Skip to main content

Forms of Business Organisations

Every business needs an organisation to regulate its functioning. When two or more persons work together to achieve a common objective, the division of labor takes place between them. This is the beginning of an organisation. The organisation plays a vital role in achieving the main and ancillary objective of the business.

The business units have different forms of organisations. These can be classified as follow

1. Individual or sole proprietorship

Sole proprietorship is the first stage in the evaluation of various forms of business organisation and hence the oldest one. It is the simplest and most natural form of organisation. Though, the sole proprietorship is the oldest for of organisation and many changes have taken place thereafter in the form of business ownership, yet it remain the most popular form in the modern business.

" A sole proprietorship is that form of business as the head of which stands an individual as the one who is responsible, who directs its operations and who alone runs the risk of failure."

2. Partnership firm

Partnership has two or more members each of whom is responsible for the obligation of the partnership. Each of the partners may bind the other, and assets of the partners may be taken for the debts of the partnership.

3. Joint Hindu family

Joint Hindu family or Hindu undivided family firm is a peculiar form of organisation which comes into existence by operation of Hindu law. The functioning of this form of organisation is governed by Hindu law. The hindu law comes into operation on the basis of two schools of thoughts which are as follow.

School of mitakshara

The school of mitakshara is applicable to whole of India except the state of Assam and Bengal, where the school of dayabhaga is applicable.

The Joint Hindu family firm as a form of organisation has its origin in the principles of inheritance under the mitakshara school of Hindu law. Thus, legally speaking, joint Hindu family firm exists only under the mitakshara system. All the male members of the joint Hindu family firm are known as coparceners. Their interest in the family business is called as the coparcenery interest. Thus the sons, grand sons and great grand sons become joint owners in the family property. The moment a male child borns in joint Hindu family, he becomes a joint owner to the ancestral property. Initially, a female member was not having right to the joint family property, but the amended Hindu succession act, 1956, enable the female members of the deceased coparceners family to share out of the coparcenery interest of such coparceners. However, the female members or their relatives do not enjoy the status of coparceners even after the amendment in Hindu succession act 1956.

4. Joint stock company

Company is an artificial person created by law for some common purpose, where the capital is divisible into parts, known as shares and with a limited liability.

5. Co-operative organisation

Co-operative organisation is the form of business organisation where in persons voluntarily associate together as human beings on the basis of equality for promotion of economic interest of themselves.

6. State enterprises and public utilities

Public enterprises mean state ownership and operation of industrial, agricultural, financial and commercial undertakings. 

Comments

.

Popular posts from this blog

Branches of Commerce

Commerce is just like a tree. Following are its main branches.

Technological Environment

Definition of Technological Environment :-


“Technological Environment means the development in the field of technology which affects business by new inventions of productions and other improvements in techniques to perform the business
 work. "

Information Technology Act 2000

Introduction of Information Technology Act 2000

Information technology is one of the important law relating to Indian cyber laws. It had passed in Indian parliament in 2000. This act is helpful to promote business with the help of internet. It also set of rules and regulations which apply on any electronic business transaction.


Due to increasing crime in cyber space, Govt. of India understood the problems of internet user and for safeguarding the interest of internet users, this act was made.

Objective of Business Environment

Following are main objectives of business environment:
1. Knowledge of Information 
By studying the business environment, we can know the changes of business. This information is very useful for our business. Every businessman should aware current environment of business. With this, he can think the future of his business in such environment. 
2. Basis of Decisions 
One of main objective of the study of business environment that it can provide all the information which is needed for taking good decisions. Suppose, you completed your internal business environment study. With this study, you can take decision relating to purchase, sale, salary and price because you know your competitor, you know your suppliers and you know your customers. 
3. Helpful in making of Policies 
For making good business policies, we need to know and scan business through business environment. 
4. Technological Planning 
Today, technology is changing very fastly. 3 years ago, I have to search software for downloading …

Factors of Environmental Scanning

Following are the main factors of environment scanning.


1. Events

Past events of business environment is the main factor of environment scanning. For example, if Govt. has to control food prices, it has to scan every week prices of vegetables, fruits, milk and other food items. For more simplification of price rise, Govt. will calculate wholesale price index.