The difference between enterprise and company is vital for a person involved in business. An enterprise is any project or venture requiring effort, planning, and organization, such as a business, start-up, or large-scale endeavor that may or may not pre-prologue. However, a company is a legal business aiming to generate a profit. An enterprise can be understood to be a type of business, while all enterprises are perforated as companies.
An enterprise is a term that broadly incorporates several human activities and institutions, while a company refers to a specific legal form of doing business. The difference between enterprise and company is in their engagement domain, legal structure, and aims. This article will thoroughly explain the points discussed, helping you distinguish between the two terms.
What is Enterprise?
An enterprise is an activity or project that requires effort, which, if properly laid down and organized, would work toward attaining a certain goal. Thus, it can mean an activity at the small end, a large business at the other end, or a little something technically called an enterprise that may not necessarily be for profit. Operating units like individuals, groups, or organizations undertake enterprises. Enterprise usually stresses the project’s scale, ambition, and innovativeness.
While profit is the focus of most enterprises, some are for developing initiatives, social endeavours, and research. Therefore, an enterprise could be considered a nonprofit interested in advancing rural education. Likewise, a tech startup developing new software would be considered an enterprise or endeavour. The main thing both have in common is a systematic disposition toward achieving a goal.
Characteristics of Enterprise
- Organized movement towards a specified goal.
- Some enterprises aim at profit, while others serve nonprofit interests.
- Enterprises are subject to the existence of innovative possibilities and risk-taking.
- They may range from small projects to huge ventures.
- They do not necessarily have a legal business structure.
Types of Enterprises
Enterprises exist in numerous types, depending on the project’s reason, size, and structure. By recognizing the types of enterprises, we can derive their various roles in the economy and society.
According to Purpose
- Commercial Enterprises: Designed to make a profit by selling goods or services. This includes retail shops, restaurants, and manufacturing units.
- Social Enterprises: Not-for-profit or NGOs whose income is retained for social goals.
- Government Enterprises: The government owns these for the public interest, i.e., transportation, healthcare, and utilities.
Based on Ownership
- Private Enterprises: Owned by an individual or a group. Such as family businesses and private startups.
- Public Enterprises: Owned and managed by the government. Some examples are public transport systems and state-run banks.
- Joint Enterprises: A mixture of ownership and management, where private sectors and the government own businesses.
- Cooperative Enterprises: These are owned and managed by a group of persons for mutual benefit, e.g. farm cooperatives.
What is Company?
A company is a business entity that is both legally recognized and set for commercial activity to get profit. The company registration is then applied at certain legal bases, subjecting them to specific rights and obligations. There are huge variations among the companies in size and structure, and it could be even as small as a one-man outfit or as large as a multinational corporation. Companies are owned by private individuals, states, or stock exchanges and, for the most part, are created hierarchically formal in management and have well-structured ownership through shares or other legal means.
Types of Companies
A company is a legal business entity engaged in profit-making. Companies find existence in the legal domain; they have rights and liabilities distinct from themselves. The companies may differ in size, ownership nature, and scope of operations.
Based on Ownership
- Private Limited Company: A privately held company that does not list or trade shares publicly. It has limited liability for shares to its members.
- Public Limited Company: A company whose shares can be traded in the stock market and are available for public purchase.
- Multinational Company (MNC): An MNC works in several host countries, with Apple Inc., Microsoft Corp, and Google being just a few examples.
- State-Owned Company: A company that is owned and controlled by the government.
Based on Structure
- Sole Proprietorship: Owned and managed by a single individual. This is the simplest type of business.
- Partnership: A partnership is owned by two or more persons who share profit and responsibility.
- Limited Liability Company (LLC): This combines the advantages of corporation and partnership with flexibility and limited liability.
- Corporation: Large company with shareholders, limited liability, but strictly governed.
Difference Between Enterprise and Company
Both are organised efforts toward goals; however, they differ in meaning regarding the scope and legal structure and their very intent. Understanding the difference between enterprise and company throws light on how various context-driven businesses and projects work.
Legal Structure
- An enterprise is not necessarily legally established. It may be an informal setup or a formal one.
- The company is a legally established entity registered under a statute.
Scope
- Enterprise embraces various activities, from profit-making businesses to charitable projects.
- Companies are more concerned with profit-making business activities.
Ownership and Management
- An enterprise may be owned by an individual, a group, or even a government and possess a flexible management structure.
- Companies own and manage themselves according to well-defined ownership in the form of shares and a formal management structure.
Risk and Innovation
- Among startups, enterprises are often characterised by higher levels of innovation and risk.
- Companies typically work within established business models and risk management strategies.
Examples
- A tech startup developing a new app is an enterprise.
- A registered IT company offering software services is a company.
| Feature | Enterprise | Company |
| Definition | Any organized venture towards a goal | A legally registered business entity |
| Legal Status | May or may not have legal recognition | Always has legal recognition |
| Profit Orientation | Can be profit or non-profit | Primarily profit-oriented |
| Scope | Broad, includes social, cultural, and business | Narrow, focuses on business activities |
| Ownership | Individuals, groups, or government | Shareholders or private owners |
| Management Structure | Flexible, can be informal | Formal, with defined roles |
| Risk Level | Often higher, especially in startups | Managed risk, more structured |
| Size | Can be small or large | Typically structured based on size (small, medium, large) |
| Innovation | High, especially in new ventures | Moderate, with focus on established methods |
| Registration | Not always required | Mandatory |
| Legal Obligations | Minimal unless formalized | Subject to laws, taxes, and regulations |
| Examples | Startups, NGOs, government projects | IT companies, retail chains, manufacturers |
| Purpose | Varied (profit, social good, innovation) | Primarily profit-driven |
| Global Presence | Possible but not necessary | Often have global branches, especially MNCs |
| Taxation | Depends on formal structure | Subject to corporate taxes |
| Continuity | May depend on individual efforts | Ensured through legal structure |
| Financial Reporting | Optional unless formalized | Mandatory |
| Public Access | Limited unless formal | Public access in case of public companies |
| Capital Raising | Informal or through grants | Through shares, investments, or loans |
| Liability | Varies, often personal | Limited liability for owners |
Enterprise vs Company: Difference FAQs
What is the difference between enterprise and company?
An enterprise is a general term that refers to any organised endeavor, whether or not for profit. A company is a legally registered business organisation that is profit-oriented.
What is a private limited company?
A private limited company is owned privately. Shares of this company are not available to the public, and the owners have limited liability.
What is an MNC company?
An MNC company is a multinational company that operates in many countries. Google, Microsoft, and Apple are a few examples.
What is an IT company?
An IT company provides technology-related services, including software development, IT consulting, and security solutions.
Who are the Big 4 companies?
The Big 4 companies refer to the largest accounting and professional services firms across the world: Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY), and KPMG.
