Forms of entrepreneurship - types, features and interesting facts

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

Each entrepreneurial activity is carried out in the format of organizational forms, which are chosen by the owner himself. The choice of the form itself may depend on many factors. Among the main motives that influence the choice of the legal form of entrepreneurship are:

1. Early capital.
2. The nature of the activity of the future company.
3. Personal preference.

But first you need to define the concept of business entities and forms of business. In economic theory, this is a set of norms that determine relations within a firm, as well as its relations with other firms and the state.

There are three main groups - individual, collective and corporate.

Custom Shapes

This is the most common and simplest form of entrepreneurship. Most often, in this case, all activities in the management of this organization are performed by one person or family. It is important to consider that an individual entrepreneur is not a legal entity (unlike other forms ofentrepreneurship). At the same time, the owner does not need to do all the work himself, he can use hired labor, but in small quantities. You can invite up to 20 people maximum. IP is the most common form of small business entities. This is convenient and allows you to successfully conduct business.

In this form of small business, the main advantage is what is its weakness - its size. Since the owner is represented in one person, he can quickly make any decisions without conferring with anyone. This form is excellent in areas where it is necessary to respond quickly depending on the change in the course of the market and other external factors, large capital is not required, because individual entrepreneurs, as a rule, do not have such. Among the shortcomings of this form, one can single out the concentration of all functions in one hand. This person must have knowledge in the field of marketing, economics and production itself.

Collective Forms

Interestingly, these forms became very popular in the 20th century. Among them, there are three main ones: business partnerships (divided into general partnerships and the so-called limited partnerships, or limited partnerships), business companies, joint-stock companies. Consider these types in more detail.

Business partnerships

This form of small and medium-sized business appeared in conditions when there was a need to unite a group of people to achieve certain personal goals. The advantages of this formis the pooling of capital and forces, the division of risk and responsibility between the participants of the organization. Such organizations are divided into general partnerships and limited partnerships.

General partnerships

The first form is a company based on a collective initial capital, uniting a group of individuals or legal entities to conduct joint activities on the basis of an agreement. All participants in a general partnership bear full responsibility in equal shares. This form has one feature. The enterprise itself has the form of a legal entity, but while maintaining the status of a legal entity - participants in this partnership.

In this partnership, each participant can act on behalf of the partnership, entering into transactions and participating in negotiations. The organization must have an authorized person, but he cannot be the sole decision maker, since each participant has the right to act independently. Even one vote against any decisions suspends the activities of the enterprise. This form of organization gives broad autonomy and initiative to each participant.

Fellowships in faith

The second form is limited partnerships. Under this form, a certain circle of persons has unlimited liability, and the rest are responsible only for that part of the firm that is within the limits of their investments. All participants are jointly and severally liable, and the capital is also formed from the amounts of contributions of the participants in the partnership.

All participants can be divided into two groups. First -these are the actual participants of the partnership, that is, authorized persons who are fully responsible to other participants, carry out activities and have the right to make decisions. The second group is the contributors who only form capital and are responsible for their contribution.

Business companies

They can be divided into limited liability companies and additional liability companies. LLC is an association of participants for the purpose of conducting entrepreneurial activities, is a legal entity and can conclude contracts on its own behalf, apply with decisions to the court, have its own rights and obligations. LLCs must consist of two or more members, but have an upper limit on the number of members. If the company exceeds this number, then it will be transformed into a joint-stock company. Members of the company participate in the activities of the organization, depending on the share of the contribution to the capital of this organization, receive profit in the form of dividends.

ODOs are formed thanks to the authorized capital, which is divided into certain shares. Such a company is a kind of LLC, so almost all legal and legislative regulations are the same. The main difference is that if the society does not fulfill its obligations under credit obligations, then the participants risk their personal property according to the shares of the capital invested by them.

Joint-stock companies

This is a form of business organization in which capital is combined to conductjoint activities. This form is similar to economic societies, but the difference is that if the forces of people are mainly united there, then the main thing here is the association of capital. Similar is the responsibility that investors bear according to their shares in the capital. JSC is also a legal entity and is liable to creditors.

The main advantage of a JSC is the ability to raise additional capital by issuing new shares, but at the same time the number of participants increases, and the company's capital is split into smaller parts. JSC is created indefinitely, but this is unless otherwise provided by the charter of the enterprise. The authorized capital consists of a certain number of shares and must be a multiple of 10. By law, there is a lower threshold for the creation of joint-stock companies. It is important to consider that the authorized capital must be equal to or less than the total property under the management of the company. Management is divided into supervisory, executive and supreme bodies. They can be divided into closed ones, where shares and capital are redistributed among shareholders closed, and open, where additional shares can be purchased by any person. JSCs can have branches at home and abroad.

Corporate Uniforms

The corporate form implies the association of several firms to solve production or financial issues. Such cooperation allows firms to retain the status of a legal entity and the powers of managers, because the leaders of associations do not have the right to dispose of individual companies in full.measure. Among the main ones, one can single out a concern and a consortium.

Concern - a voluntary association of several companies to solve joint production issues. Most often, these are companies of the same industry that are united to solve production, scientific, technical and environmental functions. But there are also cross-industry concerns.

A consortium is an association of several firms on a voluntary basis to solve a specific issue. The association is temporary. In the Russian Federation, this form was created with the support of state programs. After the performance of these functions, the consortiums cease their activities.