A utility company is an economic concept that implies an organization that provides the population with electricity, gas, water and other important services. Such organizations have a monopoly, and their functioning is regulated by the activities of the government. A related term is also used to designate a communal economic entity: a public utility company.
How do municipal housing enterprises
Community property is one of the main components of the local finance system. The enterprises of the communal sector of the economy include only those business entities that operate only on the basis of communal property, or those in whose finances the share of communal property is more than 50%. They also include those industries whose activities are under the control of local authorities.
Utilities operate on the basis of local budgets.
Stages of public utilities
- The decision to establish a public utility enterprise is made by the local council. In this case, funds are allocated, registration is made, a seal is approved, a bank account is established, the authorized capital is determined, and a candidate for the position of director of this organization is selected. Also, the local council decides on the minimum size of the authorized capital.
- On the basis of the current legislation, the charter of the municipal communal enterprise is formed, which contains the main provisions, such as: the purpose and nature of the functioning of the communal organization, duties and rights, general provisions, management methods and its structure, the nature of income distribution, the main features of the activity, the reasons why the work of the enterprise may be terminated.
- The name of the legal entity is selected. There should be included information about the legal and organizational form, as well as the name. It is not allowed to use in this name the names (both full and abbreviated) of any state bodies. government or local government.
The main types of utilities
Utilities are divided into corporate and unitary. Let's consider them in more detail.
A unitary communal enterprise is created by one local government body, which becomes its founder and is included in its sphere of management. This body approves the charter, allocates the funds required for its functioning, creates a charter fund that is not divided into shares (units), distributes income (both directly and through the head), manages the enterprise, and also hires employees to form a working team oversees issues related to the possible transformation or removal of the enterprise.
Unitary are the majority of utilities in Russia.
Unlike a unitary one, a corporate enterprise is created with the participation of two (or more) founders on the basis of their mutual agreement. They carry out joint business management, and their property is combined into a single whole. They can create bodies through which to manage communal services.
Sometimes corporate enterprises function as joint stock companies or even as limited liability organizations. The latter can be created by one person, at least in Ukraine.
Municipal Joint-Stock Company
In a communal joint-stock company, the authorized capital is divided into a number of shares with an equal value, the rights to which are fixed by shares. In the case of compensation for losses, the source of compensation is only the corporate property of the joint-stock company. In a joint-stock company of a communal type, local governments hold half of the shares and the right of decisive influence.
Municipal LLC
In a communal limited liability company, the fund of funds is allocated to certain shares (that is, units), and their volume is determined by special documents. This fund is fully or partially under the jurisdiction of local authorities. Moreover, they also play a decisive role in the functioning of a communal limited liability company. The liability of members of the company for the obligations of their activities applies only to the funds of this fund.
The interaction between members of communal enterprises and local self-government bodies is based on the principle of subordination, accountability, provided that the self-governing bodies that control the work of communal services are the higher authorities. In particular, their tasks include monitoring the rational spending of funds by public utilities, using the profits they receive as intended, receiving reports verbally or in writing.
The funds of unitary enterprises are state property and are used on the basis of economic expenses.
Communal housing enterprises have property, which consists of such components as goods, circulating and fixed assets, as well as other material and financial resources.
What is the source of funds for a communal organization?
Sources of tangible and financial property of communal services may be:
- funds provided by the city, district or regional council;
- profit from securities;
- income arising from the implementation of economic and financial activities, in particular, the sale of services;
- funds received under the agreement from the district, regional or city budget;
- bank and other loans;
- cap. investments, budget and other financing;
- donations, charity (from citizens or organizations);
- transactions for the acquisition of another's property;
- other legal sources.
