FORMS OF BUSINESS ORGANISATION FOR CS FOUNDATION
BUSINESS ENVIRONMENT
` MEANING OF
BUSINESS UNDERTAKING
1. A CONCERN, COMPANY OR ENTERPRISE WHICH BUY AND
SELLS, ITS OWNED BY ONE PERSON OR GROUP OF PERSONS AND IS MANAGED UNDER A
SPECIFIC SET OF OPERATING POLICIES.
2. BUSINESS ACTIVITIES OF INDUSTRIAL AND
COMMERCIAL ACTIVITIES,BUSINESS ORGANIZATION ARE UNITS THAT UNDERTAKE THESE
ACTIVITIES
FEATURES OF FORM OF ORGANIZATION
- DISTINCT
OWNERSHIP:- RIGHT OF INDIVIDUAL OR GROUP OF INDIVIDUAL TO ACQUIRE LEGAL
TITLE TO ASSETS OR PROPERTIES FOR RUNNING THE BUSINESS
- EXCHANGE OF
GOODS AND SERVICES:
- DEALING IN
GOODS AND SERVICES
- PROFIT MOTIVE
- CONTINUITY OF
TRANSACTIONS
- RISK AND
UNCERTAINTY : EXPOSED TO RISK AS THE FUTURE IS UNCERTAIN AND
UNPREDICTABILITY
- FEATURES OF
FORM OF ORGANIZATION
- LAWFUL BUSINESS
: MUST INVOLVE ACTIVITIES WHICH ARE LAWFUL NOT ILLEGAL ACTIVITIES
- SEPARATE STATUS
AND MANAGEMENT:-EVERY BUSINESS UNDERTAKING IS AN INDEPENDENT ENTITY
FACTORS INFLUENCING THE CHOICE OF SUITABLE FORM
OF ORGANIZATION
- EASE OF
FORMATION:- EASY TO FORM THE ORGANIZATION,NO TIME CONSUMING
- CAPITAL REQUIREMENT: HOW MUCH CAPITAL IS NEEDED.EASY FOR RAISING CAPITAL. IF THE
FUNDS ARE TO BE RAISED FROM THE PUBLIC THEN SAFETY OF INVESTMENTS, FAIR
RETURN ON INVESTMENT,TRANSFER ABILITY OF THE HOLDING.
- LIABILITY
:ORGANISED FROM THE RISK POINT OF VIEW.FROM THE POINT OF RISK.LIMITED
LIABILITY IS PREFERABLE
- MANAGERIAL NEED:CONTROL
AND MANAGEMENT OF SHOULD BE IN THE HANDS OF THE OWNER FOR THE EFFICIENT
- CONTINUITY:STABILITY
AND CONTINUITY IS REQUIRED
- TAX LIABILITY:
- GOVT
REGULATIONS
- FLEXIBILITY OF
OPERATIONS:-ABLE TO ADJUST QUICKLY
- FACTORS
INFLUENCING THE CHOICE OF SUITABLE FORM OF ORGANIZATION
- RELATIONSHIP
BETWEEN OWNERSHIP AND MGMT:EVERY BUSINESS IS AN INDEPENDENT ENTITY. IT HAS
ITS OWN ASSETS AND LIABILITIES
- RISK
INVOLVEMENT
FORMS OF BUSINESS
1.
SOLE PROPRIETORSHIP
2.
PARTNERSHIP
3.
COMPANY
4.
PRIVATE COMPANY
5.
PUBLIC COMPANY
6.
ONE PERSON COMPANY
7.
STATUTORY BODIES AND CORPORATIONS
8.
CO-OPERATIVES,SOCIETIES AND TRUSTS
9.
LIMITED LIABILITIES PARTNERSHIP
10. ASSOCIATION OF
PERSONS
11. BODY OF INDIVIDUALS
12. JOINT VENTURES
§SOLE PROPREITORSHIP
§A SOLE TRADER
IS A PERSON WHO SET UP BUSINESS WITH HIS OWN RESOURCES, MANAGES THE BUSINESS
HIMSELF BY EMPLOYING PERSONS FOR HIS HELP AND ALONE BEARS ALL THE GAINS AND RISKS OF BUSINESS.
§S.R. DAVAR ,”
THE SOLE TRADER IS A PERSON WHO CARRIES ON BUSINESS OF HIS OWN, THAT IS,
WITHOUT THE ASSISTANCE OF PARTNER. HE BRINGS IN HIS OWN CAPITAL AND USES ALL HIS LABOUR. HE ALSO GETS HIMSELF
ASSISTED BY OTHERS TO WHOM HE PAYS A SALARY BY WAY OF REMUNERATION”
§A BUSINESS
ENTERPRISE EXCLUSIVELY OWNED,MANAGED AND CONTROLLED BY A SINGLE PERSON WITH
AUTHORITY,RESPONSIBILITY AND RISK
CHARACTERISTICS
1. INDIVIDUAL INITIATIVE
2. UNLIMITED LIABILITY
3. MOTIVATION
4. SECRECY
5. PROPRIETOR AND PROPRIETORSHIP ARE ONE
6. OWNERS AND BUSINESS EXIST TOGETHER
7. LIMITED AREA OF OPERATION
8. LESS LEGAL FORMALITIES
LEGAL POSITION OF SOLE TRADE BUSINESS
1. NO SPECIFIC LAW
2. WILL BE SUBJECT TO GENERAL LAWS OF THE LAND
3. NO DISTINCTION BETWEEN BUSINESS AND BUSINESSMAN
4. UNLIMITED
ADVANTAGES
- EASE IN
FORMATION
- BETTER OF
CONTROL
- FLEXIBILITY
IN OPERATIONS
- SECRECY
- EASE TO RAISE
FINANCE
- DIRECT
MOTIVATION
- QUICK IN
DECISION MAKING
- ADVANTAGES
- INEXPENSIVE
MGMT
- NO LEGAL
RESTRICTION
SOCIALLY DESIRABLE - SELF EMPLOYMENT
- HEALTHY
RELATION WITH EMPLOYEE
DISADVANTAGES
1. LIMITED RESOURCES
2. LIMITED MANAGERIAL ABILITY
3. UNLIMITED LIABILITY
4. UNCERTAIN CONTINUITY
5. LIMITED SCOPE OF EMPLOYEES
6. MORE RISK
SUITABILITY
1. WHERE MARKET IS LOCAL AND SMALL FOR EXAMPLE
SELLING GROCERY ITEMS,BOOKS,STATIONERY ETC
2. PERSONAL CONTACT: FURNITURE,BOUTIQUE ETC
3. NATURE OF THE BUSINESS IS SIMPLE
4. CAPITAL REQUIREMENT IS NOT HEAVY
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