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INTRODUCTION
Many commercial enterprises (organizations) came into existence due to rapid growth of trade and industries in the 20th century. With the development and growth of industries, commercial organizations have also grown from one man’s business, i.e., sole trading to organizations with collective ownership, i.e., the partnership firm.
FORMS OF BUSINESS ORGANISATION
Various
forms of business organizations can be shown in the following fig:
Forms
of business organisation
1. Private
sector: Private sector
enterprises are owned and managed by the individual or group of individuals. On
the basis of ownership and management, private sector organisations are
classified as under:
i)
Sole trading concern: A sole trading concern is one of the
oldest and simplest of all forms of business enterprises. A business unit which
is owned and controlled by a single individual is known as a sole trading
concern. The person who manages it is called a sole trader. He himself manages
the business with the assistance of his relatives or employees. He alone enjoys
all profits and bears all losses in the business. It is also known as sole
proprietorship.
ii)
Partnership firm: In partnership form of organization, two
or more than two persons come together to conduct some kind of business
activity jointly and collectively. The persons who are the owners of a
partnership firm are individually called ‘Partners’ and collectively called a
‘Firm’. The name under which the partnership is formed is called a ‘Firm name’.
iii)
Joint Hindu Family Business: Joint Hindu family business is a unique
kind of business orgnaisation, possible only in India, among Hindu families
only. It comes into existence due to the operation of the Hindu law. The
members of the Joint Hindu family are called co-parceners. Only the eldest
member in the family is allowed to conduct, manage, and control the business.
He is called “Karta’ or ‘Manager’.
iv)
Joint Stock Company: A joint stock company, as a distinct form
of business organisation. It is established by law and can be dissolved only by
law. It is incorporated association which is an artificial person created by
law, having a separate name, a common seal, a separate legal entity and
perpetual succession.
v)
Cooperative organisation: Generally, the basic aim or objective of
any form of business organisation is to earn profit. But the fundamental
objective of cooperative form of business organisation is to serve people. One
can say that the fundamental object of a cooperative is ‘organising and
rendering service to its members, who have a common economic interest’.
2. Public
Sector: Public sector
organisations are owned and controlled by the government. If a need arises, the
government may invite the public to subscribe for its shares and debentures.
Public sector undertakings are classified as under:
i)
Government Companies: In government companies, 51 percent or
more of the share capital is controlled by either the Central Government or the
State Government. Ex: LIC, Air India etc.
ii)
Boards and Commissions: Boards and Commissions are formed by the
government for specific purposes. These organisations function independently,
within the framework of the laws framed by the government. Ex: Railway Board,
Electricity Boards etc.
iii)
Government Departments: Government departments are created by the
government for the smooth functioning of the regulations laid down by the
government. Ex: income tax Department education Department etc.
iv)
Statutory Companies: Statutory companies are formed by a
Special Act of the Parliament. Such companies are significant form the nation’s
point of view. They are required for all-round development of the nation. Ex:
SBI, RBI etc.
3. Joint
Sector: Joint Sector is a
form of business organisation wherein public and private sectors coexist. A
join sector enterprise is jointly owned and managed by the group of individuals
and the government department.
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