Business Low Unit 2 | Part 1 BBA First Semester 2023
Business Low Unit 2 | Part 1 BBA First Semester 2023

Business Low Unit 2 | Part 1 BBA First Semester 2023

Unit  2 | Part 1 BBA First Semester 2023

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Unit- II

Forms of business organization Meaning and definition

  • According to L.H Haney, the form of business organization should be so strong so that it can continue for a ling time ad small obstruction should to extinguish it

The various forms of business organization are

  1. Sole proprietorship
  2. Hindu undivided family
  3. Partnership
  4. Cooperative society
  5. Joint stock company

Sole proprietorship

  • Sole proprietorship refers to a form of business organization which is owned managed and controlled by an individual who is the recipient of all profits and bearer of all risks.
  • The term sole implies only and proprietor refers to owner hence a sole proprietor is the one who is the only owner of a business

Features of sole proprietorship

  • Formation and closer
  • Liability
  • Sole risk bearer and profit recipient
  • Control
  • No separate entity
  • Lack of continuity

Merits of sole proprietorship

  • Quick decision making
  • Confidentiality of information
  • Direct incentive
  • Sense of accomplishment
  • Ease of formation and closure

Limitation of sole proprietorship

  • Limited resources
  • Limited life of a  concern
  • Unlimited liability
  • Limited managerial ability

Hindu undivided family business

  • It refers to a form of organization where in the business is owned and carried on by the members of the Hindu undivided family
  • The business is managed and controlled by the eldest male member of the family known as karat are binding on all the members

There are two system of inheritance under the Hindu law

 Daya Bhaga system

  • This system prevails in west Bangle only under this system both male and female members of the family are allowed to be co-partnership

MIT Akashara system

  • This system prevails all over India except west Bangle under this system only the male members are allowed to be co-partnership in the business.

Partnership

  • According to Indian partnership act, partnership is the relation between persons who have agreed to share the profit of the business carried on by all or any one of them acting for all

Features of partnership

Merits of partnership

  • Ease of formation and closure
  • Balance decision making
  • More funds
  • Sharing of risks
  • Secrecy

Limitations of partnership

  • Unlimited liability
  • Limited resources
  • Possibility of conflicts
  • Lack of continuity
  • Lack of public confidence

Types of partners


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