firm

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Firm

Refers to an order to buy or sell that can be executed without confirmation for some fixed period. Also, a synonym for company.

Firm

1. A company or any other for-profit business.

2. Describing an order to buy or sell a security that may be executed without confirming the order with the person or company making it. Most firm orders have a time limit.

firm

see BUSINESS.

firm

or

company

or

supplier

or

enterprise

A transformation unit concerned with converting FACTOR INPUTS into higher-valued intermediate and final GOODS or SERVICES. The firm or BUSINESS is the basic producing/supplying unit and is a vital building block in constructing a theory of the market to explain how firms interact and how their pricing and output decisions influence market supply and price (see THEORY OF THE FIRM, THEORY OF MARKETS). The legal form of a firm consists of:
  1. a sole proprietorship: a firm owned and controlled (managed) by a single person, i.e. the type of firm that most closely approximates to that of the ‘firm’ in economic theory.
  2. a partnership: a firm owned and controlled by two or more persons who are parties to a partnership agreement.
  3. a JOINT-STOCK COMPANY: a firm that is owned by a group of ordinary shareholders and the capital of which is divided up into a number of SHARES. See COOPERATIVE.

The economic form of a firm consists of:

  1. a horizontal firm: a firm that is engaged in a single productive activity, e.g. motor-car assembly.
  2. a vertical firm: a firm that undertakes two or more vertically linked productive activities, e.g. the production of car components (clutches, steel body shells) and car assembly.
  3. a diversified or conglomerate firm: a firm that is engaged in a number of unrelated productive activities, e.g. car assembly and the production of bread.

For purposes of COMPANY LAW and the application of many company taxes and allowances (e.g. CORPORATION TAX and CAPITAL ALLOWANCES), a distinction is made between ‘small and medium-sized’ companies and ‘large’ companies. Small and medium-sized companies are defined as follows (Companies Act, 1995):

  1. annual turnover of less than £11.2 million;
  2. gross assets of under £5.6 million;
  3. not more than 250 employees.

In 2004 there were some 3,800,000 firms in the UK, of which 70% were run by the self-employed. Most businesses were small, with around 3,766,000 firms employing fewer than 50 people, 27,200 firms employing between 50 and 249 people, while only 6,900 firms employed more than 250 people. In terms of their contribution to GROSS DOMESTIC PRODUCT (GDP), however, firms employing more than 50 people contributed in excess of 75% of total output.

The total stock of firms fluctuates from year to year, depending on the net balance of new start-up businesses and those businesses ceasing trading (see INSOLVENCY). Generally, the total stock of firms increases when the economy is expanding (or as a result of some ‘special’ factor, e.g. the surge in newly established INTERNET businesses) and falls in a recession.

A final point to note is that with the increasing globalization of the world economy, MULTINATIONAL COMPANIES are becoming more prevalent in economies such as the UK's (see FOREIGN INVESTMENT for further details). See HORIZONTAL INTEGRATION, VERTICAL INTEGRATION, DIVERSIFICATION, BUSINESS CYCLE.

References in classic literature ?
The Mohican maintained his firm and haughty attitude; and his eyes, so far from deigning to meet her inquisitive look, dwelt steadily on the distance, as though it penetrated the obstacles which impeded the view and looked into futurity.
But list'n not to his Temptations, warne Thy weaker; let it profit thee to have heard By terrible Example the reward Of disobedience; firm they might have stood, Yet fell; remember, and fear to transgress.
The king's request had undoubtedly been acceded to by an affirmative sign, for in firm, sonorous accents, which vibrated in the depths of Athos's heart, the king began his speech, explaining his conduct and counseling the welfare of the kingdom.
Previously to July, 1830, this estimable class of citizens had not dared to indulge their native tastes for extravagance and parade, the grave dignity and high breeding of a very ancient but impoverished nobility holding them in some restraint; and, then, THEIR fortunes were still uncertain; the funds were not firm, and even the honorable and worthy Jacques Lafitte, a man to ennoble any calling, was shaking in credit.
And then the butter itself seems to communicate a fresh charm--it is so pure, so sweet-scented; it is turned off the mould with such a beautiful firm surface, like marble in a pale yellow light
My lord," replied Guenaud, in a firm voice, "it is God who can give you days of grace, and not I.
Only superstition is now so well advanced, that men of the first blood, are as firm as butchers by occupation; and votary resolution, is made equipollent to custom, even in matter of blood.
Angel Clare rises out of the past not altogether as a distinct figure, but as an appreciative voice, a long regard of fixed, abstracted eyes, and a mobility of mouth somewhat too small and delicately lined for a man's, though with an unexpectedly firm close of the lower lip now and then; enough to do away with any inference of indecision.
Some two weeks later, Newland Archer, sitting in abstracted idleness in his private compartment of the office of Letterblair, Lamson and Low, attorneys at law, was summoned by the head of the firm.
and the wish, which constitutes the Emperor's sole and absolute aim- to establish peace in Europe on firm foundations- has now decided him to despatch part of the army abroad and to create a new condition for the attainment of that purpose.
After the wonderful success of "Ozma of Oz" it is evident that Dorothy has become a firm fixture in these Oz stories.
Her finely chiseled, clean-cut face, with something red Indian about the firm mouth and strongly marked cheek bones, showed even at that distance traces of the friction of the passing years.