The firm and its types

Production and services take place in enterprises: one owned by the state is a state enterprise, one based on personal property is a private enterprise, and a mix of both is a mixed enterprise. An enterprise that does business for profit is called a firm. A private firm has one owner: he or she finds the money, runs the firm, receives both profit and loss, and answers with all of their property. A partnership (shirkat) is formed by two or more people to work together; the members work in it themselves, share profit by agreement and, if debts arise, are fully liable even with personal property. In an association firm the founders contribute money and property to the starting capital, the charter fund, and may not take part in daily work; profit and loss are shared by the rule in the founding agreement. If the founders cover losses only up to the size of their contribution, it is a limited liability company (MChJ, often with “Ltd” added to the name); if they answer with all their property, it is a company with unlimited liability. One can also work without opening a firm, by registering as an individual entrepreneur and paying taxes.