If one is planning to start a business or is interested in expanding an existing one, an important decision relates to the choice of the form of organisation.
to start a factory, plans must be made and implemented
about such problems as the location of the business, the possible number of customers, the kind and amount of equipment, the shop layout, purchasing and financing needs, and hiring of
workers. These problems become more complex in a big business. However, some of the basic factors, which must be considered by anybody who is to start the business are as follows:
(1) Selection of line of business
(2) Size of the firm
(3) Choice of form of ownership
(4) Location of business enterprise
(5) Financing the proposition
(6) Physical facilities
(7) Plant layout
(8) Competent and committed worked force
(9) Tax planning
(10) Launching the enterprise
this unit provides the detailed explanation on the choice of the form of ownership.
There are five forms of business organisations from which one can
choose the right one included.
they are
(1) Sole proprietorship,
It is a type of enterprise that is owned and run by one natural person.
Example:
stationary shop,
tuition centre,
computer services,
xerox shop.
mechanic shop
(2) Joint Hindu family business,
Joint Hindu Family Business is a different type of organization, which is found only in India.
As the name suggests, it is the type of organization in which all the members of Hindu Undivided Family manage and control the business with the direction of the head of the family.
Example:
Reliance Industries.
Founded by Dhirubhai Ambani in 1966 as Reliance Commercial Corporation, Reliance Industries is the largest private sector conglomerate company in India. The company was divided between the founder's two sons, Mukesh Ambani and Anil Ambani in 2006.
(3) Partnership,
A type of business organization in which two or more individuals invest money, skills, and other resources, and share the profit and loss.
Hero Honda is the example of partnership but now The two partners in Hero Honda Ltd have finally decided to ride off on their own in different directions.
(4) Cooperative societies.
the organization owned by and operated for the benefit of those using its services. Profits and earnings generated by the cooperative are distributed among the members, also known as user-owners.
Example:
Amul is a trademark of Gujarat co-operatives of milk product and considered as the biggest co-operative of India today.
(5) Joint stock company.
A joint-stock company is a business entity in which different amount of shares of the company stock can be bought and owned by shareholders. Each shareholder owns company stock in proportion, evidenced by their shares.
Example:
The State Bank of India is the country's largest commercial bank and boasts more than 130 branches in at least 32 nations across the globe. The company is widely known for its diverse offering of financial services and traces its roots to the early 19th century.
There are 7,887,573,568 share holders for State bank of India.
In the next video let us look the sole proprietorship ownership in detail.
