CHOICE OF FORM

OF
ORGANISATION
 PAGE 01

CAPITAL
CONSIDERATIONS

-Larger amounts of capital are collected by issuing

shares
- Partnership firms have the combined resources of
partners
- Resources of a sole proprietor are limited
-Depends on the scale of operations
Expansion

Most advantageous- Company

Least advantageous- Sole proprietorship
COST AND EASE PAGE 02

IN SETTING UP
-Sole proprietorship is the most inexpensive way of starting a business
Legal requirements are minimum
- Partnership- lesser legal formalities and lower cost due to limited
scale of operations
-Cooperative societies and companies have to be registered
compulsorily
Lengthy and expensive legal procedure

Most advantegeous- Sole

proprietorship
Least advantegeous-
Company
 PAGE 04

NATURE OF
BUSINESS
- Direct personal contact
- Professional nature of services
- Large manufacturing units

DEGREE OF
CONTROL
Direct control over operations
and decision- making control
 PAGE 05

MANAGEMENT ABILITY
- Sole proprietor cannot have expertise in every area
- Division of work in companies and partnerships according to
area of expertise
Conflict because of difference of opinion
- Complex operations requiring professional management-
Company form of organisation preferred

Most advantageous-
Company
Least advantageous- Sole
proprietorship
 PAGE 06

CONTINUITY
Most advantageous- Company
Least advantageous- Sole
proprietorship
-Continuity of partnership and sole
proprietorship affected by death and
insolvency
-Companies, HUF and Cooperative
Societies have a permanent structure
 PAGE 07

LIABILITY
- Sole proprietorship and partnership- Most advantageous-
liability of owners/ proprietors is Company
unlimited Least advantageous-
- HUF- Karta has unlimited liability Sole proprietorship
- Company and Cooperative Society-
Limited to company's assets