Introduction
You have three components:
1. Macroeconomics: The macroeconomic environment of a business is the
economy in its entirety, which often involves looking at the level of an entire
country.
2. Mesoeconomics: Mesoeconomics is a bit narrower. This concerns a certain
business sector and the factors that affect this sector.
3. Microeconomics: Finally, the smallest level is microeconomics, which
concerns decisions on company level.
The field of Business economics is concerned with economics actions that are
carried out by a business. A Company refers to a party that produces and/or
provides goods and/or services. The financial aspect also called business is
where a company’s focus lies on. And therefore, the most important goal for a
company is continued existence.
And you need Financial management, a few important overviews are: Income
statement, balance sheet and cash flow statement.
Possible stakeholders (Parties who are interested in a company’s result)
• Investors
• Lenders
• Suppliers
• Customers
• Competitors
• Governmental Institutions
• Employees
If you want a business, you need to make a business plan. This plan details
how the business concept can be executed. Contains information about the
entrepreneur, the business and financial budgets. With financial statement
analysis you can make an assess a company’s result, with comparing key
figures to previous year.
Fixed assets: Have a high value, lots of money has to be invested (you use an
investment selection to see witch assets are or are not eligible for
investment.)
Current assets: form the business’s working capital. The money and assets
required to keep the business activities operational from day to day.
Equity — contributed by the entrepreneur and/or owners
Debt — to the bank or suppliers
Paragraph 2 relation with other fields
Financial management gathering information and checking whether a company
is on track to achieve its objectives. Management accounting is mainly aimed at
the future and concerns the internal provision of information to a business’s
management.
,
,The following fields are closely associated with business economics:
• Auditing and accountancy
• Fiscal law
• Accounting
• Marketing
• Organisation science
• Corporate law
When you are registered at the chamber of commerce you have to pay taxes.
Like Payroll tax, turnover tax or VAT (value added tax)
You have two different company’s
1: business without legal entity (unincorporated) the entrepreneur with their
private assets is liable for the debt of the company.
2: business with legal entity (incorporated) a legal entity can take out contracts
and act, just like a real person.
Business without legal entity
A business’s legal form is important information as several matters, such as an
entrepreneur’s legal liability and tax liability, are determined based on this.
Different forms of Business
Sole proprietorship (one-man business)
the business where one person is responsible for the business win every aspect.
The entrepreneur is the owner and also the boss of the company. The business is
incorporated and only has the name under which the entrepreneur operates, the
business itself cannot conduct any activities, only the entrepreneur can as
natural person. Legally there is no distinction between private assets and
company assets. This means that the owner is jointly and severally liable for
alle debts of the business.
General partnership
Can be compared to a sole proprietorship, but for multiple entrepreneurs. In this
case the entrepreneur are referred to as partners. To prevent disputes from
arising, it is wise to draw up a partnership contract. Contains agreements
about who is allowed to do what whiten the business. Like a creditor can demand
each partner to pay full debt.
Limited partnership
A special version of the partnership is this, can be compared to a partnership. An
importance difference lies in the fact that there are two types of partners:
Managing partners (concern themselves with the daily goings- on of the
business, they are jointly and severally liable for all debts of the business.) and
Silent partners. (Only contribute capital and do not interfere with the business
operations. They are only liable for what their contribution was.)
(Limited liability) partnership
A partnership is a collaboration between two or multiple entrepreneurs who
expertise a profession under a joint name. Each entrepreneur is referred to as
partner and practise his own profession whiting the company. They each
function as independently working entrepreneur. Each partner is liable for a
proportional share of all debts of the partnership. There is no joint and several
, liability of the entrepreneurs. But each entrepreneur is jointly and severally liable
for tax debts.
Every form is founded through registration in d=the trade register of the
chamber of commerce.
Business with legal entity
A juridical person is an independent carrier of rights and duties, just like an
actual human being.
These businesses have a publication duty that the annual figures must. Be
deposited at the chamber of commerce after a financial year. The amount of
information depends on the size of the business.
Criteria
Type of business Turnover Balance sheet total Number of
employees
Micro business < 700,000 < 350,000 < 10
Small business > 700,000 - > 350,000 - > 10 -49
12,000,000 6,000,000
Medium-sized > 12,000,000 - > 6,000,000 - > 50 - 249
business 40,000,000 20,000,000
Large business > 40,000,000 . 20,000, 000 > 250
Different incorporated legal forms
Private company
A private limited liability company is an often-used legal entity, for which the
capital is split into shares, and the risks of joint and several liability are limited.
Founding occurs by drawing up a notarial deed that includes the statutes.
This can be founded by one or multiple people. These statutes stipulate the
internal rules. A private company equity is split into shares. Shares are
therefore pieces of ownership of the private company. The owners of these
shares are called Shareholders. The shareholders together form the annual
general meeting of shareholders. Which is the highest power whiting the
business. The shares in a private company are issued by name. This means that
the owners of the shares are recorded in the shareholder registry. There could be
a third body whiting a private company, a supervisory board, who supervises the
board on behalf of the shareholders. If the owner of a private company is in
charge of daily management himself, we call this owner president majority
shareholder. If a shareholder holds at least 5% of the shares of a private
company, we call this a substantial participation. If profit is paid in dividend,
dividend tax is owed. In this case, the owner is no longer legally viewed as
entrepreneur by default.
Public limited company
Resembles the private company. It is easier for the PLC to attract capital. As in
the case with the private company, the owner is only liable for his own
contribution. Directors can be held liable in case of improper management. PLC
