Organizing forms of business activity.

Presently in our country exist and are developped three main types of
business companies: individual holdings (enterprises, based on personal
property of owner), partnership and corporations. For instance, in
United Staffs in 1982 s from 16 million companies suppressing majority
were shown by individual possessions and their average profits formed
only 42400 dollars, partnership was in 4 times above, but cost sold by
goods corporations and services at the average exceeded 2 million

Individual holdings and partnership.

Expect, I has decided to open a shop on the assembly and selling the
computers. I will come to lease a premises under the shop, buy
completing to was than fill regiments, and, possible hire anyone, who
stood for the pay-desk, while I on occupations. I shall completely order
a remainder of profit after my business it is expenses payment.

— An Individual possession — an enterprise, basing in property of one
person, having full right on tinned as a result economic activity profit
and completely responsible for any losses, which tolerates an

Possible, my shop will turn out to be unprofitable, either as a many
enterprise, basing in individual property. In this case I will come to
pay for losses from the own pocket. Then I shall have to declare itself
a bankrupt and allow to separate the whole my cash assets and
miscellaneous personal property between that, who I must money.

But individual holdings not always come to nothing. Most often they
ensure heavy existance to its owners, who work many watch, quite often
earning herewith less one,gets an average salary. But under a hour
individual holdings ensure wholly decent profits to its owners.

If my shop on selling the computers prospers, possible, I want to
enlarge. For this me, probably, I will come to scramble over in the
premises little more, create a greater spare of goods, intended for
selling, possible, buy a lorry for the deivery of goods, hire more
employees, gain furniture for the office. I will be necessary free
financial capital to pay for all new equipment and spares. Where to take
this facility on? If personally beside me money not sufficiently,
probably I will try to get necessary financial facilities beside the
friend or relative, which in this case will become a partner or

— Partnership (full company) — an enterprise, basing in joint ownership
two or more persons, having its share in the profit. Each Of owners, or
partners, carries joint responsibility for all losses, which tolerates
an enterprise.

Sometimes, deal leads only one of the partners, but other only gives
money; sometimes both or all owners are active enterprise participants.
Exists several very large partnership with hundreds of companions,
amongst legal and accounting companies in particular.

However form of partnership has two essential defects. First,
partnership (either as individual holdings) are enterprises with
unlimited responsiblity. This means that if enterprise bears a loss,
each of partners personally responsible for all debts regardless of
that, was shown it really active deal participant. For instance, if one
of two partners has gone bankrupt, other has responsibility for all
debts of company. Partner on the business puts on the card all its own
property, rather then only property of company (for this reason company,
which need for the confidence of their own clients, such, as legal and
accounting offices, often are partnership).

The Second essential defect of this organizing form is bounce of
partner’s agreements. If is taken a new partner or one of the existing
partners dies or wants to come out of deal, must be invited lawyers for
sheduling a new partner’s agreement. This негибкость creates
inconveniences in the process of attraction of financial capital
required for enterprise activity and financings of its growing. Some
enterprises, such, as legal companies, requiring little equipment and
not needing for greater volumes of goods on regiments for selling, can
form necessary funds to the account of condition of individual owner or
partners, possible, by means of bank loans or other persons. But than
more enterprise and than more equipment and spares he is required for
the operation, that harder becomes to ensure a necessary financing
specified above by ways. To Mashroom an enterprise also must be able to
form the greater amounts of financing on more or less regular base. This
uncomfortably do by constant attraction of new partners.


If my enterprise on the assembly and selling the computers is increased
and prospects of growing look favourable,, considering defect of the
form of partnership, I, probably, will go on the incorporiration of my
enterprise, will organizine a corporation.

— A Corporation — an organization, concerning with on legal bases by
certain types of activity, such as usage of railways or issue of
newspaper. The Owners to corporations have responsibility only for their
own embedding in the given corporation, even though their for covering
the losses insufficiently, which it tolerates.

Corporation unlike the individual holdings or partnership has legal
existance different from existance of people, which are the owners to
corporations at any concrete moment of the time. Thereby, corporation
does not stop its existance, when one of its owners, named by the
shareholder, or shareholder, dies or when appear new owners.

Property to corporations is divided between its shareholders. Initial
shareholders are one,makes a contribution in the manner of the money or
other resources (such, as a free work or idea of product itself,
produced by the company) at a moment of making a corporation. As an
indemnifying their own expenseses they get rights on the participation
in profits of the companies. This is realized by means of slips of
paper, named by certificates share, installing nature of profit for
their owners, on the reception which they have a right (share can be
common and privileged, difference between which is concluded in the
payment fixed, in the event of privileged, and хаотичного, in the event
of common, dividend). Holders share, or shareholders, each corporations
(that is to say owners of certificates share) elect a board of
directors, which have charge of hiring the high administrations to
corporations and realizes a checking for its work.

On the measure of growing a company can cash to the account of
increasing an issue of share certificates and their sale. In exchange
for right a holdings a corporation gets necessary her facility for the
operation and growing. In turn shareholders can, as a rule, resell their
own share for cash money any, who can their buy. Thereby, present-day
owners to corporations not without fall are one,has gained share first
issue. More probably that present-day owners gained its capital beside
preceding owners through the go-between (broker) on the stock market.
Restrictions exist In some small companies on the right of owner to sell
share to disturb outsiders to gain a checking on the company (if group
of shareholders own a most share corporations, speak that this group
checks a corporation). But outsiders can gain a checking on large
companies without such restrictions by buying their share.

Profit to corporations can be discharged shareholders in the manner of
dividends or can stay in the company in the manner of нераспределенных
profits (stayed profit).

— Dividends present itself more or less regular (usually quarter)
payments, directed by the corporation to its shareholders. Stayed profit
— part of the profit, which company does not pay its shareholders as
dividends. These profits stay at the disposal of company.

Payments of dividends present itself direct profits on embedding the
shareholders. Corporations not obliged to pay dividends, but majority of
corporations their pays. Large companies, as a rule, are tortured to
support a firm flow of payments of dividends to its owners. Rate of
paying dividends, either as a rate of return company and procentage rate
of share price, greatly changes from the company to the company.

Part of the profit, staying at the disposal of company in the manner of
нераспределенной profit, is usually used for the financing of
investments and, thereby, enlarges a cost share company. Eventually,
нераспределенная profit ensures shareholders a return in the manner of
profits on the increase of capital.



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