company vs business
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1,111,111 TRP = 11,111 USD
1,111,111 TRP = 11,111 USD
1,111,111 TRP = 11,111 USD
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The key difference between a business and a company is that a company is a separate legal entity, whereas a business is simply an individual trading under a business name. Being a separate legal entity affords a company with limited liability, as well as added legal responsibilities.
While often used interchangeably, “company” and “business” have distinct meanings.
Company
1. *Formal structure*: A company is a formal, legally recognized entity, often registered with the government.
2. *Separate entity*: A company is considered a separate entity from its owners, with its own rights, liabilities, and taxes.
3. *Ownership structure*: Companies can have various ownership structures, such as shareholders, partnerships, or sole ownership.
4. *Limited liability*: Companies often provide limited liability protection for their owners, shielding their personal assets.
Business
1. *Broader definition*: A business is a broader term that encompasses any organization or entity that engages in commercial, industrial, or professional activities.
2. *Informal or formal*: A business can be formal, like a company, or informal, like a sole proprietorship or a small, unregistered venture.
3. *Focus on operations*: A business focuses on the day-to-day operations, management, and activities that generate revenue.
4. *No separate entity*: A business may not be a separate entity from its owners, and its liabilities may be tied to the owners’ personal assets.
Key differences
1. *Structure*: Companies have a formal structure, while businesses can be informal or formal.
2. *Liability*: Companies provide limited liability protection, while businesses may not.
3. *Ownership*: Companies have a defined ownership structure, while businesses can have various ownership arrangements.
4. *Focus*: Companies focus on the entity itself, while businesses focus on operations and revenue generation.
In summary, all companies are businesses, but not all businesses are companies.