Ministry of Education Chuvash State University after I.N.Ulyanov Faculty of Business and Management Course Paper: Talking Business
    Student: N.I. Nikitin, FBM-61-02
    Advisor: M.V. Emelyanova
     Cheboksary - 2003
    PLAN: Introduction.....................................................................................3 Chapter 1. Setting up a business......................................................4 Chapter 2. Company performance....................................................6 Chapter 3. The stock market.............................................................8 Conclusion..................................................................................10 Bibliography...............................................................................11 Introduction
    The given course paper represents a brief material. It has the recommendations of successful management of business. The experience of the entering business and the achievements of positive results are generalized in it. I have chosen the theme of my course paper as I think that each person has an opportunity of opening his own business in our country now, but not everyone can do it. And that's why I have decided to help the beginning businessmen to earn money.
    The given course paper consists of three parts. In the first part it is considered preparatory steps of the setting up of business. Work of the company is analyzed in the following chapter of the course paper. And I have tried to study the stock market in the third chapter.
     Chapter 1. Setting up business
    
    If a person wishes to launch a new business, he has to make some preparatory steps. The first step is the selection of an appropriate legal form. In various countries these forms differ. But usually they are as follows: a limited liability company, a partnership and a sole proprietor.
    There is a basic difference between these forms. A limited liability company is a legal entity (legal person). In case of a bankruptcy, it has to reimburse (cover) its debts with all its assets, but the creditors cannot seize the assets owned by the company's shareholders.
    Sole proprietors or partners do not form a legal entity and have unlimited liability. If their business goes bankrupt, they have to reimburse the debts not only with the firm's assets but also with their personal belongings: money, houses, cars, etc.
    For this reason, most businesses are set up as limited liability companies. The name of such a company ends with "Limited" in the UK or Canada and with "Inc.", "Corp." or "LLC" in the USA.
    A limited liability company may be private or public. A private company is usually founded by a small group of people who know each other and intend to do business together. A private company cannot sell its shares to the public and if it the business is not successful the founders loose their own money only.
    A public company's shares are traded on the stock market and may be purchased by millions of people all over the world. These shareholders are not aware of the company's day-to-day performance and must rely on the professionalism of the company's managers and their reports. If the management is poor or in case of the managers' fraud, the shareholders may loose billions of dollars.
    Many countries have special regulatory bodies to supervise public companies, such as the US Securities Exchange Commission. Yet, corporate disasters sometimes happen. One of the most recent examples is the bankruptcy of Enron Corporation, a giant supplier of energy resources in the Western part of the United States.
    The second step in setting up a business is the preparation of various documents, such as: Memorandum of Association, Articles of Association and Resolution of the founders on the appointment of directors. The Memorandum contains the conditions, on which the founders agree to set up this business, and the Articles set out the principles of the company's formation and management: its name, objectives, share capital, rules of management, etc. The founders have to make the initial investment and may either hire the directors of the company or appoint themselves as the directors.
    Every new business is to be registered with the official company register. The UK has such registration offices in London and in Edinburgh, while in the USA each of the 50 states has its own register. Chapter 2. Company performance
    
    Any business is set up to make profit. But the founders sometimes do not have enough experience or make serious mistakes, which result in losses. The financial results of the company's operations can be seen from its financial reports.
    There are at least three reasons for preparing such reports. First, every government needs to collect taxes and therefore requires detailed information on the company's performance, revenues and expenses. Second, the shareholders need to know, whether the company's management is professional enough, and ask for confirmation with facts and figures. Third, the company's top executives must control the efficiency of the company's various departments and the input of each department in the company's operational results. The reports prepared by the company's accounting department are often verified by an auditor, which is an independent public accountant. The auditor has to confirm that the reports comply with legal requirements and they reflect the company's actual performance.
    There are a lot of reports submitted annually, semi-annually and quarterly. ............