A firm is any type of business. Examples of firms are:
- Sole proprietorship
- Limited liability corporation
The term is slightly more commonly associated with a partnership.
Given the broad reach of this term, it cannot be used to specify the legal protections afforded by a certain type of legal organization. Thus, a firm that is a sole proprietorship requires the personal liability of the owner, whereas a firm that is a corporation protects its shareholders from any liability greater than the amount they paid for their shares in the enterprise.
A firm can engage in any type of business activity, as well as with any type of customer or supplier.
A government entity is not considered to be a firm, since it does not (usually) operate to generate a profit.
A firm is also known as a business.