What is a Company?

In real Life a Company, Corporation or Corporate entity is an organisation and separate legal entity usually established to undertake commercial business activities for profit. A company is owned and controlled by its shareholders who elect the board of directors to act as representatives of the shareholders and to establish a mission, strategies, policies or to make key decisions related to the company such as appointing the senior management team. The WSE defines a virtual company as an individual or group in a virtual world conducting transactions to generate a profit and which is controlled and operated by a resident of that virtual world using their main Avatar or a dedicated Avatar for all business transactions.

A Company on the WSE (Company, Business, WSE Listed Company) is a group account solely for use on the WSE and managed by a Participant playing the role of CEO in the WSE role-playing game. A company on the WSE is not a real or legally registered entity or business. The Participant may participate in the WSE service on behalf of a real and legally registered entity or business provided the Participant has sought and received written, signed consent from the business proprietor or director's along with additional approvals for items such as IP rights. All information submitted by the Participant acting as CEO is for game purposes only and may not be reliable, true, accurate or credible and is subject to the WSE Terms of Service.

Private Company

Privately held company refers to ownership of a business company in two different ways, first is referring to ownership by non-governmental organizations; and second, referring to ownership of the company's stock by a relatively small number of holders who do not trade the stock publicly. Privately held companies generally have fewer or lesser reporting requirements for transparency, via annual reports, etc. than do publicly traded companies.

Public Company

A public company usually refers to a company which is permitted to offer its securities (i.e., shares, options, bonds, etc.) for sale to the general public, typically through a stock exchange.The securities of a public company are owned by a large number of investors while the shares of a private company are owned by relatively few shareholders.

Should you have a Private or Public Company

A public company has several advantages. It is able to raise funds and capital through the sale of its securities. This is the reason why public corporations are so important, historically; prior to their existence, it was very difficult to obtain large amounts of capital for private enterprises. In addition to the ease of raising capital, public companies may issue their securities as compensation for those that provide services to the company, such as their directors, officers and employees.

A public company has several advantages. It is able to raise funds and capital through the sale of its securities. This is the reason why public corporations are so important, historically; prior to their existence, it was very difficult to obtain large amounts of capital for private enterprises. In addition to the ease of raising capital, public companies may issue their securities as compensation for those that provide services to the company, such as their directors, officers and employees. While private companies may also issue their securities as compensation for services, the recipent of those securities often have difficulty selling those securities on the open market. Securities from a public company, typically have an established fair market value at any given time as determined by the price the security is sold for on the stock exchange where the security is traded.

The primary disadvantages of being a public company includes increased government regulations that the company must comply with such as reporting and disclosure requirements, which can be costly to comply with and may also provide competitors with information about the company's activities.

A private company has several advantages. It has no requirement to publicly disclose much, if any financial information; such information could be useful to competitors.

The normal for a new company to remain privately owned as they are usually small. After a number of months or years in Second Life, if a company has grown significantly and is profitable, or has promising prospects, there is often an initial public offering which converts the private company into a public company or an acquisition of a company by public company. Yet, some companies choose to remain private for a long period of time after maturity into a profitable company. All companies registered on with the World Stock Exchange in Second Life have limited liability.

Business Planning

The business plan is a document containing a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals.
A business plan for a company based in Second Life should contain:

- Company Overview
- Company Mission Statement
- Market Overview and Size
- Current & Potential Competitors
- Competitive Advantage
- Current & New Markets
- Product / Services
- Pricing Strategy
- Distribution
- Promotional and Marketing Strategy
- Organisational Structure
- Management
- Board of Directors
- Employee Requirements
- Employee Availability
- Training Requirements
- Salary Budget
- Growth Strategy
- Sales Forecast
- Capital Requirements
- Profit & Loss Projection
- Cashflow Forecast
- Start-up Costs