Business AdministrationBusiness Administration

Ing. Ing. Pavla Řehořová, Ph.D.Pavla Řehořová, Ph.D.

Phone: +420 48 535 23Phone: +420 48 535 235353

E-mail: E-mail: pavla.rehorovapavla.rehorova@@tul.tul.czcz

Rules of BUSINESS Rules of BUSINESS ADMINISTRATION COURSEADMINISTRATION COURSE

1) All students:1) All students:

Attendance of seminars (xAttendance of seminars (x ? ? absences) absences)==>> active work at seminars active work at seminars

Rules of BUSINESS Rules of BUSINESS ADMINISTRATION COURSEADMINISTRATION COURSE

2) All students:2) All students:

2 students = 1 semestral project 2 students = 1 semestral project

„„Firm Establishment“ (and its presentation)Firm Establishment“ (and its presentation)

(i. e. foundation documents, strategic (i. e. foundation documents, strategic plan, SWOT analysis, balance sheet, plan, SWOT analysis, balance sheet, depreciations, production and sale plan …)depreciations, production and sale plan …)

Rules of BUSINESS Rules of BUSINESS ADMINISTRATION COURSEADMINISTRATION COURSE

3) NISA students:3) NISA students:

Exam: written test – minimum 60 %Exam: written test – minimum 60 %

Syllabus:Syllabus:

• 25. 10. 07 – Legal forms of business• 01. 11. 07 – my absence (selfstudy, home preparation)

Marketing activities• 08. 11. 07 – Organisation structure• 15. 11. 07 – Capital and property structure• 22. 11. 07 – Cost and Benefits, Cash Flow• 29. 11. 07 – Revision lesson• 06. 12. 07 – Financing of the enterprise, Future Value of Money• 13. 12. 07 – Investment activities• 20. 12. 07 – Human resource management, Taxes• 03. 01. 07 – Presentation of projects• 10. 01. 08 – 1st term of exam

Classification of BusinessClassification of Business

Enterprises Enterprises

Typology of enterprisesTypology of enterprises

Legal formsLegal forms Size of enterpriseSize of enterprise Type of productionType of production Sectors and branch of economySectors and branch of economy

Size clasificationSize clasification

a) Microenterprise: number of employees < 10,assets < 180 mil. CZK ornet turnover < 250 mil. CZK

b) Small enterprise: number of employees < 50,assets < 180 mil. CZK ornet turnover < 250 mil. CZK

c) Medium enterprise: number of employees < 250, assets< 980 mil. CZK or net turnover < 1 450 mil. CZK

d) Great enterprise

Size clasification - EUSize clasification - EU

a) Microenterprise: number of employees < 10,assets < 2 mil. EUR ornet turnover < 2 mil. EUR

b) Small enterprise: number of employees < 50,assets < 10 mil. EUR (in 1996 5 mil. EUR) ornet turnover < 10 mil. EUR (in 1996 7 mil. EUR)

c) Medium enterprise: number of employees < 250, assets< 43 mil. EUR (in 1996 27 mil.) or

net turnover < 50 mil. EUR (in 1996 40 mil. EUR)

d) Great enterprise

Enterprise share according to Enterprise share according to the number of employeesthe number of employees

Number of employeesNumber of employees % of enterprises% of enterprises

1 - 91 - 9 96,096,0

10 - 4910 - 49 3,13,1

50 - 24950 - 249 0,70,7

250 and more250 and more 0,20,2

Type of productionType of production

Enterprises with production:

a) Single-part production – small amount of the same products

b) Batch (line) production – production of the same type of product repeating in batches;

Size of batch:

b1) small

b2) medium

b3) great

c) Continual production – production of great amount of small type of products

SectorsSectors

1.Primary sector (primary production, basic industry, e.g. agriculture, forestry, mining industry)

2.Secondary sector (manufacturing industry, e.g. manufacturing, food, textile)

3.Terciary sector (non-productive enterprises, e.g. trade, transport, banks)

Legal formsLegal forms

1. Natural person (tradesman, enterpreneur)

2. Corporations

3. Cooperative

4. State enterprises, state organisations

5. Budgetary organisation

6. Contributory organisation

7. Foundation

8. Association

9. Not-for-profit organisation

10. Others

Legal formsLegal forms

Choice of legal form depends on these factors:

1. liability 2. competence to the management3. number of founders4. claims to the initiatory capital5. administrative costingness6. share in profit/loss7. financial possibilities8. tax burden9. duties of publication

Organisational Structure Organisational Structure of Czech Economyof Czech Economy

Legal formLegal form %%

Total subjectsTotal subjects 100100

State enterprisesState enterprises 1,651,65

CorporationsCorporations 13,8413,84 - joint stock companies- joint stock companies 1,801,80

CooperationCooperation 1,741,74

Sole enterpreneurSole enterpreneur 75,9375,93

Individual farmersIndividual farmers 6,846,84

Types of business organisationsTypes of business organisations

a) personal established by 2 and more people,partners participate on business,collective company liability - co-partnership- limited partnership

b) capital capital participation of partners on business, they do not participate personally on

business,- limited company – Ltd., - joint-stock company (public limited company – Plc.)

Sequence of establishment Sequence of establishment of companiesof companies

1) Signing of partnership contract

2) Deposit the capital in the bank

3) Application in the licence authority

4) Registration in the Companies register

Natural Person (Sole trader)Natural Person (Sole trader)

Simpliest legal form of business organizationSimpliest legal form of business organization Proprietor – sole owner of business enterprise Proprietor – sole owner of business enterprise

and is able to exercise complete control over its and is able to exercise complete control over its operationsoperations

Sole trader is liable for the debts of business to Sole trader is liable for the debts of business to the full extent of his personal assetsthe full extent of his personal assets

Sole traders are taxed on the individual´s Sole traders are taxed on the individual´s personal income tax return at a progressive rate personal income tax return at a progressive rate from 1from 155%%

Natural Person (Sole trader)Natural Person (Sole trader)

Natural person can be only a person who:Natural person can be only a person who:- is older than 18,- is older than 18,- is unblemished,- is unblemished,- is eligible (competent) to the legal acts,- is eligible (competent) to the legal acts,- does not have any tax back-payment.- does not have any tax back-payment.

= we distinguish three types of Natural Person= we distinguish three types of Natural Person= according to these types people need a special = according to these types people need a special

licence and different number of working licence and different number of working experience yearsexperience years

LtdLtd

Liability of ownersLiability of owners together into amount of outstanding deposit

Minimum of capitalMinimum of capitalmin. min. 200 000 CZK200 000 CZK

each partner min. each partner min. 20 000 CZK20 000 CZK

Minimum of partners (founders)Minimum of partners (founders) min. 1, max. 50min. 1, max. 50

InstitutionsInstitutions

General meetingGeneral meeting – highest – highest institutioninstitution

ExecutivesExecutives – corporate inst. – corporate inst.

Advisory boardAdvisory board - voluntary - voluntary

Profit/loss sharingProfit/loss sharing aaccording of share of business ccording of share of business shareshare

Limited liability company Limited liability company ((Společnost s ručením omezenýmSpolečnost s ručením omezeným))

Joint stock company Joint stock company Akciová společnost (Corporation – USA)Akciová společnost (Corporation – USA)

Legal entity Legal entity is is separate and distinct from the separate and distinct from the pepeople ople who are its ownerswho are its owners

It has legal distinction between the corporation It has legal distinction between the corporation and its stockholdersand its stockholders

There is a separation of roles – stockholders are There is a separation of roles – stockholders are owners, president and other executives manage owners, president and other executives manage the corporation (company)the corporation (company)

Company in which each owner has unlimited Company in which each owner has unlimited liability. Joint stock company combinesliability. Joint stock company combines features features of a corporation and a partnershipof a corporation and a partnership

Joint stock companyJoint stock companyThe process of becoming a corporation, call The process of becoming a corporation, call

incorporationincorporation, gives the company separate , gives the company separate legal standing from its owners and protects legal standing from its owners and protects those owners from being personally liable those owners from being personally liable in the event in the event whenwhen the company is the company is losinglosing (a condition known as limited liability). (a condition known as limited liability).

Incorporation also provides companies with Incorporation also provides companies with a more flexible way to manage their a more flexible way to manage their ownership ownership sstructure.tructure.

Joint stock companyJoint stock company

Share capital must be at least CZK 2 million.Share capital must be at least CZK 2 million. The company must put at least 20 % of the The company must put at least 20 % of the

capital into a reserve fund, which is founded by capital into a reserve fund, which is founded by after-tax profits.after-tax profits.

The accounts must be audited annually. The accounts must be audited annually. There must be at least three members on the There must be at least three members on the

board of directors, and each member must be a board of directors, and each member must be a Czech citizen or resident. Czech citizen or resident.

Joint stock companyJoint stock company

Liability of stock holdersLiability of stock holders nonenone

Minimum of capitalMinimum of capital

min. min. 2 000 000 CZK2 000 000 CZK without tender of without tender of stocksstocks

min. min. 20 000 000 CZK20 000 000 CZK with tender of with tender of stocksstocks

Minimum of partners Minimum of partners (founders)(founders)

min. 2 natural person or 1 corporate min. 2 natural person or 1 corporate bodies (legal entities)bodies (legal entities)

InstitutionsInstitutions

Shareholder´s meetingShareholder´s meeting

Board of directorsBoard of directors

Advisory boardAdvisory board – min. 3 members – min. 3 members

Profit/loss sharingProfit/loss sharing aaccording of share of nominal value of ccording of share of nominal value of stock to all stocksstock to all stocks

Limited partnershipLimited partnership((Komanditní společnostKomanditní společnost))

Liability of owners Liability of owners

Complementar– Complementar– Sole traderSole trader,, liable liable for the debts of business to the full for the debts of business to the full extent of his personal assetsextent of his personal assets

Commanditist– amount of Commanditist– amount of outstanding depositoutstanding deposit

Minimum of capitalMinimum of capital Commanditist minimum Commanditist minimum 55 000000 CZK CZK

Minimum of partners Minimum of partners (founders)(founders) 1 + 11 + 1

Profit/loss sharingProfit/loss sharing

profitprofit 1 : 1, 1 : 1,

complementars complementars - - the same amountthe same amount,,

commanditist commanditist - - among their among their depositsdeposits

lossloss – complementars the same – complementars the same amount amount (equal share)(equal share)

Co - partnershipCo - partnership ((Veřejná obchodní společnostVeřejná obchodní společnost))

Liability of owners Liability of owners ttogether liability for the debts of ogether liability for the debts of business to the full extent of business to the full extent of personal assetspersonal assets

Minimum of capitalMinimum of capital iis not defineds not defined

Minimum of partners (founders)Minimum of partners (founders) 2 natural person or 2 corporate 2 natural person or 2 corporate bodies (legal entities)bodies (legal entities)

Profit/loss sharingProfit/loss sharing eequal sharequal share

Cooperative Cooperative ((DružstvoDružstvo))

Liability of ownersLiability of owners nno liabilityo liability

Minimum of capitalMinimum of capital min. min. 50 00050 000 CZKCZK

Minimum of partners (founders)Minimum of partners (founders) min. 5 partners or 2 corporate min. 5 partners or 2 corporate bodies (legal entities)bodies (legal entities)

InstitutionsInstitutions

Member meetingMember meeting

BBoard of directorsoard of directors – corporate – corporate inst.inst.

Control commisControl commisssionion – 3 – 3 membersmembers

Profit shareProfit share aaccording to level of member ccording to level of member depositdeposit

SeminarSeminar

Groups – 3-4 people Groups – 3-4 people

(German + Polish + Czech)(German + Polish + Czech) Legal forms of enterprises in Germany and Legal forms of enterprises in Germany and

PolandPoland Comparison of these forms with Czech Comparison of these forms with Czech

systemsystem Capital and personal companiesCapital and personal companies