Under the company in a general sense, we should understand the property complex, which is used to conduct business. Its composition includes all types of material values. These include, among other things, land, equipment, facilities, products, raw materials. This complex as a whole or any part of it can act as an object of rent, pledge, sale and other transactions. There are various legal forms of enterprises. Consider one of them.
Municipal enterprises and institutions and their owners
The local authority acts as the owner of such organizations. He also manages municipal enterprises. The owner can direct his work in any way according to the law. The local authority has the opportunity to:
- Create, reorganize, liquidate municipal enterprises and institutions.
- Determine the subject and purpose of the work of these complexes.
- Appoint managers.
- To control the use and preservation of material assets entrusted to enterprises.
Work specifics
The activities of municipal enterprises related to social services are beyond the scope of traditional entrepreneurship and competition for raising capital. Their functioning is complemented by the need to provide services to the public without relying on profit. A municipal utility company or other other service complex can use market mechanisms and introduce the experience of administration by private companies. This has a beneficial effect on the operation of the complex, increases the efficiency of use of the resources provided to it.
Legislative regulation
Given the specifics of the work of the considered complexes, normative acts regulate the procedure for their creation. So, the municipal state-owned enterprise directs most of its products, works or services to meet the needs of the Moscow Region. Such a complex produces goods at a set cost to solve social problems.
A single price is assigned to categories of work and services. Municipal state-owned enterprise receives subsidies from the state. In accordance with this, the purpose of its functioning is determined. In addition, complexes of this type in some cases are unprofitable. Such regulation is established in Federal Law No. 161.
The municipal enterprise uses tangible assets, the privatization of which is not allowed. Its functioning is aimed at solving various social problems. These include, among other things, the sale of services and goods at the lowest cost.
Some nuances
New municipal enterprises of a city or other locality are created quite rarely. Currently, there are not so many objects for which privatization is prohibited by law. Moreover, their legal status is clearly regulated by regulations.
A municipal enterprise that is created to provide services or to sell products at the lowest cost is difficult enough to exist without subsidies. In all cases, in fact, profitable operation of the complexes takes place. Municipal organization enterprises, in this regard, is automatically tied to budget revenues.This, in turn, contradicts in a certain sense the provisions of the Civil Code. The Code, in particular, refers a municipal enterprise to a commercial structure. It is hard to imagine the work of such an association without profit. On the other hand, the Law on Bankruptcy establishes the obligation of the founder, in this case the municipality, to prevent the insolvency of the enterprise he created.
Expanding scope
Given the current economic situation, a number of experts believe that the conditions for the formation of business complexes need more. Municipal enterprises operate today in all sectors of the economy. They provide services, create jobs, receive income that goes to the budget and their own development. Nevertheless, many of them receive state and regional subsidies. In this regard, it is difficult to talk about any profitability of such enterprises. New conditions for their creation would allow:
- Fill market niches. This is relevant in the absence of any specialized enterprise, insufficient activity of private investments, and the presence of increased or unmet demand.
- Eliminate the monopolies of any manufacturer or products in the local market.
- Quickly implement a profitable project.
- Relieve labor market tension.
All these problems are present today in the social sphere. In this area, the production process is determined not only by the desire to make a profit, but also by social utility, the interests of social justice, solvent demand, and so on. When creating a new municipal enterprise, it is necessary to take into account the presence of private companies on the market and the consequences of their work for the population. Some services should be left to these associations. Before setting up a municipal enterprise, local authorities should explore opportunities in the private sector.
Classification
The rights of municipal unitary enterprises are legally limited. Meanwhile, such complexes have a certain degree of independence in both legal and economic terms. In accordance with this criterion, the following groups are distinguished:
- Enterprises that do not have neither economic nor legal independence. They have their own administrative bodies. Nevertheless, in essence, such complexes act as units of the local administration. The costs and revenues of such enterprises are integrated into the local budget. The functioning of the complexes is carried out in accordance with instructions received from local authorities. In a general sense, a municipality acts as one enterprise, while coordinating the work of its units.
- Complexes with legal and economic independence. In this case, certain rights of municipal enterprises take place, however, key decisions regarding work are taken by the administration. The local budget shows only the results of their financial activities. The profit earned by such enterprises usually does not cover their expenses. This is due to the fact that local and regional authorities set appropriate prices for them. In particular, this applies to transport, communications, utilities. The sources of financing enterprises are the funds of the population (consumers), as well as revenues from the local budget. In industrial centers, large municipalities, such complexes can earn money on their own and direct profits to improve the services to citizens.
- Enterprises operating on a commercial basis. Such complexes are derived from the administration structure. They are transferred to trust management specialists (managers). Enterprises sell goods at market value.These include various construction, industrial, agricultural, commercial and other complexes. They have the right to carry out their work in the form of a joint stock company or other business company, which is established by local authorities. The latter holds a controlling stake in securities. These enterprises have freedom in their actions, have a specific legal status. They work for the needs of the mass consumer, including local markets.
Property of a municipal enterprise
Municipal formation (MO) can translate the complex created by him into self-sufficiency, combining with this the provision of subsidies to consumers (form of targeted support). In the process of transition to a commercial basis, an increase in the volume of paid services, on the one hand, the border between municipal institutions and enterprises is liquidated, and on the other, between the latter and private companies. Nevertheless, despite a certain degree of freedom of action in relation to the created complex, the Ministry of Defense is obliged to comply with legislative requirements. They guarantee the rights of both the enterprise itself and its management.
The functioning of the complexes is carried out mainly on the basis of economic management. This right provides certain powers to the enterprise to use, own, dispose of material assets, any movable objects, finances, including, at its sole discretion. In addition, it may lease, sell, change, mortgage.
The exception is immovable objects. They are not subject to the right of disposal at their sole discretion. For the implementation of a transaction must be agreed with the owner. In practice, authority is transferred to the head of the enterprise. He single-handedly implements them. The relationship between the leader and the owner is regulated by labor law.
Obligations, opportunities, prohibitions
According to the Civil Code, the intervention of the owner in the activities of a municipal enterprise, outside the powers established for him, is considered illegal. The owner may seize only material assets that are not used for their intended purpose and dispose of them at their own discretion.
A municipal enterprise is liable for its obligations with all property that belongs to it. MO is liable only in case of bankruptcy of the complex created by him. Other obligations do not apply to him. In bankruptcy, subsidiary liability arises. The same rule applies for the lack of property of a state-owned enterprise.
According to the Civil Code, the director acts as an administrative body. Collegial management structures in municipal enterprises are excluded. The head exercises control over the movement of cash flows, makes independent decisions on the use of profit. With the consent of the owner, an enterprise can become a member of a non-profit or commercial company, dispose of shares owned by it, as well as shares in business partnerships and societies.
Industry issues
The legislation does not establish the obligation to conduct an independent audit for municipal enterprises, as well as the creation of any supervisory structures within it. The lack of control functions in the MO often leads to a violation of financial discipline.
For example, the funds of municipal enterprises are sent to other companies to conceal the profit that has arisen, and deals are beginning to be concluded to satisfy the individual interests of management. In addition, biased or incomplete information about the work is often provided, which, accordingly, does not allow to prevent and suppress illegal actions.
In some cases, the powers possessed by the owner do not allow not only to present requirements to the heads of enterprises, but also to determine indicators of their economic efficiency (reporting or planned). TC, providing effective protection for employees, at the same time significantly complicates the process of applying liability measures to them.
Sector reduction
It has long been discussed at the government level. Officials offer two options for the liquidation of municipal enterprises:
- Alienation non-core assets under the privatization law. As part of this approach, the sale should be carried out without fail at any cost. This, in particular, is about holding an auction. If the first auction did not take place, then repeated ones are appointed. In this case, the initial price is not announced.
- Transformation into a municipal institution with the right to earn money in excess of the established amount in the estimate.
Possible consequences
The sale of municipal enterprises can help reduce the inalienable minimum of property that local authorities need to exercise their powers. In accordance with this MO can lose the status of an economic entity. This, in turn, will be contrary to the fundamental regulatory acts of local self-government.
Municipalities are required to possess own sources of funds to implement their functions and solve socio-economic problems. In the conditions of market relations for local authorities, this means not only the opportunity, but also the need to have commercial structures at their disposal, combining mandatory and voluntary powers.
Meanwhile, another aspect of eliminating municipal enterprises is important. These complexes bear the main social burden and provide containment of the increase in tariffs for vital services, receiving budgetary subsidies if necessary. However, a municipal enterprise operating on the basis of economic management rights can at any time be transferred to self-financing with the exception of financing balances from the budget.
If tariff regulation is abolished, that is, it is allowed to provide services to the population at a cost that includes at least average income, then this will become available to any complex. In this case, it will not differ much from a private company by the strength of motivation. And subsidies will be redirected directly to consumers.
