A joint-stock company (hereinafter referred to as the company) is an organization created on the basis of a voluntary agreement of legal entities and individuals (including foreign ones) who have pooled their funds by issuing shares and whose purpose is to meet public needs and generate profit.
Companies carry out any types of business activities except those prohibited by law.
Business activities of companies in the defense industries, in industries engaged in the extraction of precious and rare metals, minerals, raw materials, timber, furs, are carried out with the permission of the Council of Ministers.
Companies are created without limitation of the term of activity, unless otherwise specified in their charter.
Companies are legal entities, have a company name, a registered trade mark, a seal with its name and trade mark. The company acquires the rights of a legal entity from the moment of its state registration.
The company may have an official abbreviated name.
Companies have complete business independence in matters of determining the form of management, making business decisions, marketing, setting prices, remuneration, distributing net profit.
The company has the right to perform all actions provided by law. The company’s activities are not limited to those specified in the charter. Transactions that go beyond the statutory activities, but do not contradict the current legislation, are recognized as valid.
Companies may have representative offices, branches in the country of foundation and abroad, and also participate in the capital of other companies.
Shareholders are liable for the company’s obligations within the limits of their personal contribution to the capital.
The company is liable for its obligations with all assets (all property).
A share is a security issued by a joint-stock company, in other words, by the issuing company. All investors who bought shares became co-owners of the company. A share confirms that its owner has a share in the company, even if it is very small.
What do shares give to the owner?
the right to vote at a meeting of shareholders and thus participate in the management of the company (if the share is voting);
the right to receive dividends – part of the company’s profit (if they are paid);
the right to receive part of the company’s property in the event of its liquidation.
Why is the right to vote important? Because all the most important decisions are made by the general meeting of shareholders. Including decisions on the liquidation and reorganization of the company. It is the meeting that decides how best to dispose of the profit based on the results of the year: to direct all the money to business development or part of it – to pay dividends.
What types of shares are there?
Company shares are either ordinary or preferred. The differences are related to two main rights: voting and receiving dividends.
Ordinary. The most common type of shares. They always give the right to vote at a shareholders’ meeting, but do not guarantee dividends.
Preferred. Have a predetermined dividend amount, for example, a percentage of the company’s profit. Their owners can participate in voting only if they have not received dividends for the previous year.
Sometimes there are special types of preferred shares:
Non-voting preferred. Have a fixed dividend and the right to receive payments first, but do not allow voting.
Preferred with special rights. The terms of dividend payment and the possibility of participating in voting are spelled out in the company’s charter. For example, the owners of such shares may have the ability to vote, receive priority in dividend payments, and be the first to buy new share issues. The charter may also include any other rights that the company wants to grant to their owners.
The type of shares determines whether their owners will be paid dividends and in what amount. If the shareholders’ meeting decides to allocate part of the company’s profit to pay dividends, it will be distributed first among the owners of non-voting preferred shares. They are entitled to a fixed dividend – a specific amount or a percentage of the par value of the securities. Owners of non-voting preferred shares participate in voting only in cases where the issue of liquidation of the joint-stock company is at stake.
Second in line for dividend payments are the owners of standard preferred shares. The amount of dividends on these shares may be equal to a specific amount or a percentage of the par value of the share. But most often it is defined as a percentage of the company’s net profit for the year, divided by the number of preferred shares. The procedure for calculating dividends is usually spelled out in the charter. Owners of such shares cannot vote in the event of dividend payments. But if dividends are not accrued, then at the next meeting they receive the right to vote on all issues.
One Joint-Stock Company may have several types of preferred shares, including shares with special rights. The company’s charter must clearly specify the order of payment of dividends to their owners. Owners of ordinary shares can count on dividends only if the company fully fulfills its obligations to all preferred shareholders.
After the dividends are distributed, payments are made to all categories of shareholders of the company simultaneously.
Trading means trading currencies, securities or goods for profit. Traders work in both the financial and stock markets – these are official participants in the trades. They buy or sell assets either on their own behalf or on behalf of clients.
Types of trading
Traders use several approaches in trading.
Day trading:
Used most often, it involves the trader opening positions in the morning and closing them in the evening, that is, the transaction is completed in one day
Scalping:
This is a type of day trading. It is characterized by a high intensity of transactions, that is, the trader sells and buys assets with minimal price fluctuations
Swing trading:
By fixing a certain trend, the trader tries to make the maximum amount of money on it. As a rule, such positions are closed within a few days
Positional trading:
Positions are opened for a certain period and for a specific event
Medium-term and long-term trading:
Used by investors when positions, for example, are closed once a year
In their activities, a competent trader equally uses three types of analysis:
1. Technical – this is the analysis of charts and volumes, various indicators and schemes to determine the future directions of asset price movements. It is based on the assumption that different events psychologically affect the masses of people in the same way, which leads to the repetition of price chart movements, and you can make money on this.
2. Fundamental – analysis of the economic activity of companies and the state of the macroeconomy. Based on the results of this study, assets are selected that should show growth or decline ahead of the market.
3. Operational analysis and response to the news flow help to predict how events will affect the dynamics of asset prices.
The concept of “entrepreneurship” is multifaceted and can be considered from different angles. The most universal concept is the definition of entrepreneurship as an economic category, which is an independent activity for the sale of goods, works, services, associated with risk, the result of which is profit.
When studying the concept of entrepreneurial activity, the question often arises about the identity of the concepts of “entrepreneurship” and “business”. Most often in the literature, such concepts are used interchangeably.
In fact, the concept of business is much broader than entrepreneurship, since it implies any independent activity aimed at making a profit by selling goods and services that are in demand. While entrepreneurship still implies innovation, to one degree or another.
Entrepreneurial risk:
In parallel with independent decision-making, the entrepreneur also assumes specific risks, which he must be aware of and bear responsibility for.
Entrepreneurial risk is a situation of uncertainty in which an entrepreneur must make a choice in the absence of information between alternative options, such a choice will affect the entrepreneur’s financial situation in the future.
Focus on systematic profit-making:
It should be noted that a one-time transaction and profit-making as a result is not entrepreneurial activity, since it is not systematic. At the same time, the fact of profit-making is not important, what is important is the focus on systematic profit-making. Activities aimed at profit-making, which result in losses, can also be recognized as entrepreneurial.
Legality:
It is important to carry out entrepreneurial activity within the framework of the norms established by current legislation. In the absence of a sign of legality, entrepreneurial activity turns into illegal entrepreneurial activity.
Production is an economic process in which a manufacturer creates goods for consumption. Goods can have both a material and an immaterial attribute. After all, a service can act as an object of production. In parallel with this, infrastructure, in a broad sense, also does not have a user. But it is also produced.
The production process is the moment of creating a certain product intended for sale. In economic theory, this process is called the creation of goods. The manufacturer has every right to demand financial compensation for the goods he has created. And here the sales process begins. But it is worth noting that the contact from the creator to the consumer is not always the same. In modern society, most often there are intermediaries.
Intermediaries are on a certain borderline. They do not make goods themselves, but offer services for both the creator and the buyer. Retailers create comfort for both parties. The system of division of labor, where each participant forms one product – The manufactured products satisfy the needs of the consumer, and not the TP itself. This happens as a result of purchase and sale transactions. Between the TP and the buyer, a space is formed, actively filled with intermediaries and supply channels.
An exchange is carried out that corresponds to the creator’s costs. The buyer pays the price that is included in the creation of the product. This is the cost of raw materials + labor + delivery to the end customer. The very fact of purchase is considered recognition of the product, and the amount of recognition is based on the price paid. In connection with the development of the global economy, new signs appear, as well as conditions for the creation of an exchange process. This is the opportunity for companies to enter the market, the emergence of fair competition and internal niche competition, the presence of private property used for production, entrepreneurship, profit and other driving effects.
How does production turn into money?
The main motivation for the creation of goods is profit. This parameter is also determined by economic theory and the modern way of life. In addition to launching the TP, it is also important for an entrepreneur to create a cash flow leading to his profit. In these conditions, additional areas of activity were created that allow increasing the profitability of the process, reducing costs and expenses:
Sales:
This is the release of a batch of product at a set price for further sale, or directly to the consumer, for the amount paid by him
Marketing:
These are any actions aimed at popularizing the product and the manufacturer’s brand, leading to increased sales, increasing the buyer’s interest, telling him about the product
Logistics:
The system of delivery of raw materials and goods to the sale, with maximum savings on the delivery itself
Accounting and accounting:
Measures taken to control the financial side of the TP, for the purpose of planning expenses, summing up income, paying taxes and wages to workers
Modernization:
Technological progress in the production process allows increasing the volume of output, reducing costs, improving quality
Logistics is a science that helps to forecast, control and optimize the process of transferring goods, information or services from the manufacturer/supplier directly to their consumer. This science is focused on solving practical issues and helps to reduce costs in the production, storage and transportation of goods.
Any company strives for success, trying to profitably present competitive advantages in the market. Specialists make forecasts of consumer demands and abilities in order to satisfy them in full. To do this, they need to deliver goods to the point of sale on time, without allowing a shortage.
Distribution logistics is a tool that helps to solve these issues, provided that the main points are met:
the goods are in demand;
the goods meet all quality standards;
the required number of units of goods were delivered;
delivery was made within the agreed time frame;
the order was delivered to the place specified in the contract;
delivery took a minimum of the company’s costs.
The goal of the logistics department is considered achieved if the cargo, which did not lose its marketable appearance during transportation, was delivered at the right time to the right place. Shipping costs from the manufacturer to the store shelf are among the highest, and they directly affect the final cost of the product.