COMPANY

Mercantile Association or industry funded to start or carry out constructions, businesses or important projects. Sometimes the term “business” is used indistinctly to refer to a company.

It may occur that the terms business and company are used indistinctly in some occasions, although they have different definitions; a business is an activity done to gain a profit.

For example, a person purchases a product with the intention of selling it afterwards at a higher price, this way he will obtain a profit, made from the difference between what it cost him to buy it and what he got in return of his sale. If the business is carried out repeatedly, with localization and employees to help out with the business; in that case that business is now a company. companies can have shareholders.

A company is an administrated group of human resources, materials and financial resources that, by the application of techniques and technologies, they have the purpose to obtain utilities by offering its products and services to one or more markets. The types of entities are regulated upon each country´s laws, so they may differ from one to another. We may find:

  • A company limited by guarantee: companies formed for non-commercial purposes, where its members guarantee the payment of certain amounts of money if the company goes into insolvent liquidation, but otherwise they do not have any economic right in relation with the company. Used primarily for non-profit organizations that requires legal personality. Does not usually have shareholders but instead has members who act as guarantors.
  • A Limited liability company (LLC): a company that is characterized by limited liability, management by members or managers, and limitations on ownership transfer. It may be publicly traded company (not the same as public owned company; they offer their securities for sale to the general public) or a privately held company (do not offer their shares to the general public).
  • An Unlimited company (UC), with or without share capital: a hybrid entity where the liability of members or shareholders for the debts of the company are not limited.
  • Sole proprietorship: consists of a single owner.
  • General partnership: partnership in which all the partners are jointly liable for the debts of the partnership.
  • Limited Partnership (LP): a partnership where at least one partner has unlimited liability, and one or more partners have limited liability.
  • Limited liability Partnership (LLP): a partnership where a partner´s liability for the debts of the partnership is limited, except in the case of liability for acts of professional negligence or malpractice. In some states, LLPs may only be formed for purposes of practicing a licensed profession, typically attorneys, accountants and architects. This is often the only form of limited partnership allowed for law firms (as opposed to general partnerships).
  • Limited liability Limited Partnership (LLLP): in some states, it is a combination between LP and LLP.
  • Professional Limited liability company (PLLC): states allow the liability limitation only applies to the business side, such as creditors of the company, as opposed to the service side offered by the professional. This is meant to maintain the higher ethical standards that these professionals have committed themselves to by becoming licensed in their profession and not immune to malpractice suits.
  • Corporation, Incorporated (Corp., Inc.): Some states that allow the use of «company» prohibit the use of «and company», «and Co.», «& company» or «& Co.».
  • Professional Corporations (PC): corporate entities for which many corporation statutes make special provision, regulating the use of the corporate form by licensed professionals.
  • Doing business As (DBA): a business name used by a person or entity that is different from the person´s or entity´s true name