FORMS OF

BUSINESS
ORGANISATION
(BST PROJECT 2020-21)
TABLE OF CONTENTS
SR. NO TOPIC SLIDE NO.
1 ACKNOWLEDGEMENT 3
2 INTRODUCTION 4
3 BUSINESS ORGANISATION 5
4 FORMS OF BUSINESS ORGANISATION 6
5 SOLE PROPRIETORSHIP 7
6 JOINT HINDU FAMILY BUSINESS 14
7 PATNERSHIP 20
8 PATNERSHIP ACT 1932 26
9 CO-OPERATIVE SOCIETIES 27
10 JOINT STOCK COMPANY 33
11 BIBLIOGRAPHY 39
ACKNOWLEDGEMENT
I would like to express my special thanks of gratitude to my teacher
as well as our principal who gave me the golden opportunity to do
this wonderful project on the topic FORMS OF BUSINESS
ORGANISATION, also helped me in doing a lot of Research and I came
to know about so many new things I am really thankful to them.
Secondly I would also like to thank my parents and friends who
helped me a lot in finalizing this project within the limited time
frame
REGARDS –
Vikhyat Anand
INTRODUCTION
Business is the activity of making
one's living or making money by
producing or buying and selling
products (such as goods and
services). Simply put, it is "any
activity or enterprise entered
into for profit. It does not mean
it is a company, a corporation,
partnership, or have any such
formal organization, but it can
range from a street peddler to
General Motors.
BUSINESS ORGANISATION
If one is planning to start a
business or is interested in
expanding an existing one, an
important decision relates to
the choice of form of
organization. The most
appropriate form is
determined by weighing the
advantages and disadvantages
of each type of organization
against one’s own
requirement.
 FORMS OF BUSINESS
ORGANISATION

SOLE JOINT HINDU

PROPRIETORSHIP PATNERSHIP
FAMILY BUSINESS

CO-OPERATIVE JOINT STOCK

SOCIETIES COMPANY
SOLE PROPRIETORSHIP
The sole proprietorship is the simplest
business form under which one can
operate a business. The sole
proprietorship is not a legal entity. It
simply refers to a person who owns the
business and is personally responsible
for its debts. A sole proprietorship can
operate under the name of its owner
or it can do business under a fictitious
name, such as Nancy's Nail Salon. The
fictitious name is simply a trade name -
it does not create a legal entity
separate from the sole proprietor
owner.
ADVANTAGES OF SOLE
PROPRIETORSHIP
Having control of your business -
Since you are the only owner of a sole
proprietorship, you are in complete control
of your business.

Simplified and Less Costly

Organization - There are no forms
to complete, and no government fees
to pay, to form a business as a sole
proprietorship.
Privacy - Since a sole proprietorship
does not file any formation documents or
annual reports with the federal or state
governments, your business operations
are not subject to public disclosure like
an LLC or corporation.

Minimal to No
Reporting
Requirements- A sole
proprietorship does not need to file
an annual report with the state or
federal governments.
Simplified Tax Reporting -
The sole proprietorship tax
advantages are simplified reporting
requirements and not having to pay
separate taxes for the business.

Organizing your business as a sole

proprietorship has several advantages.
However, this decision should take into
consideration all of your circumstances,
including whether you will need others to invest
in your business, your personal asset protection
needs, and your tax situation.
DISADVANTAGES OF SOLE
PROPRIETORSHIP
Management Problems - A
business can be efficiently run by
professional managers. They
perform specialized functions such
as keeping inventories, accounting
and maintaining tax records.
Limited Financial
Resources - Another
disadvantage of this type of
business is the strict limitation on
its ability to acquire capital for
expansion.
Few fringe benefits – The
sole owner of a firm loses the
fringe benefit which often comes
by working with others

Limited Life Span- If the sole

proprietor dies, becomes
physically unfit, or retires the
business ceases to exist (unless it
is sold to an outsider or taken over
by the heirs of the sole proprietor)
Limited Capital-
The amount of capital that
a person can invest in a
business is limited.
Moreover, he cannot get
unlimited credit. Thus, the
scope of growth is limited
and the business will
remain smaller.

Any person is not equipped to own and competent

enough manage a business. Often it is difficult to save
enough money to start a business and carry it on. It is
very difficult, at times, for a single person to cover
the costs of inventory (raw materials), insurance,
advertising, rent, computers and so on.
JOINT HINDU FAMILY
BUSINESS
Joint Hindu Family Business is a
different type of organization,
which is found only in India. As the
name suggests, it is type of
organization in which all the
members
of Hindu Undivided Family manage
and control the business with the
direction of head of the family. It
is not a Partnership.
 ADVANTAGES OF JOINT HINDU
FAMILY BUSINESS

Effective control - The decision

making power lies only with the Karta and no
other member has the right to interfere in his
decision. Thus, the Karta can take prompt and
flexible decisions that ensure effective control
in the organisation.

Limited liability of members -

Except the Karta, the liability of other members
is limited to the extent of their share in the
business.
Continued business existence -
The operation of the business is not
threatened by the death, insanity or
imprisonment of the Karta because in the
eventuality of any mishappening with the
Karta, the next eldest member takes up his
position.
Increased loyalty and
cooperation - In a Joint Hindu Family
Business, chances of great coordination
among the members are more because they
all belong to the same family. Hence,
chances of loyalty towards business are
more as compared to other forms of
organisations
DISADVANTAGES OF JOINT
HINDU FAMILY BUSINESS
Unlimited liability
of Karta - The liability
of the karta is unlimited but
the liability of co-partners is
limited. The karta is liable
to pay the dues even from
his personnel property.
Unlimited liability makes
him more cautions and he
may not take any risk.
Limited Capital - This type of
business does suffer from the limitation of
capital. This is because the business has to
depend upon the savings of the family.
Again, limited amount of borrowings is
possible from friends, banks and others.

No entry for non

family members - Only
family members can get entry into
the business. Outsiders are not
allowed to interfere in the family
business. So there is less scope for
increasing the capital of family
members.
Limited Growth and
Expansion - The investment of
the joint Hindu family business is
limited. Growth and expands is
possible only when there is large
investment. But the liability of the
Karta is unlimited. Hence, there is
less scope for Growth and
expansion.

Like Sole trading concern, the Joint Hindu

family business lacks legal status. The
registration of this type of business is not
compulsory. The members and the firm do
not have separate entity.
PATNERSHIP
A partnership is an arrangement
where parties, known as business
partners, agree to cooperate to
advance their mutual interests.
The partners in a partnership may
be individuals, businesses,
interest-based organizations,
schools, governments or
combinations.
CLASSIFICATION OF
PATNERSHIP
ON BASIS OF DURATION
▪ Partnership at will
▪ Particular partnership

ON BASIS OF LIABILITY
▪ General partnership
▪ Limited partnership
ADVANTAGES OF
PATNERSHIP
two heads (or more) are better
than one
your business is easy to establish
and start-up costs are low
more capital is available for the
business
you’ll have greater borrowing
capacity
high-calibre employees can be
made partners
there is opportunity for income
splitting, an advantage of
particular importance due to
resultant tax savings
partners’ business affairs are
private
there is limited external
regulation
it’s easy to change your legal
structure later if circumstances
change
DISADVANTEGES OF
PATNERSHIP
the liability of the partners for the
debts of the business is unlimited
each partner is ‘jointly and
severally’ liable for the
partnership’s debts; that is, each
partner is liable for their share of
the partnership debts as well as
being liable for all the debts
there is a risk of disagreements
and friction among partners and
management
each partner is an agent of the
partnership and is liable for
actions by other partners
if partners join or leave, you
will probably have to value all
the partnership assets and this
can be costly.
PATNERSHIP ACT
1932
THE INDIAN PARTNERSHIP ACT’
1932 Section.4 of the Indian
Partnership Act, 1932
defines Partnership in the following
terms: “ Partnership is the relation
between persons
who have agreed to share the
profits of a business carried on by
all or any of them
acting for all.”
CO-OPERATIVE
SOCIETIES
A cooperative is "an autonomous
association of persons united voluntarily to
meet their common economic, social, and
cultural needs and aspirations through a
jointly-owned enterprise“. Cooperative
businesses are typically more
economically resilient than many other
forms of enterprise, with twice the number
of co-operatives (80%) surviving their first
five years compared with other
business ownership models
TYPES OF
COOPERATIVE SOCIETY
CONSMER’S
COOPERATIVE
SOCIETY

CREDIT PRODUCER’S
COOPERATIVE COOPERATIVE
SOCIEY SOCIETY

COOPERATIVE
SOCIETY

COOPERATIVE MARKETING
HOUSING COOPERATIVE
SOCIETY SOCIETY

FARMER’S
COOPERATIVE
SOCIETY
ADVANTAGES OF
COOPERTATIVE SOCIETY
EQUALITY IN VOTING
STATUS – The principle of one
man vote governs the cooperative
society.

LIMITED LIABILTY – The

liability of members of a
cooperative society is limited to
extent of their capital
contribution
STABLE EXISTENCE – Death,
bankruptcy or insanity of a member do
not affect a cooperative society
ECONOMY IN OPERATION –
The member often provide honorary
services to the society.
EASE OF FORMATION – The
registration procedure is simple
involving few formalities. The formation
is governed by the provisions of
cooperative society act 1912
DISADVANTAGES OF
COOPERATIVE SOCIETY
LIMITED RESOURCES – The
resources of cooperative society consists
of capital contribution of members with
limited resources

GOVERNMENT CONTROL – In
return of the privileges offered by the
govt. the cooperative society has to comply
with various rules and regulations
DIFFERNCES OF OPINION –
Internal quarrels arising as as a result
of contrary viewpoints may lead to
difficulty in decision making.
LACK OF SECRECY – Due to open
discussions in meeting it’s difficult to
maintain secrecy about the operation
of cooperative society.
INEFFICIENCY IN
MANAGEMENT – Cooperative
societies are unable to employ expert
management because of their inability
to pay high salaries.
JOINT STOCK
COMPANY
A joint-stock company is a business
entity in which shares of the
company's stock can be bought and
sold by shareholders. Each
shareholder owns company stock in
proportion, evidenced by
their shares (certificates of
ownership). Shareholders are able to
transfer their shares to others
without any effects to the continued
existence of the company
 TYPES OF COMPANY

PRIVATE COMPANY OWNED BY INDIVIDUAL OF GROUP OF INDIVIDUAL

• MINIMUM 2 TO MAXIMUM 200 MEMBERS

PUBLIC COMPANY OWNED BY THE GOVERNMENT

• MINIMUM 7 TO MAXIMUM UNLIMITED MEMBERS
ADVANTAGES OF
COMPANY
Large Capital- The outstanding
advantage is that it allows vast mobilization of
capital which otherwise is not possible to
arrange. In a public company, there is no limit to
the number of members.
Vast Scope of Expansion- The
vast capital collected by means of shares coupled
with the earnings of the company contribute
sufficient scope for its expansion. The company
offers an excellent scope of self-generating
growth.
Limited Liability- The liability of
the members of the company is limited.
Members cannot be called upon to pay
anything more than the nominal value of the
shares held by them.

Permanent Existence-
The life of the company does not depend on
the life of its members. Law creates the
company and can dissolve it.

Transferability of Shares-
The shares in a company are transferable and
members can transfer their shares without the
consent of other members of the company.
DISADVANTAGES OF
COMPANY
Delay in Decision-Making- In this form of
organisation, decisions are not made by single individual. All
important decisions are taken by the Board of Directors.
Decision-making process is time-consuming.

Fraudulent Management- Frauds have been a

common feature of many a company. The promoters and
directors may indulge in fraudulent practices. The company
law has devised various methods to check the fraudulent
practices but they have not proved to check them
completely.
Reckless Speculation Encouraged-
This form of organisation encourages reckless
speculation in shares at stock exchanges. This is an
evil of great magnitude in our country because in
many cases stock exchanges act as ‘bush agencies’,
rather than aid to sound investment or stability.
Monopolistic Powers- There is, generally,
tendency for company organisation to form
themselves into combinations exercising
monopolistic powers which may react detrimentally
to other producers in the same line or to
consumers of the commodity produced.
Excessive Regulation by Law- The
State that creates the company, minutely watches
the activities of the company organisation. A
company and the management have to function
well within the law and the provisions of
Companies Act are quite elaborate and complex.
BIBLIOGRAPHY

✓ GOOGLE
✓ QUORA
✓ YOUTUBE
✓ SLIDESHARE
✓ WIKIPEDIA
✓ NCERT BOOK
THANKYOU