ABSTRACT
The entrepreneur is the individual who steps out of the mass of humanity and undertakes the organisation of production. The word actually means ‘undertaker’ – one who undertakes to create goods or services needed by mankind. The simplest type of organisation is therefore that set up by the sole trader, who takes upon himself the task of combining the factors of production to create some useful good or service. Where two or more people combine we have an arrangement called a partnership. A partnership is often referred to as a ‘firm’. Later it became common to save time in the name of a partnership by only naming one of the partners and calling the rest his ‘company’. So Jones & Co. meant Jones and his other partners, whoever they might be. Later still the word company developed a special meaning, and today is generally taken to mean a limited liability company set up by registration under the Companies Act 1985. The significant difference between partnerships and companies as we use the word today is that companies have a separate legal status conferred upon them by a statutory process known as ‘incorporation’. This means ‘becoming a body’. In the eyes of the law an ‘incorporation’ enjoys the same legal rights as any other ‘body’ (i.e. legal person). It may own land, collect capital, employ factors of production, distribute profits, sue and be sued in the courts, etc. Of course it cannot do really personal things like getting married, having children or dying. When a company does come to the end of its useful life it is said to be ‘wound up’, a process which sells off the company's assets and distributes the proceeds to those entitled to the money – usually the creditors or the shareholders.
