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A company, abbreviated as co., is a
legal entity In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by ...
representing an association of people, whether
natural Nature, in the broadest sense, is the natural, physical, material world or universe The universe ( la, universus) is all of space and time and their contents, including planets, stars, galaxies, and all other forms of matter and ...
,
legal Law is a system A system is a group of interacting Interaction is a kind of action that occurs as two or more objects have an effect upon one another. The idea of a two-way effect is essential in the concept of interaction, as oppose ...
or a mixture of both, with a specific objective. Company members share a common purpose and unite to achieve specific, declared goals. Companies take various forms, such as: *
voluntary association A voluntary group or union (also sometimes called a voluntary organization, common-interest association, association, or society) is a group of individuals who enter into an agreement, usually as volunteers, to form a body (or organization ...
s, which may include
nonprofit organization A nonprofit organization (NPO), also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in contrast with an entity that o ...
s *
business entities In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by its b ...
, whose aim is generating profit * financial entities and
bank A bank is a financial institution Financial institutions, otherwise known as banking institutions, are corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), stat ...

bank
s * programs or educational institutions. A company can be created as a legal person so that the company itself has
limited liability Limited liability is a legal status where a person's financial liability Liability may refer to: Law * Legal liability, in both civil and criminal law ** Public liability, part of the law of tort which focuses on civil wrongs ** Product liab ...
as members perform or fail to discharge their duty according to the publicly declared
incorporation Incorporation may refer to: * Incorporation (business), the creation of a corporation * Incorporation of a place, creation of municipal corporation such as a city or county * Incorporation (academic), awarding a degree based on the student having a ...
, or published policy. When a company closes, it may need to be
liquidated Liquidation is the process in accounting by which a company (law), company is brought to an end in Canada, United Kingdom, Republic of Ireland, Ireland, Australia, New Zealand, and Italy, and many other countries. The assets and property of th ...
to avoid further legal obligations. Companies may associate and collectively register themselves as new companies; the resulting entities are often known as
corporate group A corporate group or group of companies is a collection of parent and subsidiary corporations A corporation is an organization—usually a group of people or a company A company, abbreviated as co., is a legal entity In law, a l ...
s.


Meanings and definitions

A company can be defined as an "artificial person", invisible, intangible, created by or under law, with a discrete
legal personality In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by ...
,
perpetual succession In company law Corporate law (also known as business law or enterprise law or sometimes company law) is the body of law governing the rights, relations, and conduct of persons, companies, organizations and business Business is the ac ...
, and a
common seal The harbour (or harbor) seal (''Phoca vitulina''), also known as the common seal, is a true seal The earless seals, phocids or true seals are one of the three main groups of mammal Mammals (from Latin language, Latin , 'breast') are ...
. Except for some senior positions, companies remain unaffected by the death, insanity, or
insolvency In accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such as businesses and corporations. Accounting, which has been call ...
of an individual member.


Etymology

The English word ''company'' has its origins in the
Old French Old French (, , ; Modern French French ( or ) is a Romance language The Romance languages, less commonly Latin or Neo-Latin languages, are the modern languages that evolved from Vulgar Latin Vulgar Latin, also known as Popular o ...
term (first recorded in 1150), meaning a "society, friendship, intimacy; body of soldiers", which came from the
Late Latin Late Latin ( la, Latinitas serior) is the scholarly name for the written Latin Latin (, or , ) is a classical language belonging to the Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, kn ...
word ("one who eats bread with you"), first attested in the''
Lex Salica The Salic law ( or ; la, Lex salica), or the was the ancient Salian Franks, Salian Frankish Civil law (legal system), civil law code compiled around AD 500 by the first Frankish King, Clovis I, Clovis. The written text is in Latin and contains so ...
'' (English:
Salic Law#REDIRECT Salic law The Salic law ( or ; la, Lex salica), or the was the ancient Salian Franks, Salian Frankish Civil law (legal system), civil law code compiled around AD 500 by the first Frankish King, Clovis I, Clovis. The written text is in La ...
) ( 500 AD) as a
calque In linguistics Linguistics is the scientific study of language, meaning that it is a comprehensive, systematic, objective, and precise study of language. Linguistics encompasses the analysis of every aspect of language, as well as the me ...

calque
of the
Germanic Germanic may refer to: * Germanic peoples, an ethno-linguistic group identified by their use of the Germanic languages ** List of ancient Germanic peoples and tribes * Germanic languages :* Proto-Germanic language, a reconstructed proto-language of ...

Germanic
expression (literally, "with bread"), related to
Old High German Old High German (OHG, german: Althochdeutsch, German abbr. ) is the earliest stage of the German language German ( Standard High German: , ) is a West Germanic language mainly spoken in Central Europe Central Europe is an area of Euro ...
("companion") and to
Gothic Gothic or Gothics may refer to: People and languages *Goths or Gothic people, the ethnonym of a group of East Germanic tribes **Gothic language, an extinct East Germanic language spoken by the Goths **Crimean Gothic, the Gothic language spoken by ...
("messmate").


Semantics and usage

By 1303, the word referred to trade guilds. Usage of the term ''company'' to mean "business association" was first recorded in 1553, and the abbreviation "co." dates from 1769.


Companies around the world


China

In
China China (), officially the People's Republic of China (PRC; ), is a country in East Asia East Asia is the eastern region of Asia Asia () is Earth's largest and most populous continent, located primarily in the Eastern Hemisphere ...

China
companies are often
government A government is the system or group of people governing an organized community, generally a state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Departmen ...

government
run or some government supported. Others may be foreign companies or
export An export in international trade International trade is the exchange of capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distinction between the letters that are in larger uppercase ...

export
-based
corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal ...

corporation
s. However, many of these companies are government
regulated Regulation is the management of complex systems A complex system is a system A system is a group of interacting Interaction is a kind of action that occurs as two or more objects have an effect upon one another. The idea of a two-way e ...
.


United Kingdom

In
English law English law is the common law In law, common law (also known as judicial precedent or judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions. ''Blac ...
and in legal jurisdictions based upon it, a company is a
body corporate In law, a legal person is any person A person (plural people or persons) is a being that has certain capacities or attributes such as reason, morality, consciousness or self-consciousness, and being a part of a culturally established form of ...
or corporation company registered under the
Companies ActsCompanies Act (with its variations) is a stock short title used for legislation in Botswana, Hong Kong, India, Kenya, Malaysia, New Zealand, South Africa and the United Kingdom in relation to company law. The Bill for an Act with this short title wil ...
or under similar legislation. Common forms include: *
Private companies limited by guarantee Private or privates may refer to: Music * "In Private", by Dusty Springfield from the 1990 album ''Reputation'' * Private (band), a Denmark-based band * Private (Ryōko Hirosue song), "Private" (Ryōko Hirosue song), from the 1999 album ''Private' ...
*
Community interest company A community interest company (CIC, colloquially pronounced "kick") is a type of company introduced by the United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain,Usage ...
*
Charitable incorporated organisation A Charitable Incorporated Organisation (CIO) is a corporate form of business designed for (and only available to) charitable organisations in the United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as ...
* Private companies limited by shares - the most common form of company *
Public limited companies A public limited company (legally abbreviated to PLC or plc) is a type of public company under United Kingdom company law, some Commonwealth of Nations, Commonwealth jurisdictions, and the Republic of Ireland. It is a limited liability company who ...
- companies, usually large, which are permitted to (but do not have to) offer their shares to the public, for example on a
stock exchange A stock exchange, securities exchange, or bourse is an exchange Exchange may refer to: Places United States * Exchange, Indiana Exchange is an Unincorporated area, unincorporated community in Green Township, Morgan County, Indiana, Green To ...
In the United Kingdom, a
partnership A partnership is an arrangement where parties, known as business partner A business partner is a commercial entity with which another commercial entity has some form of Business alliance, alliance. This relationship may be a contractual, exclus ...

partnership
is not legally a company, but may sometimes be referred to (informally) as a "company". It may be referred to as a
"firm"
.


United States

In the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

United States
, a company is not necessarily a corporation. For example, a company may be a "
corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal ...

corporation
,
partnership A partnership is an arrangement where parties, known as business partner A business partner is a commercial entity with which another commercial entity has some form of Business alliance, alliance. This relationship may be a contractual, exclus ...

partnership
, association,
joint-stock company A joint-stock company is a business entity In law, a legal person is any person or 'thing' (less ambiguously, any legal entity) that can do the things a human person is usually able to do in law – such as enter into contracts, lawsuit, sue ...
, trust, fund, or organized group of
person A person (plural people or persons) is a being that has certain capacities or attributes such as reason Reason is the capacity of consciously applying logic Logic is an interdisciplinary field which studies truth and reasoning Reason is ...

person
s, whether incorporated or not, and (in an official capacity) any receiver, trustee in bankruptcy, or similar official, or liquidating
agent Agent may refer to: Espionage, investigation, and law *, spies or intelligence officers * Law of agency, laws involving a person authorized to act on behalf of another ** Agent of record, a person with a contractual agreement with an insuran ...
, for any of the foregoing".Black's Law and lee Dictionary. Second Pocket Edition. Bryan A. Garner, editor. West. 2001.


Types

* A
company limited by guarantee In British, Irish and Australian company law Corporate law (also known as business law or enterprise law or sometimes company law) is the body of law Law is a system A system is a group of Interaction, interacting or interrelated ...
(CLG): Commonly used where companies are formed for non-commercial purposes, such as clubs or charities. The members guarantee the payment of certain (usually nominal) amounts if the company goes into insolvent liquidation, but otherwise, they have no economic rights in relation to the company. This type of company is common in
England England is a Countries of the United Kingdom, country that is part of the United Kingdom. It shares land borders with Wales to its west and Scotland to its north. The Irish Sea lies northwest of England and the Celtic Sea to the southwest. E ...

England
. A company limited by guarantee may be with or without having
share capital __NOTOC__ A corporation's share capitalGlossary on Trade Financing Terms - S
in the U ...
. * A
company limited by shares A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a mixture of both, with a specific objective. Company members share a common ...
: The most common form of the company used for business ventures. Specifically, a limited company is a "company in which the liability of each shareholder is limited to the amount individually invested" with corporations being "the most common example of a limited company". This type of company is common in
England England is a Countries of the United Kingdom, country that is part of the United Kingdom. It shares land borders with Wales to its west and Scotland to its north. The Irish Sea lies northwest of England and the Celtic Sea to the southwest. E ...

England
and many
English-speaking countries Speakers of English English usually refers to: * English language English is a West Germanic languages, West Germanic language first spoken in History of Anglo-Saxon England, early medieval England, which has eventually become the Wo ...
. A company limited by shares may be a **
publicly traded company A public company, publicly traded company, publicly held company, publicly listed company, or public limited company A public limited company (legally abbreviated to PLC or plc) is a type of public company under United Kingdom company law, som ...
or a **
privately held company A privately held company or private company is a company which does not offer or trade its company stock In finance, stock (also capital stock) consists of all of the shares In financial markets A financial market is a market in whi ...
. * A company limited by guarantee with a share capital: A hybrid entity, usually used where the company is formed for non-commercial purposes, but the activities of the company are partly funded by investors who expect a return. This type of company may no longer be formed in the UK, although provisions still exist in law for them to exist. * A
limited liability company A limited liability company (LLC) is the US-specific form of a private limited company A private limited company is any type of business entity in Privately held company, "private" ownership used in many jurisdictions, in contrast to a Pu ...
. "A company—statutorily authorized in certain states—that is characterized by limited liability, management by members or managers, and limitations on ownership transfer", i.e., L.L.C. LLC structure has been called "hybrid" in that it "combines the characteristics of a corporation and of a partnership or sole proprietorship". Like a corporation, it has limited liability for members of the company, and like a partnership it has "flow-through taxation to the members" and must be "dissolved upon the death or bankruptcy of a member". * An
unlimited company An unlimited company or private unlimited company is a hybrid company (corporation) incorporated with or without a share capital (and similar to its limited liability, limited company counterpart) but where the legal liability of the members or ...
with or without a share capital. A hybrid entity, a company where the liability of members or shareholders for the debts (if any) of the company are not limited. In this case doctrine of a veil of incorporation does not apply. Less common types of companies are: * Companies formed by letters patent. Most corporations by letters patent are '' corporations sole'' and not companies as the term is commonly understood today. * . Before the passing of modern companies legislation, these were the only types of companies. Now they are relatively rare, except for very old companies that still survive (of which there are still many, particularly many British banks), or modern societies that fulfill a quasi-regulatory function (for example, the
Bank of England The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the Kingdom of England, English Government's banker, and still one of the bankers for t ...

Bank of England
is a corporation formed by a modern charter). * Statutory companies. Relatively rare today, certain companies have been formed by a private statute passed in the relevant jurisdiction. When "Ltd" is placed after the company's name, it signifies a limited company, and "PLC" (
public limited company A public limited company (legally abbreviated to PLC or plc) is a type of public company A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a company whose ownership is or ...
) indicates that its shares are widely held. In the legal context, the owners of a company are normally referred to as the "members". In a company limited or unlimited by shares (formed or incorporated with a share capital), this will be the
shareholder A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a Trust law, trust or partnership) that is registered by the corporation as the ...
s. In a
company limited by guarantee In British, Irish and Australian company law Corporate law (also known as business law or enterprise law or sometimes company law) is the body of law Law is a system A system is a group of Interaction, interacting or interrelated ...
, this will be the guarantors. Some offshore jurisdictions have created special forms of
offshore company The term "offshore company" or "offshore corporation" is used in at least two distinct and different ways. An offshore company may be a reference to: * a company, Corporate group, group or sometimes a division thereof, which engages in offshoring ...
in a bid to attract business for their jurisdictions. Examples include " segregated portfolio companies" and restricted purpose companies. There are, however, many, many sub-categories of types of company that can be formed in various jurisdictions in the world. Companies are also sometimes distinguished for legal and regulatory purposes between
public companies A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whet ...
and
private companies A privately held company, private company, or close corporation is a corporation not owned by the government, non-governmental organizations and by a relatively small number of shareholders or company members, which does not offer or trade its com ...
. Public companies are companies whose shares can be publicly traded, often (although not always) on a
stock exchange A stock exchange, securities exchange, or bourse is an exchange Exchange may refer to: Places United States * Exchange, Indiana Exchange is an Unincorporated area, unincorporated community in Green Township, Morgan County, Indiana, Green To ...
which imposes listing requirements/ Listing Rules as to the issued shares, the trading of shares and future issue of shares to help bolster the reputation of the exchange or particular market of an exchange. Private companies do not have publicly traded shares, and often contain restrictions on transfers of shares. In some jurisdictions, private companies have maximum numbers of shareholders. A
parent company A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...
is a company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors; the second company being deemed a subsidiary of the parent company. The definition of a parent company differs by jurisdiction, with the definition normally being defined by way of laws dealing with companies in that jurisdiction.


See also

*
Corporate personhood Corporate personhood is the legal notion that a corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private ...
*
List of company registers This is a list of official business registers around the world. There are many types of official Company register, business registers, usually maintained for various purposes by a state authority, such as a government agency, or a court of law. ...
*
List of largest employers The largest employers in the world include companies, militaries, and governments. Largest employers Public companies and institutions are included in this list. ''f = Including franchise employees''. Largest private and semiprivate employers ...
*
Lists of companies This is an index of company-related list articles on Wikipedia Wikipedia ( or ) is a free, multilingual open-collaborative online encyclopedia created and maintained by a community of volunteer contributors using a wiki A wiki ( ...
*
Stewardship Stewardship is an ethic that embodies the responsible planning and management of resources. The concepts of stewardship can be applied to the environment and nature, economics, health, property, information, theology, cultural resources etc. Histo ...

Stewardship
*
Types of business entity Type may refer to: Science and technology Computing * Typing Typing is the process of writing or inputting text by pressing keys on a typewriter A typewriter is a or machine for characters. Typically, a typewriter has an array of , a ...


References


Further reading

* Alan Dignam and John Lowry. ''Company Law''. Oxford:
Oxford University Press Oxford University Press (OUP) is the university press A university press is an academic publishing Publishing is the activity of making information, literature, music, software and other content available to the public for sale or for fre ...

Oxford University Press
, 2020. . *
John Micklethwait Richard John Micklethwait (born 11 August 1962) is editor-in-chief An editor-in-chief, also known as lead editor or chief editor, is a publication's editorial leader who has final responsibility for its operations and policies. The highest-ran ...
and
Adrian Wooldridge Adrian Wooldridge (born 11 November 1959) is the management editor and, since 1 April 2017, the 'Bagehot' columnist for ''The Economist ''The Economist'' is an international weekly newspaper printed in magazine-format and Electronic publishi ...
, ''The Company: a Short History of a Revolutionary Idea''. New York: Modern Library, 2003. *


External links

* * Gov.UK {{cite web , title=Get Information About a Company , url=https://www.gov.uk/get-information-about-a-company
Legal entitiesThis category contains articles related to juristic or natural person In jurisprudence Jurisprudence, or legal theory, is the theoretical study of law. Scholars of jurisprudence seek to explain the nature of law in its most general form and ...
Corporations