mutual company

Mutual Company

A private company whose ownership base is made of customers. Also referred to as a "co-operative".

Notes:

Very common in the insurance industry, mutual companies have account holders who receive distributions based upon the extent of their exposure and business with the company.

Some example of mutual companies outside of the insurance business are the Federal Savings and Loan Association and the many banking trusts and community banks found in localities around Canada and America.

See also: Demutualization, Life Insurance, Private Company, Public Company

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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.