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Legal Entities
Legal Entities
Business organization may be owned and managed by single individual or group of individuals who
may form a partnership form or a joint stock company. such arrangement of ownership and
management is termed as a form of business organizations or entities.
1.Sole Proprietorship
2. Partnership
Advantages:
He is the Boss
Disadvantages:
You have unlimited liability for debts as there’s no legal distinction between private and business
assets.
Partnership: A partnership is a formal arrangement by two or more parties to manage and operate a
business and share its profits.
Advantages:
Disadvantages:
The liability of the partners for the debts of the business is unlimited.
Company or joint stock company: In simple words company is a voluntary association of persons
formed for the purpose of doing business and sharing profits.
Advantages :
Disadvantages:
TYPES of the Company : companies are divided in to two types based on ownership and nationality.
Private company: These companies can be formed by at least two individuals having minimum paid
up capital of not less than one lakh.
Private company is a firm that is privately owned. Private company may issue the stock and have
shareholders, but their shares do not trade on public exchanges or not issued through an IPO.
The high costs of an IPO is one of the reason companies choose to stay private.
Public Company:
A public company is a company that has sold all or portion shares of itself to the public via an initial
public offering.
Government Companies: Government (Either state or central government or both) holds a majority
share capital i.e., not less than 51% in either public or private company.
Indian Company:
Any company registered in India which pays taxes in India, and carrying its business operations in
India is considered as Indian company.
Foreign Company: A company registered in foreign country and carrying its business operations in
India is called foreign company.