Updated October 29, 2020:

The business association meaning refers to membership organizations that are engaged in and supportive of the promotion of the business interests of their members.

Overview of Business Associations

Associations typically perform an assortment of activities that could be costly and time consuming for an individual company to undertake on its own. This could include activities such as research, lobbying, setting industry standards, and information gathering.

Spokespersons for associations contend that companies combining their voices under one banner, a strong presence is established allowing that shows unification while allowing protection to their shared interests.

A focus of large companies is to be active in the participation of business associations with the goal of using the organization to promote issues in many areas.

Smaller companies also benefit from association memberships as long as they find organizations that reflect their priorities, which may be significantly different than those of a large corporation. For example, a smaller business may prefer association memberships such as education or networking opportunities versus taking on major issues such as OSHA regulations.

There are many leading United States business associations such as:

  • The Better Business Bureau
  • The National Restaurant Association
  • The National Manufacturers Association
  • The U. S. Chamber of Commerce
  • The National Retail Federation

Choosing a Business Association

Business associations operate at all levels including local, state, regional, and national levels.

When considering joining an association, a brochure or information packet with information about the group's background, services, philosophy, and affiliations should first be requested. A meeting should also be requested to meet a representative of the association or you can attend an organizational meeting to attain more detailed and in-depth information.

Current and former members are a good source of information about the workings of the association.

Characteristics of a Business Association

There are three characteristics of a business association:

  • The association must have more than one member when they are formed.
  • The assets must be legally distinct from the private assets of the members.
  • The association must have a formal system of management, which may consist of people who are members as well as those who are not members.

The first characteristic of multiple members distinguishes the business association from that of a business owned by one individual, who, as a single owner, would control the assets and is not internally regulated by the law.

The second characteristic regarding assets is to clearly outline what assets the managers of the association may use to run the business.

The third characteristic regarding system management can vary. In a simple business association, members who provide assets are entitled to be part of the management team unless there is an agreement to the contrary. In a complex business, members have no immediate right to be part of the management team, are entitled to appoint and dismiss the management staff.

Types of Business Associations

  • Sole proprietorships
  • Partnerships
  • Limited partnerships
  • Partnerships with limited liability
  • Joint venture
  • Corporation
  • Limited Liability Company

Business Organization Overview

Keep in mind that these business organizations are not all created equal. Some are poorly organized, some are poorly attended, and others offer little in benefits to businesses.

On the reverse side, some entrepreneurs who have limited time to attend to business and family are unable to invest the time needed to commit to a membership.

Overview of a Business Organization

A business organization can be a single person or a group of people working together in the pursuit of the same commercial goals. There are two types of businesses: profit and nonprofit.

A nonprofit business is an individual or a group of people working to enhance the public good. This type of business needs enough funding to cover operational expenses. Any excess funds are channeled back into the organization to propel the business forward.

Companies focused on profit offer goods or services in exchange for money or other goods and services.

The businesses are usually led by a hierarchical structure that establishes the roles and positions within the company.

The leaders of the company are responsible for organizing and executing strategies designed to benefit the company goal, and all employees are expected to be on the same page and work towards a common goal.

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