Trigger 4: The role of the government in economic growth

1. What are the different types of economies? (case studies)

According to Business Dictionary, economic system is "An organised way in which a state or a nation allocates it's resources and apportions goods and services in the national community"(Business Dictionary, 2017) There are at least four different economy types in the world; traditional economic system, command economic system, market economy system and mixed economy system.  Each an every one works differently. As a case study, I will introduce you to North-Korean economy system which is command economy system.

As North Korea is regarded as an unreformed, isolated, tightly controlled, dictatorial country, it is fairly obvious that they would be using command economy system. The government rather that the free market decides what goods should be produced, how much should be produced and also the price at which the goods are offered to sale. The command economy is a key feature of any communist society.

(Investopedia, Command Economy, Prateek Agarwal / Introduction to economics, The Four Types of Economies)

2. What are government policies for economic growth?

Government policies to increase economic growth are focused on trying to increase aggregate demand or increase aggregate supply/productivity. Demand side policies include fiscal policies which mean cutting taxes/increasing government spending and monetary policies which mean cutting interest rates. Supply side policies include privatisation, deregulation, tax cuts, free trade agreements (free market supply side policies) and improved education and training, improved infrastructure. (interventionist supply side policies.

(Tejvan Pettinger, Plocies for Economic Growth, 2017)

3. What are the methods to make a country attractive to FDI?

Trigger 6: Starting up a new business in Finland

1a. Types of company forms to open a business and their pro's and con's

Proprietorship (toiminimi)

This is the most popular way to start in business to operate as a private entrepreneur using a company name. It is often beneficial to start as a proprietorship for a part-time entrepreneurship since it's speedy and uncomplicated to start a business this way.

Partnership (avoin yhtiö) 

"A partnership is formed when two or more individuals agree to it by signing a partnership agreement." Partners have an equal part in the company's operations and are personally responsible for company decisions, liabilities and debts.

Limited partnership (kommandiittiyhtiö)

"A limited partnership differs from an ordinary partnership in that in addition to one or more accountable partners there is at least one sleeping partner, i.e. a participant in the company who generally acts as an investor."

Limited company (osakeyhtiö)

Limited company requires at least one individual or corporation. Limited company's minimum share capital is 2500€. The share capital is divided to shares and the shareholder's voting power, profit and liability depend on how many shares they own.

Cooperative association (osuuskunta)

"Cooperative association is company owned by its members." In the case of for example debts, The liability of the members for the cooperative association's obligations is limited to their investment of share capital.

http://www.infopankki.fi/en/living-in-finland/work-and-enterprise/starting-a-business/company-forms

1b. The legal quirements of accounting / documentation in different forms of business.

Proprietorship

Does not require a separate set of accounting records, since the owner is considered to be inseparable from the business. It could make sense to start with the most minimal accounting record keeping that is based on the cash flows into and out of a bank account. A single entry system is most suited to a  cash basis accounting system. 

https://www.accountingtools.com/articles/accounting-for-a-sole-proprietorship.html

Partnership

There are several distinct transactions associated with a partnership that are not found in any other type of a company form. These transactions are: Contribution on funds, contribution of other than funds, withdrawal of funds, withdrawal of assets, allocation of profit or loss and tax reporting. 

These transactions may first be recorded in a drawing account which balance is later shifted into the capital account.

https://www.accountingtools.com/articles/2017/5/5/partnership-accounting

Limited partnership

Profits or losses are to be shared among partners and the division should be clearly spelled in the writing of the legal document of a partnership agreement. Regarding taxes, each partner is responsible of his/hers own personal income tax for reporting income from the partnership.

http://smallbusiness.chron.com/accounting-limited-partnership-distribution-23566.html

Limited company

Limited companies have a legal responsibility to keep records about the company itself and financial and accounting records. There should be accounting records that include all money received and spent by the company, details of assets owned by the company, debts the company owes or is owed, stock the company owns at the end of the financial year, the stocktakings one used to work out the stock figure, all goods bought and sold, who you bought and sold them to and from (unless you run a retail business).

https://www.gov.uk/running-a-limited-company/company-and-accounting-records

Tigger 5