One of the main conditions for the successful implementation of international trade operations is the choice of a suitable partner (counterparty) Counterparties in international trade are parties that are in contractual relations for the purchase and sale of goods, services, results of intellectual activity.
Depending on the goals and nature of the activities of counterparties in the world market, it can be divided into 4 categories:
Firm. State bodies and organizations (ministries and departments). Business unions. International economic organizations of the UN system.
Most international trade is done by firms. Let’s take a closer look at this category.
The term “firm” (translated from Italian means a signature on a business document) is used in world practice to designate a counterparty pursuing commercial goals. A firm is understood as an enterprise engaged in economic activities in the field of industry, trade, construction, transport, agriculture in order to make a profit.
In countries with market economies, a clear system of classification of firms has been worked out. They are classified according to a number of criteria:
by type of economic activity and the nature of the operations performed; by legal status; by the nature of the property; capital ownership and control; by volume of transactions; by the nature of economic relations and the goals of the association.
According to the type of economic activity and the nature of the operations performed, firms can be industrial (if more than 50% of the turnover is their own products), agricultural and agro-industrial (carry out processing and marketing of the main types of products of farms), trade (carry out foreign trade operations for the purchase and sale of goods and services), transport (provide transportation of goods under foreign trade transactions), insurance (perform insurance operations), engineering (provide a range of services of an engineering and technical nature), tourist (the subject of trade is tourist services), etc.
With regard to the legal situation, the following should be noted. Each firm that participates in economic activities belongs to a certain legal form and acts in accordance with the norms of civil and commercial law of its state. Knowledge of the legal status of the company provides answers to the following questions:
who and to what extent is responsible for the obligations of the company? who pays the debts of the company in the event of its bankruptcy? who has the right to conclude contracts on behalf of the company (since if its representative has exceeded his authority, the company has the right to refuse to fulfill its obligations under this transaction)?
The legal form determines the responsibility and eligibility of the company’s shareholders, reporting forms, the procedure for taxation of profits received, the procedure for the liquidation of the company and a number of other aspects that need to be known when establishing business relations with the company.
According to the legal status, firms are divided into joint-stock companies, limited liability companies, various forms of partnerships, individual entrepreneurs or merchants. The main differences between the main legal forms are:
in the ownership of capital; in the assignment of dividends; liability for obligations.
I would like to note that in accordance with the norms of civil and commercial law of individual states, legal forms differ and have their own specific features.
The name of the company must contain an indication of its legal status. The company, similar in legal status to a limited liability company of the Republic of Belarus and registered in Germany, in its name contains the abbreviation GmBH, in the UK – Ltd., in the Netherlands – BV, in France – SARL or SaRL, in Italy – SRL or S.r.l., in Hungary – Kft., in Poland – Spzo.o., in the Czech Republic and Slovakia – S.R.O. For joint-stock companies, the following indications are made on the legal status of the company: in Germany, Austria – AG, in France – S.A., in the UK, USA – Co., Inc.
In international trade, quite often there are firms with an indication of the legal status of LLC (Limited Liability Company). Such firms, as a rule, are registered in offshore zones, and, in particular, in the state of Delaware (USA). They are partnerships whose income is taxed only after redistribution between the current owners and declared as their personal income. The attraction of LLC firms is that their owners receive income without deducting US federal taxes (i.e., there are no high corporate taxes, there are only personal ones).
According to the nature of ownership, firms are divided into private, public and cooperative.
According to capital ownership and control, national, foreign and mixed are distinguished.
According to the volume of operations, firms are divided into large, medium and small (small), depending on the number of employees and turnover, and in different countries these criteria vary. For example, in Germany, small firms have up to 49 employees, medium-sized ones – from 49 to 500 people. In the United States, small firms with the number of employees up to 499 people, medium – more than 500 people. In the countries of the European Union: small firms – up to 49 people, medium – from 50 to 249 people working.
By the nature of economic relations and the goals of the association, these can be cartels, trusts, concerns, holdings. In international markets, there are large TNCs that create sales, production, export subsidiaries in various countries (legally independent, but under the strict control of the parent company), which act in the markets of other countries as counterparties.
State bodies and organizations. They usually do not pursue commercial goals, unlike state-owned firms. Only those ministries and departments that have special permission from the Government may take part in commercial operations. For example, in the United States, this is the State Property Administration, which makes purchases and sales of strategic materials, and also sells silver from the reserves of the US government on the foreign market. In England, this is the Ministry of Trade and Industry, in India – the Ministry of Defense and the Ministry of Agriculture, through which 90% of agricultural imports are carried out.
Unions or associations of entrepreneurs. They differ from firms in that the purpose of their activities is not to make a profit, but to represent groups of businessmen in government bodies and to assist private entrepreneurs in expanding their exports. For example, in South Korea there is the Korean International Trade Association. The unions of entrepreneurs are responsible for the standardization of products, the organization of consulting services, training, maintaining industry statistics, etc. There may be sectoral, territorial unions and unions by type of activity (trade, industrial, tourism, etc.).
In a number of countries (Japan, Sweden, France), industry unions of entrepreneurs act as representatives of the industry. Most of the unions do not carry out trade operations, but, for example, in Finland there are 4 unions that have a monopoly on the export of products of the timber industry on behalf of their members.
The Belarusian Union of Entrepreneurs and a number of others have been established in the Republic of Belarus.
International economic organizations of the UN system act on the world market as major buyers of goods and services. Among them, the largest organizations for the purchase and sale of goods and services on the world market are UNDP (United Nations Development Programme) and UNIDO (United Nations Industrial Development Programme).
At the expense of targeted voluntary contributions of the states participating in the technical cooperation system within the framework of the UN, UNDP funding funds are formed (formed). States may make contributions to equipment and materials. UNDP regulates the level and channelling of multilateral economic and technical assistance. Mainly at the expense of UNDP financing, the construction of investment facilities is carried out (in the amount of more than 10 million US dollars). UNDP then undertakes “technical assistance projects” under a subcontracting contract with public authorities or private firms in developing countries. The direct executors of the projects are other specialized organizations of the UN system: UNIDO, UNEP (Environment Programme), ILO (International Labour Organization), ECOSOC (UN Economic and Social Council).