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Organizing forms of business activity

Organizing forms of business activity
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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 dollars.

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 enterprise.

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 companion.

- 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.

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