Legal Definitions - business transaction

A business transaction refers to any activity or event that has a direct impact on the financial health or economic standing of an individual or entity.

Here are a few examples to illustrate what constitutes a business transaction:

• A company purchasing office supplies: When a marketing firm buys new computers and software from a vendor, this is a business transaction. It directly affects the firm's financial position by decreasing its cash assets and increasing its physical assets (the computers) and potentially its expenses (software licenses).
• A freelance consultant providing services: A freelance web developer completes a project for a client and sends an invoice for their work. This is a business transaction because it creates an economic gain for the developer (income) and a financial obligation for the client (payment for services rendered), directly impacting both parties' economic interests.
• A restaurant taking out a loan: A local restaurant secures a loan from a bank to renovate its dining area. This is a business transaction because it increases the restaurant's liabilities (the debt owed to the bank) and its cash assets, directly altering its financial structure and economic resources.