DEFINITION AND FEATURES OF A COMPANY

A company is a legal entity that is formed to conduct business activities, such as producing and selling goods or providing services, with the aim of making a profit. Companies can be either public or private, and they can be organized in various forms, such as sole proprietorships, partnerships, limited liability companies (LLCs), or corporations.

1. Legal entity: A company is a separate legal entity from its owners, which means it can own assets, enter into contracts, and sue or be sued in its own name.

2. Limited liability: Shareholders of a company are not personally liable for the debts or obligations of the company. Their liability is limited to the amount of money they have invested in the company.

3. Ownership: A company is owned by its shareholders, who have the right to vote on major decisions such as electing the board of directors and approving mergers and acquisitions.

4. Management: The day-to-day operations of a company are managed by a board of directors and executive officers who are elected by the shareholders.

5. Profit motive: The primary goal of a company is to make profits for its shareholders, and it does so by providing goods or services to customers at a price that is higher than the cost of production.

6. Perpetual existence: A company has a perpetual existence, which means it can continue to exist even if its shareholders or management changes over time.

7. Transferability of ownership: Shares in a company can be bought and sold freely, allowing shareholders to transfer their ownership in the company.