What is a Company?


  • A company is a business or association usually formed to manufacture or supply products or services for profit. A company can be a proprietorship, partnership, or corporation. A corporation is set up in accordance with government regulations and limits the liability of its owners. In a proprietorship or partnership the owners share the profits or losses of the business in which they have all invested, and are liable for all debts.

    A corporation is a company legally separate from the stockholders who own it and the managers who run it. Corporations can be privately or publicly held. A public corporation offers these advantages: (1) Limited liability, which means that the stockholders’ responsibility for the company’s debts is limited to their investment in its stock; (2) long life, which means a corporation continues to exist even when its stockholders or managers change; (3) easily transferable ownership, which means that stockholders can easily sell their ownership shares in the stock market. Private corporations offer advantages 1 & 2, and also issue stock, which can only be sold directly to individuals or other corporations. Private corporations are not subject to the stingent disclosure requirements impossed upon public corporations.

    Vocabulary

    Company: A business or association usually formed to manufacture or supply products or services for profit.

    Corporation: A company legally separate from stockholders who own it and the managers who run it.

    Entrepreneur: A person who organizes, operates, and assumes the risk for a business venture.

    Partnership: A company owned and managed by two or more people who share its profits or losses. A partnership is not separate from its owners, who are liable for the company’s debts.

    Private corporation: A corporation that doesn’t sell shares to the public. You Can’t buy shares of a private company in the stock market.

    Public corporation: The stock of a public company is owned and traded by individual and institutional investors. In contrast, the stock is held by company founders, employees, and sometimes venture capitalists.

    Sole-proprietorship: A company owned and run by one individual who receives its profits or bears its losses. A proprietorship is not separate from its owner, who is liable for the company debts.

    Assignment

    Below you will find a link to the "Chocolate Company" which is a quick story about the start of Hershey's chocolate company.  Please read the document and then copy and paste the questions below in a Word document.  Answer the questions in the Word document, save it, print it, and hand it in.

    Questions to copy, paste, and answer in a Word document:

    Based on your reading about Hershey, answer the following.

    1. Why did Milton think his chocolate candy would sell?

    2. Where did he get the money to start making chocolate?

    3. What type of company did Hershey have before he incorporated?

    4. What benefits do you think Milton gained from forming a corporation?

    5. Why would people today want to invest in the Hershey Company?



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