Why Do Companies Exist?
Companies exist to provide goods or services to consumers, generate
profit for owners and shareholders, and create
employment opportunities. They also contribute to the
economy by fostering innovation and competition.
How Are Companies Formed?
The formation of a company involves several legal steps, starting with the creation of a
business plan and objectives. The process generally includes registering the company name, obtaining necessary licenses, and fulfilling specific regulatory requirements. Initial
capital needs to be raised through investments or loans.
Sole Proprietorship: Owned by one individual, easy to set up, but offers no liability protection.
Partnership: Owned by two or more individuals who share profits and liabilities.
Corporation: A separate legal entity, providing limited liability to its owners but subject to more regulations.
Limited Liability Company (LLC): Offers liability protection with fewer regulations than a corporation.
Cooperative: Owned and operated by a group of individuals for their mutual benefit.