State registration and entrepreneurial responsibility
Lessons 14–15 · 2 lessons · U. G‘afurov, Q. Sharipov. Basics of Entrepreneurship: textbook for Grade 11 of general secondary schools and for secondary specialised and vocational institutions. 1st edition. “O‘zbekiston” publishing house, Tashkent, 2018
15
Entrepreneurial responsibility
Textbook: pp. 70–73
GoalExplain an entrepreneur’s rights and duties, contract and payment obligations, compliance with law, fair competition, accountability and the kinds of liability.
New words
entrepreneur’s right: an action the state allows or permits the entrepreneur to take · Tadbirkorning huquqientrepreneur’s duty: an action the entrepreneur is required to perform or observe · Tadbirkorning majburiyatiliability: the obligation to answer for conformity of one’s actions with law and social and moral rules · Javobgarlikfair competition: competing only by permitted means · Halol raqobat
Explanation
Entrepreneurial responsibility shows first of all in fulfilling the rights and duties set by law. An entrepreneur has the right to do any activity not prohibited by law, to own his or her property, to choose the direction of activity, suppliers and buyers independently, to dispose freely of the profit left after taxes, to take loans and to engage in foreign economic activity. The duties are performing contracts fully and on time, paying taxes and mandatory payments by the deadline, paying employees’ wages on time, observing labour protection, sanitary and ecological requirements, competing fairly and keeping correct accounts and submitting reports by the set dates. Intimidating a rival, stealing trade secrets, deliberately damaging property or selling below cost to drive out competition (dumping) are unfair competition. Liability arises when a duty is breached and may be property, administrative, criminal or moral; by subject it is individual, group or collective. The amounts of fines and penalties are set in laws (often as multiples of the BHM); the exact sum must be checked in the current law. As an employer the entrepreneur also answers for employees’ safety.
Worked examples
Contract duty: Zafar signed a contract to deliver a 20 000 000 so‘m batch in 10 days, with a penalty of 0.5 % per day of delay in the contract. He was 6 days late: 0.5 % × 6 = 3 %; the penalty is 20 000 000 × 3 / 100 = 600 000 so‘m. This is an example of property liability.
Unfair competition: one of two bakeries sells bread at 2 000 so‘m where the cost is 3 000 so‘m to drive out its rival. This is dumping: at first buyers seem to win, but if the rival closes, prices rise and the market is distorted; that is why it is a form of unfair competition.
Class activity
Right or duty? The teacher reads statements (for example “paying tax on time”, “choosing a supplier independently”, “paying a worker on time”, “disposing of the profit left after tax”). Students raise one of two cards (“right” or “duty”) and justify it.
Practice
1
State the difference between an entrepreneur’s right and duty.
A right is an action one is allowed to take; a duty is an action one is required to perform.
2
Why is paying taxes on time important?
Taxes fill the budget; if late, budget funds fall short and wages, pensions and social services may be delayed; the entrepreneur also faces liability.
3
What is dumping and why is it called unfair competition?
Selling below cost; because it is used to drive rivals out of the market and distorts the market.
4
The contract sum is 30 000 000 so‘m and the delay penalty is 0.2 % per day. How many so‘m is the penalty for a 5-day delay?