A company is a business organisation which has its own legal identity.
It has limited liability (an advantage over sole traders and partnerships.) A company is responsible for the money it owes but the personal possessions of its owners are safe. It is essential for a company to have limited liability so that it is able to reaise money by selling shares. If this wasn't the case, investors would be less likely to buy shares becasue of the risk of losing their personal possessions.
A company is owned by shareholders. A shareholder is an investor in and one of the owners of a company. The more shares they own, the more of the company belongs to them.
By investing in a company, shareholders become the owners of the business. If the business is successful, the value of the shares would increase.
The part of the profits that is paid out to the shareholders is called the dividends.
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