Company

Companies

Company A companyis a legally recognized organization that makes, buys and sells goods or provides services for a profit.

Once a company is registered under the Companies Act it must comply with the act and it becomes a separate legal entity. This means that it has its own legal existence, separate from that of the owners. A new company is like an empty box. There is nothing in it at first and anything that goes into it must go out again at some time. A company is not the owner - it is a separate entity. If the owners or shareholders put money into the company the company has a legal obligation to pay it back.

The owner puts money into the company.

The company has an obligation to pay money back to the owner

Proprietorship or Owner's Equity

Proprietorship Proprietorshipis the amount of the owner's interest or investment in the business."

When an owner or a group of owners want to start a business they often use some of their own money to do this. This money is called Proprietorship. Proprietorship can also be called Owner's Equity or Stockholder's Equity. As

mentioned above this money must be paid back to the owners one day. It is money the company owes to the owners. Owners can also contribute other assets such as vehicles, buildings and land to the company

Assets

Assets Assets represent everything of value that a business owns

In order to know how well an organization is doing financially, accountants examine the value of the things it owns. Even though a company may not have much cash, it may still be a strong business if it owns a lot of things that can be sold for money.

Дата добавления: 2014-12-23