A company is a legal entity formed by a group of individuals to engage in and operate a business enterprise. This business can be commercial or industrial. Companies can be organized in various ways for tax and financial liability purposes depending on the corporate law of the company's jurisdiction. Often the line of business the company engages in dictates the structure it chooses. In the United States, these types of companies are defined by tax laws administered by the Internal Revenue Service and individual state dictates.
A company has similar, if not the same, legal rights and responsibilities as an individual. This includes the ability to enter into contracts, right to sue or be sued, ability to borrow money, responsibility of paying taxes, can own assets, and can hire employees.
Companies can be as simple as registering a trade name a single individual uses to conduct business. And it can be as complicated as forming a complex structure of entities across multiple countries and regulatory structures.
Types of Companies
Examples of these types include:
- Joint-stock Company
- Private companies limited by guarantee
- Private companies limited by shares
- Public limited companies
- Gesellschaft mit beschränkter Haftung (GmbH)
In the United States, a company is not necessarily a corporation, although all corporation can be classified as companies. In the United Kingdom, a company is a body corporate or corporation. As well, in the United Kingdom, a partnership is note legally a company though they may be informally referred to as a company or referred to as a firm.
Most jurisdictions have forms of private limited companies and stock corporations. A private limited company is a company privately owned by the members or a single member of the company. A stock corporation differs from a private limited company in its ability to issue shares which entitle owners to portions of the corporations profits. In a stock corporation, these stocks can be shared publicly, privately, or on stock exchanges.
The word company comes originally from the Old French word compagnie which stood for "society, friendship, intimacy; body of soldiers" in the 12th century. This old French comes originally from the Late Latin companio which stood for "bread fellow, messmate" and the Latin root com, which stood for "with, together".
In the 14th century, the Middle English use of company is for "companionship, consort of persons, intimate association, sexual union". This is expanded in the late 14th century in usage to include usage for "a number of persons united to perform or carry out anything jointly" and from this usage developed a commercial sense of "business association". The definition for business association is in use by the 1550s after it is seeing use in reference to trade guilds.
The abbreviation of company as "co." dates from the 1670's. And company continues to be used in a military sense to refer to a subdivision of an infantry regiment.
"Company" begins to be used to refer to business associations.
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- OrganizationAn organization or organisation is an entity comprising multiple people, such as an institution or an association, that has a collective goal and is linked to an external environment.
- CorporationA corporation is a company or group of people authorized to act as a single entity (legally a person) and recognized as such in law.
- BusinessExchange of services.