FORMS OF BUSINESS

ORGANISATION

BBA Vth Semester

DIFFERENT TYPES OF ORGANISATION

• SOLE PROPRITER SHIP

• JOINT HINDU FAMILY BUSINESS
• PARTNER SHIP
Busin ess
• COOPERATIVE SOCIETY Cooper•l'M P•,tncn.hip

• JOINT STOCK COMPANY Ownership

 SOLE PROPRITERSHIP
• This is one of the simplest form of business organisation which is derived from 2 words
where "sole" means "one or only" and " propriter" means "owner" where it is managed,
controlled only by single operations depends upon the nature of the business.

• Features:-
• Easy to form as there is no separate legal entity
• lt is controlled by the owner
• Unlimited liability
• Sole risk bearer and profit recipient
• No separate legal entity
• Lack of Business continuity
 MERITS AND LIMITATIONS OF
SOLE PROPRITER SHIP
• ME RITS- •
LIMITATIONS-
• Quick decision making • Limited Resources

• Confidentiality of information • Unlimited liability

• Sense of • Lack of business
accomplishment continuity
• Direct incentive • No growth
• Ease of formation and • Lack of management
closure skills
 JOINT HINDU FAMILY BUSINESS
• This is the only organisation found in India which is practised by Hindu
undivided family.
• The head of this business is Karta who co n trols the whole business and rest of
the family members are called as Co parceners.
• It has 2 systems:-
• Dayabhaga- In this system where it exists only in Wes t Bengal where it allows both
males and females to be co parceners
• Mitakashara- It allows only males to be co parceners where it is found all over
India except in West Bengal.
 FEATURES
• Easy to Form
• Controlled by Karta
• Business Continuity
• Unlimited liability for
Karta and limited liability
For coparceners.
*Minor can also be a
coparcener
 MERITS AND LIMITATIONS OF
JHF
• MERITS- • LIMITATIONS-
• Good decision making • Limited Resources
• Limited liability of co parceners • Unlimited liability of
• Increased Loyality and cooperation karta
• Dominance of karta
• Business continuity
• Limited managerial abilities
 PARTNERSHIP
• lt is one of the famous form of organisations, according to Indian Partnership Act 1932 it is defined as
a relation between persons who had agreed to share their pro fits and losses in an agreed ratio.

• Features

• Controlled by partners
• Lack of Continuity
• Limited Liability
• Membership
• Mutual understanding
• Ease of Formation
 MERITS AND DEMERITS
OF PARTNERSHIP
• MERITS- •
LIMITATIO NS-
• Ease of formation. • Unlimited liability
• Balanced decision making • Lack of business
continuity
• More funds
• Possibility of conflicts
• Sharing of
risks • Lack of public
confidence
• Secrecy
• Limited resources
 TYPES OF PARTNERSHIPS-

• PARTNERSHIP BY • PARTNERSHIP BY LIABILITY

DURATIO N- • General partnership
• Partnership at Will
• Limited partnership
• Particular partnership
 TYPES OF PARTNERS

• Active partner
• Sleeping or Dormant partner
• Secret partner
• Nominal partner
• Partner by estoppel
• Partner by holding out
 COOPERATIVE SOCIETY

• This is one of the famous business organisation where it focuses

on welfare of the society and service mo tives.
• This society is mainly established to satisfy the basic needs of
common people and protect them from their exploitation.
• This society is controlled by cooperative socities act 1912.
• AMUL is the best example for this type of society w h i c h
brought white revolution in India.
 FEATURES

• Voluntary membership
• Legal status
• Controlled by elected bodies
• limited Liability
• Ease of Formation
• Service motive
The Taste of
India
 Merits and Limitations

• MERITS- • Limitations
-
• Ease of formation • Limited resources
• Stable existence • Inefficiency in management
• limited liability • Lack of secrecy
• Support from government • Government control
• Economy in operations • Differences of opinion
 JOINT STOCK COMPANY
• This is one of the complex form of business organisation while compared to other
forms of organisation because it involves many formalities and documents.
• In this organisation members are called as shareholders where they raise the funds
by allotting the shares among the members depending upon their investment This
is governed by co mpaiues act 1956.
• In this organisation they can even transfer the shares if necessary and this company is
divided in to two parts
• Public Ltd Company
• Private Ltd Company
 Features

• Artificial person
• Separate legal entity
• Transfer of interest
• Complexity in Formation
• Controlled by board of directors
• Business Continuity
• Perpetual Succession
• Risk bearing
 MERITS AND LIMITATIONS
OF COMPANY
• ME RIT S- •
LIMITATIONS-
• Limited liability • Complexity of formation
• Transfer of interest • Numerous rules and regulations
• Scope for expansion • Delay decision making
• Perpetual existence • Impersonal v.rork environment
• Professional management • Oligarchic management
• Conflict in it1terest
 PUBLIC LIMITED AND PRIVATE
LIMITED COMPANY
• PUBLIC LIMITED COMPANY
• It requires minimum 7 members and
unli1nited on maxi1n um strength
• It can raise the funds by allo tt ing
shares
• Has mini1nu1n paid capital of 5 • Has minimum paid capital of 7 lakhs
lakhs
• It is not probihited from issuing
shares
• It 1n ust 1n ain tain ind ex and
prospectus
• It can start its operations only after getting
Certificate C)f Incorporation.
• PRIVATE LIMITED COMPANY
• It requires 1ninitnum 2 members and
maximum 50 m e m b e r s
• has only limited thus it cannot raise
the funds
• It is probihited from issuing the
share
• It can start its operations after getting
Certificate Of Incorporation
THANK
YOU