A company (short for co.) is a legal group made up of persons who work together to reach a goal. They can be real people (called natural persons), or other companies (called juridical persons), or both.
Companies usually have the following features: they are treated like their own person in the eyes of the law, they have limited liability (which means the owners and employees of the company are not fully responsible for its debts), they can sell or give away parts of the company (called shares), they are owned by investors, and they are run by managers. Many small companies are managed by their owners. Companies are created when the government gives them legal permission to start.
Companies can be different kinds, such as:
When a company is created, it becomes its own legal "person." This means the company—not the people in it—is responsible if something goes wrong, as long as the company follows its rules written in its incorporation papers. If a company closes, it might go through a process called liquidation to take care of its final debts and duties.
Sometimes, companies join together and make a group. These corporate groups often include one big company and smaller ones it owns.
A company can be called an "artificial person". This means it is not a real human, but it is treated like a person by the law. It is invisible, cannot be touched, and is created by laws made by the government.
A company has its own legal rights and can continue to exist even if some of its members die, become unable to work, or go bankrupt. This is called perpetual succession. A company also has a special stamp called a common seal that it can use to sign documents.
The word company comes from the Old French word compagnie, which was first used around the year 1150. It meant things like "friendship", "group", or "a group of soldiers". That word came from Late Latin companio, which means "someone who eats bread with you". This idea came from an old Germanic expression meaning the same thing—basically, a companion is someone you share food with.
The word is related to other old words like Old High German galeipo and Gothic gahlaiba, which also mean "companion" or "friend you eat with".
By the year 1303, the word company was being used to describe trade guilds—groups of people who worked in the same job, like blacksmiths or merchants.
By 1553, it started to mean a "business group"—a group of people working together to run a business. The short form "co." (used in names like “Smith & Co.”) started to appear by 1769.
There are many different kinds of companies. Here are some of the main types:
If a company’s name ends in "Ltd", it means it is a limited company. If it ends in "PLC", it is a public limited company, meaning its shares are sold to the public.