Forms of Business Organisations — Flashcards

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A business organisation refers to the arrangement of resources like men, money, materials, machines, and methods in a systematic way to achieve business objectives such as earning profit. It involves …

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Sole Proprietorship is a form of business organisation owned, managed, and controlled by a single individual who provides the capital, bears all risks, and enjoys all profits. Example: A local grocery…

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1. Single Ownership – One person owns the business. 2. No Separation of Ownership and Management – Owner manages everything. 3. Less Legal Formalities – Easy to start and close. 4. No Separate Entity …

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1. Easy to Start and Wind Up – No legal formalities. 2. Quick Decision Making – No need for consultation. 3. Direct Motivation – Entire profit goes to owner. 4. Flexibility in Operations – Easy to cha…

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1. Limited Resources – Depends only on owner’s capital. 2. Lack of Continuity – Ends with death, illness, or insolvency of owner. 3. Unlimited Liability – Personal property at risk. 4. Limited Manager…

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Sole Proprietorship is suitable when: - The market is local and small. - Capital requirement is low. - Risk involved is limited. - Personal attention to customers is important. - The business relies o…

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Partnership is a form of business organisation where two or more persons agree to carry on a business and share its profits and losses. It is governed by the Indian Partnership Act, 1932. Example: Two…

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1. Two or More Persons – Minimum 2, maximum 100 partners. 2. Contractual Relationship – Based on agreement (oral, written, or implied). 3. Sharing of Profits and Losses – As per agreed ratio. 4. Lawfu…