Company

AAA

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. Subchapter S (S Corporation)

    A form of corporation that meets the IRS requirements to be taxed ...
  2. Corporation

    A legal entity that is separate and distinct from its owners. ...
  3. Limited Partnership - LP

    Two or more partners united to conduct a business jointly, and ...
  4. Sole Proprietorship

    The sole proprietor is an unincorporated business with one owner ...
  5. Limited Liability Company - LLC

    A corporate structure whereby the members of the company cannot ...
  6. Public-Private Partnerships

    A business relationship between a private-sector company and ...
RELATED FAQS
  1. What risks does a business owner face under a business structure with unlimited liability?

    The risks that a business owner faces under a business structure with unlimited liability are literally unlimited, but they ... Read Full Answer >>
  2. Are there any practical differences between a wholly owned subsidiary and a regular ...

    There are differences between a wholly owned subsidiary, or a company 100 percent owned by another company, and a regular ... Read Full Answer >>
  3. What's the difference between a financial plan and a financial forecast?

    Selecting the appropriate business structure for a new company can present challenges to an entrepreneur. Considerations ... Read Full Answer >>
  4. Which factors drive the marginal propensity to consume?

    A limited liability company (LLC) is not a separate entity from its business owners but is instead considered a pass-through ... Read Full Answer >>
  5. How can I merge technical analysis and fundamental analysis with quantitative analysis ...

    It is important for a sole proprietor with no employees to register as a limited liability company because an LLC provides ... Read Full Answer >>
  6. What is the difference between a money market fund and a savings account?

    The primary advantages of the Herfindahl-Hirschman Index (HHI) are the simplicity of the calculation necessary to determine ... Read Full Answer >>
Related Articles
  1. Entrepreneurship

    10 Tax Benefits For The Self-Employed

    Running your own business has both personal and financial perks.
  2. Entrepreneurship

    Are You An Entrepreneur?

    Many people want to start a business, but not everyone has what it takes to succeed.
  3. Entrepreneurship

    Can You Handle A Home-Based Business?

    Find out if you have the traits to be a top entrepreneur.
  4. Entrepreneurship

    Start Your Own Small Business

    Quit your job, be your own boss and earn a paycheck. Find out what to do to make it happen.
  5. Entrepreneurship

    Should You Incorporate Your Business?

    Find out how becoming a corporation can protect and further your finances.
  6. Entrepreneurship

    10 Breakout Ideas For Small Businesses

    If your business has hit a wall, we've got the answer to break through and increase sales and earnings.
  7. Entrepreneurship

    4 Steps To Creating A Stellar Business Plan

    If you're going into business, you must have a plan. Find out how to put this important document together.
  8. Entrepreneurship

    Get the Best Freelance Rates for Your Work

    Smart strategies for estimating costs, researching fees, pricing projects and getting your rate for a range of clients.
  9. Entrepreneurship

    What is Unlimited Liability?

    Unlimited liability means that the owners of a business are liable for the entire amount of debt and obligations of that business.
  10. Economics

    What is a Partnership?

    A partnership is an organization where two or more owners operate a business.

You May Also Like

Hot Definitions
  1. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  2. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  3. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  4. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  5. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  6. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
Trading Center