What are the firms?

Every day people are faced with manifestations of firmsin their life. Restaurants, shops, banks, factories, farms - all these are firms (enterprises) that carry out entrepreneurial activities. The firm is a legally constituted unit of entrepreneurial activity, i.e. economic link that realizes its own interests through the production and sale of goods and services by comparing production factors. The enterprise is also an economic link, but within the framework of which there is a combination of factors of production for the creation of goods and services. And if the enterprise is a legal person with its own interests, then it is a firm, and if not, it means that it is part of the firm. More in detail, what are the firms, we will consider in this article.

Enterprises of market economy

  • Private commercial enterprises. Retrieve profit, which is the main purpose of the organization. Activity is determined by the market.
  • Private non-profit enterprises. The main goal is not to make a profit. They are created in order to satisfy some public needs. Profit is an attendant goal. You can not distribute the profit received by the enterprise among the founding members. Such enterprises are charitable foundations, public organizations, etc.
  • The state. Can be commercial and non-commercial. As a rule, activities are determined by political decisions.
  • Mixed.

Types of firms in the economy

  • Individual. It is created by a citizen who carries out entrepreneurial activity without forming a legal entity. Responsible for their obligations with their own property. The property, which by law can not be recovered, does not enter here.
  • Full partnership. Its participants are engaged in entrepreneurial activity, bear responsibility with their property.
  • A limited partnership. Participants are engaged in business, bear responsibility with their property for the obligations of the partnership. At the same time, there are depositors who risk their deposits, but do not engage in entrepreneurial activities.
  • Limited liability company. The statutory fund is divided into certain certain shares. The participants of the organization do not meet the obligations, they risk only their contributions.
  • Company with additional responsibility. The responsibility of the participants of such a company is not limited to deposits only, it extends to property.
  • Joint-stock company. The capital is divided into a number of shares. Shareholders are at risk within their deposits.
  • Production cooperative. Citizens unite and carry out certain economic activities, which are based on their labor participation and the pooling of share contributions.
  • Unitary enterprise. A commercial enterprise that does not own the property that is assigned to it. The property is indivisible.
  • Concerns. Large superobedineniya monopoly type. The most important feature is the unity of ownership of the enterprises, firms, banks entering into it. Holds a controlling stake in the holding company.
  • Holding. Carries out the redistribution and centralization of financial resources of the participants of the concern.
  • Consortia. Temporary consolidation of enterprises. Are created for the decision of concrete problems, realization of the big investment, social and other projects.
  • Cartel. It is a contractual association of enterprises, is based on an agreement on quoting production volumes, terms of sale, sales prices, delineation of sales markets. Each enterprise is legally independent.
  • Syndicate. Association of enterprises, involves the centralization of the supply of participants and the sale of the product they produce. Members of the syndicate can be enterprises, associations, concerns, trusts.
  • Trust. Association of enterprises, in which they lose any of their independence and are subject to unified management.

Joint Stock Companies

All of the above main types of firms are allOnly the legal side of some kind of entrepreneurial activity. And the economic value and economic power of a firm are determined by its size and position on the market.

What are the firms

  • Small. The number of employees is up to 100 people. It does not require large expenses initially. Does not need an administrative apparatus.
  • Average. Employees from 100 to 499 people. It is either a growing and prosperous small firm, or a narrowly focused company that occupies a dominant position in the market.
  • Large. From 500 workers. Much more stable. Are less subject to bankruptcy. A large income, part of which is invested in the further development of the firm. Success in big business very often brings not only economic power, but also some political influence. It is a very complex process.

Different types of firms show 3 main types of economic activity: they demand the factors of production, organize the production and sale of products and invest.

Now you know what kinds of firms and enterprises there are, and you can easily navigate the world of economic news and business areas.

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