What is the Meaning of Firm in Business?

A company is a for-profit organization, typically formed as a partnership, that provides professional services such as legal or accounting advice. According to company theory, companies exist to maximize profits. Signature Theory is a collection of economic theories that explain and predict the nature of the company, including its structure, relationship to the market, behavior and its very existence. Smith argued that a manufacturing firm employed a more intense form of division of labor than could be achieved through market exchange. As such, a sole proprietorship requires the personal liability of the owner, while a corporation shields its shareholders from any liability beyond the amount they paid for their shares in the company.