The most frequent forms of entrepreneurship
or self employment are the forms of trade
licence activity or the form of commercial
companies.
The main difference between the two forms
is that a trader (i.e. a physical person)
does business on his or her behalf and needs
the so-called trade licence, while a commercial
company ( i.e. a legal entity) does business
on behalf of the company, i.e. all its owners.
For setting up such a company the trade licences
of its founders are required, as well as a
legal contract among them.
TRADE LICENCE ACTIVITIES
A trade licence activity is the easier way
of starting a business. One has to apply for
the trade licence, which provides authorisation
to do business in a particular trade. There
are different requirements for the following
different kinds of trades (all require probity):
Free trades - no specific qualification
is required, just an extract from police records
(these trades include, for example, ordinary
sales work or various intermediary activities,
etc.)
Craft trades - apprenticeship or otherwise
defined courses of vocational education and
training are required, or six years of experience
in respective activities or occupations (these
trades include for example joinery, smithery,
mechanical trades, bricklaying, tinsmithery,
beautician services, etc.).
Regulated trades - besides appropriate
qualifications there are additional requirements
defined in various regulations (these are
trades such as bookkeeping, assembling, repair
and control of electrical appliances, chemical
production, optician, massage services, psychological
counselling, etc.)
The above types of trades are called registered
trades. The applicant who meets the defined
requirements submits relevant documents to
the trade office, which issues the trade licence.
Concessions - for these, requirements
(including qualification) are defined by regulations
and laws. Moreover, in addition to registration,
the application requires the approval of a
certain state administration authority (e.g.
for money-changing it is the Czech National
Bank). If the approval is granted, the applicant
receives besides the trade licence as well
as the so- called concession. Examples of
concessions include the production, repair,
sale and hire of weapons, the provision of
communication services, taxi services, etc.
ENTREPRENEURSHIP IN THE FORM OF COMMERCIAL ENTERPRISES (TRADING COMPANIES OR PARTNERSHIPS)
Those who do not want to be in business alone
but wish to join forces and finance with other
partners, which might be unavoidable if the
start-up costs are high, have the opportunity
to set up a commercial enterprise. The most
common is the so-called limited liability company.
The partners are each obliged
to make a basic capital deposit, from which
debts or other financial commitments can be
paid in case of the company being liquidated
(that is why the liability is limited - the
company is liable only up to the amount of
the basic capital). They conclude the partnership
contract which lays down, among other things,
the amounts invested by the individual partners
and how their joint profit will be shared.
Such a limited liability company may also
be set up by one single partner. There are
other types of commercial enterprises as well,
such as the joint-stock company, public company, limited partnership
, etc. The details are defined in the Trade Code.
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