Types of Business Units

US economic legislation distinguishes three basic forms of economic activity: individual proprietorship from partnership and corporation, each of which, in turn, has features, species and subspecies. Let’s consider each of these forms separately.

Individual entrepreneurship is the most massive form. Annually in the US, businessmen fill approximately 25 million tax returns, the vast majority of which are related to individual business. Of this amount, approximately 1 million people. business is an addition to the main income; 10 million people. participate in the family business, in which there are no hired personnel, and about 6 million – in small business with hired personnel, but without the formation of a legal entity.

A partnership is a legal entity in which entrepreneurs join together for joint business. For the obligations of the partnership, all its participants bear full collective responsibility with all their property. A partnership can have employees. Revenues from partnerships that do not expand and replicate the business are distributed among the participants who pay tax from it as an individual income. Partnerships were widely distributed in the field of special services (legal, management consulting, engineering, etc.).

In recent years, many states have enacted laws allowing entrepreneurs to join associations that are largely analogous to partnerships, but in which there is no full financial responsibility for the obligations of the legal entity. Such associations are called “limited liability company” (limited liability company). Their participants are liable for the obligations of the association only in the amount of their contributions to the authorized capital. But just like partnerships, such companies are not subject to profit tax. Lack of full responsibility is a significant advantage, so most of the partnerships have been re-registered as “limited liability companies”.

Corporations are the main form of organization of economic activity. Corporations began to be created in the USA at the end of the 17th century. initially to concentrate public resources in addressing such tasks as the creation of infrastructure facilities (roads, dams, dams, canals, etc.), the construction of civilian ships and public buildings. Such corporations received certain privileges (monopoly rights, tax exemptions, etc.), as they were created to meet public needs. But very soon the corporation as a form of business organization began to dominate. At the same time, the goals of satisfying individual consumers and making a profit came to the forefront. In the middle of the XIX century. in the United States began to take shape corporate business law. A number of court decisions were adopted, which consolidated the status of corporations as legal entities, which determined the main aspects of management organization, as well as the interaction of owners with hired managers.

This led to a rapid growth in the number of corporations, stimulated the centralization of management and the right to make economic decisions in the hands of hired managers. The latter got the right to hold seats on the boards of directors of corporations and represent the interests of groups of shareholders. Particular importance was attached to ensuring the continuity of management, its stability and relative independence from the changing composition of shareholders of the corporation turned into the main form of organization of economic activity in the United States.

At the beginning of the XXI century. a corporation is a legal entity, within the framework of which individuals and legal entities are united for joint activities. The participants of the corporation are only liable for its obligations in a limited amount, in the amount of those funds that are socialized for the joint management of cases in the form of shares or shares of shares. There are corporations that do not issue stocks (non stock), such as, for example, cooperatives, mutual credit societies, etc., as well as issuing shares (stock). The bulk of corporations distribute their shares among a limited number of possible buyers in accordance with the rules prescribed in their charters, these are the so-called closed corporations. But the most widespread are open (public) corporations whose shares are quoted on the main exchanges. There are about 8,000 such corporations in the US, but they produce up to 90% of the gross profit in the country and own 70% of industrial assets.

Objectives of management

Organization of interaction with owners and satisfaction of their interests. In the traditional management scheme, the management authority is related to its participation in the board of directors, where it represents the interests of the owners. But this initial idea of a corporate organization has lost its significance as the number of shareholders in open corporations increases, which today is measured in millions.

Spatitude of owners and their inability to consolidate their rights and put forward the task of communication of owners and management to the forefront. The organization of internal management ensures the effectiveness of the organization and is associated with the internal structure of companies, mechanisms for organizing work, incentives, control of performance, etc. For a long time, American companies have been fashion legislators in this matter. It was believed that this way the young America defies the Old World. Choice of the strategy of economic behavior; optimal sizes of companies and its divisions. As the direction of management activity was formed in the last quarter of the XX century, when it was revealed that “economies of scale” have limits, and the effectiveness of business is due not only to the rationality of the internal organization, but also the correctly chosen strategy of behavior in the markets.

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