Company

WorldBrand briefing

AI supplement

Original synthesis to sit alongside the encyclopedia article below. Not part of Wikipedia; verify facts on Wikipedia when precision matters.

A company is a standardized legal business entity formed to conduct commercial, industrial, or professional activities, with distinct legal status separate from its owners or operators. It is a core organizational form of modern global economy.

Key moments

11th centuryEarly merchant guilds and trading partnerships emerged in medieval Europe as precursors to modern companies
1600British East India Company, one of the first formal joint-stock companies, was founded
1844UK Joint Stock Companies Act established standardized registration and limited liability rules for corporate entities
1930s–1950sLarge multinational corporations rose rapidly following World War II
21st centuryRemote-first and global startup company models became mainstream

Historical Evolution of Corporate Legal Status

The concept of the company evolved from medieval trade associations, which allowed groups to pool resources for long-distance commerce. Over centuries, legal systems formalized the separate legal personality of companies, limiting owners' personal liability for business debts. Key legislative shifts, such as the UK's 1844 act, democratized access to corporate status, moving away from rare royal charters to general registration frameworks.

Global Diversity of Corporate Structures

Different jurisdictions have developed distinct legal classifications for companies: for example, the US limited liability company (LLC) offers flexible pass-through taxation, Germany's GmbH combines limited liability with private ownership flexibility, and the UK's PLC designates publicly traded firms. These variations reflect local business needs, legal traditions, and regulatory priorities, enabling enterprises to choose structures aligned with their size, funding needs, and operational goals.

Societal and Economic Role

Companies are foundational to modern economies, driving innovation, employment, and wealth creation. However, they also face widespread scrutiny over environmental impact, labor practices, and corporate governance, sparking ongoing debates about mandatory corporate social responsibility and stricter regulatory oversight.

A company is a legal entity representing an association of legal persons with a shared objective, such as generating profit or benefiting society. Depending on the jurisdiction, companies can take on various forms, including voluntary associations, nonprofit organizations, business entities, financial entities, banks, and educational institutions. Companies have evolved to share common legal features, such as a separate legal personality, limited liability, transferable shares, investor ownership, and a managerial hierarchy.[1]

The term "company" may or may not be synonymous with corporation, partnership, firm, or society. Companies are governed by company law, also referred to as corporate law in many regions. Incorporated companies are created through state registration,[1] whereas unincorporated companies are not.

History

English law recognised long ago that a corporation would have separate legal personality, also known as corporate personality or juridical personhood. In 1612, Sir Edward Coke remarked in the Case of Sutton's Hospital,[2]"the Corporation itself is onely in abstracto, and resteth onely in intendment and consideration of the Law; for a Corporation aggregate of many is invisible, immortal, & resteth only in intendment and consideration of the Law; and therefore it cannot have predecessor nor successor. They may not commit treason, nor be outlawed, nor excommunicate, for they have no souls, neither can they appear in person, but by Attorney. A Corporation aggregate of many cannot do fealty, for an invisible body cannot be in person, nor can swear, it is not subject to imbecilities, or death of the natural, body, and divers other cases."In 1776, Adam Smith wrote in the Wealth of Nations that mass corporate activity could not match private entrepreneurship, because people in charge of "other people's money" would not exercise as much care as they would with their own.[3]

In 1843, William Gladstone took chairmanship of a Parliamentary Committee on Joint Stock Companies, which led to the Joint Stock Companies Act 1844.[4]

United States

At the end of the 19th century in the United States, the law allowed for the concentration of wealth and power in the hands of a few people, or a single person. In response, the Sherman Antitrust Act of 1890 was created to break up big business conglomerates, and the Clayton Act of 1914 gave the government power to halt mergers and acquisitions that could damage the public interest. By the end of the First World War, it was increasingly perceived that ordinary people had little voice compared to the "financial oligarchy" of bankers and industrial magnates.[5] In particular, employees lacked voice compared to shareholders, but plans for a post-war "industrial democracy" (giving employees votes for investing their labor) did not become widespread.[6]

The Wall Street crash of 1929 saw the total collapse of stock market values, as shareholders realized that corporations had become overpriced. They sold shares en masse, meaning many companies found it hard to get finance. The result was that thousands of businesses were forced to close, and they laid off workers. Because workers had less money to spend, businesses received less income, leading to more closures and lay-offs. This downward spiral began the Great Depression.[7]

References

John D. Turner. Three centuries of corporate governance in the United Kingdom The Economic History Review, 2024-01-30^

Case of Sutton's Hospital (1612) 10 Rep 32; 77 Eng Rep 960, 973^

A Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776) Book V, ch 1, para 107^

Report of the Parliamentary Committee on Joint Stock Companies (1844) British Parliamentary Papers vol VII^

See L Brandeis, Other People's Money And How the Bankers Use It (1914)^

The Massachusetts governor Calvin Coolidge passed "An Act to enable manufacturing corporations to provide for the representation of their employees on the board of directors" (April 3, 1919) Chap. 0070. This was a measure that allowed corporations to voluntarily give workers votes. It remains in the Massachusetts Laws, General Laws, Part I Administration of the Government, Title XII Corporations, ch 156 Business Corporations, §23^

AA Berle, 'For Whom Corporate Managers Are Trustees: A Note' (1932) 45(8) Harvard Law Review 1365, 1372. See also the Berle-Dodd debate.^

A. A. Berle. Corporate Powers as Powers in Trust Harvard Law Review, May 1931^

e.g. AP Smith Manufacturing Co v Barlow, 13 N.J. 145, 98 A.2d 581, 39 ALR 2d 1179 (1953) and Shlensky v Wrigley, 237 N.E. 2d 776 (Ill. App. 1968)^

Compare a definition of a corporation: "Perhaps the best definition of a corporation was given by Chief Justice John Marshall in a famous Supreme Court decision in 1819. A corporation, he said, 'is an artificial person, invisible, intangible, and existing only in contemplation of the law.' In other words, a corporation [...] is an artificial person, created by law, with most of the legal rights of a real person." William M. Pride, Robert J. Hughes, Jack R. Kapoor. Business Cengage Learning, 1985, retrieved 20 Apr 2019^

12th century:^

Compare: - '[...] the word having been used in reference to trade guilds from late 14c.'^

Compare: - 'From late 14c. as "a number of persons united to perform or carry out anything jointly," which developed a commercial sense of "business association" by 1550s, the word having been used in reference to trade guilds from late 14c.'^

Compare: - "1759 Compl. Let.-writer (ed. 6) London: Printed for Stanley Crowder, and Co."^

Compare: - 'by 1670s as an abbreviation of company in the business sense, indicating the partners in the firm whose names do not appear in its name. Hence and co. to indicate "the rest" of any group (1757)'.^

Companies Act 2006 legislation.gov.uk, retrieved March 15, 2020^

Black's Law Dictionary. Second Pocket Edition. Bryan A. Garner, editor. West. 2001.^

Incorporation and names Companies House, 15 July 2024, retrieved 13 August 2025^

Jason Fernando. What Is an LLC? Limited Liability Company Structure and Benefits Defined Investopedia, 2026-02-09, retrieved 2026-03-05^

Company

WorldBrand briefing

Historical Evolution of Corporate Legal Status

Global Diversity of Corporate Structures

Societal and Economic Role

History

United States

Terminology and definition

Etymology

Semantics and usage

Nomenclature

Types

See also

Further reading

External links

References