In the world of business and commerce, various terms are commonly used interchangeably. Corporate and company are one the many pairs that harbor similar meanings but have a very fine line of difference. A corporate body varies both in functionality and in liability distribution when compared to a company. When compared on the basis of legality and existence, the two terms widely vary from each other.
Company vs Corporate
The difference between a company and a corporate body is that a company usually is a broader and generalized term for a group of associated people who work for the same objective, whether it may be a small association recognized only in a zone or a district or else internationally recognized. A corporate body on the other hand is always referred to as a company with a larger workforce and more recognition throughout the world. A corporate is always a company but not all companies are corporate bodies.
A company’s one basic feature is its limited liability imposition on its owner/s. A company may limit its goals to maximum profit and utmost proficiency in commerce. A company can have more than one owner and also any of the owners can act as the legal body for the company or concern. When talking about LLC or limited liabilities companies, the owners are called their members.
A corporate body, on the other hand, consists of shareholders and usually has a distinct and separate legal body apart from the owner or shareholders of that corporate. A point of difference that lies distinctly between a corporate and a company is that a corporate body’s shareholders are never personally liable for the actions and decisions of the corporate body.
Comparison Table Between Company and Corporate
|Parameters of comparison||Company||Corporate|
|Definition||An association of people who work for a common objective and is a legal entity for operating a commercial or profit based business.||A legal entity created by the shareholders to earn profit and work together for the same goal. It has a different legal body unlike a company.|
|Workforce and Recognition||Can consist of minute workforce and may have less recognition as well as less set up funds.||Consists of massive workforce and is usually nationally or internationally recognised. Set-up funds and profits as well as yearly turnovers are very high when compared to small companies.|
|Names and Denotations||LLC, PLLC, private limited (pvt ltd), etc. Many variations depending on the different countries they are set up in.||Inc. aka incorporation, corp. aka corporation.|
|Legal requirements and obligations||Less paperworks required and legal requirements are sometimes handled by the members themselves.||Large number of paperworks and heavy agreements are signed up for setting up a corporate bodies. Sometimes there are exclusive laws for the corporate bodies.|
What is Company?
One of the most commonly used term in the field of commerce and business management, a company is considered as a legal body set up by a group of people or members who work together for a common goal and distribute the profit equally amongst themselves. At least 2 members are required to make a private company, and a public company demands a minimum of 7 to 8 members. Usually, the setup fund of a company is not sky high, especially for an entrepreneur.
There are many types of companies like LLC (limited liability company), Individual or sole proprietorship; individual entrepreneurship or proprietorship is a type of enterprise owned and run by one person. Usually, there is no distinct legal body for a sole proprietor. Also, there is LLP (limited liability partnership) which states that the partners or members are not responsible for the misbehavior or ill-decisive actions performed by the other partner/ member.
All the corporate bodies and MNCs fall under the category of a company whereas, vice versa is not true.
What is Corporate?
A Corporate is a business structure similar to a corporation which is also a legal form of an organization like a company. Setting up a corporate body requires extensive and precise legal works to fulfill the legal obligations and criteria.
Unlike a new private company, a corporate is equipped with rich resources and is globally recognized. The workforce of a corporate body is very large and also is tied up with nationally or internationally recognized agreements. A board of directors is also appointed for monitoring the actions of a corporate. This board is elected by the shareholders and can be changed according to the situation.
A corporate body has a separate legal identity distinct from its owners aka shareholders. A corporate is also responsible for its actions like a hypothetical singular human. The liabilities and debts of a corporate body are not personally the concern of a single shareholder.
Main Differences Between Company and Corporate
- A company is suitable for smaller legal and organisational entities whereas, a corporate is usually referred to a bigger and vaster association of shareholders which is recognized either nationally or internationally.
- The ownership is usually limited in a company due to smaller infrastructure or less resources whereas, the number of shareholders of a corporate can exceed any number. The management of a corporate body is much more difficult than a company.
- Corporate have a separate legal body and a board of directors to monitor the actions happening in it, whereas, a company doesn’t have these perks.
- A company has flexible regulations and objectives hence, the transparency is limited in a company but, in case of a corporate, the rules are stringent. As a result, the transparency in a corporate body is higher. Up to down communication is more effective in a corporate than a company.
- A company has lesser number of legal paperwork and agreements when compared to a corporate.
Company and corporate operate separately when we consider their fundamental definitions but, they are not opposed to each other neither are they entirely different. Instead, they are complementary and are interrelated when we consider the hierarchy of organizations. A company can prosper to become a corporate but vice versa cannot happen.
Differences lie between them under the parameters like the owner’s liabilities, the worldwide spread, and the legalities. Both of them require extensive time management and human resource management as well as funds.