Sie sind auf Seite 1von 2

The basic forms of business organizations are: Proprietorship: A sole proprietorship is the oldest and the most common

form of business. It is a one-man organisation where a single individual owns, manages and controls the business. Advantages * * * * Ease of formation Maximum incentive for work Secrecy of business Quick decisions and flexibility of operations

Disadvantages * * * * Limited capital Limited managerial ability Limited life Unlimited liability

Hence, this form of organisation is suitable for the businesses which involve mo derate risk, small financial resources, capital requirement is small and risk in volvement is not heavy like automobile repair shops, small bakery shops, tailori ng, etc. It accounts for the largest number of business concerns in India. Private Limited Company: A private limited t more than fifty res is limited to c to subscribe to company is a voluntary association of not less than two and no members, whose liability is limited, the transfer of whose sha its members and who is not allowed to invite the general publi its shares or debentures.

A private company is preferred by those who wish to take the advantage of limite d liability but at the same time desire to keep control over the business within a limited circle and maintain the privacy of their business. Advantages * Continuity of existence * Limited liability * Less legal restrictions Disadvantages * * * * Shares are not freely transferable Not allowed to invite public to subscribe to its shares Scope for promotional frauds Undemocratic control

Partnership Firm: Partnership is defined as a relation between two or more persons who have agreed to share the profits of a business carried on by all of them or any of them act ing for all. The owners of a partnership business are individually known as the "partners" and collectively as a "firm". Advantages

* Ease of formation * Greater capital and credit resources * Better judgement and more managerial abilities Disadvantages * * * * Absence of ultimate authority Liability for the actions of other partners Limited life Unlimited liability

Partnership is an appropriate form of ownership for medium sized business involv ing limited capital. This may include small scale industries, wholesale and reta il trade; small service concerns like transport agencies, real estate brokers; p rofessional firms like charted accountants, doctors' clinic, attorney or law fir ms etc. Public Limited Company: A public limited company is a voluntary association of members which is incorpor ated and, therefore has a separate legal existence and the liability of whose me mbers is limited. Advantages * * * * * Continuity of existence Larger amount of capital Unity of direction Efficient management Limited liability

Disadvantages * * * * Scope for promotional frauds Undemocratic control Scope for directors for personal profit Subjected to strict regulations