Organization and Environmental Factors
is a group of people intentionally organized to accomplish a common or set of
goals. Types of Business Organizations
1 Sole Proprietorships
majority of small business starts out as sole proprietorships very dangerous.
These firms are owned by one person, usually the individual who has day-to-day
responsibility for running the business. Sole proprietors own all the assets of
the business and the profits generated by it. They also assume "complete
personal" responsibility for all of its liabilities or debts. In the eyes
of the law, you are one in the same with the business.
Partnership, two or more people share ownership of a single business. Like
proprietorships, the law does not distinguish between the business and its
owners. The Partners should have a legal agreement that sets forth how
decisions will be made, profits will be shared, disputes will be resolved, how
future partners will be admitted to the partnership, how partners can be bought
out, or what steps will be taken to dissolve the partnership when needed.
corporation, chartered by the state in which it is headquartered, is considered
by law to be a unique "entity", separate and apart from those who own
it. A corporation can be taxed; it can be sued; it can enter into contractual
agreements. The owners of a corporation are its shareholders. The shareholders
elect a board of directors to oversee the major policies and decisions. The
corporation has a life of its own and does not dissolve when ownership changes.
4 Joint Stock Company
financial resources & heavy burden of risk involved in both of the previous
forms of organization has led to the formation of joint stock companies these
have limited dilutives. The capital is raised by selling shares of different
values. Persons who purchase the shares are called shareholder. The managing
body known as; Board of Directors; is responsible for policy making important
financial & technical decisions. There are two main types of joint stock Companies
Private limited and Public limited company.
limited company-This type company can be formed by two or more persons. Te
maximum number of member ship is limited to 50. In this transfer of shares is
limited to members only. The government also does not interfere in the working
of the company.
ü Public Limited Company-It is one whose membership is open to general public. The minimum number required to form such company is seven, but there is no upper limit. Such company’s can advertise to offer its share to genera public through a prospectus. These public limited companies are subjected to greater control & supervision of control.
5 Public Corporations
corporation is wholly
owned by the
Government centre to
state. It is established usually by a Special Act of
the parliament. Special statute also prescribes its management pattern power
duties & jurisdictions. Though the total capital is provided by the
Government, they have separate entity & enjoy independence in matters
related to appointments, promotions etc.
6 Government Companies
enterprise can also be organized in the
form of a Joint stock company; A government company is any company in
which of the share capital is held by the central government or partly by
central government & party by one to more state governments. It is managed
b the elected board of directors which may include private individuals. These
are accountable for its working to the concerned ministry or department &
its annual report is required to be placed ever year on the table of the
parliament or state legislatures along with the comments of the government to