formation of Joint venture

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Joint ventures: Joint ventures may mean many things, depending upon

the context we are using it in. But in a broader sense, a joint venture is the

pooling of resources and expertise by two or more businesses, to achieve a

particular goal. The risks and rewards of the business are also shared. The

reasons behind the joint venture often include business expansion,

development of new products or moving into new markets, particularly in

another country.

Benefits: Business can achieve unexpected gains through joint ventures

with a partner. The major benefits of joint venture are as follows:

(i) Increased resources and capacity (ii) Access to new markets and

distribution networks (iii) Access to technology (iv) Innovation (v) Low cost

of production (vi) Established brand name.

BUSINESS STUDIES UNIT-3 CBSE|PART 5|PRIVATE, PUBLIC AND GLOBAL ENTERPRIS...

BUSINESS STUDIES UNIT-3 CBSE|PART 5|PRIVATE, PUBLIC AND GLOBAL ENTERPRIS...

BUSINESS STUDIES UNIT-3 CBSE|PART 5|PRIVATE, PUBLIC AND GLOBAL ENTERPRIS...

BUSINESS STUDIES UNIT-3 CBSE|PART 2|PRIVATE, PUBLIC AND GLOBAL ENTERPRIS...

PRIVATE SECTOR AND PUBLIC

SECTOR

There are all kinds of business

organisations — small or large,

industrial or trading, privately owned

or government owned existing in our

country. These organisations affect our

daily economic life and therefore

become part of the Indian economy.

Since the Indian economy consists of

both privately owned and government

owned business enterprises, it is

known as a mixed economy. The

Government of India has opted for a

mixed economy where both private and

government enterprises are allowed to

operate. The economy, therefore, may

be classified into two sectors viz.,

private sector and public sector.

The private sector consists of

business owned by individuals or a

group of individuals, as you have

learnt in the previous chapter. The

various forms of organisation are

sole proprietorship, partnership,

joint Hindu family, cooperative

and company.

The public sector consists of

various organisations owned and

managed by the government. These

organisations may either be partly or

wholly owned by the central or state

government. They may also be a part

of the ministry or come into existence

by a Special Act of the Parliament. The

government, through these enterprises

participates in the economic activities

of the country.

The government in its industrial

policy resolutions, from time-to-time,

defines the area of activities in which

the private sector and public sector are

allowed to operate. In the Industrial

Policy Resolution 1948, the

Government of India had specified the

approach towards development of the

industrial sector. The roles of the

BUSINESS STUDIES UNIT-3 CBSE|PART 2|PRIVATE, PUBLIC AND GLOBAL ENTERPRIS...

PRIVATE SECTOR AND PUBLIC

SECTOR

There are all kinds of business

organisations — small or large,

industrial or trading, privately owned

or government owned existing in our

country. These organisations affect our

daily economic life and therefore

become part of the Indian economy.

Since the Indian economy consists of

both privately owned and government

owned business enterprises, it is

known as a mixed economy. The

Government of India has opted for a

mixed economy where both private and

government enterprises are allowed to

operate. The economy, therefore, may

be classified into two sectors viz.,

private sector and public sector.

The private sector consists of

business owned by individuals or a

group of individuals, as you have

learnt in the previous chapter. The

various forms of organisation are

sole proprietorship, partnership,

joint Hindu family, cooperative

and company.

The public sector consists of

various organisations owned and

managed by the government. These

organisations may either be partly or

wholly owned by the central or state

government. They may also be a part

of the ministry or come into existence

by a Special Act of the Parliament. The

government, through these enterprises

participates in the economic activities

of the country.

The government in its industrial

policy resolutions, from time-to-time,

defines the area of activities in which

the private sector and public sector are

allowed to operate. In the Industrial

Policy Resolution 1948, the

Government of India had specified the

approach towards development of the

industrial sector. The roles of the

BUSINESS STUDIES UNIT-3 CBSE|PART 1|PRIVATE, PUBLIC AND GLOBAL ENTERPRISES

You must have come across all types

of business organisations in your daily

life. In your neighbourhood market,

there are shops owned by sole

proprietors or big retail organisations

run by a company. Then there are

people providing you services like legal

services, medical services, being owned

by more than one person i.e.,

partnership firms. These are all

privately owned organisations.

Similarly, there are other offices or

places of business which may be owned

by the government. For example,

Railways is an organisation wholly

owned and managed by the

government. The post office, in your

locality is owned by the Post and

Telegraph Department, Government of

India, though our dependence on their

postal services, particularly in cities

and towns has been greatly reduced.

This is because of plenty of private

courier services firms operating in

bigger towns. Then there are businesses

which operate in more than one country

known as global enterprises. Therefore,

you may have observed that all types

of organisations are doing business in

the country whether they are public,

private or global. In this chapter we

shall be studying how the economy is

divided into two sectors, public and

private, the different types of public

enterprises, their role and that of the

global enterprises.

BUSINESS STUDIES UNIT-2 CBSE|PART 6|FORMS OF BUSINESS ORGANISATION|Joint...

A company is an association of persons

formed for carrying out business

activities and has a legal status

independent of its members. The

company form of organisation is

governed by The Companies Act, 1956.

A company can be described as an

artificial person having a separate legal

entity, perpetual succession and a

common seal.

The shareholders are the owners of

the company while the Board of

Directors is the chief managing body

elected by the shareholders. Usually,

the owners exercise an indirect control

over the business. The capital of the

company is divided into smaller parts

called ‘shares’ which can be transferred

freely from one shareholder to another

person (except in a private company).

Features

The definition of a joint stock company

highlights the following features of a

company.

(i) Artificial person: A company is a

creation of law and exists independent

of its members. Like natural persons,

a company can own property, incur

debts, borrow money, enter into

contracts, sue and be sued but unlike

them it cannot breathe, eat, run, talk

and so on. It is, therefore, called an

artificial person.

(ii) Separate legal entity: From the

day of its incorporation, a company

acquires an identity, distinct from its

members. Its assets and liabilities are

separate from those of its owners. The

law does not recognise the business

and owners to be one and the same.

(iii) Formation: The formation of a

company is a time consuming,

expensive and complicated process. It

BUSINESS STUDIES UNIT-2 CBSE|PART 5|FORMS OF BUSINESS ORGANISATION||COOP...

BUSINESS STUDIES UNIT-2 CBSE|PART 4|FORMS OF BUSINESS ORGANISATION|PARTN...

Partnership is defined as an association of two or more persons who agree

to carry on a business together and share the profits as well as bear risks

collectively. Major advantages of partnership are: ease of formation and

closure, benefits of specialisation, greater funds, and reduction of risk. Major

limitations of partnership are unlimited liability, possibility of conflicts,

lack of continuity and lack of public confidence. As there are different types

of partners such as active, sleeping, secret and nominal partners; so is the

case with types of partnerships which can vary from general partnership,

limited partnership, partnership at will to particular partnership.

BUSINESS STUDIES UNIT-2 CBSE|PART 3|FORMS OF BUSINESS ORGANISATION|JOINT...

JOINT HINDU FAMILY BUSINESS.





JOINT HINDU FAMILY BUSINESS is a

specific form of business organisation

found only in India.



JOINT HINDU FAMILY BUSINESS is

owned and carried on by the members

of the Hindu Undivided Family (HUF).



The

basis of membership in the business is

birth in a particular family and three

successive generations can be members

in the business.



The business is controlled by the

head of the family.



 the

head of the family is the eldest

member.



the eldest

member is called karta.



so, the whole power lies with karta.



All

members have equal ownership right

over the property of an ancestor and

they are known as co-parceners.



the Features ofJOINT HINDU FAMILY BUSINESS.

The following points highlight the

essential characteristics of the joint

Hindu family business.





1.Formation:

to start JOINT HINDU FAMILY BUSINESS, there should be at least two

members in the family.

The

business does not require any

agreement as membership.The membership is made automatically by birth in the family.

It is governed by the Hindu Succession

Act, 1956.



2.Liability:

liability is the state of being legally responsible for something.it may be assets or organization etc.

so in JOINT HINDU FAMILY BUSINESS.

The karta that is head of the family has unlimited liability and resposibility.

all other members of the business that is co-parceners have limited liability and responsibility.



3.Control:The control of the family

business lies with the karta. He takes

all the decisions and is authorised to

manage the business. His decisions are

binding on the other members.



4.Continuity:

The business

continues even after the death of the

karta as the next eldest member takes

up the position of karta, leaving the

business stable. The business can,

however, be terminated with the

mutual consent of the members.

for 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.



5.Minor Members:

The inclusion of

an individual into the business occurs

due to birth in a Hindu Undivided

Family. Hence, minors can also be

members of the business.

BUSINESS STUDIES UNIT-2 CBSE|PART 3|FORMS OF BUSINESS ORGANISATION|JOINT...

JOINT HINDU FAMILY BUSINESS.





JOINT HINDU FAMILY BUSINESS is a

specific form of business organisation

found only in India.



JOINT HINDU FAMILY BUSINESS is

owned and carried on by the members

of the Hindu Undivided Family (HUF).



The

basis of membership in the business is

birth in a particular family and three

successive generations can be members

in the business.



The business is controlled by the

head of the family.



 the

head of the family is the eldest

member.



the eldest

member is called karta.



so, the whole power lies with karta.



All

members have equal ownership right

over the property of an ancestor and

they are known as co-parceners.



the Features ofJOINT HINDU FAMILY BUSINESS.

The following points highlight the

essential characteristics of the joint

Hindu family business.





1.Formation:

to start JOINT HINDU FAMILY BUSINESS, there should be at least two

members in the family.

The

business does not require any

agreement as membership.The membership is made automatically by birth in the family.

It is governed by the Hindu Succession

Act, 1956.



2.Liability:

liability is the state of being legally responsible for something.it may be assets or organization etc.

so in JOINT HINDU FAMILY BUSINESS.

The karta that is head of the family has unlimited liability and resposibility.

all other members of the business that is co-parceners have limited liability and responsibility.



3.Control:The control of the family

business lies with the karta. He takes

all the decisions and is authorised to

manage the business. His decisions are

binding on the other members.



4.Continuity:

The business

continues even after the death of the

karta as the next eldest member takes

up the position of karta, leaving the

business stable. The business can,

however, be terminated with the

mutual consent of the members.

for 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.



5.Minor Members:

The inclusion of

an individual into the business occurs

due to birth in a Hindu Undivided

Family. Hence, minors can also be

members of the business.

BUSINESS STUDIES UNIT-2 CBSE|PART 2|FORMS OF BUSINESS ORGANISATION|Sole ...

Forms of organisation. what is forms of organisation?.....

it is the structure of the organisation. it tells about the ownership of the organisation.

the first and simple form of organization is 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









The word “sole” implies “only”.

and “proprietor” refers to “owner”.

This form of business is particularly

common in areas of personalised

services such as beauty parlours, hair

saloons and small scale activities like

running a retail shop in a locality.

1)Formation and closure: 

For starting the business.Hardly any legal formalities are required to

start a sole proprietary business, though in some cases one may require

a license. There is no separate law that governs sole proprietorship. 

for closing the business.Closure of

the business can also be done easily.

Thus, there is ease in formation as well

as the closure of the business.

2)Liability: Sole proprietors have

unlimited liability. This implies that the

owner is personally responsible for payment of debts in case the assets of

the business are not sufficient to meet

all the debts. As such the owner’s

personal possessions such as his/her

personal car and other assets could be

sold for repaying the debt. Suppose the

total outside liabilities of XYZ dry

cleaner, a sole proprietorship firm, are

Rupees 80,000 at the time of dissolution, but

its assets are Rupees. 60,000 only. In such a

situation the proprietor will have to bring

in Rs. 20,000 from her personal sources

even if she has to sell her personal

property to repay the firm’s debts.

3)Sole risk bearer and profit

recipient: The risk of failure of

business is borne all alone by the sole

proprietor. However, if the business is

successful, the proprietor enjoys all the

benefits. He receives all the business

profits which become a direct reward

for his risk bearing.

4)Control: The right to run the

business and make all decisions lies

absolutely with the sole proprietor. He

can carry out his plans without any

interference from others.

5)No separate 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. The owner is,

therefore, held responsible for all the

activities of the business.

6)Lack of business continuity:

Since the owner and business are one

and the same entity,the business will be stoped in caseof , death, insanity,

imprisonment, physical ailment or

bankruptcy of the sole proprietor will

have a direct and detrimental effect on

the business and may even cause