Forms of

Business
Organization
What is business?
A business is defined as an organization
or enterprising entity engaged in
commercial, industrial, or professional
activities. Businesses can be for-profit
entities or non-profit organizations.
Business types range from limited liability
companies, sole proprietorships,
corporations, and partnerships.
What do you mean
by the word
“organization”?
An organization is a group of
people who work together, like
a neighborhood association, a
charity, a union, or a
corporation. 
How could you
define “business
organization”?
A business organization is one or
more businesses controlled in
common by a person or group of
people. An organization may have
one or more businesses. A business
may not have more than one
organization.
Three forms of
Business
Organization
 SOLE PROPRIETORSHIP
As the name suggests, ‘sole’ means ‘Only one’ and
‘proprietorship’ implies ‘ownership’. Hence, a sole
proprietorship is a form of business organization, wherein
a single person owns, manages and controls, all the
business activities and the individual who operates the
business is called as a sole proprietor or, a sole trader.
 In this business unit, the sole proprietor is
exclusively responsible for employing capital
to commence business, bearing all the risk
of the enterprise and also for managing all the
activities single-handedly. And to do so, he/she 
pools and arranges various resources in an
organized way, with the sole aim of earning
profit. The owner is exclusively responsible
for all the decisions.
 
All the profits earned by the business goes to
sole trader’s pocket, and he is solely responsible
for the loss suffered.
 
 PARTNERSHIP

It is a business owned by two or More

person who contributes resources into
the entity. The partners divide the profits
of the business among themselves.
 Characteristics of Partnership

The Partnership is the relation which

subsists between individuals, who have
decided to pool their money, skill and
resources in business, to share profits and
losses, in an agreed ratio. The members
of a partnership, are jointly known as
the partnership firm and severally
known as partners.
 CORPORATION

It is an artificial being created by operation

and powers, attributes and properties
expressly of law, having the right of
succession authorized by law or incident to its
existence.
 A legal entity, formed to govern all
aspects of a
business (Income, expenses, legal
requirements, etc.). Not all businesses
are corporations, or “incorporated.” A
corporation usually has to follow a
different set of rules related to
government and tax regulations.
Major Contributions of Forms of Business Organization in
Socio Economic
Development
 
Business are considered the engine of the economy because
they contributed to the economy of our country through
paying corporate taxes so that the government can provide
the promote social welfare of its citizens. Business also
provides job opportunities which compensates the people in
the society.
Thanks for listening.
God bless everyone !!!

-Maam Yunis