The laws of dialectics indicate that everything that arises and arises in the future develops, transforms and dies. This also applies to such a category as an enterprise. An enterprise established for an indefinite period can function indefinitely. This period (life cycle) can be divided into certain stages: creation, development, reorganization, restructuring, bankruptcy, reorganization, and liquidation.
The decision to establish new enterprises is made by the owner of the capital. At the same time, the goals of organizing new business entities may differ depending on the founders. If the state acts as the founder, then it pursues the following goals:
production of socially significant goods and services; strengthening the country’s defense capability and increasing its competitiveness; involvement in production of the unemployed able-bodied population and thereby solving the problem of employment; the use of available natural resources; production of fundamentally new types of industrial products using high-tech technologies; satisfaction of economic interests of members of the labor collective.
The owner of a private enterprise has the goal of maximizing profits to satisfy personal interests.
The creation of an enterprise begins with the search for a market niche (an effective area of business organization) and the choice of partners. The next stage is the development of a business plan and the preparation of constituent documents (memorandum and articles of association).
The memorandum of association must contain the following information: the name of the enterprise, its location, the procedure for managing its activities, information about the founders, the amount of the authorized capital, the share of each founder in the authorized capital, the procedure and method of contributions by the founders to the authorized capital.
The charter of the enterprise reflects the organizational and legal form of the enterprise, the name, location, size of the authorized capital, the composition and procedure for the distribution of profits, the formation of the funds of the enterprise, the procedure and conditions for the reorganization and liquidation of the enterprise.
For certain organizational and legal forms of enterprises, the constituent documents (the memorandum of association and the charter), in addition to those listed, contain other information.
Newly established enterprises are subject to state registration. From the moment of state registration, the enterprise is considered established and acquires the status of a legal entity.
The creation phase is mandatory for all businesses. In the future, some enterprises can develop and successfully function indefinitely, others in the period of adaptation to market conditions of management carry out reorganization, restructuring, reorganization, which may not give positive results, which will lead to the liquidation of the business entity.
Reorganization is the creation of new production and functional units, the merger or liquidation of inefficient workshops, re-profiling and diversification of production. A special form of reorganization is the restructuring of enterprises. Directions of restructuring: changes in the production, organizational, social and financial spheres of activity of enterprises, including the transformation of state-owned enterprises into joint-stock companies.
The commercial activity of the enterprise at any stage of its functioning entails the emergence of various crisis situations, the result of which may be insolvency and bankruptcy. The crisis of the enterprise is caused by the inconsistency of its production and financial activities with the requirements of the external environment, which in turn is due to the wrong strategy, inadequate to the requirements of the market. A characteristic feature of crisis situations is:
deterioration of the financial position of the enterprise, reduction of sources and reserves of development; reduced profits and profitability; insolvency (lack of own working capital, lack of funds to repay debt obligations). Certified by the court, the complete insolvency of a business entity is called bankruptcy. In this case, emergency measures are needed to restore the solvency of the enterprise and maintain the production process, i.e. reorganization.
Reorganization is a set of measures aimed at the financial recovery of the enterprise, to prevent bankruptcy.
Reorganization can be carried out by removing the head of the enterprise from decision-making and appointing an anti-crisis manager, whose task is to eliminate the consequences and causes of the crisis, i.e. stabilize the financial situation of the enterprise and carry out its restructuring.
If the reorganization did not bring the expected results, the bankruptcy procedure is carried out. Bankruptcy is considered as an economic and legal procedure for the liquidation of the debtor, the sale of his property and settlement with creditors.
Termination of the activity of the enterprise may also be carried out in the following cases:
by decision of the founders; due to the expiration of the period for which the enterprise was established; in connection with the achievement of the purpose for which the enterprise was established; if the court invalidates the registration of the enterprise, in connection with violations of the law or other legal acts committed during its creation, if these violations are irreversible; by court decision, in the case of: carrying out activities without proper permission (license) or activities prohibited by law, or with repeated or gross violation of the law or other legal acts; concealment (understatement) of profit (income) and other objects of taxation for 12 consecutive months; the presence of losses for the results of the second and subsequent financial years and not sending messages by a commercial organization, with the exception of an agricultural production cooperative, within 3 months after the end of the financial year to the registering and tax authorities about the causes of losses; the existence of arrears in payments to the budget and state target budgetary and extra-budgetary funds for more than two months in a row from the date of formation of the debt of a commercial organization, with the exception of an agricultural production cooperative; reduction of the value of net assets of a commercial organization based on the results of the second and each subsequent financial year below the minimum size of the authorized capital established by law); recognition of the enterprise as insolvent (bankrupt), if it is not able to satisfy the claims of creditors. the registration authority in the following cases: violation of the terms of registration of shares established by law; violation of the terms and procedure for the formation of the minimum size of the authorized capital provided for by law.