Lessons 4 · 1 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
4
Family entrepreneurship
Textbook: pp. 20–24
GoalExplain the essence of family entrepreneurship, the forms of family entrepreneur and family enterprise, their advantages, disadvantages and limits, and analyse simple situations.
New words
family entrepreneurship: business organised by family members and close relatives · Oilaviy tadbirkorlikfamily entrepreneur: family business without forming a legal entity · Oilaviy tadbirkorfamily enterprise: family business that forms a legal entity · Oilaviy korxonapersonal labour: the participants’ own work in the business, the basis of a family enterprise · Shaxsiy mehnat
Explanation
Family entrepreneurship is activity organised voluntarily by family members and close relatives at their own risk and property liability. It takes two forms: without forming a legal entity it is a family entrepreneur (OT), with a legal entity it is a family enterprise (OK). The advantages are trust among family members, convenient division of labour, the possibility of working at home, and the young learning business secrets from the family; the disadvantages are the effect of family relations on work relations and vice versa, possible lack of qualification among members, and difficulty growing into a large enterprise. A family entrepreneur uses only family members’ labour and hires no outsiders; a family enterprise has at least two participants who must personally work in it, and its staff must not exceed the limit set for small business entities. The law also sets limits: for example producing excise goods, extracting minerals, using toxic or very hazardous equipment is not allowed, and industrial activity is not carried out in a multi-flat building. The tax and mandatory payment procedure and the minimum charter fund are set by law and must be checked in the current law.
Worked examples
Family entrepreneur: The Qodirov family makes dried curd balls and strained yoghurt in their yard in summer and delivers it to neighbourhood shops. The father, mother and elder daughter do the work, no outside staff. No legal entity was formed, so this is a family entrepreneur.
Family enterprise: in the Rahimov family a mother, her two daughters and the grandmother formed a legal entity called “Gulbahor Oila” and sew national skullcaps. All four work in it personally, so they can be participants. When orders grew, they took on a neighbour not as a participant but as a hired employee under an employment contract.
Class activity
Family council: groups of 4–5 play one family, choose an idea for a handmade product, assign roles (who produces, who sells, who keeps the accounts) and invent 2 rules so that work relations do not harm family relations. Each group presents for 1 minute.
Practice
1
What is the main difference between a family entrepreneur and a family enterprise?
A family enterprise forms a legal entity; a family entrepreneur does not.
2
Why is the participants’ personal labour important in a family enterprise?
Because the essence of this form is activity based on the family members’ own work; someone who only invests money and does not work cannot be such a participant.
3
What is the difference between a participant and a hired employee in a family enterprise? In what capacity can a person who is not a family member work there?
A participant is a family member who has a share in the enterprise’s property and takes part by personal labour; a hired employee receives wages under an employment contract. A person who is not a family member can only be a hired employee.
4
A family enterprise had 6 000 000 so‘m of revenue and 4 350 000 so‘m of costs in a month. What is the profit in so‘m?