Lessons 6 · 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
6
The private enterprise
Textbook: pp. 30–33
GoalExplain what a private enterprise is, who may found it, its distinctive features, advantages and disadvantages, and distinguish it from an individual entrepreneur and from an LLC.
New words
private enterprise: a commercial organisation founded and managed by a single natural person who owns it · Xususiy korxonaowner: the sole founder who gives the enterprise its property and approves its charter · Mulkdorcharter fund: the initial property or money put into an enterprise by its owner or participants · Ustav fondifull liability: answering for the enterprise’s debts also with the owner’s own property when its property is not enough · To‘liq javobgarlik
Explanation
A private enterprise is a commercial organisation formed and managed by a single owner, that is one natural person, and it is a legal entity. The owner gives the enterprise property and approves its charter; the founder may only be a natural person, not a legal entity. The charter fund is not divided into shares and its size is set by the owner; money, securities or other property valued in money may be put into it. The owner manages the enterprise as sole head, acts in its name without a power of attorney, concludes contracts and employment contracts and opens bank accounts; this allows quick decisions. The advantages are independence and speed, with no other founders interfering; the disadvantages are that, because a legal entity cannot be the owner, attracting funds is hard, and if the enterprise’s property is not enough the owner answers for debts fully with his or her own property. After the firm name “xususiy korxona” or “XK” is written. In practice many entrepreneurs open an LLC even alone, because liability there is limited; consider this difference when choosing a form.
Worked examples
Funds problem: Bobur runs a furniture workshop as a private enterprise. He needs partners to expand, but no other founder may join. He can take one of two paths: borrow from a bank or change the enterprise into another form (for example an LLC).
Full liability: a private enterprise has property worth 40 000 000 so‘m and debts of 55 000 000 so‘m. The shortfall of 15 000 000 so‘m may be covered by the owner’s personal property. Calculation: 55 000 000 − 40 000 000 = 15 000 000.
Class activity
Choosing a form debate: the class splits into two groups. The first defends “One person should start as a private enterprise”, the second “One person should open an LLC”. Each group gives one legal argument (liability, founder, attracting funds).
Practice
1
Who may found a private enterprise?
Only one natural person; a legal entity or several persons cannot be founders.
2
In which important respect does a private enterprise differ from an individual entrepreneur?
A private enterprise is a legal entity with a charter and charter fund; an individual entrepreneur does not form a legal entity.
3
Why is the charter fund of a private enterprise not divided into shares?
Because there is only one owner; shares need several participants.
4
The enterprise’s property is 62 000 000 so‘m and its debts are 70 000 000 so‘m. How many so‘m might the owner have to cover from his or her own property?