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What is a Company?

Definition of a Company

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

What is a Company? A company is a legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise. A company may be organized in various ways for tax and financial liability purposes depending on the corporate law of its jurisdiction.

Types of Companies in the UK

Sole Trader

A Sole trader is a Company that is usually run by one person. The person or business owner is liable for all the business operations. Setting up as a sole trader is relatively quick and easy. 

Partnerships

Partnerships are companies where 2 or more partners are involved in running the business. They are similar to sole traders except that there is more than one person involved in the business

Limited Companies

In a limited company, the liability of members or subscribers of the company is limited to what they have invested or guaranteed to the company. Limited companies may be limited by shares or by guarantee. In a company limited by shares, the liability of members is limited to the unpaid value of shares. A limited Company must have at least one director and one shareholder.

Private Company Limited by Shares (Limited or Ltd)

Limited by shares companies are usually businesses that make a profit. This means the company:

  • is legally separate from the people who run it
  • has separate finances from your personal ones
  • has shares and shareholders
  • can keep any profits it makes after paying tax

Private Company Limited By Guarantee

Limited by guarantee companies are usually ‘not for profit’. This means the company:

  • is legally separate from the people who run it
  • has separate finances from your personal ones
  • has guarantors and a ‘guaranteed amount’
  • invests profits it makes back into the company

Limited Partnership

A limited partnership (LP) is a company which consists of two or more partners who can be individuals or corporate entities.

Limited Liability Partnership

A Limited Liability Partnership operates in a similar way to a traditional partnership with the added benefit of limited liability. The primary objectives of an LLP are generally profit driven and this structure is favoured in professions such as law and accountancy

Public Limited Companies

A public limited company is a type of public company under United Kingdom company law which can offer its shares of stock to the general public.

Community Interest Company

A community interest company is a type of company introduced by the United Kingdom government in 2005 under the Companies Act 2004, designed for social enterprises that want to use their profits and assets for the public good

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Types of Companies in The US

Partnerships 

A partnership is a formal arrangement in which two or more parties cooperate to manage and operate a business. The parties involved are responsible for all the business activity including the profits and liabilities

Sole Proprietor

A sole proprietorship is a type of enterprise owned and run by one person. lt is also known as a sole tradership, individual entrepreneurship or proprietorship. Sole propretors are the easiest and simplest way to start a business

Corporations 

Corporations are legal entities that are separate and distinct from their owners and provide the same rights and responsibilities as a person

Limited Liability Companies

A Limited liability Company is a business entity that protects individuals from being liable for the company’s financial losses and debt liabilities

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