Company vs. Business: What’s the Difference?

The main difference between a company and a business is that a company is a specific legal entity that is formed under the laws of a particular jurisdiction, while a business refers to an organization or individual engaged in commercial, industrial, or professional activities.

Before we move to more differences, let’s first understand Company and Business:

  • Company: A company is a legal entity that is separate from its owners and is formed through the process of incorporation.
  • Business: A business refers to any organization or entity that is involved in commercial, industrial, or professional activities.

Now, let’s get to Company vs Business:

Major differences between Company and Business

Company Business
A company is considered a distinct legal entity, meaning that it is liable for its debts and obligations separately from its owners. In a business, the owners are typically personally liable for the debts and obligations of the business.
Companies often have more complex organizational structures than businesses, with layers of management, shareholders, and directors. Businesses are typically smaller, and the owner(s) may handle most of the day-to-day operations.
To set up a company, one needs to go through a legal process of incorporation and registration. Starting a business can be as simple as starting to work in a certain field.
A company may have more stringent regulatory and compliance requirements than a business. A business may have fewer regulatory requirements, but it still needs to comply with basic legal standards and registration for tax purposes.
The term “business” is broader and encompasses more types of entities than “company,” which is a specific corporate structure. A company can only be a corporation.

So, these are the main differences between the entities.

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