what is company in accounting

In accounting, a company is a legal entity formed by a group of individuals to engage in and operate a business enterprise in a commercial or industrial capacity. It is a separate legal entity from its owners, and it can sue and be sued and incur debts. The companys owners, known as shareholders, can limit their personal liability and are generally not liable for company debts. A company may be organized in various ways, ranging from a partnership to a proprietorship, or even a corporation. The structure, costs, and legal obligations make a company structure better suited to a medium to large business. In corporate accounting, a company is an autonomous association of persons made for achieving business objectives. A company can purchase assets or sell them, take on debt, and open a bank account. The purpose of company accounts is to track the cash balance, money owed to the business, money owed to creditors, excess, and access and the payroll paid to employees.