Company

For other uses, see Company (disambiguation).

"Firm" redirects here. For other uses, see Firm (disambiguation).

A modern corporate office building in Münster, North Rhine-Westphalia, Germany

An office building of Nokia Corporation in Hervanta, Tampere, Finland

A company, abbreviated as co., is a legal entity representing an association of legal people, whether natural, juridical or a mixture of both, with a specific objective. Company members share a common purpose and unite to achieve specific, declared goals.

Over time, companies have evolved to have the following features: "separate legal personality, limited liability, transferable shares, investor ownership, and a managerial hierarchy". ^[1] The company, as an entity, was created by the state which granted the privilege of incorporation. ^[1]

Companies take various forms, such as:

• voluntary associations, which may include nonprofit organizations
• business entities, whose aim is to generate sales, revenue, and profit
• financial entities and banks
• programs or educational institutions

A company can be created as a legal person so that the company itself has limited liability as members perform or fail to discharge their duties according to the publicly declared incorporation published policy. When a company closes, it may need to be liquidated to avoid further legal obligations. Companies may associate and collectively register themselves as new companies; the resulting entities are often known as corporate groups, collections of parent and subsidiary corporations.

Meanings and definitions

A company can be defined as an "artificial person", invisible, intangible, created by or under law, ^[2] with a discrete legal capacity (or "personality"), perpetual succession, and a common seal. Except for some senior positions, companies remain unaffected by the death, insanity, or insolvency of an individual member.

Etymology

The English word, "company", has its origins in the Old French term compagnie (first recorded in 1150), meaning "society, friendship, intimacy; body of soldiers", ^[3] which came from the Late Latin word companio ("one who eats bread with you"), first attested in the Salic law (c. AD 500) as a calque of the Germanic expression gahlaibo (literally, "with bread"), related to Old High German galeipo ("companion") and to Gothic gahlaiba ("messmate").

Semantics and usage

By 1303, the word company referred to trade guilds. ^[4] The usage of the term company to mean "business association" was first recorded in 1553, ^[5] and the abbreviation "co." dates from 1769. ^{[6] [7]}

Companies around the world

Africa

South Africa

Under the Companies Act 2008, South Africa provides for non-profit companies and several profit-company forms: private companies, public companies, personal liability companies, and state-owned companies. ^{[8] [9]}

Nigeria

Nigeria’s Companies and Allied Matters Act 2020 recognizes private and public companies limited by shares, companies limited by guarantee, and unlimited companies it also enables single-member companies. ^{[10] [11]}

Kenya

Kenya’s Companies Act 2015 provides for private and public companies, including public limited companies. It sets naming and formation rules and consolidates modern company law in Kenya. ^[12]

Americas

Canada

Companies in Canada can be incorporated at the federal or provincial level under the Canada Business Corporations Act or equivalent provincial statutes. ^[13]

United States

See also: List of companies of the United States by state

In the United States, a company is not necessarily a corporation. For example, a company may be a "corporation, partnership, association, joint-stock company, trust, fund, or organized group of persons, whether incorporated or not, and (in an official capacity) any receiver, trustee in bankruptcy, or similar official, or liquidating agent, for any of the foregoing". ^{[14] [15]}

Brazil

Brazil’s main company forms are the sociedade limitada - governed by the Civil Code and the sociedade anônima - governed by the Corporations Law. ^[16]

Mexico

Mexico’s General Law of Commercial Companies recognizes, among other forms, the Sociedad Anónima and the Sociedad por Acciones Simplificada, the latter added by 2016 reforms to facilitate single-shareholder startups. ^{[17] [18]}

Asia–Pacific

Australia

Australian companies are broadly proprietary or public under the Corporations Act 2001 proprietary companies commonly use the suffix Pty Ltd. ^{[19] [20]}

China

According to the Company Law of the People's Republic of China, companies include limited liability companies and joint-stock limited companies which were founded in mainland China.

India

India’s Companies Act 2013 provides for public and private companies and introduced the One Person Company as a single-member private company; naming conventions include “Limited” for public companies and “Private Limited”. ^{[21] [22]}

Japan

Japanese company law recognizes several types of companies, with the most common being the Kabushiki Kaisha, similar to a joint-stock company. Another popular form is the Gōdō Kaisha, which resembles a limited liability company. The Companies Act of 2005 established the legal framework for these and other business entities in Japan, regulating their formation, governance, and operation. ^[23]

New Zealand

In New Zealand, under the Companies Act 1993, the registered name of a limited liability company must end with “Limited” or “Tāpui”. ^{[24] [25]}

Europe

European Union

Directive 2017/1132 consolidates EU company-law measures on incorporation, capital, disclosure and cross-border aspects for limited-liability companies the EU also recognizes the Societas Europaea. ^[26]

Germany

In Germany, the most common corporate forms include the Gesellschaft mit beschränkter Haftung and the Aktiengesellschaft. The GmbH is a private limited liability company, widely used for small and medium-sized enterprises. The AG is a public limited company used by larger firms and those listed on stock exchanges. German corporate law is governed by the Handelsgesetzbuch. Companies must register with the local commercial register and comply with strict disclosure and accounting standards. ^[27]

France

France’s widely used forms include the "société par actions simplifiée", "société à responsabilité limitée" and "société anonyme" government guidance sets out their main features and minimum capital and confirms SAS as the most common commercial form. ^{[28] [29] [30]}

Russia

In Russia, companies are governed by the Civil Code and federal laws such as the Law on Joint-Stock Companies and the Law on Limited Liability Companies. Common types of corporate entities include the Open Joint-Stock Company, the Closed Joint-Stock Company, and the Limited Liability Company. ^{[31] [32] [33]}

United Kingdom

See also: List of companies of the United Kingdom

In English law and in legal jurisdictions based upon it, a company is a body corporate or corporation company registered under the Companies Acts or under similar legislation. ^[34] Common forms include:

• Private companies limited by guarantee
• Community interest company
• Charitable incorporated organisation
• Private companies limited by shares - the most common form of company
• Public limited companies - companies, usually large, which are permitted to (but do not have to) offer their shares to the public, for example on a stock exchange

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

Middle East and North Africa

United Arab Emirates

The UAE’s Federal Decree-Law No. 32 of 2021 governs company types. Since 2021 reforms, onshore “mainland” companies in many sectors may be 100% foreign-owned. ^{[35] [36]}

Saudi Arabia

Saudi Arabia’s new Companies Law modernized company forms and introduced the Simplified Joint Stock Company to support startups and VC activity. ^{[37] [38]}

Egypt

The principal forms for private investment include the joint-stock company and the limited liability company, regulated by Law No.159 of 1981 and related investment legislation. ^{[39] [40]}

Types

For a country-by-country listing, see types of business entity.

See also: Business § Forms

• A company limited by guarantee (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. A company limited by guarantee may be with or without having share capital.
• A company limited by shares: 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". ^[15] This type of company is common in England and many English-speaking countries. A company limited by shares may be a publicly traded company or a privately held company.
• 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. ^[34]
• A limited liability company : "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. ^[15] 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 depending on local laws may have to be "dissolved upon the death or bankruptcy of a member". ^[41]
• An unlimited company 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, the doctrine of a veil of incorporation does not apply.^{[ citation needed ]}

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.
• Royal charter corporations : In middle-ages Europe, before the passing of modern companies legislation, these were the only types of companies.^{[ citation needed ]} Now they are relatively rare, except for very old companies that still survive (particularly many British banks), or modern societies that fulfill a quasi-regulatory function (for example, the Bank of England is a corporation formed by a modern charter).^{[ citation needed ]}
• Statutory companies: Relatively rare today, certain companies have been formed by a private statute passed in the relevant jurisdiction.^{[ citation needed ]}

When "Ltd" is placed after the company's name, it signifies a limited company, and "PLC" (public limited company) indicates that its shares are widely held. ^[42]

See also

• Business and economics portal
• Companies portal

• Corporate personhood
• List of company registers
• List of largest employers
• Lists of companies
• Types of business entity

References

1. Turner, John D. (January 30, 2024). "Three centuries of corporate governance in the United Kingdom". The Economic History Review. 78: 3–29. doi: 10.1111/ehr.13326 . ISSN   0013-0117.
2. Compare a definition of a corporation: "Perhaps the best definition of a corporation was given by Chief Justice John Marshall in a famous Supreme Court decision in 1819. A corporation, he said, 'is an artificial person, invisible, intangible, and existing only in contemplation of the law.' In other words, a corporation [...] is an artificial person, created by law, with most of the legal rights of a real person."Pride, William M.; Hughes, Robert J.; Kapoor, Jack R. (1985). "4: Choosing a form of business ownership". Business. CengageNOW Series (10 ed.). Mason, Ohio: Cengage Learning (published 2009). p. 116. ISBN   9780324829556 . Retrieved April 20, 2019.
3. 12th century: Harper, Douglas. "company". Online Etymology Dictionary .
4. Compare: Harper, Douglas. "company". Online Etymology Dictionary . - '[...] the word having been used in reference to trade guilds from late 14c.'
5. Compare: Harper, Douglas. "company". Online Etymology Dictionary . - 'From late 14c. as "a number of persons united to perform or carry out anything jointly," which developed a commercial sense of "business association" by 1550s, the word having been used in reference to trade guilds from late 14c.'
6. Compare: "co" . Oxford English Dictionary (Online ed.). Oxford University Press.(Subscription or participating institution membership required.) - "1759 Compl. Let.-writer (ed. 6) London: Printed for Stanley Crowder, and Co."
7. Compare: Harper, Douglas. "co". Online Etymology Dictionary . - 'by 1670's as an abbreviation of company in the business sense, indicating the partners in the firm whose names do not appear in its name. Hence and co. to indicate "the rest" of any group (1757)'.
8. "The Companies Act, 2008 (overview)" (PDF). Companies and Intellectual Property Commission (CIPC). Retrieved August 30, 2025.
9. "Companies Act 71 of 2008 | South African Government". www.gov.za. Retrieved August 30, 2025.
10. "Companies and Allied Matters Act, 2020" (PDF). PwC Nigeria (official CAMA text). 2020. Retrieved August 30, 2025.
11. "Companies and Allied Matters Act (consolidated)" (PDF). Policy and Legal Advocacy Centre (PLAC). Retrieved August 30, 2025.
12. Companies Act. December 27, 2024.
13. Government of Canada, Innovation (July 4, 2016). "Corporations Canada". ised-isde.canada.ca. Retrieved July 7, 2025.
14. Garner, Bryan A., ed. (1891). "company". Black's Law Dictionary. Black's Law, 9th Edition. Vol. 1 (9 ed.). St. Paul, Minnesota: West Publishing, Inc (published 2009). p. 318. ISBN   9780314199492 . Retrieved April 20, 2019. 2. A corporation, partnership, association, joint-stock company, trust, fund, or organized group of persons, whether incorporated or not, and (in an official capacity) any receiver, trustee in bankruptcy, or similar official, or liquidating agent, for any of the foregoing. Investment Company Act 2(a)(8)(15 USCA 80a-2(a)(8)).^{[ permanent dead link ]}
15. Black's Law Dictionary. Second Pocket Edition. Bryan A. Garner, editor. West. 2001.
16. "Law No. 6.404 of December 15, 1976 (Corporations Law)" (PDF). Brazil Securities and Exchange Commission (CVM). Retrieved August 30, 2025.
17. "DOF - Diario Oficial de la Federación". www.dof.gob.mx (in Spanish). Archived from the original on February 18, 2025. Retrieved August 30, 2025.
18. "Ley General de Sociedades Mercantiles › Capítulo XIV - De la Sociedad por Acciones Simplificada› Artículos 260 al 273". Justia (in Mexican Spanish). May 25, 2023. Retrieved August 30, 2025.
19. "Company types". www.asic.gov.au. Retrieved August 30, 2025.
20. "CORPORATIONS ACT 2001". www5.austlii.edu.au. Retrieved August 30, 2025.
21. "Companies Act, 2013 (as amended)" (PDF). India Code. Retrieved August 30, 2025.
22. "MCA amends One Person Companies (OPCs) rules". www.pib.gov.in. Archived from the original on April 3, 2025. Retrieved August 30, 2025.
23. muazzam (September 26, 2023). "Understanding the Difference between Kabushiki Kaisha (K.K.) and Godo Kaisha (G.K.) in Japan". HLS Japan. Retrieved July 7, 2025.
24. "Companies Act 1993 No 105 (as at 01 July 2025), Public Act Contents – New Zealand Legislation". www.legislation.govt.nz. Retrieved August 30, 2025.
25. "The rules relating to company names". companies-register.companiesoffice.govt.nz. Retrieved August 30, 2025.
26. "Directive - 2017/1132 - EN - EUR-Lex". eur-lex.europa.eu. Retrieved August 30, 2025.
27. portal, Legal knowledge (August 2, 2016). "GmbH or AG - what are the differences?". TELFA. Retrieved July 7, 2025.
28. "Création d'entreprise : choisir la forme juridique de votre entreprise". entreprendre.service-public.fr (in French). Retrieved August 30, 2025.
29. "Société par actions simplifiée (SAS) : ce qu'il faut savoir". entreprendre.service-public.fr (in French). Retrieved August 30, 2025.
30. "Société anonyme (SA) : ce qu'il faut savoir". entreprendre.service-public.fr (in French). Retrieved August 30, 2025.
31. "Legal Forms of Companies in Russia". Federal Tax Service of Russia. Retrieved July 7, 2025.
32. "New regulations on Russian joint stock companies | Global law firm | Norton Rose Fulbright". www.nortonrosefulbright.com/en-in. Retrieved July 7, 2025.
33. lawyersrussia.com (September 13, 2024). "Commercial Code in Russia". Lawyers in Russia. Retrieved July 7, 2025.
34. "Companies Act 2006". www.legislation.gov.uk. Archived from the original on April 10, 2015. Retrieved March 15, 2020.
35. "Wayback Machine". uaelegislation.gov.ae. Archived from the original on November 22, 2024. Retrieved August 30, 2025.
36. "Full foreign ownership of commercial companies | The Official Portal of the UAE Government". u.ae. Retrieved August 30, 2025.
37. "Companies Law (English translation)" (PDF). Gulf Cooperation Council Board Directors Institute. 2022. Retrieved August 30, 2025.
38. "New Saudi Companies Law 2022: Key Changes, and Next Steps for Companies in KSA". Bracewell LLP. Retrieved August 30, 2025.
39. "Law No. 159 of 1981 (Companies Law) — English text" (PDF). General Authority for Investment and Free Zones (GAFI). Retrieved August 30, 2025.
40. "Laws & regulations on incorporation (guide)" (PDF). JETRO Cairo. October 2023. Retrieved August 30, 2025.
41. root. "Limited Liability Company (LLC) Definition - Investopedia". Investopedia. Archived from the original on November 27, 2012. Retrieved November 14, 2012.
42. "BBC Bitesize - GCSE Business - Forms of business ownership - Revision 3". BBC Bitesize. Archived from the original on September 1, 2018. Retrieved August 31, 2018.

Further reading

• Alan Dignam and John Lowry. Company Law. Oxford: Oxford University Press, 2020. ISBN   978-0-19-928936-3.
• John Micklethwait and Adrian Wooldridge, The Company: A Short History of a Revolutionary Idea. New York: Modern Library, 2003.
• "Company"  . Encyclopædia Britannica . Vol. 6 (11th ed.). 1911. pp. 795–803.

External links

• "Labor and Employment". Government Information Library. University of Colorado at Boulder. Archived from the original on June 12, 2009. Retrieved August 5, 2009.
• "Get Information About a Company". Gov.UK.