Company

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For other uses, see Company (disambiguation).

A company is an association or collection of individuals, whether natural persons, legal persons, or a mixture of both. Company members share a common purpose and unite in order to focus their various talents and organize their collectively available skills or resources to achieve specific, declared goals. Companies take various forms such as:

A company or association of persons can be created at law as legal person so that the company in itself can accept Limited liability for civil responsibility and taxation incurred as members perform (or fail) to discharge their duty within the publicly declared "birth certificate" or published policy.

Because companies are legal persons, they also may associate and register themselves as companies – often known as a corporate group. When the company closes it may need a "death certificate" to avoid further legal obligations.

Meanings and definitions[edit]

A company can be defined as an "artificial person", invisible, intangible, created by or under law, with a discrete legal entity, perpetual succession and a common seal.[citation needed] It is not affected by the death, insanity or insolvency of an individual member.

Etymology[edit]

The English word company has its origins in the Old French military term compaignie (first recorded in 1150), meaning a "body of soldiers",[1] and originally from the Late Latin word companio "companion, one who eats bread [pane] with you", first attested in the Lex Salica as a calque of the Germanic expression *gahlaibo (literally, "with bread"), related to Old High German galeipo "companion" and Gothic gahlaiba "messmate". By 1303, the word referred to trade guilds. Usage of company to mean "business association" was first recorded in 1553,[citation needed] and the abbreviation "co." dates from 1769. (French uses the equivalent abbreviation cie.)

United States[edit]

In the United States, 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".[2] In the US, a company is not necessarily a corporation.[3]

United Kingdom[edit]

In English law and other legal jurisdictions based upon it a company is a body corporate or corporation company registered under the Companies Acts or similar legislation.[4] Common forms include:

In Britain 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.

Types[edit]

For a country-by-country listing, see Types of business entity.
  • A company limited by guarantee. 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 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."[2] This type of company is common in England and many English-speaking countries. A company limited by shares may be a
  • 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.[5]
  • 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.[2] 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 must be "dissolved upon the death or bankruptcy of a member".[6]
  • 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 doctrine of veil of incorporation does not apply.

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.
  • Charter corporations. Before the passing of modern companies legislation, these were the only types of companies. Now they are relatively rare, except for very old companies that still survive (of which there are still many, 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).
  • Statutory Companies. Relatively rare today, certain companies have been formed by a private statute passed in the relevant jurisdiction.

Note that "Ltd after the company's name signifies limited company, and PLC (public limited company) indicates that its shares are widely held."[citation needed]

In legal parlance, the owners of a company are normally referred to as the "members". In a company limited or unlimited by shares (formed or incorporated with a share capital), this will be the shareholders. In a company limited by guarantee, this will be the guarantors. Some offshore jurisdictions have created special forms of offshore company in a bid to attract business for their jurisdictions. Examples include "segregated portfolio companies" and restricted purpose companies.

There are however, many, many sub-categories of types of company that can be formed in various jurisdictions in the world.

Companies are also sometimes distinguished for legal and regulatory purposes between public companies and private companies. Public companies are companies whose shares can be publicly traded, often (although not always) on a stock exchange which imposes listing requirements/Listing Rules as to the issued shares, the trading of shares and future issue of shares to help bolster the reputation of the exchange or particular market of an exchange. Private companies do not have publicly traded shares, and often contain restrictions on transfers of shares. In some jurisdictions private companies have maximum numbers of shareholders.

A parent company is a company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors; the second company being deemed as a subsidiary of the parent company. The definition of a parent company differs by jurisdiction, with the definition normally being defined by way of laws dealing with companies in that jurisdiction.

Largest companies[edit]

The following table illustrates companies by size and country of origin. All the values have been publicly revealed in the respective company annual report and are recorded as of 2014.

Company name Industry Sales
(US$ billion)
United States Walmart Retail 485,651
Netherlands United Kingdom Royal Dutch Shell Oil and Gas 421,105
United States Goldman Sachs Financial Services 460,000
United States Exxon Mobil Oil and Gas 453,100
United Kingdom Barclays Financial Services 454,900
China Sinopec Oil and Gas 411,700
United Kingdom BP Oil and Gas 370,900
Saudi Arabia Saudi Aramco Oil and Gas 356,000
China China National Petroleum Oil and Gas 328,500
Germany Deutsche Bank Financial Services 320,000
Netherlands Switzerland Vitol Commodities 303,000
China State Grid Corporation of China Electric Power 265,000
Germany Volkswagen Automotive 254,000
United States Chevron Oil and Gas 242,000
France Total Oil and Gas 240,000
Japan Toyota Automotive 222,000
Switzerland Glencore Commodities 214,000
Netherlands ING Financial Services 197,900
South Korea Samsung Computers 187,000
Germany E.ON Electric Power 174,000
Japan Japan Post Holdings Conglomerate 168,000
Italy Eni Oil and Gas 167,000
United States Phillips 66 Oil and Gas 166,000
Russia Gazprom Oil and Gas 164,000
United States Berkshire Hathaway Conglomerate 162,000
United States Apple Computers 156,000
United States General Motors Automotive 152,000
United States Bank of America Financial Services 150,480
Germany Daimler Automotive 150,000
China Industrial & Commercial Bank of China Financial Services 148,700
United States General Electric Conglomerate 147,000
United States Citigroup Financial Services 146,560
United Kingdom HSBC Financial Services 146,100
Brazil Petrobras Oil and Gas 144,000
Germany Allianz Financial Services 140,000
United States Enron Conglomerate 137,718
China Agricultural Bank of China Financial Services 136,400
United States Cargill Commodities 136,000
United States Ford Automotive 134,000
Russia Lukoil Oil and Gas 134,000
Japan JX Holdings Oil and Gas 130,000
France GDF Suez Electric Power 128,000
United States AT&T Telecommunications 127,000
Japan Nippon Telegraph & Telephone Telecommunications 127,000
France BNP Paribas Financial Services 126,000
United States Valero Energy Oil and Gas 126,000
Venezuela PDVSA Oil and Gas 125,000
United States McKesson Healthcare 123,000
Switzerland Trafigura Commodities 122,000
China China Construction Bank Financial Services 121,300
United States HP (Hewlett-Packard) Computers 120,000
France AXA Financial Services 118,000
Japan Hitachi Computers 117,000
United States JP Morgan Financial Services 116,400
Taiwan Foxconn Computers 114,000
Japan Nissan Automotive 114,000
United Kingdom Tesco Retail 114,000
United States AIG Financial Services 113,190
Norway Statoil Oil and Gas 112,000
Mexico Pemex Oil and Gas 111,000
United States Koch Industries Conglomerate 110,000
United States Verizon Telecommunications 110,000
Spain Santander Financial Services 109,700
Italy Exor Conglomerate 109,000
United Kingdom Royal Bank Scotland Financial Services 108,500
France Societe Generale Financial Services 108,000
United States Cardinal Health Healthcare 107,000
United States CVS Caremark Retail 107,000
United States IBM Computers 107,000
Switzerland UBS Financial Services 105,590
China Bank of China Financial Services 105,100
France Carrefour Retail 105,000
Italy Assicurazioni Generali Financial Services 104,000
Germany BASF Manufacturing 104,000
Kuwait Kuwait Petroleum Oil and Gas 104,000
Switzerland Credit Suisse Financial Services 103,720
Italy Enel Electric Power 103,000
United States United Health Healthcare 102,000
Germany Siemens Conglomerate 101,000
Switzerland Nestle Agribusiness 100,000
India Tata Conglomerate 100,000

See also[edit]

References[edit]

  1. ^ Harper, Douglas. "company". Online Etymology Dictionary. 
  2. ^ a b c Black's Law and lee Dictionary. Second Pocket Edition. Bryan A. Garner, editor. West. 2001.
  3. ^ http://legal-dictionary.thefreedictionary.com/company
  4. ^ Companies Act 2006, Section 1
  5. ^ Companies Act 2006
  6. ^ Definition of 'Limited Liability Company – LLC'

Further reading[edit]