1. TYPES OF BUSINESS ORGANIZATIONS
VOŠ – 3 grade – 2 semester
© Markéta Čeřovská

2. I Definition of a business
a business is a legally-recognized organization existing within an economically free country
it is designed to sell goods and/or services to consumers
its main goal is to make a profit
it is any business activity which is not against the law of the given country

3. conditions given by the state have to be fulfilled in order to start business
usually the whole property of partners serves as the liability
capital is needed – either of the owner or of another investor
there is a body represented by the owner himself or by a deputy or board
some form of authorization is needed – either trade licence or licence deed

4. II Starting a business the person has to be over 18 fully competent
his/her penal register has to be without any records that would concern business
a confirmation is required from the Revenue Office proving the person has no debts

5. III Basic types of trades
Notifiable trade
CRAFT TRADE – beauty services, car repairs etc.
REGULATED TRADE – driving school, guide service, providing massages etc.
FREE TRADE – purchase and sale of goods
Licensed trade

6. III A) Notifiable trade
in order to conduct trade a written report must be given to the Trade Licensing Office
1 CRAFT TRADE
we need to have qualification which we can prove by a certificate:
a vocational certificate and three years of practice
or school leaving certificate and two years of practice
or diploma and one year of practice

7. 2 REGULATED TRADE
various conditions must be fulfilled in order to be allowed to carry on
the conditions are specified in the Trade Licensing Act
3 FREE TRADE
no professional qualification is needed

8. III B) Licensed trade
the person has to hold a permission (a licence deed) granted by the state is required or an abstract of record
must have professional qualification
e. g. taxi service, funeral service, private detectives etc.

9. IV Cooperatives
it is an entity of unlimited number of persons which is set up in order to carry on business or to provide for needs of its members
at least 3 members are required in order to set up the cooperative
the cooperative is liable with all its property, but each individual member is not liable
its working capital comes from members´ deposits
there are bodies which make decisions, control or manage the cooperative

10. V Partnerships Private ownerships Stock corporations
it is a body corporate which is set up by a number of people in order to run a business
all partners or some of them are liable for liabilities and work in the company in person
PUBLIC LIMITED COMPANY
LIMITED PARTNERSHIP
Stock corporations
the minimum basic deposit is given by the law and is required in order to run the business
partners are not required to work in the company in person but they have to provide financial deposits
LIMITED LIABILITY COMPANY
JOINT STOCK COMPANY

11. Private ownerships V A) Public limited company
in order to set up, at least 2 persons are needed, they are liable with their whole assets and they have to register in the business register
basic capital is not compulsory as well as the partner´s deposit
the liability is unlimited
the statutory body involves all of the partners unless it is stated differently in the contract
the profit is divided equally among all partners and they are responsible to give taxes from their own part

12. Private ownerships V B) Limited partnership
to set up, at least two persons join together:
THE UNLIMITED PARTNER
THE LIMITED PARTNER
owns a trade licence
is registered in the business register
is liable with his whole assets
is liable only partially by his deposits
gives the basic capital according to his own decision
has to give at least 5,000 CZK
has unlimited liability
has limited liability
makes up the statutory body
acts independently

13. profit is divided equally between the unlimited and limited partners
each unlimited partner receives an equal part
limited partners receive profit according to the height of their deposit
in case of a loss, the unlimited partners have to meet the liabilities equally but the limited partners are required to do so only in case it is stated in the contract

14. Stock corporations V C) Limited liability company
basic capital is compulsory and it is created by the deposits of the partners
the company can be set up by one person, but the maximum of partners is fifty
every partner is required to give a deposit
every partner is liable
the limit of the liability is the height of unpaid deposit
the statutory body is formed by agents
the profit is divided according to the deposit

15. Stock corporations V D) Joint stock company
basic capital of this business is at least 2 million CZK (or 80,000 EUR)
basic capital is divided into a certain number of shares
the property of the business is impartible
the shareholders are not liable, they would only lose their deposits
the company is liable with all its property
basic capital is compulsory as well as the partner’s deposit
the board of directors forms the statutory body

16. Sources:
JUDr. František TALIÁN. Ekonomika pro obchodní akademie a střední školy. Fortuna
JUDr. Radovan RYSKA, Bc. et PhDr. Monika PUŠKINOVÁ. Ph.D. Právo pro střední školy. 2. vydání. Eduko nakladatelství 2013.