When we explore the world of online business and commerce in general, we come across many terms casually flung about that we may or may not be completely familiar with. One such term is “Enterprise”, which is treated in a way that seems to encompass multiple definitions. But what does an enterprise really mean?
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Enterprise has been used to mean any sort of business or project. However, a company called an enterprise will typically have certain traits. Generally speaking, enterprises are big, intricate organizations with several departments and divisions overseen by an executive team or board of directors.
Enterprise can also be used as an adjective to describe someone who is “enterprising”, which can mean someone who is bold and takes initiative, like when getting ready to embark on a new venture.
Enterprise and Business are usually used interchangeably as well, but you’ll soon find out that both words can be quite distinct.
In this article by Ecommerce Pro, we take a deeper look into the meaning of Enterprise and go over the 4 types of businesses that can strictly qualify as an enterprise.
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What is an Enterprise?
A business that strictly qualifies as an enterprise operates at a rather large scale and has a composite structure. You can think of enterprises as corporations that operate on a large scale.
Enterprises frequently have several divisions or departments, each with a distinct role to fulfill. An enterprise might, for example, have a legal team, a marketing department, an IT department, and resources to start new ventures.
Enterprise-type businesses also typically manufacture or sell a variety of goods and services to meet the needs of various markets. They could service other companies (B2B), sell to customers directly (D2C), or do both.
Tell-tale signs that a business can be considered an enterprise are a large workforce, international sales, and significant resources.
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4 Types of Enterprises
1. Sole Proprietorship
A sole proprietorship is an unincorporated enterprise with just one owner who is responsible for paying personal income tax on earnings.
Due to lesser involvement by the government, sole proprietorships are simple to set up and dissolve, which makes them well-liked by contractors and small-business owners.
As most small businesses expand, they eventually convert from being sole proprietorships to corporations or limited liability companies.
2. Partnership
Unlike sole proprietorship, a partnership is an unincorporated agreement that allows two or more people to run a business, split earnings, and shoulder debts and liabilities.
Individuals, corporations, or other kinds of businesses can be partners. General partners provide labor or knowledge while actively participating in the undertaking. On the other hand, limited partners might only be allowed to make financial contributions.
3. Corporation
A corporation is a kind of enterprise that the law regards as though it were a single individual. It follows that a company has the authority to make purchases like a car, enter into contracts with suppliers, or take out loans to pay for office space. A corporation structure is designed to protect the owners of the enterprise, from the likes of lawsuits or liability cases.
A corporation may have more than one shareholder, even though it is treated as an individual. An elected board of directors oversees executives who manage the day-to-day operations of the corporation on behalf of the shareholders.
4. Limited Liability Company (LLC)
A limited liability company is similar to a corporation in the sense that its structure protects its owners from the legal pursuits of debts and liabilities. However, LLC enterprises also combine characteristics of sole proprietorship and partnership, in the sense that profit and loss are reported on the annual tax returns of the individual members.
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Shopify Plus for Enterprises
Shopify Plus is an enterprise-level ecommerce solution by Shopify. Made for scale, Shopify Plus powers some of the world's most popular brands, with the platform’s high-growth design attracting companies, merchants, and brands that are looking to expand their reach to more customers and grow their ecommerce branch of business like never before.
Shopify Plus has the most advanced tools needed to help brands scale easily compared to other enterprise platforms. It is an all-in-one ecommerce platform offering solutions built for high-growth and high-volume businesses, giving you full control and more choices on how you want to run your enterprise.
Learn more about the benefits of Shopify Plus in this article: Upgrade to Shopify Plus in 2023: Top Features and Benefits
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