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.

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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.

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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.