Business Administration

Ing. Pavla ehoov, Ph.D.

Phone: +420 48 535 2353
E-mail: pavla.rehorova@tul.cz

Rules of BUSINESS
ADMINISTRATION COURSE
1) All students:
Attendance of seminars (x ? absences)
=> active work at seminars

Rules of BUSINESS
ADMINISTRATION COURSE
2) All students:
2 students = 1 semestral project
Firm Establishment (and its presentation)
(i. e. foundation documents, strategic plan,
SWOT analysis, balance sheet, depreciations,
production and sale plan )

Rules of BUSINESS
ADMINISTRATION COURSE
3) NISA students:
Exam: written test minimum 60 %

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 Business
Enterprises

Typology of enterprises

Legal forms
Size of enterprise
Type of production
Sectors and branch of economy

Size clasification
a) Microenterprise:

number of employees < 10,

assets < 180 mil. CZK or
net turnover < 250 mil. CZK

b) Small enterprise: number of employees < 50,

assets < 180 mil. CZK or
net 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 - EU
a) Microenterprise:

number of employees < 10,

assets < 2 mil. EUR or
net turnover < 2 mil. EUR

b) Small enterprise: number of employees < 50,

assets < 10 mil. EUR (in 1996 5 mil. EUR) or
net 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

the number of employees

Number of employees

% of enterprises

1-9

96,0

10 - 49

3,1

50 - 249

0,7

250 and more

0,2

Type 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

Sectors
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 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 forms
Choice of legal form depends on these factors:
1. liability
2. competence to the management
3. number of founders
4. claims to the initiatory capital
5. administrative costingness
6. share in profit/loss
7. financial possibilities
8. tax burden
9. duties of publication

Organisational Structure
of Czech Economy
Legal form
Total subjects
State enterprises
Corporations
- joint stock companies

Cooperation

%
100
1,65
13,84
1,80

1,74

Sole enterpreneur

75,93

Individual farmers

6,84

Types 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
of 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)

Simpliest legal form of business organization

Proprietor sole owner of business enterprise
and is able to exercise complete control over its
operations
Sole trader is liable for the debts of business to
the full extent of his personal assets
Sole traders are taxed on the individuals
personal income tax return at a progressive rate
from 15%

Natural Person (Sole trader)

Natural person can be only a person who:

- is older than 18,
- is unblemished,
- is eligible (competent) to the legal acts,
- does not have any tax back-payment.

= we distinguish three types of Natural Person

= according to these types people need a special
licence and different number of working
experience years

Limited liability company

(Spolenost s ruenm omezenm)
Ltd
Liability of owners

together into amount of

outstanding deposit

Minimum of capital

min. 200 000 CZK

each partner min. 20 000 CZK

Minimum of partners (founders)

min. 1, max. 50

Institutions

General meeting highest

institution
Executives corporate inst.
Advisory board - voluntary

Profit/loss sharing

according of share of business

share

Joint stock company

Akciov spolenost (Corporation USA)

Legal entity is separate and distinct from the

people who are its owners
It has legal distinction between the corporation
and its stockholders
There is a separation of roles stockholders are
owners, president and other executives manage
the corporation (company)
Company in which each owner has unlimited
liability. Joint stock company combines features
of a corporation and a partnership

Joint stock company

The process of becoming a corporation, call
incorporation, gives the company separate
legal standing from its owners and protects
those owners from being personally liable
in the event when the company is losing
(a condition known as limited liability).
Incorporation also provides companies with
a more flexible way to manage their
ownership structure.

Joint stock company

Share capital must be at least CZK 2 million.

The company must put at least 20 % of the
capital into a reserve fund, which is founded by
after-tax profits.
The accounts must be audited annually.
There must be at least three members on the
board of directors, and each member must be a
Czech citizen or resident.

Joint stock company

Liability of stock holders

none

Minimum of capital

min. 2 000 000 CZK without tender of

stocks
min. 20 000 000 CZK with tender of
stocks

Minimum of partners
(founders)

min. 2 natural person or 1 corporate

bodies (legal entities)

Institutions

Shareholders meeting
Board of directors
Advisory board min. 3 members

Profit/loss sharing

according of share of nominal value of

stock to all stocks

Limited partnership
(Komanditn spolenost)
Liability of owners

Complementar Sole trader, liable

for the debts of business to the full
extent of his personal assets
Commanditist amount of
outstanding deposit

Minimum of capital

Commanditist minimum 5 000 CZK

Minimum of partners
(founders)

1+1

Profit/loss sharing

profit 1 : 1,
complementars - the same amount,
commanditist - among their
deposits
loss complementars the same
amount (equal share)

Co - partnership
(Veejn obchodn spolenost)
Liability of owners

together liability for the debts of

business to the full extent of
personal assets

Minimum of capital

is not defined

Minimum of partners (founders)

2 natural person or 2 corporate

bodies (legal entities)

Profit/loss sharing

equal share

Cooperative
(Drustvo)
Liability of owners

no liability

Minimum of capital

min. 50 000 CZK

Minimum of partners (founders)

min. 5 partners or 2 corporate

bodies (legal entities)

Institutions

Member meeting
Board of directors corporate
inst.
Control commission 3
members

Profit share

according to level of member

deposit

Seminar

Groups 3-4 people

(German + Polish + Czech)
Legal forms of enterprises in Germany
and Poland
Comparison of these forms with Czech
system
Capital and personal companies