Company

DEFINITION of 'Company'

An entity formed to engage in a business. A company may be organized in various ways for tax and financial liability purposes. The line of business the company is in will generally determine which business structure it chooses. There are several types of companies, including sole proprietorships, limited partnerships, limited liability partnerships, limited liability corporations, S corporations and C corporations.

BREAKING DOWN 'Company'

The benefits of starting a company include income diversification, a strong correlation between effort and reward, creative freedom and flexibility. The disadvantages of starting a include increased financial responsibility, increased legal liability, long hours, responsibility for employees and responsibility for administrative, regulatory and tax issues. Many of the world's largest personal fortunes have been amassed by people who have started their own company.

RELATED TERMS
  1. Limited Liability Company - LLC

    A corporate structure whereby the members of the company cannot ...
  2. Limited Liability

    A type of liability that does not exceed the amount invested ...
  3. C Corporation

    A legal structure that businesses can choose to organize themselves ...
  4. Firm

    A firm is a business organization, such as a corporation, limited ...
  5. Unlimited Liability

    A type of business where owners share joint and several responsibility ...
  6. Partnership

    A business organization in which two or more individuals manage ...
Related Articles
  1. Professionals

    Client Type

    FINRA/NASAA Series 66: Section 3 Client Type. This section discusses different types of partnerships, corporations and other entities like estates and trusts.
  2. Professionals

    Client Type

    NASAA Series 65: Section 11 Client Type. This section contains descriptions about Sole Proprietorship, different types of Partnerships, Corporations and other entities.
  3. Professionals

    Forms Of Business Organization

    Find out how businesses are organized.
  4. Entrepreneurship

    Starting A Small Business: Business Structures

    By Amy Fontinelle When you start your business, you have several options for structuring it that will affect your income tax situation and your potential liability if something goes wrong.Sole ...
  5. Entrepreneurship

    Which Type of Organization Is Best For Your Business?

    Learn the differences between the types of business organizations so you can determine how to best structure your business for tax and liability limitations.
  6. Professionals

    Types Of Businesses

    This section includes exam topics regarding various types of business entities and their filing requirements.
  7. Economics

    Understanding Limited Liability

    Limited liability is a legal concept that protects equity owners from personal losses due to their ownership interest in the company.
  8. Options & Futures

    Asset Protection For The Business Owner

    Could incorporating your business help protect it? Find out here.
  9. Entrepreneurship

    S Corp. Vs. LLC: Which Should I Choose?

    Understand the major distinctions between an S corporation and an LLC, and the important factors to consider when choosing your business structure.
  10. Professionals

    Family Limited Partnership or Limited Liability Company

    Family Limited Partnership or Limited Liability Company
RELATED FAQS
  1. If you have a house that is under your company name and you want to sell it back ...

    The answer to this question really depends on the type of legal entity your business is operated through. Businesses may ... Read Answer >>
  2. What's the difference between a financial plan and a financial forecast?

    Learn which types of business structures present the greatest amount of risk through unlimited liability to the owner or ... Read Answer >>
  3. What's the difference between limited liability partnership and general partnership?

    Learn the differences between general partnerships and limited liability partnerships; each type has unique traits, benefits ... Read Answer >>
  4. Do companies have to pay back their paid-up capital?

    Learn what business structures are available to entrepreneurs, and learn the process for making the most appropriate selection ... Read Answer >>
  5. What are some examples of how corporations manage short-term investments?

    Learn how a business owner can protect against significant liability by forming a corporate entity structure, and understand ... Read Answer >>
  6. Can I invest my IRA in an entity, business or LLC?

    Explore different types of businesses, entities, corporations and limited liability companies, and the types IRA-eligible ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center