Definitions Of Company On The Web

Definitions of company on the Web: • • • • • • •

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an institution created to conduct business; "he only invests in large wellestablished companies"; "he started the company in his garage" small military unit; usually two or three platoons the state of being with someone; "he missed their company"; "he enjoyed the society of his friends" organization of performers and associated personnel (especially theatrical); "the traveling company all stayed at the same hotel" caller: a social or business visitor; "the room was a mess because he hadn't expected company" a social gathering of guests or companions; "the house was filled with company when I arrived" party: a band of people associated temporarily in some activity; "they organized a party to search for food"; "the company of cooks walked into the kitchen" ship's company: crew of a ship including the officers; the whole force or personnel of a ship be a companion to somebody a unit of firefighters including their equipment; "a hook-and-ladder company"

Generally, a company is a form of business organization. The precise definition varies. In the United States, a company is a corporation—or, less commonly, an association, partnership, or union—that carries on an industrial enterprise."[1] Generally, 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."[1] In English law, and therefore in the Commonwealth realms, a company is a form of body corporate or corporation, generally registered under the Companies Acts or similar legislation. It does not include a partnership or any other unincorporated group of persons. Contents

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1 Etymology

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2 History 3 Types

Etymology The word company is traced from a 1150 A.D. O.Fr. term compaignie or "body of soldiers" and from L.L. companio (companion). The word's meaning of "subdivision of an infantry regiment" is from 1590. The use of the word in a sense of "business association" was first recorded 1553, having earlier been used in reference to trade guilds (1303). The abbreviation co. dates from 1769.[2] In short a company can be defined as an artificial person having a separate legal entity, perpetual succession and a common seal.It is not affected by the death,lunacy or insolvency of a member. History According to one source, "it may be formed by Act of Parliament, by Royal Charter, or by registration under company law (referred to as a limited liability or joint-stock company)."[3] In the United Kingdom, the main regulating laws are the Companies Act 1985 and the Companies Act 2006.[3] Reportedly, "a company registered under this Act has limited liability: its owners (the shareholders) have no financial liability in the event of winding up the affairs of the company, but they might lose the money already invested in it".[3] In the USA, companies are registered in a particular state —Delaware being especially favoured—and become Incorporated (Inc). [3] In North America, two of the earliest companies were The London Company (also called the Charter of the Virginia Company of London)—a English joint stock company established by royal charter by James I of England on April 10, 1606 with the purpose of establishing colonial settlements in North America—and Plymouth Company that was granted an identical charter as part of the Virginia Company. The London Company was responsible for establishing the Jamestown Settlement, the first permanent English settlement in the present United States in 1607, and in the process of sending additional supplies, inadvertently settled the Somers Isles, alias Bermuda, the oldest-remaining English colony, in 1609. Types For a country-by-country listing, see Types of business entity. There are various types of company that can be formed in different jurisdictions, but the most common forms of company (generally formed by registration under applicable companies legislation) are: •

A company limited by guarantee. Commonly used where companies are formed for non-commercial purposes, such as clubs or charities. The

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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 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."[1] This type of company is common in England. 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.[4] 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.[1] An unlimited liability company. A company where the liability of members for the debts of the company are unlimited. Today these are only seen in rare and unusual circumstances.

Less commonly seen types of companies are: •

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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 fulfil 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, and PLC (public limited company) indicates that its shares are widely held."[3] In legal parlance, the owners of a company are normally referred to as the "members". In a company limited by shares, 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 regulated stock 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.

KINDS OF COMPANIES The type of entity forms the basis of equity accounting. This section covers the major forms a company can take. Proprietorships If a company has only one owner and has done nothing else to organize his company, than it is a proprietorship (P). For many companies, this is the best form for them to take. There are three accounts in the Equity Section for P's: 1. Owner's Capital 2. Draws 3. Current Profit (Loss) Current Profit (Loss) comes from the Income Statement. This is year to date net income. Draws are the money the owner takes out of the company. Owners do not take out wages. It is a good idea, however, for owners to budget themselves periodic payments in lieu of wages. Both of these accounts are closed to the Capital account at the end of the year. Any money that owners invest in the company can go to two areas: capital or loans payable. For P's there are little tax consequences for investing money either way. P's get hit with two taxes: the income tax and the selfemployment tax. P's taxes are determined on the Schedule C on the personal 1040 tax return. Net income is adjusted for allowable expense deductions. Taxable net income from the

business is transferred to the front page of the 1040 and included in the rest of personal income from other sources. If the business lost money, then that amount gets transferred, too. Self-employment taxes correspond to the payroll taxes (social security and medicare) on employees. In payroll accounting, the business pays half and the employee pays half of these taxes. But for P's the owner is both. Hence, the selfemployment tax. This is the combination of employer and employee payments. The rate is 15.3%. This rate is computed on Schedule SE. The amount is transferred to page 2 of the 1040. Partnerships Partnerships (Ptnr) are like Proprietorships. Ptnr's have more than one owner. Partners should always have a partner agreement to form a business. This is a practical requirement, not necessarily a legal one. Each partner needs his own capital and drawing accounts. These accounts represent his ownership position in the company. Partners may take wages from the company. These enter the Partnership tax return as "Guaranteed Payments". They are deductible to the partnership company and income to the individual partner. The partner pays self employment tax on these. The partners also pay self employment taxes on their portion of the total net income of the partnership. Income tax returns are filed thru Form 1065. This form is similar to the tax return for the Sub S Corporation discussed below. Part of this return is a Schedule K. This shows the total income taxes, credits, and other taxable items that flow out to the partner's individual income tax returns. Each partner gets a Schedule K-1. This shows his/hers' share of the Schedule K items. There is a special kind of partnerships called limited partnerships. These have to have at least one general partner. General partners are fully liable for the business. Limited partners can only loose their capital investments. Limited partners have no say in the running of the business. They just share in the profits. Limited partners' share of net income is not subject to self employment tax. If they do work for the business, then their compensation for that is. Partnerships are automatically dissolved upon the death of partners with 50% or more of ownership.

Corporations (regular) Corporations are separate "persons" under the law. They can sue and be sued. They are registered with the state. They file income tax returns like a partnership (using Form 1120) but unlike a partnership, they pay income taxes on their net income. Shareholders control the corporation to the extent that they own shares of voting stock. Corporations may issue different classifications of stock. Common stock is the voting stock. Preferred stock generally is not. Since corporations are separate "persons" shareholders of the corporation they shield shareholders from legal liability. If a lawsuit drives a company bankrupt, then the shareholders will loose their investment in the company but no more. In order for plaintiffs to go after the owners of the company, they have to sue them individually. In the equity section the corporation shows "Common Stock" with an amount. Depending on how it is organized the stock may be shown at par or no-par value. If the company has set a par value for the stock, then any money investors put in over that amount is in another line just under "Common Stock" called "Contributed Capital in Exess of Par". If a company buys back some of its own stock, then it is debited to "Treasury Stock". This is another line item in the equity section. As corporations earn profits, "Retained Earnings" build up. If the company racks up losses then call the account "Retained Deficits". Corporations distribute profits to shareholders by declaring dividends. The total amount of money it decides it can pay is divided by the number of shares to determine the dividend per share. The money is paid to shareholders and subtracted from retained earnings. Form 1120 income tax returns don't issue K-1's like partnerships and Sub-S Corporations. They pay taxes themselves. Shareholders report their dividend income in their 1040's on Schedule B. Corporations must be sure to issue 1099-DIV to the shareholders each year. Sub S Corporations Subchapter S refers to a section of the IRS Code. Usually states do not require any special registration beyond the normal corporate licensing for Subchapter S Corporations. Subchapter S was adopted by Congress in the 1950's to help small businesses. To qualify for Sub S status with the IRS, the corporation must file Form 2553, have

only one class of stock, and only 75 or fewer shareholders. Distribution of profits must be based on ownership. Further, at least some of the owners must be active in the business. That means the IRS will look for "Officers' Wages" on the 1120S tax return. There had better be some and it had better be reasonable. It there is not, then that can be a huge audit flag. Small businesses jump through all of these hoops to gain one big advantage: dividend distributions are not taxable! Shareholders of regular corporations end up having to pay taxes twice: • •

at the corporate level, when their corporation pays taxes on its annual net income and at the personal level, when they have to pay taxes on the part of net income is distributed to them

Shareholders of Sub S corporations pay taxes only once: when they have to transfer the net income amounts of their K1's into the Schedule E of their 1040's. Shareholders do not pay self-employment taxes. Very important point! The payroll taxes are paid through deductions on "Officers' Wages". The corporation pays the employer's share. This substitutes for self-employment taxes. This is why shareholders want their wages to be as low as possible and their dividend distributions to be as high as possible. The IRS wants the reverse. The question reduces to what is reasonable. Limited Liability Company Limited Liability Companies appeared in the 1990's. They are like Sub S Corporations but with more flexibility. They file Form 1065 (or Schedule C if only one owner). They can elect to be taxed as a corporation. They then file Form 1120. Income can be distributed on a different basis than ownership. For example, if two partners own 50-50 of the business but agree that one partner should get 60% of the profits, they can agree to do that. Owners are referred to as "members". The choice of what kind of entity the company will be is one of the most crucial choices entrepreneurs can make

Kinds of Company Thefts and How to Avoid Them

Even before the financial overturn happened in Wall Street this year, there had already been several losses that American companies have been reporting about. These losses are no joke and pose greater risks because of the figures that are not just on the level of thousands but of billions and a timeframe of a year. If today’s financial problem has been rooted to a more complicated issues on economic policies and other international investment disparagements, the older problem is rooted on the premise of internal embezzlement of none other than the companies’ employees. Yes. Sad to accept but American businesses have been ailing for quite some 40 billion dollars of losses caused by company theft and other embezzlements. Though this problem might seem to be a parody of the employers or a complete exaggeration to front the government of tax evasion, this has never erased the fact that the problem in employment theft is a reality and is really destructive. In a survey posted at Inquest’s website, 30% of failures in the businesses in the land is said to be the end product of large and small scale company theft and dishonesty. Almost all types of businesses in America experience the same fate. Most of the time, companies with most losses are those which has something to do with merchandising and direct selling. Critically, the country is loosing honest employees or is just being tolerated by ignorance of the employers. Almost all establishments in the US these days are already equipped with high end surveillance systems. Almost every corner of the office, store, or even outside premise of a company is installed with cameras that monitors every move of employees and clients alike. These systems are said to have been installed in order to avoid any theft that can happen both internally and externally. However, surveillance systems are not the only way to solve this classic problem. Same website suggested that if all companies take it by heart to conduct background checks on all their employees and applicants, the number of incidents can be lowered. However, how can an employee rob a company? What are the kinds or thefts that an employee can do to a particularly company? Basically, there are so many ways in which an employee can take advantage of the company illegally. 1. Falsifying Receipts – Most of the time, receipts are not computer generated. These are often hand printed. Dishonest clerks can forge receipts and charge a client of a higher price and have the difference kept in the employee’s pocket.

2. Stealing Merchandise – this is the most common theft that can happen in a store. Often, stolen products are those small and easy to keep ones. There are so many ways on how an employee may steal merchandise out of the store. 3. Cash Theft – this happens mostly to cashiers or those employees that receives payments. Especially to those that has no specific recording system, services or products can be sold without undergoing on a process. 4. Bookkeeping Fraud – receipts are very important in auditing. So there are times that in order for employees to get something from the company illegally, they would hide in receipts and declare a forged amount on the record. 5. Fake Purchases – employees may intentionally buy things and had it reflected on the record but the purchase did not actually happened. Or they can create imaginary suppliers which are actually just them. Background check reports basically lay off a limit to these types of employees before they can be accepted to the company. The past records of a particular employee will tell you whether he/she is worthy of trust or not. Pre-employment checks are an effective way to save a company’s future. This is a solution that literally said as saving billions with 30 bucks