Business organizations: concept, types, structure, features

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Business organizations are the basis of the modern economic system. Without them, it is difficult to imagine the complex cycles of creating science and technology-intensive products. If they are dispensed with, then only at a primitive level of production (for example, a subsidiary farm).

Introduction

What are they needed for? Economic organizations are needed to meet the interests and needs of a person and society in the external, in relation to the organization, environment. To do this, they can produce products that take the form of goods, services, knowledge or information. In reality, economic organizations are:

1. Legal entities of all forms. The exception is public and religious organizations. Examples include joint-stock companies, consumer cooperatives, and the like.
2. Non-legal entities of all forms. These are divisions of organizations, associations based on individual labor activity, and the like.

They have a form of ownershipstate, public, rental, private, group. Sometimes there is a mixture of them. For example, a joint-stock company, part of whose shares are owned by the state, and the rest - by legal entities and individuals.

About size

Speaking about what the organization of economic enterprises is, it should be noted that there are four groups in total: micro, small, medium and large. As criteria for such a division, the number of personnel, the value of products, the cost of the property complex, and the share of the occupied market are used. The most important when referring to a particular group are:

1. Share of authorized capital.
2. The limit value of the average number of employees. Here the sphere in which the activity is carried out plays an important role. So, for scientific organizations, the criteria for a small business are up to 30 people. Whereas industrial and construction structures can number up to hundreds of people.

If the number of personnel is significantly less than provided for a small enterprise, then the object belongs to micro-organizations. For example, a six-person construction firm that specializes in electrification.

Classification

Business organizations can be grouped by more than just their size. There are still a large number of different approaches that allow you to classify them. Yes, inas a base, you can also choose:

1. By duration. There are temporary and permanent. It is necessary to indicate the period of activity in the registration documents. An organization can be registered for a day, month or year.
2. According to the season of active action. This status gives the organization the opportunity to recruit workers for a certain cyclic period. There are winter, summer, rainy season and the like.
3. According to the scale of production. It can be single, serial and mass.
4. According to the range of tasks performed. There is specialized production and universal.
5. According to the range of products. Distinguish those concentrated on one product (their group) and specializing in a large assortment.

The organization of accounting for economic activity largely depends on the chosen form. Distinguish between non-profit and commercial economic structures. The former include consumer cooperatives, public and religious associations, charitable foundations and similar organizations. Commercial - these are partnerships, societies, municipal and state unitary enterprises. It is permissible to unite in the form of unions and associations between organizations of various types.

About non-legal entities

Accounting for the financial and economic activities of an organization depends on many important points. For example, does it have the status of a legal entity. To receive it, you must register in the prescribed manner, have a bank account, separate property,be responsible for obligations, acquire rights, fulfill obligations, act as a plaintiff or defendant in court, have an independent balance sheet. A non-legal entity is an organization for which any of the points listed above are not available. It should be noted that, as a rule, economic organizations have a status that brings them to a qualitative level of activities. Therefore, in most cases, the information is focused on legal entities. Although the material under consideration is largely suitable for those who do not have such a status, as well as for informal organizations. After all, the organization of economic accounting and operations does not have an innumerable set of implementation options.

Important terminology

Now we should make a small digression. When analyzing the topic, an important factor is the organization of accounting for financial and economic activities. But some people have trouble using the terminology. To avoid confusion, it is necessary to consider the meaning of a number of words:

1. Possession - this refers to the actual possession of a particular thing. It may or may not be legal. It should be noted that the owner is not always the owner. The mortgagee and the tenant can act as his role.
2. Use - this means the right to consume a thing according to its purpose. This is the operation of property, equipment, land, and the receipt of income from them.
3. Order - this meansthe right to determine the legal fate of a certain thing. A person may enter into lease, sale, donation, and destruction transactions. The last three options are accompanied by deprivation of ownership.
4. Responsibility - this means the obligation to indemnify, pay a pen alty for damage caused to the owner. It is solidary, subsidiary and shared. The first type of liability is determined by the contract and is provided for in cases where the subject of obligations is indivisible. At the same time, claims can be made both to all debtors, and to one person. Subsidiary liability provides for the presence of guarantors - third parties. They act as guarantors who confirm that the organization will be able to fulfill its obligations. And shared liability is when there are several debtors, as well as the procedure for paying obligations arising from the contract.

Basic legal forms

Business operations of the organization, reporting and much more depend on how exactly the system for carrying out activities was built. Let's briefly go through the main types and their structural features:

1. Limited Liability Company. Also known as LLC. It is an association of citizens and legal entities, which is created for joint economic activities. The authorized capital is formed exclusively from the shares (contributions) of the founders. An LLC is established and operates on the basis of a memorandum of association and articles of association. But if it was founded by only one person, then only the second document is needed.
2. Company with additional liability (until 1.09.2014). Also known as ODO. A feature of this legal form is that the participants bear subsidiary liability for losses incurred in the course of their activities. It also operates on the basis of the memorandum of association and articles of association. If it was created by one person, then only the second document is needed.
3. Joint-stock company (JSC). It is a commercial organization whose authorized capital is divided into a certain number of shares. They serve to certify the mandatory rights of the participants in the company in relation to the legal entity. Joint-stock companies are open (OJSC) and closed (CJSC). In the first case, you can alienate securities without the consent of other participants. In addition, the number of shareholders is not limited. CJSCs are more constrained in this respect. So, their shares can be distributed exclusively among the founders or other, predetermined circle of persons. At the same time, the number of shareholders should not exceed fifty people. Responsibility by legal entities shall be borne within the limits of their property. Shareholders - within the framework of the perfect contribution. These are the most popular options.

Specific Shapes

In addition to the options discussed above, the economic plan of the organization may provide for the creation of less familiar now associations:

1. General partnership. It is a commercial organization whose members are equalpartners. The activity is carried out on the basis of the concluded contract. Participants are fully responsible for all belongings (even personal).
2. Fellowship in faith. It includes not only participants, but also contributors. The status is similar to the organizational form in paragraph No. 1. But at the same time, investors do not participate in entrepreneurial activities. And they bear the risk within the limits of their contributions. A limited partnership operates on the basis of a memorandum of association. The presence of the charter is not provided.
3. Unitary enterprise. This is a commercial organization that does not have ownership of the property assigned to it. Everything that is, belongs to the right of either operational management or economic management. The property of a unitary enterprise is indivisible.
4. Consumer cooperative. It is an association of citizens and legal entities, which is created to meet the material and other needs of the participants. This form provides for making share contributions and limited liability for the obligations of the cooperative.
5. Fund. This is an organization established by citizens or legal entities on the basis of voluntary property contributions. It is created to achieve social, charitable, cultural and other socially useful goals. The Foundation does not provide for membership. To implement the statutory tasks, the foundation can engage in entrepreneurial activities, participating and even creating business companies.

Other shapes

Completing the analysis of economic activityorganizations:

1. Institution. They are created for the implementation of socio-cultural, managerial and other functions of a non-commercial nature. Institutions are financed in whole or in part by the owners. This form is suitable as a basis for a financial and industrial group, a holding and other associations. They concentrate strategic management.
2. Unions and associations. This implies the creation of non-profit organizations that are established by commercial structures to protect their interests and coordinate this process. At the same time, the participants of the association retain their independence and the status of a legal entity. The financial and economic activity plan of the organization in such cases provides for subsidiary liability.

Features of organizational forms

In this case, the division is carried out into two types:

1. Unit organizational forms. In this case, habitual societies, private enterprises and similar structures are created. They are characterized by the fact that among the founders there is no more than one legal entity. Examples include workshops, small construction firms, and so on.
2. Associations built on the principles of cooperation or concentration. There is a wide variety of possible options for cooperation and relationships. For example, an association, when organizations are united on a technological basis. In addition, there are also cartels, consortiums, concerns, corporations, syndicates,trusts, financial and industrial groups, holding companies.

Each considered option has its own specifics, which affects the organization of business accounting, management, reporting to shareholders and founders, the degree of freedom in the decision-making process, and the like. For example, a consortium is a long-term contractual association of homogeneous companies that, when interacting with partners, act as a single entity. Whereas a cartel is a structure whose task is to create a favorable infrastructure for doing business. And corporations are generally similar to a joint-stock company, with the only difference being that they include separate enterprises, each of which has its own "weight" in decision-making.

Conclusion

Here it is briefly considered what economic organizations are. Alas, but all this is limited by the size of the article. But if we consider in detail, then to describe only one, for example, a limited liability company, as well as other forms, an amount of information commensurate with that (and even more) that is set out here may be required.