Definition: A company is a legal entity formed by people or groups to engage in commercial activities or operate a business. The company members share a common goal, forming an association to achieve shared objectives.
A company can be either private or public. Both types of businesses have their own set of rules and regulations and reporting requirements. Public firms provide stock to the public and are subject to public scrutiny, whereas private companies have fewer stakeholders and are subject to fewer regulatory and reporting requirements.
Example of Company
A few examples of companies in the USA are
- Amazon
- McDonald
- Pepsi
- Starbucks
Types of Companies
In the United States; a company can be of the following types:
- Partnerships: Here, two or more individuals or entities sign an agreement to run a business jointly.
- Corporations: These are legal entities and have the same rights and responsibilities as a person but are different from the owner.
- Associations: Association is the joining of two or more entities or groups to achieve a common goal.
- Trusts: A trust is a legal arrangement that allows a third party to hold assets on behalf of a beneficiary.
- Funds: A fund is a pool of money businesses collect to spend on a specific purpose.
Summary
Individuals or groups of individuals form a company to serve society and earn profits for themselves. A company is equivalent to a legalized artificial person with human-like traits except for death.
A business might be for-profit or non-profit. For-profit businesses engage in commercial operations, while non-profit businesses promote social causes.