TYPES OF BUSINESS ORGANISATIONS

• INTODUCTION:-
• Imagine you want to business .which business are you
interested in?
• Example: to start intel industry , there are so many
alternatives in this industry.
• You can buy or sell
• You can set up a small/medium/large industry to manufacture
• You can st up a workshop to repair
• You can develop a software
• You can design a hardware
• You can be a consultant/trouble-shooter
• Next step to take decision in business is
• You want to be the only owner
• You want to take some more professionals as co-
owners along with you( it means that partnership
with others).
• You want to be a global player by mobilising large
resources across the country/world.
• You want to bring all like-minded people to share
benefits of common enterprise (joint stock company).
• You want to involve government in IT (public
enterprise).
• These factors helps to taking correct decisions.
 FACTORS AFFECTING THE COICE OF
FORM OF BUSINESS ORGANISATION
• 1.EASY TO START AND EASY TO CLOSE:- The form of business should be
easy to open and easy to close and it should not long procedure for
opening and closing.
• 2.DIVISON OF LABOUR:-we have to divide the work among all expertise
labours and run the business most efficiently
• 3.LARGE AMOUNT OF RESOURCES:-To produce large production we need
large resources.so all types of business do not permit to raise large
resources.select which permits to produce large resources.
• 4.LIABILITY:-the owners should have capable to invest money and not to
bring their personal properties into business.
• 5.SECRECY:-To run a business for long period we have to maintain some
secrets.
• 6.TRANSFER OF OWNERSHIP:-It should be simple procedure to transfer the
ownership to next legal heir.
7.OWNERSHIP,MANAGEMENT AND CONTROL:-It will be
in hands of one person or small group persons and it
will be effective and easier.
8.CONTINUITY:-Business should be continue for ever
and ever irrespective of uncertainties in future.
9.QUICK DECISION MAKING:-We have to take decisions
quickly and promptly.
10.PERSONAL CONTACT WITH CUSTOMERS:-from
customers we can get suggestions and clues to
improve business.
11.FLEXIBILITY:-To jump from one business to other,we
have to commit the lesser funds.
12.TAXATION:-more profits means more tax .so choose
such a form which permits to pay low tax.
 FORMS OF BUSINESS ORGANISATION
• IT IS BASED ON OWNERSHIP
1.Sole trader or proprietorship
2.Partnership
3.Joint stock company
4.Coorperative society /public sector
enterprises
 SOLE TRADER
• It is a simplest ,oldest and natural form of business organisation.
• Sole means ‘one’.
• Sole trader means only one trader will be present (owner).
• In this the owner has to take all decisions with his skills,own capital and
intelligence.
• He is owner,manager and controller and freedom to take all decisions.
• Ex:restaurants,supermarkets,medical shops etc.

• FEATURES:
• It is easy to start and close.
• He enjoy all profits and suffer in losses alone.
• In this he has unlimited liability to take his personal properties in case of
loss.
• Easy to shift from one business to other.
• He has to look after purchase , sale ,cash,accounts,taking care of customers.
• Business secrets can be high guarded well,no continuity.
 the business come close if owner may died or illness,if legal heirs show
interest to continue but it cannot restored.
 ADVANTAGES:
 EASY TO START AND CLOSE
 PERSONAL CONTACT WITH CUSTOMER DIRECTLY
 PROMPT MAKING DECISION
 HIGH DEGREE OF FLEXIBILITY
 SECRECY
 LOW RATE OF TAXATION
 DIRECT MOTIVATION
 TOTAL CONTROL
 MINIMUM INTERFERENCEFROM GOVERNMENT
 TRANSFERABILITY
 DISADVANTAGES
 UNLIMITED LIABILITY
 LIMITED AMOUNTS OF CAPITAL
 NO DIVISION OF LABOUR
 UNCERTAINITY
• INADEQUATE FOR GROWTH AND EXPANSION
• LACK OF SPECIALISATION
• MORE COMPETITION
• LOW BARGAINING POWER
• SUITABILITY
• Small business and low capital
• Manage by one person
• Risk is low
• Personal attention is necessary to take care of customers
• Product/services based on customer specifications
2.partnership