The core difference lies in that "enterprise" is a broad term referring to any business undertaking, while "limited company" is a specific legal structure that offers its owners limited liability.
Here's a breakdown:
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Enterprise: This is a general word meaning any business or undertaking, whether it's a small startup, a large corporation, a sole proprietorship, or a partnership. It describes the activity of doing business. An enterprise can take many legal forms.
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Limited Company: This is a specific legal structure for a business. Also known as a limited liability company (LLC), it separates the business's finances and legal liabilities from the owner(s). The owners are not personally liable for the company's debts or lawsuits, up to the amount of their investment. A limited company is a type of enterprise, but not all enterprises are limited companies.
Key Differences Summarized:
| Feature | Enterprise | Limited Company (LLC) |
|---|---|---|
| Definition | A general term for any business undertaking. | A specific legal business structure. |
| Liability | Varies depending on the legal structure adopted. | Owners have limited personal liability. |
| Size | Can be any size, from very small to extremely large. | Can be any size, but often associated with smaller to mid-sized businesses. |
| Legal Structure | Not a legal structure itself. | A formal legal structure recognized by law. |
Examples:
- An individual selling handmade crafts at a local market is an enterprise. If they structure their business as an LLC, then they are also running a limited company.
- A multinational corporation like Apple is an enterprise. It operates as a limited company (specifically, a corporation, which is a form of limited liability company).
In essence: All limited companies are enterprises, but not all enterprises are limited companies. "Enterprise" describes what you're doing (business), while "limited company" describes how you've structured your business from a legal and liability perspective.
