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Characteristics of Partnership firm

A partnership is defined as an association of individuals competent to enter into contracts, who agree to carry on a lawful business in common to earn and share profits. The persons who are the owners of a partnership are individually called ‘Partners’ and collectively called a ‘Firm’. The name under which the partnership is formed is called a ‘Firm name’. “Partnership is the relationship between the persons, who have agreed to share profits of a business, carried on by all or any of them, acting for all.” --Section 4 of the Indian Partnership Act, 1932 ð CHARACTERISTICS OF PARTNERSHIP FIRM The following are the features of a partnership firm: 1. Agreement or contractual relationship: A partnership is always a result of a written contract between the partners. It is also advisable to get the partnership registered with the Registrar of Firm of the concerned state. 2. Agreement to carry on busi...

8 REASONS FOR THE SURVIVAL OF SOLE PROPRIETORSHIP FORM OF BUSINESS

In spite of the development of a number of large trading organizations like partnership firms, joint stock companies, etc., the sole trading concerns are still a popular form of business organizations in India and even throughout the world. The following points highlight the reasons for the survival of sole trading concerns: 1. Human Inertia: Sometimes in spite of possibility of further expansion, a sole trader may continue to run business on a small-scale. That may be due to human inertia. The trader may have limited interest in the expansion of business, or he may be satisfied with the existing business. 2. Individual Tastes: In certain cases, customers’ wants are so individual and varied that the seller needs to customize his products as per the demand of individual consumers. For example, the tailoring business in India is generally carried on a small-scale. 3. Changes in Fashion: There are s...

10 Disadvantages of Sole Proprietorship.

Welcome back to Learn At Ur Desk! Last time I shared notes for Adavantages of Sole Proprietorship forn of business and today I am going to discuss some disadvantages Inspite of so many advantages sole proprietorship does have some drawbacks. The following are the Disadvantages/Demerits of sole proprietorship form of organisation. 1. Limited capital: The sole trader has limited physical and financial resources. He raises capital from his personal savings or borrowing from friends and relatives. He may find it difficult to raise loans from banks and financial institutions. So it is obvious that the financial resources of a single person will be insufficient for business growth and expansion. Thus, limitation of finance is a major handicap for his sole trading business. 2. Unlimited liability: The liability of the procreator for debts of his business is unlimited. The creditors have a right to recove...

Top 10 Advantages of Sole Proprietorship form of Business.

The following are some advantages of sole proprietorship/sole trading concern over other forms of business organisations.: 1. Easy formation: It is economical and easy to start its sole proprietorship form of Business. As it does not require any agreement or registration. A sole trader can start his operation just by opening a bank account and registering his firm with the sales tax and income tax authorities. 2. Business secrecy: Business secrecy is a vital important to the success of any business organisation. Being a sole trader, he is not expected to share his trade secrets with anybody else. There is also no need for a him to disclose his account or any other material facts to the public. 3. Flexibility: A sole proprietorship form of business is a highly flexible type of organisation. A sole trader can easily expand his business operations or can restric...

Top 10 Features of Sole Proprietorship form of business

Sole proprietorship is the oldest form of business organisation in which a single individual introduces his or her own capital, skills, an intelligence in the management of its affairs. And it’s and is solely responsible for the results of its operations. Definitions: According to James Stephenson. A Sole Trader is a person who carries on business exclusively by and for himself. He is not only the owner of the capital of the undertaking, but is usually the organiser and manager and takes all the profits or responsibility for losses. According to J.L. Hanson, “A type of business unit where one person is solely responsible for providing the capital and bearing the risk of the enterprise, and for the management of the business. Features of sole proprietorship. The following are the important features of sole proprietorship business organisation. 1. Individual initiative: The sole proprietorship business is started by t...

9 FACTORS INFLUENCE A CHOICE OF BUSINESS ORGANISATION

The following factors are generally considered by an entrepreneur while selecting a particular form of business organization: 1. Ease of Formation: One of the basic points of consideration of an entrepreneur is the simplicity with which an organization can be set op, i.e., the organization which can be formed with the least expenses and minimum legal formalities. 2. Ease of Financing: The suitability of a particular organization is also determined by the amount of capital required to set up a business organization. 3. Limited Liability: Another factor that affects the choice of a business organization is the degree of risk involved in the business. Limited liability means in the case of winding up or insolvency of an organization, the owner or owners are held responsible only up to the amount to contribute by them in the business. 4. Control of Management and Own...

Forms Of Business Organisation

INTRODUCTION Many commercial enterprises (organizations) came into existence due to rapid growth of trade and industries in the 20 th 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. F ORMS 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 sing...