I need a way to set up one to many items, for example, I have "companies items" with many "business items"

Is there some way to have a dropdown custom field in business items to choose a parent item from a companies category?

I need to set up a company item, and then add many Business items belonging to that company item

then I will display K2 Company items, and on the K2 company detail page, show a list of K2 busines items belonging to the company under the company item details

Halp :)

You will need an extension for this functionality.
You can look at the JED or KED. If I recall correctly, BNR related items was used by some users in the community.
I have not used it personally nor can I endorse it.