Mutual Company

Mutual company

A corporation that is owned by a group of members and that distributes income in proportion to the amount of business that members do with the company.

---

mutual company

A company owned by its customers rather than by a separate group of stockholders. Many thrifts and insurance companies (for example, Metropolitan and Prudential) are mutual companies. Compare stock company.

---

Mutual Company

A company structure in which the company's owners are also its clients. That is, the mutual company's profits are distributed to its participating customers each year in proportion to their individual exposures to the company. Many insurance companies are structured as mutual companies, meaning that policyholders have the right to receive portions of the company's profits, and often may elect the company's management. Savings & loan associations are also common structured as mutual companies.

---

Mutual company. A mutual company is a privately held company owned by its policyholders, depositors, or other customers. A share of the profits is distributed as dividends, allocated in proportion to the amount of business each customer does with the company.

Insurance companies, federal savings and loan associations, and savings banks are examples of mutual companies, although each type operates somewhat differently.