Annexure – I

Micro Project Proposal

Aims/Benefits of the Micro-Project:

Ownership, in its most comprehensive signification, denotes the relationship between a person

and any right that is vested in him. That which a man owns is in all cases a right. When, as is often the

case, we speak of the ownership of a material object, this is merely a convenient figure of speech. To own

a piece of land means in truth to own a particular kind of right in the land, namely, the fee simple of it.

Ownership is a socially significant concept because it is an index of wealth and social position.

Ownership of land was a means of controlling the government. In a feudal system based on land

ownership, the feudal lords wielded tremendous influence, and even the qualification to vote was based on

ownership of land.

Course Outcomes Addressed:

1. Use basic management principles to execute daily activities.
2. Use principles of planning and organizing for accomplishment of tasks.
3. Use principles of directing and controlling for implementing the plans.
4. Apply principles of safety management in all activities.
5. Understand various provisions of industrial acts.
 1. INTRODUCTION
The first decision you’ll make as a business owners is how your business will be structured. You
need to know the advantages and disadvantages of each of the different forms of business organization to
make sure you make the right decision for your new business. All businesses must adopt some legal of that
configuration that defines the rights and liabilities of participants in the business’s ownership
, control , personal liability, lifespan and financial structure. The form of business determines which
income tax return form to file and the company’s and owner’s legal liabilities.

Fig: Types of Ownership

Forms of business ownership:

 Forms of business ownership and types of businesses describe how they are organized and run.
 The four main forms of business ownership are listed below:
1. Sole proprietorship
2. Corporation
3. Partnership
4. Co-operatives
 A franchise is a combination, or hybrid, of the four forms of ownership.
 2. SOLE PROPRIETORSHIP

The word sole means “Single” or “One”. The word proprietor means “Owner”. A Sole
Proprietorship, therefore, is a business owned by one person. The sole proprietorship is the oldest and most
common form of business ownership. Approximately 75 percent of all business in the United States today
are organized as sole proprietorship.
Most Sole Proprietorships are small-business operations, each owed by an individual. An
individual who starts a business is known as an entrepreneur.
The vast majority of small businesses start out as sole proprietorships. These businesses usually are
owned by one person, aka the individual who has day-to-day responsibility for running the business. Sole
proprietors can be independent contractors, freelancers or home-based businesses.

Advantages:
1. The owner receives all profits.
2. Profits are taxed only once.
3. The owner makes all decisions and is in complete control of the company (but this could also be a
disadvantage).
4. It is the easiest and least expensive form of ownership to organize.
5. They are easy to form, and the owners enjoy sole control of the business profits.

, Disadvantages:
1. There is unlimited liability if anything happens in the business. Your personal assets are at risk
(including your home in Kansas City).
2. It is limited in raising funds and the owner might have to acquire consumer loans.
3. There is no separate legal status.
4. Unlimited Liability and it means when a person in the business pays the debts by selling the assets
in the business.
5. Taxes the sole proprietor pays taxes individually because all forms of capital are invested by him
and all documentation papers are registered by the name of him.

Example:
 Art studio,
 A local grocery,
 IT consultation service
 3. CORPORATION

A corporation is considered by law to be a unique entity, separate from those who own it. A
corporation can be taxed, sued and enter into contractual agreements. The corporation has a life of its own
and does not dissolve when ownership changes .A Corporation is a business granted legal status with
rights, privileges, and liabilities that are distinct from those of the people who work for the business.
Corporations can be small such as one-person business or large such as a multinational that conducts
business in several different countries. Small portions of corporate ownership that are owned publically are
called stocks or shares. Individuals who own shares of a corporation are called shareholders and become
owners of the business.

There are three types of corporations:

1. C-corporation,
2. S-corporation
3. Limited Liability Company.

1. C-corporation:

A C-corporation is a corporation that is taxed separately from its owners. It gives the owners
limited liability, which can encourage more risk-taking and potential investment.

Advantages:
- It is limited liability.
- In regards to transfer of ownership, shareholders can sell their shares.
- The company pays fringe benefits.

Disadvantages:
- It is subject to double taxation. (Corporation and shareholder earnings are taxed.)
- It can be costly to form.
- C-corps pay corporate taxes at a different time than other forms of business.

2. S-Corporation

S-corporation, also known as subchapter S-corporation, offers the owners limited liability. S-
corporations do not pay income taxes; the earnings and profits are treated as distributions. The
shareholders must report their income on individual income tax returns.

Advantages:
- It enjoys limited liability.
- It avoids double taxation.
- It offers transfer of ownership.
 Disadvantages:
- It can be costly to form.
- Stockholders are limited to individuals, estates or trustees.
- Stockholders are limited to citizens or resident aliens of the United States.

3. Limited Liability Company:

A limited liability company or LLC is a hybrid business structure that provides the limited legal
liability of a corporation and the operational flexibility of a partnership or sole proprietorship. However,
the formation is more complex and formal than that of a general partnership.

Advantages:
- It is the most common business structure and is specifically created for small businesses..
- LLCs are usually taxed as a sole proprietorship.
- LLCs can have an unlimited number of owners.

Disadvantages:
- It requires yearly administrative costs.
- LLCs have a personal tax liability.
- Legal and accounting assistance is recommended for LLCs.
 4. PARTNERSHIP

Partnership two or more people share ownership of a single business. Like proprietorships, the law
does not distinguish between the business and its owners. The partners should have a legal agreement that
establishes how decisions will be made, how profits will be shared, how disputes will be resolved, how
future partners will be admitted to the partnership, how partners can be bought out or what steps will be
taken to dissolve the partnership when needed.

Partnerships present the involved parties with complex negotiation and special challenges that must
be navigated unto agreement. Overarching goals, levels of give-and-take, areas of responsibility, lines of
authority and succession, how success is evaluated and distributed, and often a variety of other factors
must all be negotiated. Once agreement is reached, the partnership is typically enforceable by civil
law, especially if well documented. Partners who wish to make their agreement affirmatively explicit and
enforceable typically draw up Articles of Partnership. Trust and pragmatism are also essential as it cannot
be expected that everything can be written in the initial partnership agreement, therefore quality
governance and clear communication are critical success factors in the long run. It is common for
information about formally partnered entities to be made public, such as through a press release, a
newspaper ad, or public records laws.

Advantages:
- It is easy to establish (with the exception of developing a partnership agreement).
- Separate legal status gives liability protection.
- Profits are taxed only once.
- Partners may have complementary skills.

Disadvantages:
- Partners are jointly and individually liable for other partners’ actions.
- Profits must be shared with the partners.
- Decision making is divided.
- Business can suffer if the detailed partnership agreement is not in place.
 5. CO-OPERATIVES

A co-operative is owned by the workers or members who buy the products or use the services that
the business offers. This type of business is motivated by service and not profit. Adaptations of this
business model include consumer, retail, and worker co-operatives.

A cooperative is a private business organization that is owned and controlled by the people who use
its products, supplies or services. Although cooperatives vary in type and membership size, all were
formed to meet the specific objectives of members, and are structured to adapt to member's changing
needs. A co-operative usually only allows a limited distribution of profits to members (some don’t allow
any). This business structure encourages a democratic style of management and promotes the concepts of
sharing resources and delegation to increase competitiveness.

Advantages:
- Generally inexpensive to register.
- All members must be active in the co-operative.
- Members have an equal vote at general meetings regardless of their level of investment or involvement.
- Than directors, members can be aged less than 18 years. These members cannot stand for office and
don’t have voting rights.

Disadvantages:
- As co-operatives are formed to provide a service to members rather than a return on investment, it may
be difficult to attract potential members seeking a financial return.
- There is usually limited distribution of profits to members and some co-operatives may prohibit the of
distribution of any surplus.
- Members providing greater involvement or investment than others will still only get one vote,
- Requires on-going education programs for members.
 6. CONCLUSION

Ownership is a socially significant concept because it is an index of wealth, and social position.

Ownership of land was the means of controlling government. In a feudal system based on land ownership,

the feudal lords wielded tremendous influence, and even the qualification to vote was based on ownership

of land. The social aspect of ownership also highlights the important principle that on owner shall enjoy

his interest in a manner compatible with the interest of others.

 REFERENCES

1. https://en.wikipedia.org/wiki/Frederick_Winslow_Taylor
2. https://courses.lumenlearning.com/wm-introductiontobusiness/chapter/scientific-management-
theory/
3. https://www.mindtools.com/pages/article/newTMM_Taylor.htm
4. https://www.business.com/articles/management-theory-of-frederick-taylor/