Business Organisation and

Management

Types of

BUSINESS
Sole trade Partnership firm

BUSINESS

Joint Hindu Family

Joint Stock Company

=> FEATURES OF

SOLE TRADE

Individual initiative Unlimited liability Managament & control Motivation Secrecy Propretor & Propretor ship are one Limited area of operations

=>Advantages of SOLE TRADE

     

Essay formation Better control Flexibility Retention of business secreates Direct motivation Promptness in decision making

    

Direct Accessibility to consumers In expensive management No legal restrictions Socially desireable Healthy relation with employees

Disadvantages of
 

SOLE TRADE

   

Limited resources Limited managerial ability Unlimited liability Uncertain continuity More risk involved No large scale economies Limited scope of employees

=> FEATURES OF Partnership



firm

    

Association two or more persons Earning of profit Existence of business Implied authority Unlimited liability Principal & agent relationship Utmost good faith

 

Restriction on transfer of shares Partners and partnership are one Capital contribution Protection of minority interest continuity

=>Merits of
  

Partnership Firm

 

 

Easy to form Large resources Greater managerial talent More credit standing Promptness decision making Sharing of risk Close supervision

 

Relation ship between reward & work Secrecy Protection of minority interest Democratic Administration

=>Demerits of

Partnership Firm

Unlimited liability Instability Mutual distrust Limitation on transfer of shares Burden of implied authority Lack of prompt decision Cautious approach

o=> FEATURES of o Creation o Registration o Types of members o liability o Right of management

Joint Hindu Family firm o No. of members o Responsibility of kartha o Profit shares

o Leger status

Merits of

Joint Hindu Family firm

Continuity Centralized management No upper limit to membership Flexibility of operation Business secrecy Division of labour Better credit worthiness

Demerits Of

Joint Hindu Family firm

No relation between efforts & rewards Limited managerial ability No managerial powers No right to females

FEATURES of

Joint Stock Company

Association of persons Independent Leger entity Limited liability Common seal Transferability of shares Perpetual existence

Centralised and deligated management Publication of accounting Corporate finance