Classification of Business. Enterprises

Transcription

1 Classification of Business Enterprises

2 Typology of enterprises Legal forms Size of enterprise Type of production Sectors and branch of economy

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4 three groups according to independence criteria: The new definition of SME categorizes them in following: linked enterprises, when one company owns most of the capital or voting rights in the other company, partner enterprises, when one company is an upstream enterprise and owns more than 25% of the capital or voting rights in a downstream enterprise, autonomous enterprises that do not meet the two above mentioned criteria of independence.

5 Size clasification - EU Enterprise Category Number of employees Annual Work Unit Annual turnover or Mediumsized < mil. (in yr. 1996: 40 mil.) Small < mil. (in yr. 1996: 7 mil.) Micro < 10 2 mil. (not defined) Annual balance sheet total 43 mil. (in yr. 1996: 27 mil.) 10 mil. (in yr. 1996: 5 mil.) 2 mil. (not defined)

6 Enterprise share according to the number of employees Number of employees % of enterprises , , ,7 250 and more 0,2

7 Type of production Enterprises with production: a) Single part production small amount of the same products b) Batch (line) production production of the same type of product repeating in batches; Size of batch: b1) small b2) medium b3) great c) Continual production production of great amount of small type of products

8 Sectors 1.Primary sector (primary production, basic industry, např. agriculture, forestry, mining industry) 2.Secondary sector (manufacturing industry, e.g. manufacturing, food, textile). 3.Terciary sector (non-productive enterprises, např. trade, transport, banks).

9 Legal forms 1. Natural person (tradesman, enterpreneur) 2. Corporations 3. Cooperative 4. State enterprises, state organisations 5. Budgetary organisation 6. Contributory organisation 7. Foundation 8. Association 9. Not-for-profit organisation 10. Others

10 Definitions The definition of a natural person: He/she is a citizen born in the Czech Republic. The natural person must be 18 years old to achieve full legal capacity. The definition of an entrepreneur (physical person): Entrepreneurs are natural people devoted to business (so-called self-employed people; Czech acronym OSVČ). They have entrepreneurial resources, which they use for the realisation of business plans, but they accept the business risk. Entrepreneurs carry the business risk. Their personnel property is a business liability. The definition of legal (juridical) person: This is a business entity (corporation) according to a business code or other specific legal conditions. In the Czech Republic, people may carry out business in two ways - as a natural person (self-employed) or as a legal entity.

11 The legal forms of business are as follows: sole owner, e.g. trader (Czech acronym OSVČ), silent partnership, limited liability company (Czech acronym s.r.o.), limited partnership (Czech acronym k.s.), unlimited partnership (Czech acronym v.o.s.), joint-stock company (Czech acronym a.s.), cooperative.

12 Types of business organisations a) personal established by 2 and more people, partners participate on business, collective company liability co-partnership, limited partership b) capital capital participation of partners on business they do not have participate personally on business, limited company Ltd, joint-stock company (public limited company plc.)

13 Sequence of establishment of companies 1) Signing of partnership contract 2)Deposit the capital in the bank 3) Application in the licence authority. 4) Registration in Companies register.

14 Legal Forms of Business Organisation Proprietorship Partnership Cooperation

15 Sole Owner Natural Person (Entrepreneur) The natural person (individual entrepreneur) can carry on business activities in their own name on the basis of a valid trade licence or other permission. In the case of a foreign non-eu individual, registration in the Commercial Register is also required.

16 Silent Partnership A silent partnership is established by a written contract between a silent partner and a Czech entrepreneur. The silent partner invests in the Czech business and awaits the results a share of the profits. Silent partners are only liable for losses to the extent of their original investment.

17 Limited liability company Společnost s ručením m omezeným Ltd Liability of owners Minimum of capital Together into amount of outstanding deposit min CZK Minimum of partners (founders) min. 1, max. 50 Institutions Profit/loss sharing General meeting highest institution Executives corporate inst. Advisory board - voluntary According of share of business share

18 Joint stock company This form of business is characterized by the limited liability of its owners, the issuance of shares of easily transferable stock, and existence as a going concern. The process of becoming a corporation, call incorporation, gives the company separate legal standing from its owners and protects those owners from being personally liable in the event that the company is sued (a condition known as limited liability). Incorporation also provides companies with a more flexible way to manage their ownership structure.

19 Joint stock company Owners have limited liability. Share capital must be at least CZK 1 million. The company must put at least 20% of the capital into a reserve fund, which is funded by after-tax tax profits. The accounts must be audited annually. There must be at least three members on the board of directors, and each member must be a Czech citizen or resident

20 Joint stock company Liability of stock holders Minimum of capital none min CZK without tender of stocks min CZK with tender of stocks Minimum of partners (founders) Institutions Profit/loss sharing min. 2 natural person or 1 corporate bodies (legal entities) Shareholder s s meeting Board of directors Advisory board min. 3 members According of share of nominal value of stock to all stocks The minimum share capital condition is CZK 2 million for companies set up without a public offer for share subscription. The shares may be issued either in certificated or uncertificated (paperless) form. All joint-stock companies are required to establish reserves of at least 20% of their share capital.

21 Cooperative - družstvo Liability of owners Minimum of capital Minimum of partners (founders) Institutions Profit share No liability min CZK min. 5 partners or 2 corporate bodies (legal entities) Member meeting board of directors corporate inst. Control commision 3 members According to level of member deposit

22 Limited partnership (comandite) Komanditní společnost Liability of owners General partner Sole trader is liable for the debts of business to the full extent of his personal assets Limited partner amount of outstanding deposit Minimum of capital Limited partner minimum 5000 Minimum of partners (founders) Profit/loss sharing profit 1 : 1, than General partner the same amount and Limited partner among their deposits loss General partner the same amount

23 Unlimited- partnership - Veřejnáejná obchodní společnost Liability of owners Minimum of capital Minimum of partners (founders) Profit/loss sharing Together liability for the debts of business to the full extent of personal assets Is not defined 2 natural person or 2 corporate bodies (legal entities) Equal share In an unlimited partnership (Czech acronym v.o.s.), all partners (minimally two) are jointly and severally liable for the partnership s obligations. Partnership profits are shared equally unless otherwise specified in the partnership agreement. There is no minimum capital requirement.

24 Sources: uidelines-starting-a-businesspsc/ /