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 periodicals archive ?
Investors offered over 3.5 billion euros, or seven times the amount the Macedonian authorities sought, which is one of the firmest proofs of how strong the investors' trust is in Macedonia's stability and the positive prospects of Macedonia's economy, the Ministry of Finance said.
At a party there last night, William, 35, said the UK and Germany would stay "the firmest of friends" after Brexit.
With the co-operation of I-BRAIN and Sandy, the robot, HARRTSTM with its Untested Novel Technology is the realm's firmest Human Assisted Robotic Hair Transplant System which is proficient in effecting up to 1800 Grafts Procedure in about 2 Hours.
This combination of growing demand and falling supply has pushed house prices up further, with 55 per cent of respondents seeing a growth in prices - the firmest price momentum of any region across the UK.
Their dedication said: to situation and firmest action against any found to be in such in springwood in May last had more visitors.
In the firmest remarks made since jihadis captured at least 26 servicemen in northeast Lebanon in August, Salam said the country would not accede to the will of the militants.
We believe that only the firmest and most comprehensive action against all terror groups without any distinction is the only way to defeat this evil scourge," said the MEA.
Aleksandra Mitevska comments for Utrinski vesnik that the boycott of the Parliament is a two-edged sword for the opposition, which chose the firmest method for political battle, but the same goes for the government--which is most responsible in providing a climate for a sound political competition.
This charger has a rubberized texture that provides the firmest grip and protects against minor impact.
"The most democratic countries in the world deal with saboteurs and terrorists in the firmest way and with the toughest punishment and Bahrain is no exception," he said.
Parsnips as misshapen as withered old men on park benches show me the firmest, whitest flesh when I break them open with my knife.
Tesselaar's agent, Humphrey Nijman, said: "There was interest in Jeroen from other clubs but Kilmarnock's was the firmest.