In Business, What Is Free Enterprise?

The free enterprise system is a series of institutional arrangements to ensure that enterprises can enjoy the rights to free entrepreneurship, free management, free trading, and free domination or disposal of property rights on the basis of legal protection of property rights. It includes property rights system, entry and exit system, fair competition system, equal contract system, equal transaction system, and equal access to information service system.

Free enterprise system

The free enterprise system is to ensure that enterprises can have the right to free entrepreneurship, free operating rights, free trading rights, and free domination or disposal on the basis that their property rights are protected by law.

Free enterprise system

The free enterprise system is an inevitable requirement for the development of a market economy. The market economy is a free economy. The essential characteristics of the market economy enable workers to develop and liberate freely. The most active subject in the market economy is the enterprise. The state and vitality of the enterprise It directly determines the rise and fall of the market economy. Only by establishing a free enterprise system can it meet the development requirements of the market economy, and can it stimulate the vitality of enterprises and the role of the market economy in allocating resources.

The United States is a typical country that implements a free enterprise system. In the United States, individual business owners can be divided into registered private business owners and unregistered private business owners. In accordance with American legal concepts and legal systems, engaging in any for-profit commercial activity is a natural right of each citizen, and does not require government departments to confirm or restrict it in the form of business registration. Any citizen can engage in business activities in accordance with his own wishes and obtain benefits. When a U.S. citizen independently engages in business activities on an individual basis, it naturally becomes a sole proprietorship in the main body of the U.S. market. In the United States, Americans engage in business activities in their personal names, either perennially or seasonally. Do what you want, and do nt do it. Nobel Laureate in Economics and American economist Milton Friedman pointed out in his very famous book "Capitalism and Freedom": "What's the point of using 'freedom' to describe the 'business'? In the United States, 'freedom' is understood as meaning that everyone has the freedom to build a business. "This is probably the best interpretation of the free enterprise system.

From the experience of developed countries, the free enterprise system has the following main characteristics:

Free enterprise system free management rightfrom ideal to reality

In our country, what has been implemented earlier is the right of enterprises to operate freely. As everyone knows, one of the important contents of the enterprise reform, especially the reform of state-owned enterprises, which began at the end of 1978, is the decentralization of management rights, that is, the management rights of enterprises are gradually transferred from the government to the enterprises. In the subsequent joint-stock system, every reform involved the problem of independent management of enterprises. At that time, the ultimate goal of state-owned enterprise reform was to become an economic entity that "operates independently and assumes its own profits and losses." To be sure, today, no matter whether it is a private enterprise or a state-owned enterprise, whether it is a corporate enterprise, a partnership enterprise, or a sole proprietorship, there are no obstacles to self-employment. The country has sufficient laws and policies to guarantee the independent operation of enterprises. Not only is the enterprise's autonomous operation guaranteed by law, but the "Company Law" as amended in October 2005 also clearly implements the principle of corporate autonomy. Theoretically, corporate autonomy is a higher realm of enterprise autonomous operation.

Traditionally, the basic meaning of corporate autonomy can be understood from two aspects: One is that the company, as one of the subjects of private law autonomy, enjoys the right of private law autonomy in the name of the company, including the company itself as an independent independent transaction subject in the field of private law. Natural persons generally have the same broad freedoms, such as freedom of contract, freedom of business, freedom of choice of employment (selection of business scope), etc. Second, shareholders, as owners of a company, enjoy the freedom to independently manage and operate the company, including the establishment and dissolution Freedom of the company, freedom to decide on the affairs of the company and freedom to appoint and dismiss company leaders. The specific manifestation of corporate autonomy is that the company decides its own affairs without the interference of others. "Only when a private dispute cannot be resolved, the state will come to the ruling in the capacity of the court, and the court will still make the ruling based on the parties 'agreement and shall not arbitrarily change the parties' agreement." The establishment of the principle of corporate autonomy shows The respect for the company's personality by state power has returned the company to its original and simple space. Company autonomy is more relaxed and thorough than independent operation, making the company completely independent of national political or government power. Under the premise of company autonomy, The scale and scope speak for themselves. From the implementation of the right of independent operation of the company to the autonomy of the company, this is a significant leap in the concept of China's enterprise system. This leap has laid the foundation for moving towards a free enterprise system.

The Right to Freely Establish a Free Enterprise System

The state's attitude towards the establishment of enterprises has undergone a process of development and change. Early enterprises used to have obvious public characteristics. In the 18th century, only the king and the parliament could grant the company a franchise. Generally, the establishment of joint-stock companies adopts permitism and requires government review and approval before they can be established. However, after the middle of the 19th century, the state's establishment of enterprises gradually abandoned franchise and permitism, and began to adopt normism. The establishment of enterprises has been quite considerable. Freedom, as long as it meets the conditions stipulated by law and does not require the approval or approval of any authority, an enterprise can be established.

After the reform and opening up, the establishment of Chinese enterprises has also undergone a process of development and change from permitism to standardism. Taking a company as an example, Article 77 of the "Company Law" before the amendment states: "The establishment of a company limited by shares must be authorized by the State Council Article 6 of the revised "Company Law" stipulates: "To set up a company, you must apply to the company registration authority for establishment registration in accordance with the law. If the establishment conditions specified in this law are met, the company registration authority shall separately Registered as a limited liability company or a company limited by shares; those that do not meet the establishment requirements specified in this law shall not be registered as a limited liability company or a company limited by shares. Where laws and administrative regulations require the establishment of a company to be approved, the company shall be lawfully registered before registration Go through the approval procedures. "It can be seen that in China, the establishment of a company limited by shares has changed from being approved to requiring approval procedures only as required by law. The" approval "has changed from" must "to" exception ", from The normal state has changed to the abnormal state.

In recent years, China's legislation has not only made major adjustments to the principles of enterprise establishment, but also the procedures for enterprise establishment have been considerably simplified. The main manifestation is that the enterprise registration system has changed from substantive examination to formal examination. On June 10, 2004, the State Administration for Industry and Commerce issued the "Regulations on the Procedures for Registration of Enterprises", and on December 18, 2005, the State Council issued the revised "Regulations on the Management of Companies Registration", applying for the establishment of enterprises in accordance with the above two regulations. Applicants may "apply directly to the place of registration of the enterprise or by mail, fax, electronic data exchange, e-mail, etc." "After receiving the registration application, the registration authority shall review whether the application materials are complete and in accordance with the legal form. "" Applicants or their entrusted agents who submit applications for acceptance at an enterprise registration site shall make a decision on the spot to approve the registration; if applications are submitted by mail for acceptance, the approval shall be made within 15 days from the date of acceptance Decision. "Only if" the enterprise registration authority considers that the substance of the application materials need to be verified ", it is necessary to send more than two workers to verify the application materials. This approach has changed the "examination and approval system" or "approval system" for the establishment of registration of enterprises in China in the past, and switched to the "registration system". "Registration system" means that enterprises that meet the conditions stipulated by the law will be registered unconditionally, and no administrative agency may conduct an extra-conditional review of the application for establishment of an enterprise. Such provisions of the establishment procedure are undoubtedly in line with the freedom under the free enterprise system. The requirement of the founding right means that in China, setting up an enterprise is the self-behavior of any eligible citizen and will not be hindered by any authority.

Overview of Free Enterprise System

It can be seen that the right to freely create enterprises required by the free enterprise system has also taken shape in China. Through the above analysis, we can find that the free management right required by the free enterprise system is no doubt in our country, and the free creation right has also begun to take shape. So, does this mean that the free business system has basically formed in our country? The answer is of course no of. The core of a free enterprise system is the right to freely create and operate a business. However, free creation and free management are not the entirety of a free enterprise system. The free enterprise system requires more of a relaxed, fair, equal, and free market environment and External conditions, and this external environment does not yet exist in China. Without such an environment, a true free enterprise system cannot be formed. The market economy and the free enterprise system are twin brothers. A market economy that does not implement a free enterprise system cannot be a real market economy. Therefore, while developing a market economy, it is inevitable to explore a free enterprise system.