What is Firm?

A firm is a business entity or enterprise engaged in commercial activities with the aim of generating profit. It can refer to various types of organisations, including sole proprietorships, partnerships, corporations, and other forms of business structures. Firms may operate in different industries and sectors, providing goods or services to customers, clients, or other businesses.

Features of a firm include:

• Commercial Activities: Firms are engaged in commercial activities aimed at generating profit. These activities may involve producing goods, providing services, or facilitating transactions in the marketplace.
• Legal Entity: A firm may have legal recognition as a separate entity from its owners, depending on its legal structure. This separation provides the firm with its own legal rights and obligations, including the ability to enter into contracts, own property, and sue or be sued in its own name.
• Ownership Structure: Firms may have different ownership structures, such as sole proprietorships, partnerships, corporations, or cooperatives. The ownership structure determines how ownership interests are held and managed within the firm.

Company and Firm refer to business entities engaged in commercial activities. Company typically refers to a legally registered and incorporated business entity; whereas, firm is a broader term that can encompass various types of business organisations.