Business Administration

Ing. Pavla Řehořová, 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 100
State enterprises 1,65
Corporations 13,84
- joint stock companies 1,80
Cooperation 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 individual´s
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
(Společnost s ručením omezeným)
Ltd

together into amount of

Liability of owners
outstanding deposit
min. 200 000 CZK
Minimum of capital
each partner min. 20 000 CZK

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

General meeting – highest

institution
Institutions
Executives – corporate inst.
Advisory board - voluntary
Profit/loss sharing according of share of business
share
 Joint stock company
Akciová společnost (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
min. 2 000 000 CZK without tender of
stocks
Minimum of capital
min. 20 000 000 CZK with tender of
stocks
Minimum of partners min. 2 natural person or 1 corporate
(founders) bodies (legal entities)
Shareholder´s meeting
Institutions Board of directors
Advisory board – min. 3 members
according of share of nominal value of
Profit/loss sharing
stock to all stocks
 Limited partnership
(Komanditní společnost)
Complementar– Sole trader, liable
for the debts of business to the full
Liability of owners extent of his personal assets
Commanditist– amount of
outstanding deposit
Minimum of capital Commanditist minimum 5 000 CZK
Minimum of partners
1+1
(founders)
profit 1 : 1,
complementars - the same amount,
Profit/loss sharing commanditist - among their deposits
loss – complementars the same
amount (equal share)
 Co - partnership
(Veřejná obchodní společnost)
together liability for the debts of
Liability of owners business to the full extent of
personal assets

Minimum of capital is not defined

2 natural person or 2 corporate

Minimum of partners (founders)
bodies (legal entities)

Profit/loss sharing equal share

 Cooperative
(Družstvo)

Liability of owners no liability

Minimum of capital min. 50 000 CZK

min. 5 partners or 2 corporate
Minimum of partners (founders)
bodies (legal entities)
Member meeting
Board of directors – corporate
Institutions inst.
Control commission – 3
members
according to level of member
Profit share
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