Company

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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.

INVESTOPEDIA EXPLAINS '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. Corporation

    A legal entity that is separate and distinct from its owners. ...
  2. Subchapter S (S Corporation)

    A form of corporation that meets the IRS requirements to be taxed ...
  3. Sole Proprietorship

    The sole proprietor is an unincorporated business with one owner ...
  4. Limited Partnership - LP

    Two or more partners united to conduct a business jointly, and ...
  5. Limited Liability Company - LLC

    A corporate structure whereby the members of the company cannot ...
  6. Silent Partner

    An individual whose involvement in a partnership is limited to ...
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