Business Entity: Definition, Form, Type and Comparison

Business Entity: Definition, Form, Type and Comparison – What is meant by Business Entity? At this time About the knowledge.co.id will discuss about the Business Entity and the things that surround it. Let's look at the discussion together in the article below to better understand it.

Business Entity: Definition, Form, Type and Comparison

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A business entity is a juridical or legal, economical, and technical entity with the aim of making a profit. Companies are often equated with business entities, even though they are fundamentally different. The most important difference is that a business entity is a temporary company institution, meaning a place where the business entity manages the factors of production.

In simple terms, a business entity is an organization legally formed and authorized to be used as a means of making a profit.

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Definition of Business Entity According to Experts

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Big Indonesian Dictionary (KBBI)

The definition of a business entity according to KBBI is a group of people & capital who have activities engaged in trade or global businesses/companies.

Indonesian Tax General Provisions Law

The definition of a business entity according to the Indonesian Tax General Provisions Law is a group of people and/or capital that is a unit, whether doing business or not doing business which includes limited liability companies, limited liability companies, other companies, State-Owned Enterprises or Regionally owned, firms, partnerships, socio-political organizations, or other organizations, other institutional forums including collective investment contracts & corporate forms steady business.

Dominick Salvatore

The definition of a business entity according to Dominick Salvatore is an organization that combines & coordinating various resources for the purpose of producing or producing goods or services for sale.

The types of business entities are also very diverse, ranging from government to private. The form of business entity can be influenced by several factors:

• The managing party, whether owned by the state or private;
• The amount or amount of capital used;
• Origin of capital, whether private or divided into shares;
• The type of business, whether engaged in industry, trading, plantations, or others;
• Marketing area area; And
• Big/small risk faced.

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Forms of Business Entity

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BUMN (State Owned Enterprise)

BUMN is a business unit in which all capital or most of it comes from the budget specifically state assets that are prioritized for the prosperity of the people by making a product or service.

The separated state assets are state assets originating from the State Revenue and Expenditure Budget. APBN) which is used as state capital to fund Perum (Universal Industry) or Persero and other limited liability companies. Not only the country's wealth, there is also capital from reserve capitalization and other sources and any changes thereto, either accumulation or reduction, are formalized in a government regulation.

Management of SOEs is under the responsibility of the Board of Directors. So that the directors want to be in charge of and responsible for the management of SOEs for the sake of achieving the goals of SOEs. The same is true for the Commissioners and the Supervisory Board, it's just that both the Commissioners and the Supervisory Board are fully responsible for the supervision of SOEs. Who has the following identity:

BUMD (Regional Owned Enterprise)

Regional industry or BUMD is an industry that was established based on Regional Regulations whose capital comes from regional assets that are separated and sourced from laws. The regional industry carries out its business activities in the universal business sector which understands the needs of the people's lives.

Regional Industry is led by a Board of Directors, and members of the board of directors are promoted and dismissed by the Regional Head after hearing the opinion of the People's Representative Council (DPRD). An example of BUMD is BPD.

Private Owned Enterprises

BUMS is a business in which all capital is owned by individuals or several people or private parties. BUMS aims to be profit oriented or to get the maximum possible profit in order to increase capital and business, and create jobs.

In addition, private industry or BUMS is very functional in providing goods, services and helping the government in its efforts to reduce unemployment and distribute income funds to the State in the form tax. The form of privately owned business entities in Indonesia consists of Firm Partnerships, Individual Industries, Limited Liability Companies (PT) and Limited Partnerships (CV).

Foreign Private Enterprises

Is a business entity whose capital is owned by foreign parties. There are several things, among others, that gave rise to the emergence of this foreign private owned business entity, among others is an aspect of the availability of natural energy sources (raw materials), large market capabilities, labor wages that tend cheaper. These foreign private entities can provide benefits to the country because they supply capital and apply advanced technology which is important for economic development.

Joint Ventures

A joint venture is a collaboration between several industries from various countries and then becomes one industry to achieve a concentration of economic power. Joint ventures are required to have the legal entity PT or Limited Liability Company in the Industrial sector. The joint venture is guided by a Board of Directors who are selected by the shareholders.

Cooperative Business Entity

Cooperatives are business entities whose capital is from certain citizens who have the same vision. Cooperatives are people's economic movements that are run on the basis of kinship. Cooperatives aim to serve and improve the welfare of their members and society in general and to build a strong national economic structure.

Types of Business Entities

Based on the type of activity, the business entity is divided into various business entities as follows:

• Agricultural Enterprises. The activity of an agrarian business is managing natural energy sources to create certain objects. For example, oil palm plantations, fish farms, tea plantations, and cattle farms.
• Extractive Enterprises. Extractive business activity is an activity of taking what has been produced by natural energy sources. Nature has provided mining materials, including forest and marine products, petroleum mining. For example, fishing for marine fish products, the rattan harvesting industry, the timber industry, not to mention the oil mines in the middle of the ocean.
• Trading Business Entity. Trading business activity is the activity of buying and reselling an object without changing its form. There have been many examples around us such as supermarkets or traditional markets.
• Industrial Enterprises. The activity of an industrial business entity is the activity of digesting raw materials into finished goods or ready-to-use materials or often called the manufacturing industry. For example, objects for making raw material threads for the fabric industry, or it can also be objects such as clothes, shoes.
• Service Business Entity. Service business activity is an activity that distributes services and facilities in order to meet needs. For example, services for the transportation of goods from one region to another (expedition), banking services, consultants, and others.

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Comparison of Types of Business Entities

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Individual or Individual Industry

Individual industry is a business entity whose ownership is owned by one person. People can set up an individual business without certain permits and procedures. Everyone is free to set up a personal business without any restrictions on setting it up.

In general, individual industries have small capital, limited types and quantities of production, have a small workforce and use simple technology production equipment. Examples of individual industries such as grocery stores, traveling meatball vendors, hawkers, and so on.

• Characteristics and nature of individual industries:
• Relatively easy to set up as well as disassemble
• unlimited liability and can link personal property
• there are no taxes, there are levies and levies
• enjoy all the benefits
• it's hard to control the wheel of industry because it's self-regulated
• small profits that sometimes risk income
• the term of business is not limited or for life
• can be transferred at any time

Industry/Business Entity Partnership/Partnership

Partnership industry is a business that is owned by 2 or more people who jointly work together to achieve business goals. Included in the partnership business are firms and limited partnerships, aka cv. To establish a partnership business entity requires a special permit from the relevant government agency.

Firm

Firma is a form of business association consisting of 2 or more people with a common name whose responsibilities are divided equally, not limited to each owner.

Characteristics and character of the Firm:

• If there is an unpaid debt, then each owner must pay it off with individual assets.
• Every member of the firm has the right to be a leader
• A member is not entitled to enter a new member without the permission of another member.
• Firm membership sticks and is valid for life
• a member has the right to dissolve the firm
• establishment does not require a deed of establishment
• easy to get business credit

Limited Partnership/ CV/ Commanditaire Vennotschaap

CV is a form of business venture that is established and owned by 2 or more people to achieve common goals with different levels of involvement among its members. One party in the CV actively manages a business that involves individual assets and the other party only invests capital without having to involve individual assets during a financial crisis. Those who actively manage the CV industry are called active partners, and those who only deposit capital are called passive partners.

Characteristics and nature of the CV:

• difficult to withdraw paid-up capital
• large capital because it was founded by many parties
• easy to get loan credit
• there are active members who have unlimited responsibility and there are passive members just waiting for profits
• relatively easy to set up
• the viability of the cv industry is uncertain

Limited Liability Company/PT/Corporate/Corporate

A limited liability company is a business organization that has a formal legal entity owned by a minimum of 2 people responsibility that only applies to industry without linking individual or individual assets contained in inside. In a PT, the owner of capital is not required to lead the industry, because he can appoint someone other than the owner to be the leader. Establishing a PT/limited company requires a certain minimum amount of capital and various other requirements.

PT characteristics and characteristics:

• Liability is limited to capital without linking personal assets
• capital and dimensions of large industries
• the survival of the pt industry lies in the hands of the share owner
• Can be led by people who do not have shares
• ownership changes hands easily
• it's easy to find a workforce of employees / employees
• profits are distributed to owners of capital/shares in the form of dividends
• The power of the board of directors is greater than the power of the shareholders
• hard to dissolve
• double tax on income tax/ pph and dividend tax

State Owned Enterprises (BUMN)

Business entities whose capital is wholly or partly owned by the Government. The status of employees of these business entities is BUMN employees, not state employees. There are currently 3 BUMNs, namely Perjan, Perum and Persero.

Perjan

This agreement is service oriented to the citizens, so that they are always at a loss. At present there are no BUMN industries that use the contract model because of the high cost of maintaining the agreement in accordance with Law (UU) No. 19 of 2003 concerning BUMN. Example of Perjan: PJKA (Railroad Bureau Industry) has now changed to PT. KAI

Public Corporation

Perum is a perjan that has been replaced. The goal is no longer service oriented but profit oriented. Just like the Perjan, Perum is managed by the state with the status of its employees as civil servants. But the industry is still losing money even though Perjan's status was changed to Perum, so the government was forced to sold some of the shares of the Perum to the public (go public) and changed its status to a Persero.

Persero

Persero is one of the Business Entities managed by the State or Region. In contrast to Perum or Perjan, the purpose of establishing the first Persero was to seek profit and the second to provide services to the general public. The founding capital originates in part or in whole from the separated state assets in the form of shares. The Persero is guided by directors. On the other hand, the status of the employee is like a private employee. Business body is written PT < industry name
(Persero). This industry does not get state facilities.

SOEs Have Characteristics:

• Founded based on applicable laws and owned and managed by the government.
• Established with the aim of protecting the safety and welfare of citizens.
• Built to carry out government policy.
• His business is usually characterized by providing services to residents.

In addition to commercial businesses, BUMN create products in the form of goods or services for the government whose secrecy/security is not left to private industry.

Cooperative

Cooperatives are business entities based on the principles of kinship.

Cooperatives have the identity:

• gathering of people,
• Benefit sharing for restricted service comparisons,
• The aim is to lighten the economic burden of its members, improve the welfare of its members, as well as other citizens.
• Capital is not always changing for the number of members' savings,
• Not concerned with capital income/business work but individual membership with the principle of togetherness,
• In a member meeting each member each has one vote regardless of the amount of each capital,
• Each member is free to enter/exit (change members) so that in the cooperative there is no permanent capital,
• Just like the industry that created a Limited Liability Company (PT) to Cooperatives has the form of a Legal Entity,
• The person in charge of the cooperative is the administrator,
• Cooperatives are not a collection of capital for a number of people whose aim is to make as much profit as possible.
• Cooperatives are a joint venture of kinship and mutual cooperation. Each member is obliged to work together to achieve goals, namely the welfare of the members,
• carry out a business,
• Losses are shared among the members. If the cooperative suffers a loss, then the members share it. Members who cannot be released from the burden/responsibility of losses. Losses are borne by members who can afford it.

Foundation

The foundation is a business entity, but not an industry because it does not seek profit. This business was established for social and legal entities. The identity of the foundation includes:

• Built based on applicable laws and regulations.
• Established by notarial deed.
• Built by separating the founder's individual wealth for non-profit, religious, social and humanitarian purposes.
• It does not have members and is not owned by anyone, but has administrators or to realize the goals of the foundation
• Can be dissolved by a court of law in a state of conflict with the goals of the foundation with the law, liquidation and bankruptcy.

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