Introduction

Business is the activity of making one's living or making money by producing or buying and selling products (such as goods and services).[need quotation to verify] Simply put, it is "any activity or enterprise entered into for profit. It does not mean it is a company, a corporation, partnership, or have any such formal organization, but it can range from a street peddler to General Motors."

Having a business name does not separate the business entity from the owner, which means that the owner of the business is responsible and liable for debts incurred by the business. If the business acquires debts, the creditors can go after the owner's personal possessions. A business structure does not allow for corporate tax rates. The proprietor is personally taxed on all income from the business.

The term is also often used colloquially (but not by lawyers or by public officials) to refer to a company. A company, on the other hand, is a separate legal entity and provides for limited liability, as well as corporate tax rates. A company structure is more complicated and expensive to set up, but offers more protection and benefits for the owner.

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John D. Rockefeller
John Davison Rockefeller, Sr. (July 8, 1839–May 23, 1937) was an American industrialist and philanthropist who played a pivotal role in the establishment of the oil industry, and defined the structure of modern philanthropy. In 1870, Rockefeller helped found the Standard Oil company. Over a forty-year period, Rockefeller built Standard Oil into the largest and most profitable company in the world, and became the world's richest man.

His business career was controversial. He was bitterly attacked by muckraking journalists; his company was convicted in the Federal Court of monopolistic practices and broken up in 1911. He gave up active management of Standard Oil in the late 1890s, while keeping a large fraction of the shares. He spent the last forty years of his life focused on philanthropic pursuits, primarily related to education and public health. He donated most of his wealth using multiple foundations run by experts. He was a devout Northern Baptist and supported many church-based institutions throughout his life.

Rockefeller may ultimately be remembered simply for the raw size of his wealth. In 1902, an audit showed Rockefeller was worth about $200 million, compared to the total national wealth that year of $101 billion. His wealth grew significantly after as the demand for gasoline soared, eventually reaching about $900 million, including significant interests in banking, shipping, mining, railroads, and other industries. By the time of his death in 1937, Rockefeller's remaining fortune, largely tied up in permanent family trusts, was estimated at $1.4 billion. Rockefeller's net worth over the last decades of his life would easily place him among the list of wealthiest persons in history. As a percentage of the United States economy, no other American fortune—including Bill Gates or Sam Walton—would even come close.

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The tax collector's office by Pieter Brueghel the Younger, 1640
Photo credit: Genghiskhanviet

A tax (from the Latin taxo; "rate") is a financial charge or other levy imposed upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay, or evasion of or resistance to collection, is punishable by law. Taxes are also imposed by many administrative divisions. Taxes consist of direct or indirect taxes and may be paid in money or as its labour equivalent.

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"Thus, cloth cannot be imported into Portugal, unless it sell there for more gold than it cost in the country from which it was imported; and wine cannot be imported into England, unless it will sell for more there than it cost in Portugal. If the trade were purely a trade of barter, it could only continue whilst England could make cloth so cheap as to obtain a greater quantity of wine with a given quantity of labour, by manufacturing cloth than by growing vines; and also whilst the industry of Portugal were attended by the reverse effects. Now suppose England to discover a process for making wine, so that it should become her interest rather to grow it than import it; she would naturally divert a portion of her capital from the foreign trade to the home trade; she would cease to manufacture cloth for exportation, and would grow wine for herself. The money price of these commodities would be regulated accordingly; wine would fall here while cloth continued at its former price, and in Portugal no alteration would take place in the price of either commodity. Cloth would continue for some time to be exported from this country, because its price would continue to be higher in Portugal than here; but money instead of wine would be given in exchange for it, till the accumulation of money here, and its diminution abroad, should so operate on the relative value of cloth in the two countries, that it would cease to be profitable to export it. If the improvement in making wine were of a very important description, it might become profitable for the two countries to exchange employments; for England to make all the wine, and Portugal all the cloth consumed by them; but this could be effected only by a new distribution of the precious metals, which should raise the price of cloth in England, and lower it in Portugal. The relative price of wine would fall in England in consequence of the real advantage from the improvement of its manufacture; that is to say, its natural price would fall; the relative price of cloth would rise there from the accumulation of money."

David Ricardo, On the Principles of Political Economy and Taxation, 1817

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  • ...that Valrhona, a company based in the small town of Tain l'Hermitage in the Rhône Valley in France, is one of the world's leading manufacturers of high-quality chocolate?
  • ... that Hollywood accounting is the practice of distributing the profit earned by a large project to corporate entities which, though distinct from the one responsible for the project itself, are typically owned by the same people, with the net result of reducing the project's profit by a substantial margin, sometimes even eliminating it altogether.

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