Economic 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, auxiliary peasant farming).
Introductory information
Why are they needed? Economic organizations are needed to meet the interests and needs of man and society in an external environment in relation to the organization. To do this, they can produce products that take the form of goods, services, knowledge or information. In reality, business organizations are:
- Legal entities of all forms. Exception - public and religious organizations. As an example, we can cite joint-stock companies, consumer cooperatives, and the like.
- Non-legal entities of all forms. This is a division of organizations, an association based on individual labor activity and the like.
The form of ownership they have is state, public, rental, private, group. Sometimes they are confused. For example, a joint-stock company, part of the shares of which belong to the state, and the rest to legal entities and individuals.
About size
Speaking about what constitutes the organization of business enterprises, it should be noted that there are four groups in total: micro, small, medium and large. The criteria for this separation are the number of personnel, the value of the products, the value of the property complex, and the share of the market. The most important when assigned to a particular group are:
- Share of authorized capital.
- The limit value of the average number of employees. Here, the sphere in which the activity is carried out plays a large role. So, for scientific organizations, the criteria for a small business are up to 30 people. Whereas industrial and building structures can count up to hundreds of people.
If the number of employees is significantly less than that envisaged for a small enterprise, then the object refers to microorganizations. For example, a construction company of six people, which specializes in electrification.
Classification
Business organizations can be grouped not only in size. There are many more different approaches that allow us to classify them. So, as a basis, you can also choose:
- By the time of action. There are temporary and unlimited. Indicate the period of activity is necessary in the registration documents. An organization may be registered for a day, month, or year.
- According to the season of active action. This status gives the organization the opportunity to recruit workers for a specific cyclic period. There are winter, summer, rainy season and the like.
- On the scale of production. It is single, serial and mass.
- According to the range of tasks performed. There is a specialized production and universal.
- According to the range of products. Distinguish concentrated on one product (their group) and specializing in a wide range.
The organization of business accounting largely depends on the chosen form. Distinguish between non-profit and commercial economic structures. The first 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 combine in the form of unions and associations between organizations of various types.
About non-legal entities
Accounting for the financial and economic activities of the organization depends on many important points. For example, does she have a legal entity status. To receive it, you must register in the prescribed manner, have a bank account, separate property, meet 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, business organizations have a status that brings them to a high level of activity. 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 business accounting and operations does not have a myriad of implementation options.
Important terminology
A small digression should now be made. When analyzing the topic, an important factor is the organization of accounting for financial and economic activities. But some people have problems using terminology. To avoid confusion, it is necessary to consider the meaning of a number of words:
- Possession - this means 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. A pledge holder and a tenant may act in his role.
- Use - this means the right to consume a thing according to its purpose. This is the exploitation of property, equipment, land, and the receipt of income from them.
- Order - this means the existence of the right to determine the legal fate of a certain thing. A person may make rental, sale, gift, destruction transactions. The last three options are accompanied by a deprivation of ownership.
- Responsibility - this means the obligation to indemnify, pay a penalty for damage to the owner. It can be joint, subsidiary and shared. The first type of liability is determined by the contract and provided in those cases when the subject of obligations is indivisible. At the same time, claims can be presented to all debtors, as well as to someone alone. 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 responsibility is when there are several debtors, as well as the procedure for paying obligations arising from the contract.
Basic legal forms
The organization’s business operations, reports submitted and much more depend on how the system of implementation was built. Let's briefly go over the main types and their structural features:
- Limited liability company. Also known as LLC. It is an association of citizens and legal entities that is created for joint economic activities. The authorized capital is formed solely from the shares (contributions) of the founders. An LLC is established and operates on the basis of a memorandum of association and charter. But if it was established by only one person, then only a second document is needed.
- A company with additional liability (until 1.09.2014). Also known as ODO. A feature of this legal form is that participants bear subsidiary responsibility for losses incurred in the framework of the activity. It also acts on the basis of a memorandum and articles of association. If it was created by one person, then only a second document is needed.
- Joint Stock Company (JSC). It is a commercial organization in which the authorized capital is divided into a certain number of shares. They serve to certify the mandatory rights of members of the company in relation to the legal entity. Joint-stock companies are open (OJSC) and closed (CJSC). In the first case, securities can be alienated without the consent of other participants. In addition, the number of shareholders is not limited. CJSC is more cramped in this regard. So, their shares can be distributed solely among the founders or another, predetermined circle of persons. Moreover, the number of shareholders should not exceed fifty people. Responsibility by legal entities is borne within the limits of their property. Shareholders - as part of a perfect contribution. These are the most popular options.
Specific forms
In addition to the options discussed above, the organization’s business plan may include the creation of associations that are now less familiar:
- Full partnership. This is a commercial organization whose members are equal partners. Activities are carried out on the basis of a contract. Participants are fully responsible for all property owned (even personal).
- Partnership on faith. It includes not only participants, but also investors. The status is similar to the organizational form in paragraph No. 1. But at the same time, investors do not participate in entrepreneurial activity. 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.
- Unitary enterprise. This is a commercial organization that does not have title to the property assigned to it. All that is belongs to the right of either operational management or economic management. The property of a unitary enterprise is indivisible.
- Consumer cooperative. It is an association of citizens and legal entities, which is created to meet the material and other needs of participants. This form provides for the contribution of shares and subsidiary liability for the obligations of the cooperative to a limited extent.
- 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 fund does not provide for membership. To implement the statutory tasks, the fund may engage in entrepreneurial activity, participating in and even creating business entities.
Other forms
We complete the analysis of the economic activities of organizations:
- Institution. They are created for the implementation of socio-cultural, managerial and other functions of a non-commercial nature. The institutions are fully or partially financed by the owners. This form is suitable as a basis for a financial and industrial group, holding and other associations. They concentrate strategic management.
- Unions and associations. This means 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 members of the association retain their independence and status as a legal entity. The plan of financial and economic activities 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:
- Single organizational forms. In this case, familiar 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 companies, and so on.
- Associations based on the principles of cooperation or concentration. Here there is a wide variety of various options for cooperation and relationships. For example, an association when organizations are united on a technological basis. In addition, there are cartels, consortia, concerns, corporations, syndicates, trusts, financial and industrial groups, holding companies.
Each option considered 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 whole. 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 individual enterprises, each of which has its own “weight” in making decisions.
Conclusion
So briefly reviewed what constitute business organizations. Alas, 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, it may require a volume of information commensurate with (and even more) that is set forth here.