Compare the Difference Between Similar Terms

Difference Between

Home / Business / Management / Strategic Management / Organization Structure / Difference Between Company and Firm

Difference Between Company and Firm

May 2, 2011 Posted by koshal

Company vs Firm
 

Getting to know the difference between company and firm is useful as the words firm and company are used interchangeably by people and they talk of these entities in the same breath. It is common for people to talk about an accounting company as an accounting firm or a consultancy service company as a consulting firm. However, are these terms equivalent or is there any difference between these two terms, firm and company? This article will explain the features of the entities called firm and company to see if they are same or have significant differences.

What is a Company?

In modern times, the use of the word firm has become outdated and is restricted to legal, consultancy, and accountancy businesses. For all other businesses, the word company is being preferred. Even in the professions mentioned, there are more and more people who today prefer the use of the word company against their names instead of firm. Unlike a firm, a company has been registered and has shareholders. Here is the definition given by the Oxford dictionary to explain the term company. A company is “a commercial business.” This simple definition makes us understand that firm may refer to a particular type of business while company is the name used for businesses in general.

Difference Between Company and Firm

What is a Firm?

As far as the dictionary is concerned, the Longman dictionary says that a firm is usually a small company. If one goes by this definition, a firm is a type of company and the term is in effect a subset of the generic term company.

The definition given by the Oxford English dictionary for firm is as follows. According to the Oxford English dictionary, a firm is “a business concern, especially one involving a partnership of two or more people.”

In practice, a company could be a firm. A firm, irrespective of its size or area of operation is a business entity just like a company. Usually, the word firm is reserved for businesses providing services as is clear with the use of terms like accounting firms and consulting firms. However, there is no restriction on the usage of the word firm to be used with any company manufacturing products. There is a certain charm about the word firm that makes people adopt it to signify the business they are carrying. Somehow, the word connotes professionalism and secrecy that is not reflected by the word company. Furthermore, firms are generally sole proprietorship or a partnership firm.

Firm

What is the difference between Company and Firm?

• A firm and a company are not separate entities.

• A firm is a type of a company.

• The word firm was traditionally used for accounting and consulting companies and they are even today referred to as firms.

• Firms are either sole proprietorship or partnership whereas company is registered and has shareholders.

• One can certainly say firm is a subset of the term company.

• In practice, a company could be a firm.

Now, that this article has explained the difference between company and firm, it will be easier for you to distinguish between firm and company in the future.

 

Images Courtesy:

  1. Panorama Firm logo by Eniro (CC BY 3.0)

Related posts:

Difference Between Organization and Firm Difference Between Trust and Company Difference Between Facts and Evidence Difference Between Broad and Wide Difference Between Ordinary and ExtraordinaryDifference Between Ordinary and Extraordinary

Filed Under: Organization Structure, Words Tagged With: company, company definition, company meaning, company means, Firm, firm and company, firm definition, firm meaning, firm means, partnership firm, proprietorship

About the Author: koshal

Koshal is a graduate in Language Studies with a Master's Degree in Linguistics

Comments

  1. mayur says

    January 1, 2017 at 9:54 am

    Why corporation tax levied on company and tax on personal income on firms?

    Reply
    • Marc says

      October 21, 2018 at 2:25 pm

      The primary reason is that corporations are legal entities whilst firms are generally not in many tax jurisdictions. You cannot tax something that does not exist. The firm’s partners will still be taxed on the firm’s profits but via personal income tax.

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Request Article

Featured Posts

Difference Between Coronavirus and Cold Symptoms

Difference Between Coronavirus and Cold Symptoms

Difference Between Coronavirus and SARS

Difference Between Coronavirus and SARS

Difference Between Coronavirus and Influenza

Difference Between Coronavirus and Influenza

Difference Between Coronavirus and Covid 19

Difference Between Coronavirus and Covid 19

You May Like

What is the Difference Between Prochirality and Prostereoisomerism

What is the Difference Between Prochirality and Prostereoisomerism

Difference Between Hungry Jack’s and Burger King

Difference Between Mia and Mia 2

Difference Between Descriptive and Inferential Statistics

Difference Between Human Capital and Social Capital

Difference Between Human Capital and Social Capital

Latest Posts

  • What is the Difference Between Ankylosing Spondylitis and Cervical Spondylosis
  • What is the Difference Between PAC and PVC
  • What is the Difference Between Neuralgia and Neuritis
  • What is Difference Between Craniopharyngioma and Pituitary Adenoma
  • What is the Difference Between Hydrochlorothiazide and Chlorthalidone
  • What is the Difference Between Cauda Equina and Conus Medullaris Syndrome
  • Home
  • Vacancies
  • About
  • Request Article
  • Contact Us

Copyright © 2010-2018 Difference Between. All rights reserved. Terms of Use and Privacy Policy: Legal.