Legal Definitions - common business purpose

Common business purpose refers to related activities carried out by two or more associated businesses. If one of the businesses falls under the jurisdiction of the Fair Labor Standards Act, then another business that shares a common business purpose will also be subject to the same regulations.

• Two restaurants that are owned by the same parent company and share the same menu and branding would have a common business purpose.
• A group of construction companies that work together on a large project would have a common business purpose.
• A chain of retail stores that share the same inventory and marketing strategies would have a common business purpose.

These examples illustrate how businesses that are associated with each other and have similar goals and operations can be considered to have a common business purpose. This means that they may be subject to the same regulations and laws, such as those related to labor standards and employment practices.