What is a company?
A company is an organization or unit that conducts business with the aim of making a profit. Companies can be of different sizes and operate in many different industries, such as manufacturing, services, trade and technology. Establishing and operating a company requires a variety of planning, resources and administration. In this article, we discuss the definition of a company, different types of companies, the establishment of a company and its operation.
What is a company?
A company is an economic unit that produces goods or services for the market. The main goal of a company is usually to make a profit for its owners or shareholders. Companies can be private, public or cooperative, and they can operate locally, nationally or internationally.
Business forms
There are many types of companies, and they can be classified into different types of companies. The most common business forms in Finland are:
- Business name (Tmi): Private entrepreneur, where one person is responsible for the company’s operations and finances.
- Open partnership (Ay): A company founded by two or more persons, where the partners are personally responsible for the company’s debts and commitments.
- Limited partnership (Ky): A company with at least one responsible partner and one silent partner. The responsible partner is personally responsible for the company’s debts, while the silent partner is only responsible for the capital invested.
- Osakeyhtiö (Oy): A company where the owners are not personally responsible for the company’s debts. A limited company can be private (Oy) or public (Oyj), and its owners are shareholders.
- Cooperative (Osk): A company owned by its members. The purpose of the cooperative is to provide services or benefits to its members, and its primary goal is not to make a profit.
Establishing a company
Establishing a company requires careful planning and preparation. The founding process usually includes the following steps:
- Business idea development: Establishing a company starts with the development of a business idea. A business idea is an idea about what products or services the company offers and how it stands out from its competitors.
- Preparing a business plan: A business plan is a document that describes the company’s goals, strategies, markets and financial forecasts. It serves as a road map for the company’s operations and is often necessary to obtain financing.
- Choosing the business form: The founder of the company must choose a suitable business form, which affects, among other things, taxation, liabilities and administration.
- Registration: The company must be registered in the trade register, and it must obtain the necessary permits and insurance.
- Obtaining financing: Starting and operating a business often requires capital. Funding can be obtained, for example, from own savings, loans, investors or public subsidies.
Company operations
The company’s operations consist of many different areas, such as production, marketing, sales, financial management and personnel management. A successful company needs effective management and the ability to adapt to changing market conditions. The company must also comply with laws and regulations, such as regulations regarding taxation, labor laws and environmental protection.
Additional information about establishing and operating a company can be found, for example, on the Suomi.fi website.
