By default, the Company field is mandatory in the Lead layout.
You can only make it a non-required field if you have Person Account activated. If Person Account is activated, the conversion behavior will work like this:
If Company field is not populated, the conversion form will allow you to create a Person Account.
When a Person Account is created, it will also create a Contact record using the same information. Some of the Contact fields will also be available in the Person Account object.
For example, the Contact Mailing Address and Contact Other Address.