14/9/17 What is a Business?
Many times “business” may be used to refer to a “company” and they mean absolutely the same (e.g. I’ve run my own business/company for almost 20 years.). But you may find examples when it is used differently.
Business is any commercial activity that earns you money when you provide goods or services. The most notable difference, whether you are running a business or heading a company, pertains to the way the entity has been structured financially and according to the provisions of law. It is less troublesome to launch a business than get it registered as a company, and this is precisely why most entrepreneurs start up as just businesses, and not as companies.
If you are running a business and have taken debts from several creditors, you are liable for the entire loan taken. So, if there are any losses in the business and you are not able to pay back your creditors, creditors have the right to get back their money by selling your possessions. It is alright to keep on running a business, and not wanting to convert it into a company. In fact, there are quite a number of businesses across the world that operate this way alone. These businesses have a desire to become more profitable, but they do not look to rule the world or become a big company. However, it is not feasible to keep running as a business once you have grown to a certain size, and this is when you need the protection of limited liability by incorporating into a company.