Types Of Business Organisation

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CHARACTERISTICS

1. 2. 3. 4. 5. 6. 7. 8.

Single ownership Personal organization or common identity Capital Unlimited liability One man control Profits and losses No special legislation Concept of unlimited liability

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ADVANTAGES

1. 2. 3. 4. 5. 6. 7. 8. 9.

Ease of formation Flexibility Quick decision Secrecy Personal touch Direct motivation Independent way of life Overhead costs Minimum government regulations

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DISADVANTAGES

1. 2. 3. 4. 5.

Limited control Limited managerial skills Unlimited liability Uncertainty Limited opportunity

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CHARACTERISTICS

1. 2. 3. 4. 5. 6. 7.

Two or more persons Agreement Lawful business Sharing of profits Agency relationship Unlimited liability Common management

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ADVANTAGES

1. 2. 3. 4. 5. 6.

Ease of comfort Flexibility Matching of ownership and control Impact of unlimited liability Secrecy Easy dissolution

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DISADVANTAGES

1. 2. 3. 4. 5.

Limited resources Mutual conflicts unlimited liability Delay in decision making Risk of implied agency

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CHARACTERISTICS

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Limited Capital Limited Liability of ‘Co – parceners’ Unlimited Liability of ‘karta’ Joint Ownership Sole Management and Control of ‘Karta’ Flexibility of Operations Continuity and Stability Business Secrecy Minimum Government Regulation Quick Decision Making
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ADVANTAGES

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Limited Liability of Co – parceners Efficiency and Economy Close Contact with Employers Close Contact with Customers Quick Decision Making No Maximum Limit to Membership Minimum Government Regulation Business Secrecy Continuity and Stability Flexibility of Operations
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DISADVANTAGES

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Limited Capital Unlimited Liability of Karta Limited Managerial Skills Lack of Economies of Scale No Legal Status Business Dominated by Male Members Family Disputes Problem of Total Authority Problem in Distribution of Profits Generates Inefficiency
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CHARACTERISTICS

1. 2. 3. 4. 5. 6. 7.

Distinct legal entity Perpetual existence Limited liability Transferability of shares Separations of ownership and management Separate property Common seal

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ADVANTAGES

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Vast financial resources Continued existence Limited liability Scattered risk Transferability of shares Economies Expert management Scope of growth Public confidence Social advantages
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DISADVANTAGES

1. 2. 3. 4. 5. 6. 7. 8.

Difficult formation Government control Economies oligarchy Fraudulent practices Delayed decision making Neglect of minority Lack of personal touch Difficult in winding up

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CHARACTERISTICS

1. 2. 3. 4. 5. 6. 7. 8. 9.

Voluntary association Open membership Service motive Capital Return on capital Distribution of surplus Separate legal entity Democratic functioning State regulation

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ADVANTAGES

1. 2. 3. 4. 5. 6. 7. 8. 9.

Easy formation Democratic functioning Limited liability Continuity Mutual benefit association Internal vitality State assistance Social assistance Reducing inequalities

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DISADVANTAGES

1. 2. 3. 4. 5. 6. 7. 8.

Limited liability Plenty of state regulation Lack of managerial talent Inefficient operations Misuse of funds Lack of secrecy Lack of motivation Differences and bickering among members

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Basis Of Distinction
Definition

Sole Proprietorship
A sole trader is a person who carries on business executively by or himself.

Partnership
Partnership means the relation existing between persons who agrees to carry on a business in common with a view to private gains.

Joint Hindu Family
Joint Hindu Family Business is a business by co-parceners of a Hindu undivided family.

Joint Stock Company
It is a person artificial, invisible, intangible and existing only in the eyes of law-Justice Marshell.

Co-operative Organization
It is an association of persons, usually of limited means, who have voluntarily joined together to achieve a common economic end.

Specific Act

N/A

Indian Partnership Act, 1932

Indian Companies Act, 1956 Karta having unlimited and Coparceners having limited.

Co-operative Societies Act, 1912

Liability

Unlimited

Unlimited

Limited to their Share

Limited

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