filed with the local Small Business Administration.