Have you thought about what a group of companies is? From a legal point of view, this term can be considered at once from several parties. In our article you will find quite detailed information about this. Also, not only terminology will be presented here, but also information about the structure, functional features and types of organizations that are of a group nature. Such information will be equally useful for both novice entrepreneurs and professional businessmen.
The legal concept of a group of companies
The legislation has the following definition: these are two or more organizations that can be controlled by one or more legal entities or individuals, and their activity is aimed at making profit from relationships with customers. Also a rather important feature is the fact that several organizations are most often managed from the same administrative center. A manager may be the owner of one or more companies or not have a business at all.
Also, do not forget about the word "group", which is included in the studied concept. The group most often means from two to several million entities between which business relationships are established. It is worth noting that the group may include not only Russian citizens, but also foreign individuals, as well as law firms, which are managed by the joint-stock company. Thus, even if the group of companies includes only two legal entities, it is far from the fact that there will be as many individuals.
Nuances for creating a group of companies
So, now you know what a group of companies is, but this information may not be enough for a person who decided to organize such an enterprise in his city. It is also strongly recommended that a novice entrepreneur become familiar with the structure of ownership and management of such organizations, because such knowledge can be very useful in the future, especially if you have any promising idea.
An important point in creating groups of companies is that the organizers should be located in the same country. A similar trend allows the distribution of goods and services within one region. For such activities, you can use the services of individual entrepreneurs, such as store owners. Also, a group of companies can take advantage of various benefits that can significantly reduce tax costs.
Group structure
A person who has decided to open a group of companies in Moscow or any other city should get acquainted with the structure of group companies. As mentioned earlier, it may include various individuals and legal entities that have the right to manage the organization and make decisions on business development. However, in addition to management, any company should also have workers who will perform the basic functions. If we are talking about joint-stock companies, then co-owners may be investors who decide to purchase the company's securities. Well, one should not forget about the "random owners" - these are people who became participants in the company quite by accident (a person who decided to purchase a block of shares at a low price). Such people most often do not take any part in the management, but have the right to do so. You can read more about each of these groups and the responsibilities of participants in the next section of our article.
Group company employees
Decided to create a group of transport companies for transportation? Then you should know that a production cooperative is not the most popular form of business, and workers become participants in "people's enterprises" very reluctantly. This is due to the fact that a fairly significant part of the production falls apart in a few months, and any person wants to be employed in a profession that will give him confidence in the future.
A very good idea is the decision to attract workers to the management of the company. Instead of appointing one of the relatives to the position of director and manager, it is strongly recommended that you look at employees who deserve promotion. Such actions are a real act of trust, which will provoke an increase in the workforce for your company. However, appoint only responsible workers who have good makings of leaders to the post of leader and his deputies.
What are random owners?
This term can be heard quite often from legal experts when it comes to companies within the group. As a rule, individuals who have become the owners of companies by accident fall into this category. Most often, this phenomenon is observed at joint-stock companies, when one of the novice brokers acquires the company's shares at a low price, but giving him the right to occupy a leading position in a particular company. In most cases, such a participant will give up management and transfer this matter to the hands of professionals, but it also happens that an investor who is interested in making a profit has a huge impact on the development of the enterprise. Such actions can even cause great damage to the whole cooperative, so be sure to follow the promotional policy.
Group company investors
Quite often, a group of companies includes an investor who is ready to provide funds for the development of the enterprise in return for interest income. Unlike random owners, these individuals purposefully purchase the company's securities or give the owner a certain amount of money in debt, in order to increase their capital later. Such people are only interested in the investment package, so they are unlikely to focus on methods of achieving the goal. Although any investor is interested in high-quality management, otherwise, he may lose his investment. Depending on the policy of the enterprise, shareholders may take part in the affairs of the company or remain in the shade, content with a profit from dividends.
Who are invisible?
Among the employees of the group of companies you can also find "invisible" who are engaged in the management of the enterprise, but at the same time remain in the shadows. This category of persons includes politicians, officials, deputies or even criminal persons who are not recorded in any way in the affairs of the company, but have a huge impact on doing business. It is not difficult to guess that group companies are most often registered with invisible relatives who have practically no influence on the company's affairs. Confidentiality is the main factor of invisibility, because the disclosure of their identity and activities can lead to criminal liability. Of course, we do not recommend our readers to resort to the services of such dubious figures, but we could not mention their participation in group affairs.
Company executives
Finally, we got to the very top - the owners of companies that enter into a cooperative. Such positions are most often held by individual entrepreneurs or legal entities. For example, if one of our readers decides to open a group of construction companies, then most often he will interact with various corporations owned by joint-stock companies.
The management of the companies has a very big responsibility, because they risk not only their own funds, but also the finances of the group that includes their companies. In some cases, the risk may even extend to the personal property of the owner, for example, if he cannot repay the debt to the group from the company's funds. Therefore, an agreement on joining a group should be drawn up very carefully.
What is a group of management companies?
In some cases, the management of a common business may not be carried out by all the companies that are part of it, but only by a specific group that has the right to vote. Typically, such a cooperative includes especially large corporations that have invested most of the funds in the development of the group. Who then are the other organizations? Something like subordinates who cannot take part in the management of the group, but receive a solid income from cooperation.
If we draw an analogy with individual entrepreneurship, then joining a similar cooperative can be compared with franchising. Hiding under the wing of a well-known brand, the company does not have the right to change pricing policies and production standards, however, it is given access to the company's resources and even its customers. Roughly the same thing happens with small companies that are subordinate to managers.
Why is an alliance of companies formed?
Now you know what a group of companies is and how it is managed. However, many novice entrepreneurs very often ask themselves the same question: "Why do companies even come together in cooperatives if working on their own is much easier?" We answer: most often, such associations are formed in order to fight competition and together confront companies that will try to attract the attention of customers using various dishonest methods. In addition, group associations allow you to quickly develop several companies, because any work is easiest to do together, using the strengths of your assistant and protecting the weak. Also, groups of companies can be founded to perform various financial manipulations, for example, attracting the attention of investors, but this is a completely different story ...
Classification and types of groups
As mentioned earlier, the group of companies includes several individuals or legal entities that are interested in a common goal. However, a novice entrepreneur should also be aware of the classification of such groups based on the types of owners:
- legal entities;
- individuals
- state.
Also, do not forget that a combination of different types of control is possible. For example, individuals can enter into a cooperative with legal entities, since this promises a very good benefit in the form of start-up capital. And legal entities often unite with the state to get various benefits and advantages over other companies.
Even a novice entrepreneur should understand that almost every legal entity has a physical person who directly or indirectly controls the affairs of the company and the group. Why can’t you become a member of the alliance as an individual? The fact is that in this case, the owner of the company is responsible to the entire group, securing not only the property of the company, but also his personal (at home, cars, and so on). Therefore, you should carefully select the form of business that will be used to create the cooperative.
Video clip
We hope that now you understand what a group of companies is and what is their difference from individual entrepreneurship. If you still have any questions about this, we strongly recommend that you watch a short video. It tells about how to build a group of companies, what goals to set for several enterprises, how to become part of a limited liability company and many other aspects that will be useful to a novice entrepreneur and even an experienced businessman.
Conclusion
The information in our article is for guidance only, but you can use it in practice if you think it is necessary. For example, before creating a group of transport companies, it will be very useful to learn about the classification of such alliances, as well as their management methods. To do this, read the information from the relevant sections and make notes in the business plan. If among our readers there are experienced entrepreneurs who once managed to gather several companies in one group, please express your opinion on this business scheme in the comments. Perhaps your experience will allow some of the novice businessmen not to make common mistakes.