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A STUDY ON VARIOUS FORMS OF

BUSINESS ORGANIZATION

Submitted by: Submitted to:

Kunal Acharya BC0190024 Dr. Agilla T.S

Abhishek. S BC0190002 Faculty for B.COM LLB

S.HASTHISHA DESIKAN BCO190017

Tamil Nadu National Law University

Place: IN, Dindigul, Main Rd, Navalurkuttappattu, Tiruchirappalli, 620027

Date:12 . 09. 2019

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TABLE OF CONTENTS

1. ABSTRACT

2. INTRODUCTION

3. VARIOUS FORMS OF BUSINESS ORGANISATION

 Sole Proprietorship

 Joint Hindu Family Business

 Joint Stock Companies

 Cooperative Society

 Partnership

4. Conclusion

5. Biblography

6.
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 Abstract
The business organization describes how businesses are based totally and the way
their shape lets in them meet their goals. In desired, companies are designed to give
attention to both aspects generating profits or improving society. When an agency
specializes in generating earnings, it's far known as a for-income company. When a
business enterprise makes a specialty of enhancing the social proper via the
humanities, schooling, health care, or some other place, it's miles known as a
nonprofit (or now not-for-profit)  organization and is not typically called a business
enterprise. There are distinct classes of enterprise groups that relate to how the agency
is hooked up, owned, and operated. The primary classes of corporation enterprise are
a sole proprietorship, partnership, and organization. Each shape of commercial
employer business enterprise has benefits in addition to dangers. For instance, a sole
owner of a small business enterprise is capable of operating independently of a
notable deal of the authorities regulation that influences large groups, but she or he is
liable (responsible) for all monetary dangers of the commercial enterprise. Therefore,
the proprietor of a small grocery save is capable of preserve all of the profits for
herself, however, she is also chargeable for all of her corporation money owed, even
though she must pay off debt together with her non-public budget. Among other form
of business one is partnership which is a form in which The partners manipulate the
business enterprise and count on obligation for the partnership's money owed and
different duties. The other form is corporation are the most not unusual desire of a
commercial enterprise organization and they're desired by outdoor buyers.
Corporations are created with the aid of having shareholders who proportion inside
the income of the employer but are not held chargeable for debts or legal problems.
The wide variety of shareholders is inconsequential – there may be one or lots.
Limited legal responsibility is the primary advantage of a business enterprise. The
forth form is Joint Hindu Family business is a wonderful shape of employer atypical
to India. Joint Hindu Family Firm is created by means of the operation of regulation.
It does no longer have any separate and distinct felony entity from that of its
contributors. The enterprise of Joint Hindu Family is managed below the Hindu Law
rather than Partnership Act. The membership in this shape of commercial enterprise
may be acquired only by using delivery or via marriage to a male person who's
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already a member of Joint Hindu Family. The fifth form of the business organization
is Joint Stock Companies it is a business enterprise this is owned collectively by
means of all its shareholders. All the shareholders own a certain amount of stock
inside the organisation, that's represented by using their proportion. Professor Haney
defines it as “a voluntary affiliation of humans for profit, having the capital divided
into some transferable shares, and the ownership of such shares is the circumstance of
club of the agency.” Studying the functions of a joint stock organization will make
clear its structure.
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 Introduction
The term business organization describes how corporations are structured and how
their structure helps them meet their dreams. In widespread, corporations are designed
to attention on both generating profits or enhancing society. When an enterprise
specializes in generating earnings, it's far referred to as a for-earnings corporation.
When an enterprise focuses on enhancing the social top via the humanities, training,
fitness care, or some other region, it's miles called a nonprofit (or not-for-earnings)
organization and isn't normally called a business.

There are special classes of business organizations that relate to how the commercial
enterprise is established, owned, and operated. The simple classes of the business
organization are a sole proprietorship, partnership, and organization. Each form of
commercial enterprise business enterprise has benefits in addition to disadvantages.
For example, a sole proprietor of a small business is able to perform independently of
plenty of the government regulation that influences larger companies, but he or she is
liable (responsible) for all economic dangers of the business. Therefore, the proprietor
of a small grocery store is able to hold all of the earnings for herself, however, she is
also responsible for all of her business money owed, although she must pay off debt
along with her personal finances. No count how a business is prepared, it takes on
certain risks as it operates. One way to decrease threat is for a enterprise to apply its
property and investments wisely, whether or not these are system, expertise,
belongings, or relationships. The more successfully a commercial enterprise makes
use of its property, the greater the danger that it's going to make a monetary profit.
Business employer affects how a commercial enterprise is treated below the law. State
and federal governments provide incentives and rules for each form of commercial en
enterprise. Profitability in industry helps a rustic’s financial system grow, so
governments generally assist companies via passing laws that defend investors from
legal responsibility for the debts of the commercial enterprise. Contemporary styles of
commercial enterprise agency have their roots in the Industrial Revolution. During the
Industrial Revolution, manual hard work become largely changed with the aid of
system-based hard work. Industry developed around factories wherein machines, no
longer people, have been the primary tools of production. Many people, artisans, and
family groups ceased working in homes, in small workshops, and on farms and took
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factory jobs providing pay for unskilled exertions. As companies have become extra
targeted round machines, they divided up responsibilities amongst employees and
evolved chains of command to arrange employees and executives in order of
authority. Individual employee’s jobs became more specialised and more habitual.
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 VARIOUS FORMS OF BUSINESS ORGANIZATION

Ownership is one of the most important capabilities of business agency. A sole

proprietorship is a business with a single owner, or proprietor. It is the maximum
primary form of for-income agency and the least regulated through government. The
proprietor of a sole proprietorship makes all of the selections approximately the
commercial enterprise and is unfastened to maintain all of the profits he or she makes
from the enterprise. However, the owner is likewise completely responsible
(responsible) for the money owed of the business, meaning that his or her non-public
belongings are at threat if the commercial enterprise can not pay off its debts.

When or greater human beings select to own and perform a enterprise together, the
enterprise is referred to as a partnership. In a preferred partnership, all of the
proprietors percentage within the financial earnings and losses, and that they
percentage the legal responsibility for all the debts. In a constrained partnership, one
or greater of the proprietors (known as the overall partners) run the enterprise and
have unlimited liability, or are held totally answerable for the business’s money owed.
But there will also be limited companions within the commercial enterprise who
invest in the enterprise and feature best constrained personal legal responsibility for
the business’s money owed.
Sole proprietorships and partnerships are famous varieties of companies. In reality,
there are more sole proprietorships than another form of enterprise. However, most
large corporations within the United States are companies. Corporations are organized
very in a different way from proprietorships and partnerships. The ownership of a
agency is not related to one man or woman or a small organization of individuals;
ownership of a business enterprise is represented via shares of inventory that may be
transferred among owners, or stockholders. A organization is a felony entity within
the same feel that an character character is, that means that the organization has
specific rights, duties, and privileges. When a organisation borrows money, it does so
in its own name (rather than within the name of its original founders or any other
persons). As a result, the legal responsibility for the business enterprise’s money owed
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is constrained; the most a stockholder can lose is the amount he or she has invested. A
big company can have millions of owners, or stockholders.
To start a organisation, a charter (or articles of incorporation) should be drawn up in
the kingdom where the agency intends to do business. The constitution includes the
corporation’s call, the forecasted period of its life, its commercial enterprise purpose,
and the wide variety of shares of stock that can be disbursed or bought. Another
requirement for starting a employer is the creation of bylaws, which can be guidelines
that govern the actions of the commercial enterprise. For example, bylaws will
country how the enterprise’s directors are to be selected. In massive businesses, the
stockholders elect a board of directors. The board of directors then elects the agency’s
managers, who oversee the operations of the enterprise within the hobby of the
stockholders. The result of this association is that stockholders, because they have got
manage over the administrators, have manipulate of the organisation.
 SOLE PROPRITERSHIP

Sole proprietorship is one of the most common and convenient form of business organization
and its most suitable for small scale business were the ownership and the management is
handled by a single person. The single owner invests the entire capital required for the
business and bears all therisks of the business.The sole proprietorship cannot be a legal entity.
The sole proprietor is not only the exclusive owner but also the founder and controller of the
company.Sole proprietors always have unlimited liability. This implies that the owner is
responsible for payment of debts in case the assets and capital of the business are not
sufficient to pay all the debts. The owner can employ as many workers or mangers in the
company and provide salary for them, but still the owner holds the overall income and profits
generated by the business.

Example:A Coffee shop is established and the capital and initial expenses for the shop is
invested by a sole individual and he employs few workers for its maintenance and he pays
their salary , but still he holds all the profit or loss occurred during the business.

 SALIENT FEATURES OF SOLE PROPRIETORSHIP:

 FORMATION AND CLOSURE
The formation and closure of the company in sole proprietorship is easy compared to
other forms of business since there is no legal entity and separate law that governs the
business and the owner has every right over his decision.
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 LIABILITY
Sole proprietors have unlimited liability. The owner is liable for all the debts that
occurs in the business and no one can be held liable for the debts.
 SOLE RISK BEARER AND PROFIT RECIPIENT
The sole proprietor takes all the risks in the business and enjoys all the profit gained
 CONTROL
The sole proprietor or the owner has a better control over the management and
functioning of business
 NO SEPARATE LEGAL ENTITY
In the eyes of the law, no distinction is made between the sole trader and his
business, as business does not have an identity separate from the owner.
 LACK OF BUSINESS COTINUITY
The sole proprietorship business is owned and managed through one individual
consequently death, insanity, imprisonment, bodily ailment or bankruptcy of the sole
proprietor will have a direct and destructive impact on the enterprise and might even
purpose closure of the enterprise.

 FEW MERITS OF SOLE PROPRIETORSHIP

This part is about to discuss few of the merits of sole proprietorship
 QUICK DECISION MAKING
The owner is free to any decision regarding the business he wants in a faster way and
he need not consult any others. He is the supreme authority of the company

 CONFIDENTIALITY OF INFORMATION
Sole selection making authority permits the owner to preserve all the records
associated with business operations private and hold the secrets of the company’s
details.

 DIRECT INCENTIVES

A sole proprietor without delay reaps the advantages of his/her efforts as he/she is the
only recipient of all the profit. The want to proportion earnings does now not rise up as
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he/she is the single proprietor. This gives most incentive to the only dealer to paintings
difficult.

There are many more advantages and merits inn sole proprietorship form of business.

 FEW LIMITATIONS OF SOLE PROPRIETORSHIP

 One of the biggest boundaries of a sole proprietorship is the limitless liability of the
owner. If the commercial enterprise fails it can wipe out the personal wealth of the owner
as nicely and affect his future enterprise prospects too
 Another hassle is the constrained capital a sole owner has get entry to to. His own
personal savings and cash he can borrow might not be sufficient to expand the business.
Banks and economic institutions also are cautious lending to proprietorships
 The life cycle of a sole proprietorship is not sure and connected to its proprietor. If the
owner is incapacitated in any manner it has a bad effect at the business, and it may even
lead to the closure of the enterprise. A sole proprietorship cannot carry on without its
owner.
 A sole owner also has restricted managerial ability. He cannot be an expert in all the
fields of the business. And confined resources may suggest that he cannot even hire able
humans to help him out. This may also cause the enterprise affected by mismanagement
and negative decisions.

 JOINT HINDU FAMILY BUSINESS

The Joint Hindu Family Business or the Hindu Undivided Family (HUF)is a type of business
association found uniquely in India. No place else is this an authoritative form of business
entity.It is governed and dictated by the Hindu Law, which is one of the several religious
laws prevalent in India.any individual born to the family up to the following coming three
ages is a piece of the Joint Hindu Family Business. These individuals are the co-parceners.
The head of such a Joint Family Business is the oldest individual from the family, the
"Karta". He is the principle individual in charge of the business and the funds.

 FEATURES
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Formation: To start a Joint Hindu Family Business there must be at least two individuals
related through blood. There must be a few resources, business or familial property that they
have acquired or will in the end acquire. The formation of a Joint Hindu Family Business
does not require any documentation and induction of new individuals is by birth.Both Male
and female children have co-parcenary interest for the business. Female relatives of a no
more male co-parcener can demand a share in the family property.

Liability: The liability of all the different co-parceners is just up to their share in the property
or business. So they have limited liability. Be that as it may, the Karta being the leader of the
Joint Hindu Family Business has boundless liability.

Control: The whole control of the business lies with the Karta. As the head of the joint
family, the karta has full control over the affairs of the family business and serves as the
custodian of the firms assets. He may consult with the co-parceners about different choices,
however his choice can be autonomous. His activities will be conclusive and furthermore
lawfully official.Other individuals from the business can't scrutinize his judgment, the only
cure accessible to them is to request their share of the ancestral property.

Continuity: The HUF can be proceeded indefinitely. At the passing of the Karta, the
following oldest part will turn into the Karta. Be that as it may, remember a Hindu Undivided
Family can be broken down if all individuals commonly consent for its salvation.

Minority: As we saw prior the individuals are qualified to be co-parceners by the virtue of
their birth into the family. So for this situation, even minor individuals will be a piece of the
HUF. Be that as it may, they will reap just the advantages of the association.

Fluctuating Share-The share of every part in the family property and business keeps
continuously changing. A part interest diminishes on the introduction of another co-parcener
and it increments by the passing of a current co-parcener. There is no confinement on the
quantity of co-parceners.

 Advantages
 A Hindu Undivided family encompasses blood relatives maintaining a business. Like
in any other association, there is a degree for differences and clashes. However, since
the Karta has outright power and takes all choices without anyone else's input, it will
prompt successful administration.
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 Much the same as an organization, the existence of a HUF is interminable. The passing
or retirement of one individual from even the Karta won't influence it, and it will
continue ahead.
 Since the co-parceners don't have any apparent authority over the administration of the
HUF, and all power lies with the Karta, the liability of the individuals has likewise
been restricted to just the share of the property they own. This keeps a balance among
power and liability.
 Additionally since all individuals from the HUF are relatives and individuals from a
same family, there is a feeling of dedication and loyalty. The trust among individuals
is additionally there and prompts general collaboration.
 Young individuals from the family get the advantage of the learning and experience of
senior members. Such sharing of information and experience empowers the them to
procure essential mastery effectively and rapidly.
 DISADVANTAGE
 No outside individuals other than relatives can be inducted into the HUF. This
makes it exceptionally hard to get extra capital from the market. With restricted
capital, the odds of expansion are low. It restrains the scope of the business.
 While the Karta has all the power he likewise has the obligation of unlimited
liability. This may make him excessively mindful and hesitant in his business
dealings. Thus, the business could suffer. Another factor is that he may even be
considered responsible of the actions of other co-parceners.
 the dominating power of the Karta in general business and monetary choices make
cause strife among the HUF. His choices and business decisions might be belittled
by other individuals, and cause issues inside the HUF.
 Another issue might be that the Karta may not be the most qualified individual to
lead the business. The position is given to the senior most relative, regardless of
whether he is the most qualified or not will be not thought about.
 As the benefits of the firm are shared by all co-parceners independent of their
commitments, there is no motivation to take an active initiative. There exists no
immediate connection between participation and reward. The privilege to partake
in the salary of business independent of participation made actuates laziness with
respect to individuals.
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 Since the karta has a autonomy of authority over the administration of the
business, other co-parceners get no chance to practice activity and judgment.

 JOINT STOCK COMPANIES

All the world's biggest companies like Apple Inc. Google etc. are all joint stock companies.
When managing business on a genuinely huge scale, a joint stock company is the most
appropriate type of business organisation. The easiest approach to define a joint stock
company is that it is a business association that is owned mutually by the entirety of its
shareholders. Every one of the investors claim a specific measure of stock in the organization,
which is represented to by their shares .Shareholders can move their shares to others with no
impacts to the continued existence of the organization. Joint stock companies are generally
known as partnerships or limited companies.

 FEATURES
 An organization is a legitimate substance that has been made by the statues of law.
Like a natural individual, it can perform certain things, like own property in its name,
get into a legally binding agreement, borrow and loan cash, sue or be sued, and so
forth. It has likewise been conceded rights by the law which it exercises through its
board of directors body.
In any case, not all laws/rights/liability apply to a company. It exists just in the law
and in no physical structure. So we consider it a artificial legal person.
 In contrast to an sole proprietorship or partnership, the legal identity of a company
and its individuals are independent. When the business entity is consolidated it has its
very own unmistakable lawful identity. So an individual from the organization isn't
liable for the company. Also, the organization won't rely upon any particular
individual of its for any business exercises.
 For a company to be perceived as a distinct legal entity and for it to be created, it must
be incorporated. Not enrolling a joint stock company isn't a choice. Without
incorporation, the company essentially does not exist.
 The joint stock company is conceived out of the law, so the main route for the
company to end is by the working of law. So the life of an organization is not
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identified with the life of its individuals. Individuals or investors of a company

continue changing, however this does not influence the organization's life.
 Limited liability is one of the major difference between a joint stock company and a
sole proprietorship and association. The obligation of the investors of a company is
restricted. The individual resources of a member can't be seized to reimburse the
liabilities of a company.
An investors liability is constrained to the measure of unpaid share capital. In the
event that his shares are completely paid, at that point he has no obligation. The extent
of liability makes little difference to this. Just the company's resources can be sold off
to reimburse its very own debts. The individuals can't be made to pay up.
 A company is an artificial person. So its everyday functions are led by the top
managerial staff namely the board of directors. So when a company enters any
agreement or consents to an arrangement, the consent is demonstrated by means of a
typical seal. A typical seal is engraved seal with the company's name on it. So no
report is lawfully authoritative on the organization until and unless if it has the seal
alongside the signatures of the executives.
 In a joint stock company, the ownership is separated into transferable units known as
shares. If there should be an occurrence of a public company the shares can be moved
uninhibitedly, there are no confinements. Also, in a public company, there are a few
restrictions, however the exchange can't be nullified.
 ADVANTAGES
 One of the most attractive elements of a joint stock company is the limited liability of
its members. Their liability is just restricted up to the unpaid sum on their shares. Since
their own riches is protected, they are urged to put resources into joint stock
companies.
 The shares of a joint stock company are transferable. Additionally, on account of a
listed public company they can likewise be sold in the market and be liquidated over to
money. This simplicity of possession is an additional advantage.
 Never-ending progression is another bit of advantage of a joint stock company. The
demise/retirement/lunacy/and so on affects the life of an organization but the main
liquidation under the Companies Act only can close down a company.
 A company enlists a board of directors to run every one of the functions of the
company. Proficient, gifted individuals are chosen for the board and this results in
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successful and productive administration. Likewise, a company for the most part has
huge assets and this enables them to enlist the best talents and experts.
 DISADVANTAGE
 One drawback of a joint stock company is the mind boggling and lengthy method for
its incorporation. This can take as long as half a month and is an expensive
undertaking also.
 As indicated by the Companies Act, 2013 every public company need to give their
monetary records and other related archives to the registrar. These reports are then
open archives, which any individual from the public can get access to. This prompts a
total absence of secrecy for the organization.
 Notwithstanding during its everyday working a company needs to abide by various
number of laws, guidelines, warnings, and so on. It occupies time as well as lessens the
freedom of the company.
 A joint stock company has numerous partners like the investors, the advertisers, the
board members, the workers, the debenture holders and so forth. Every one of these
partners pay special mind to their advantage and it regularly prompts a conflicted
situation.

 COOPERATIVE SOCIETY

The cooperative society is a voluntary affiliation of persons, who will be part of together with
the motive of welfare of the individuals. They are pushed via the need to guard their
monetary interests inside the face of viable exploitation at the arms of middlemen obsessed
on the desire to earn extra earnings. The company or society must be registered and it should
have its own legal entity.There is restrained legal responsibility of the contributors of co-
operative society. Liability is limited to the extent of the quantity contributed via individuals
as capital. A managing committee will be elected on behalf of the members of the society to
make the important decisions for the functioning and management of the company.A Co-
operative Society can be formed as per the provisions of the Co-operative Societies Act,
1912.

 TYPES OF COOPERATIVE SOCIETY

1] Producer Cooperative
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To guard the hobby of small manufacturers, these societies are set up. The co-operative
society individuals can be farmers, landowners, owners of the fishing operations. To boom
the advertising possibilities and manufacturing performance, manufacturers decide to work
together or as separate entities.

They perform several sports like processing, advertising & dispensing their own products.
This allows in lower fees and lines in each vicinity with a mutual benefit to every producer.

2] Consumer Cooperative

These organizations are owned and governed via consumers of a specific area for his or her
mutual advantage. Their view is to provide each day necessary commodities at an most
beneficial price. Rather than incomes a pecuniary profit, their purpose is closer to presenting
provider to the clients.

Three] Credit Unions

Credit unions are commonly member-owned monetary cooperatives. Their precept is of

human beings assisting humans. They offer credit score and monetary services to the
contributors at competitive charges. Each and each depositor has the right to come to be a
member. Members attend the annual meeting and are given rights to decide on a board of
administrators.

Four] Marketing Cooperative Society

With an aim of assisting small manufacturers in selling their merchandise, those societies are
installed. The manufacturers who want to attain affordable expenses for their output are the
members of this society.

For securing a favourable marketplace for the products they put off the middlemen and
enhance the competitive role of its contributors. It collects the output of individual members.
Various advertising features like transportation, packaging, warehousing, and many others
are finished through the cooperative societies to promote the product on the exceptional
viable rate.

5] Housing Cooperative Society

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To help people with restricted profits to construct houses at affordable prices, those societies
are installed. Their goal is to remedy the housing issues of the participants. A member of this
society ambitions you purchased the residential house at lower cost.

They construct the houses and deliver the option to participants to pay in installments to buy
the house. They construct residences or offer plots to members on which the contributors
themselves can assemble the homes as according to their choice.

 PARTNERSHIP
A partnership is an association of or extra people to hold on, as co-proprietors, a
commercial enterprise and to percentage its profits and losses. The partnership may
additionally come into existence both due to the expansion of the only buying and
selling concern or with the aid of an settlement between two or more humans desirous
of forming a partnership.
When the enterprise expands in length, the proprietor reveals it hard to manage the
enterprise and is pressured to take extra outsiders who will now not best offer
additional capital but also help him in handling the business on sound strains.
Sometimes the nature of commercial enterprise demands massive amount of capital,
powerful supervision and extra specialization. It is the precise form of organisation for
the enterprise requiring slight amount of capital and various managerial talent. This
shape isn't always appropriate for a commercial enterprise requiring extra capital and
professional managerial personnel. A partnership commercial enterprise may be
fashioned by way of two or extra participants. The coming collectively of at-least men
and women for challenge any enterprise activity brings a partnership into existence.
There is a Partnership Act, 1932 however it does no longer prescribe any mode of
forming a partnership enterprise. Even the registration of partnership is left to the
discretion of partners.

 PARTNERSHIP DEED:

Partnership deed forms the basis of partnership. It includes all important clauses like name of

business, contribution of capital, sharing of profits, mode of management, etc. “Partnership

deed is a document containing all the matters according to which mutual rights, duties and
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liabilities of the partners in the conduct and management of the affairs of the firm are

determined.” The deed must be signed by the partners.

The partnership deed can both be oral or in writing. In France and Italy, a written agreement

among partners is essential to bind them lawfully. In India, U.S.A. and Britain, the agreement

may be either oral or in writing, agreement, however, should be preferred because nobody

can dispute the contents. There may be a dispute even about what was agreed if the contents

are not in writing. So written deed should be preferred.

 FEATURES OF PARTNERSHIP

The critical capabilities and characteristics of a partnership are:

1. Agreement: The partnership arises out of an settlement among or extra parents.

2. Profit-sharing: There need to be a settlement some of the companions to percentage the

profits of the company.

3. Lawful commercial employer: The business to be carried on through a partnership should

constantly be lawful.

4. Membership: There must be at least women and men to form a partnership. The most
quantity is 20. But in the case of banking corporation, the most is 10 individuals.

5. Unlimited legal obligation: The legal responsibility of every associate is unlimited, joint
and numerous.

6. Principal-agent courting: Every accomplice is an agent of the company. He can act on

behalf of the company. He is responsible for his very own acts and moreover for the acts
completed on behalf of the opportunity partners.

7. Collective manipulate: The company and the partners are one. When a settlement is made
within the call of the employer all the partners are chargeable for it in my opinion and
together.

8. Non-transferability of shares: A partner can not switch his share of interest to others
without the consent of the alternative companions.
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 ADVANTAGES OF PARTNERSHIP
The following are the advantages of partnership business:

1.Easy to form: A partnership firm may be formed without any legal formalities and
expenses. Even if the fum is to be registered, the prices aren't a lot in comparison to
agency shape of company.
2. Access to more capital: A company includes multiple man or woman. Therefore it
could at ease extra capital from combined resources.
3. Skill and expertise: Talented human beings can be taken as partners. More skills
and talent may be available..
4. Division of tough paintings: Division of labor may be introduced which will
increase the performance in the control. One accomplice might also deal with
purchases, another sales, a 3rd payments and so forth.
5. Contact with clients: All the companions in a agency may also participate in the
control of the business enterprise. So, they get in contact with the clients at some
point of the course of the agency. It enables them to take a look at the tastes and
dreams of the customers.
6. Borrowing functionality: The lenders will lend Loans not handiest on the idea of
the enterprise’s property however additionally based totally totally on the personal
residences of the partners. So the borrowing potential of a organization is more.

 DISADVANTAGES OF PARTNERSHIP
• The following are the risks of a partnership firm:

• Division of obligation: In a partnership the management is split. As such obligations

are also divided. Every accomplice might try to shift the burden on to the shoulders of others;
sooner or later none takes the duty nicely.

• Delay in decisions: Sometimes the partners might not trust one another in taking
choices. As a end result companions will not be in a position to take brief selections.

• Lack of continuity: A partnership receives dissolved at the dying, insolvency,

madness or retirement of any partner. So, there's no guarantee for the continuity of the firm.

• No transferability of proportion: In a company the companion can't switch his

proportion of hobby to others without the consent of the alternative companions.

• Lack of secrecy: It may not be feasible to maintain secrecy in partnership due to the
number of companions.
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 Conclusion
The business organization is the generic activity which a society needs to do to run
efficiently and effectively. to do so a form of business is to be picked to run the
business the project studies in detail about the various forms of business organization
and advantages and limitation of the forms of business carry with them. For small
scale business where the a businessmen wants less risk and wants to invest low capital
he can opt for sole proptriership If we needs a large scale business with limited risk
where he will work and share his profit with other partners can opt for partnership as
their form of business and by the requirement of the businessmen they can opt for
various forms

 BIBLOGRPHY
 NCERT’S BOOKS on Business Studies.
 Poonam Gandhi’s book on Business studies.
 G.B GUPTA book on Business organization and management.
 Reliable resources on websites like encyclopedia.com ,etc.