Continuity of Existence and Small Businesses

An important distinction among the available forms of business includes the continuity of existence, which refers to the continued existence and operation of a business after an owner dies or leaves the business. A corporation ordinarily has no restrictions on the continuation of its existence, while a partnership is usually limited to a period measured by the lives of its members.

Sole Proprietorships, General Partnerships, Limited

Partnerships
Unity of Direction a. Fayol advocates one head one plan which means that there should be one plan for a group of activities having similar objectives. b. Related activities should be grouped together. There should be one plan of action for them and they should be under the charge of a particular manager. c. According to this principle, efforts of all the members of the organization should be directed towards common goal. d. Without unity of direction, unity of action cannot be achieved. e. In fact, unity of command is not possible without unity of direction. Efficient Management is a unique solution designed to automate a huge part of business processes of a power company. The system consists of different modules such as planning, finance management, contract management, resource supply and building planning which allow: y y y y Planning the whole company business Defining sourcing strategy Identifying the needs of the entire company and its units for resources Determining the costs and scope of maintenance for facilities and buildings

Limited liability is a concept where by a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership with limited liability. If a company with limited liability is sued, then the plaintiffs are suing the company, not its owners or investors. A shareholder in a limited company is not personally liable for any of the debts of the company, other than for the value of their investment in that company. This usually takes the form of that person's dividends in the company being zero, since the company has no profits to allocate. The same is true for the members of a limited liability partnership and the limited partners in a limited partnership.[1] By contrast, sole proprietors and partners in general partnerships are each liable for all the debts of the business (unlimited liability).

A public limited company is a voluntary association of members which is incorporated and, therefore has a separate legal existence and the liability of whose members is limited. Its main features are :The company has a separate legal existence apart from its members who compose it.Its formation, working and its winding up, in fact, all its activities are strictly governed by laws, rules and regulations. The Indian Companies Act, 1956contains the provisions regarding the legal formalities for setting up of a public limited company. Registrars of Companies (ROC) appointed under the Companies Act covering the various States and Union Territories are vested with the primary duty of registering companies floated in the respective states and the Union Territories.A company must have a minimum of seven members but there is no limit as regards the maximum number.The company collects its capital by the sale of its shares and those who buy the shares are called the members. The amount so collected is called the share capital.The shares of a company are freely transferable and that too without the prior consent of other shareholders or without subsequent notice to the company.The liability of a member of a company is limited to the face value of the shares he owns. Once he has paid the whole of the face value, he has no obligation to contribute anything to pay off the creditors of the company.The shareholders of a company do not have the right to participate in the day-to-day management of the business of a company. This ensures separation of ownership from management. The power of decision making in a company is vested in the Board of Directors, and all policy decisions are taken at the Board level by the majority rule. This ensures a unity of direction in management.As a company is an independent legal person, its existence is not affected by the death, retirement or insolvency of any of its shareholders. AdvantagesContinuity of existence,Larger amount of capital,Unity of direction,Efficient management,Limited liability Disadvantages Scope for promotional fraudsUndemocratic controlScope for directors for personal profitSubjected to strict regulations