We are here to discuss the significant things about the business enterprises and its types in an understandable way. Business enterprises can be broadly divided into two categories namely one which is non-corporate in form and other one which has a corporate character.
Enterprises which fall in the former category are partnerships, sole proprietorship and Hindu Undivided Family and business organisation which comprises the other category are companies and co-operative undertakings.
The difference between the corporate and the non-corporate kind of organisation is that non-corporate kind of organisation can commence its business without even registration but, whereas the corporate form need to register under the laws and obey the functionalities which is given in the company laws.
Non-corporate form of business enterprises:
In this form of business organisation, an individual normally uses his own capital, skill and intelligence to carry out some business activity. He will be ready to receive all the profits and losses and also predicts the risks involved in the ownership. Need to exercise the full control over the business affairs. Since there is no need to provide the legal obligations to anyone for his business, he can maintain highest amount of secrecy while conducting the business affairs. This kind will be suitable for small businesses where the risk involved is comparatively low.
Joint Hindu Family/ Hindu Undivided Family:
In this form of business, all the members in the family conduct business jointly under the strong control of the senior most person in the family who is called as “Karta”. The joint hindu family firm is purely comes into existence by the Hindu law, which is not by any contract.
“The relation between the partners who agreed to share their profits from the business which is carried by all the persons or any one of them who is been acting for all”.
In this form of organisation, the persons who are like-minded will pool up their resources and the skills to form their business.
This definition chiefly brings out the following features of partnership:
Existence of Business:
There can be no partnership without business. The persons who have agreed to become partners must carry out some business activity.
Mutual agency is the term where, the business should be carried by all the partners, or any one or more among the partners. Therefore, each partner will be act both as an agent and the principal for all the other partners in a firm.
Partnership is a kind of organisation which suits for medium scale businesses where the requirement of capital amount and the risk involved is slightly greater when we compared with the sole proprietorship or hindu undivided family.
Partnership arises between the person who entered into the legal agreement which indicates that only the contractual persons can be a partners.
Sharing of Profits:
The agreement of the business must comes with an important object which is about making a profit and sharing it to all the partners.
Corporate Form of Business Enterprises:
The Co-operative Organisation:
It is a voluntary association along with an unrestricted membership. The collective of funds, organised on by the democratic principle. The persons who earns moderate incomes will join together and supply the needs and wants through the mutual action. The motive of production and distribution is service rather than the higher profits.
This kind of organisation is mainly for protecting the interest of the weaker section of society. And against the exploitation of big businesses who operates only for the maximisation of profits. The basic differentiation of this organisation is only to serve the people.
This is a kind of organisation where the ownership and the management will be separate. The capital of the company will be provided by the shareholders. Management operations and functions will entrust to the “BOARD OF DIRECTORS”.
A company forms by the legal process and it is a artificial legal person. It is an entity which is separate from the members of the firm. Since we follow the natural way of incorporating and transferring of shares, the company provides the benefit of perpetual succession.
This form of organisation is suitable for the larger capital firm. The risks will eventually shared equally to all the persons in the company.
We are the business service providers (“Solubilis Corporate Services”) who provides a brilliant services to the clients and solving all their business related issues. Company registration services can complete as soon as possible. The best customer support will be provided throughout the registration process. We do have branches at various locations. They are as follows:
Coimbatore, Chennai, Madurai, Erode, Bangalore, Karur, Tirupur, Hyderabad, Cochin, Salem.