TAHSEEN ULLAH

PEPresentation Topics Types of the business organization

Types of The Business Organization

There are three big types of the business Organization.

1)Sole Proprietorship.

2)Partnership.3) Joint Stock Company.

Sole

Proprietorship

Sole proprietorship is a form of the business enterprise which is established, financed, owned, managed and controlled by an individual entrepreneur who has complete freedom of operation, who bears all-the risks and owner of the all profits.

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• ADVANTAGES OF THE SOLE TRADERSHIP *

1) Ownership: The business is owned by a single individual.

2) Finance : The necessary capital to run the business is provided by the sole owner. i.e.as friends Or bank etc.

3)No Legal formalities: There is no legal formalities for the starting the sole trader ship business.

4) Relation ship with customers: The sole trader have a good relationship with our customers.

5) Complete Control: In the sole proprietorship business the owner have full control and management in our hand.

* DISADVANTAGES *

Small Capital: In this business the owner have small money for starting the business. They don’t start a big business in the market.Unlimited Liability: A sole proprietor is personally responsible for all the debt incurred by the business.Limited managerial ability: In managing this type of business, the sole trader has to rely upon his own skill and judgment for operating the business. Most of the proprietors do not possess all the management skills required for financing, marketing, purchasing, producing and supervising of the business.No Capable persons: Most of proprietorships are small business. And have small money for pay the salaried for the capable managers and other employee’s.Technological Progress: Technological progress is often difficult to carry for the sole trader because a few such businessmen can afford the heavy capital outlay.

PARTNERSHIP

Partnership is the 2nd form of the business Organization.

A partnership is an association of two or more persons to carry on as owners of a business and to share it’s profits and losses. The relationship between two Or more then two persons who are agree for the business profits and loses on the a partnership agreement.

** ADVANTAGES OF THE PARTNERSHIP **

Easy to form: The partnership like the sole proprietorship, can be easily organized. The partners enter into a partnership agreement and start the business.Large Capital: In this business the capital are in the large mounts because the two partners are combined our money. For starting a business in the market.Greater management ability: As there are many partners involved in the operation of a business. There for the management of business is very good.Duties: In this business the partners are share the responsibilities and duties of the business.Profit and losses: In this business the profit and loses is also shared among the partners.

DISADVANTAGES OF THE PARTNERSHIP

Unlimited liability: In this business the partners also have unlimited liability as will as the Sole trade business.Lack of Interest: The all partners do not take equal and full interest in the business working. It’s the big problem of the partnership business.Lack of Economies: Due to small capital it cannot produce on large scale. Because they have low money for the business.Lack of Public confidence: The partnership form of organization may not enjoy public confidence due to lake of publicity and absence of regulations.Loss of business Opportunities: In case of differences among the partners a delay may take place in decision making. This can cause loss to the firm.

Joint Stock

Company

Joint stock company is a form of the business organization. This business is a group of the peoples combined our money for the starting a business for make the profit and loss. On our shares basics.

A joint stock company in Pakistan is registered under the company Ordinance. 1984

ADVANTAGES OF THE ( JSC)

Limited Liability: In JSC the liability of the shareholders is limited. Financing: In JSC have very large mounts of the money. For our running business in market.Production: As compared to sole proprietorship and partnership, The JSC produces the product in large scale. And also sells large-scale output.Large Membership: it has got large membership than sole proprietor Or partnership. The number of its shareholders runs into hundreds and even thousands in case of multi-national companies.Easy to transfer Ownership: One of the basic feature of join stock company is that the shareholders can transfer the ownership of share through the share brokers.Huge Profits: In JSC have a huge profits.

DISADAVNTAGES

Formation: JSC have a big legal formalities need for making.Lack of Interest : It’s shareholders get profits at their homes, So they don’t attend the meeting of the business organization. They don’t interest.Lack of Relations: It employees are in large number of workers. It’s cannot maintain personal relation with them. Further management has no personal contract with the customers.Double Taxation: The company is subject to double taxation. 1st the tax is levied on the profits of the company. 2nd the shareholders pay on the dividends received.

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