American Businesses

Businesses in America encompass a broad spectrum, ranging from colossal multinational corporations to independent entrepreneurs. This diversity includes large enterprises, small businesses, home based operations, online ventures, as well as both corporate and family-run farms. Serving as a crucial cog in the American economic machinery, businesses play a pivotal role by supplying goods and services globally. The consumption of their outputs serves as the primary engine propelling the nation's gross domestic product (GDP) forward. Moreover, businesses serve as engines of employment generation, avenues for wealth creation, and platforms for investment opportunities. Capitalism, as an economic system, fosters the growth of businesses. However, unchecked expansion can lead to concerns about monopolistic practices within industries. Instances of corporate fraud and accounting scandals have corroded public trust in the integrity of large corporations. Additionally, societal expectations place emphasis on the impact of businesses on environmental sustainability, local development, and the overall welfare of communities. Balancing the pursuit of profit with ethical considerations and societal responsibilities remains an ongoing challenge for businesses operating in America.

HISTORICAL DEVELOPMENTS

The economic landscape of America has undergone significant transformations since the arrival of the first colonists. Initially, trade with native peoples revolved around furs, food, and the exchange of American resources for imported goods. The early economy was characterized by industries such as agriculture, timber harvesting, and shipbuilding. However, with the nation's independence and the advent of the Industrial Revolution, manufacturing began to ascend in importance.

LEGAL STRUCTURES OF BUSINESSES

 Indeed legal and tax considerations play a crucial role in determining the structure of a business entity. Here's a brief overview of the main forms of business structures: 

Sole Proprietorship: This is the simplest form of business structure, where the business is owned and operated by a single individual. The owner retains full control over the business and its profits but is personally liable for all debts and obligations. From a tax perspective, income and expenses of the business are reported on the owner's personal tax return. 

Partnership: A partnership involves two or more individuals who share ownership of the business. There are two main types: general partnerships and limited partnerships. In a general partnership, all partners share equally in the management and liability of the business. In a limited partnership, there are both general partners who manage the business and have unlimited liability, and limited partners who invest capital but have limited liability. Partnerships also pass through profits and losses to individual partners, who report them on their personal tax returns. 

Corporation: A corporation is a separate legal entity from its owners (shareholders). It provides limited liability protection to its shareholders, meaning their personal assets are generally not at risk for the debts and obligations of the corporation. Corporations are more complex to set up and maintain, with specific requirements for governance and compliance. They are taxed separately from their owners, with profits taxed at the corporate level, and dividends taxed again when distributed to shareholders.

Limited Liability Company (LLC): For legal and tax purposes, all businesses must be structured as one of several legally defined forms: sole proprietorships, business partnerships, corporations, or limited liability companies (LLC). Each offers both advantages and disadvantages to the business owner.

THE ROLE OF SMALL BUSINESS IN A COMPLEX ECONOMY 

It's a common misconception that the American economy is solely dominated by large corporations. While it's true that many of the world's largest companies are headquartered in the United States, the reality is that a significant portion of employment in the country is driven by small and medium-sized businesses. According to data from the U.S. Census Bureau's 2002 economic census, a substantial number of Americans are employed by companies with fewer than five hundred employees. Specifically, out of America's 115 million workers in 2001, approximately 57.4 million were employed by such smaller enterprises. This underscores the significant role that small and medium-sized businesses play in driving employment and contributing to the overall economy.

Home Based Businesses

The landscape of small businesses in the United States includes a significant portion that operate from home. As of 2003, home based businesses accounted for 53% of all small businesses in the country. These businesses span various industries, with a notable presence in service industries, construction, retail trade, and other sectors such as finance, communications, manufacturing, and transportation. The majority of home-based businesses, approximately 91%, were structured as sole proprietorship, reflecting the simplicity and ease of setup associated with this form of business ownership. Additionally, 5% were structured as sub chapter S corporations, and 4% as partnerships, offering varying levels of liability protection and tax benefits to their owners. It's noteworthy that the vast majority (91%) of home based businesses had no employees, indicating that many entrepreneurs in this category operated as independent operators. Furthermore, less than half of these businesses operated on a fool time basis, with owners typically dedicating around twenty six to thirty five hours per week to their businesses. This suggests a flexible and often part time approach to entrepreneurship among home based business owners, allowing for a balance between work and personal life commitments.