This document summarizes different forms of business organization in India. It discusses sole proprietorships, partnership firms, and joint Hindu family firms. Some key points covered are: - Sole proprietorships are owned and controlled by one person who has unlimited liability. They are easy to form but have limited capital and managerial ability. - Partnership firms require an agreement between partners to share profits and have implied agency and unlimited liability unless otherwise agreed. They allow for larger capital but can lack stability. - Joint Hindu family firms are formed by operation of Hindu law between co-parceners of a family. They provide continuity but can lack incentive and stability if mismanaged by the head of the family.

1. Forms of Organisation

2. Non-Corporate
Enterprises
Corporate
Enterprises

3. Sole Trading
Concern
Partnership
Firm
Joint
Hindu
Family
Firm
Non –
Corporate
Enterprises

4. Corporate
Enterprises
Joint Stock
Companies
Co-
operative
Societies
Public
Enterprises

5. Sole
Proprietorship
concern

6. One man
Ownership
& Control
No legal
Formalities
Unlimited
Liability
No
separate
entity of
the firm
No legal
dissolution
& complete
secrecy
FEATURES

7. MERITS OF A SOLE TRADING CONCERN
Easy Formation
Quick Decision and Prompt Action
Highly Flexible
Direct contact with customers
Business Secrecy

8. MERITS OF A SOLE TRADING CONCERN
Efficient Management
Independent living
Better Employee Relations
Social Utility

9. Demerits of a Sole trading concern
Limited Capital
Unlimited Liability
Limited Life
Limited Managerial Ability
No Economies of bulk trade

10. Partnership Firms

11. Definition of Partnership
According to Section 4 of the
Indian Partnership Act, 1932,
Partnership is the relation between
persons who have agreed to share
the profits of a business carried on
by all or any one of them acting for
all”.

12. Essential Characteristics of Partnership
• Agreement
• Business
• Profit motive
• Management
• Implied Agency
• Unlimited liability
• Utmost good faith

13. Merits of Partnership
Easy Formation
Large Financial Resources
Flexibility of Operations
Division of Labour
Prompt Decision Making
Balanced Approach
Ease of borrowing
Easy Dissolution
Tax Advantage

14. Demerits
 Limited finance
 Unlimited liability
 Lack of Stability
 Delay in Decision Making
 No transferability of
interest
 Lack of secrecy
 Lack of harmony

15. PARTNERSHIP DEED
Oral or
in
writing
Agreemen
t between
partners
Signed
by all
partners
Stamped

16. • The name of the firm
• Name and details of all partners
• Date of commencement of business
• Duration of the firm’s existence
• Capital contributed by each partner
• Profit/loss sharing ratio
• Interest on capital payable to partners
• The extent of borrowings each partner can draw
• Salary payable to partners, if any
CONTENTS OF PARTNERSHIP DEED

17.  Salary payable to partners, if any
 The procedure of admission or retirement of a partner
 The method used for calculating goodwill
 Preparation of accounts of the firm
 Mode of settlement of dues with a deceased partner’s
executors
 The procedure followed in case disputes arise between
partners
CONTENTS OF PARTNERSHIP DEED

18. Kinds of
Partnership
Limited
Partnership
Particular
Partnership
Partnership
at will
Partnership
by holding
out
Joint
Venture

19. Kinds of Partners
Working or Active Partner
Sleeping Partner
Nominal Partner
Partner by Estoppel

20. Kinds of Partners
Limited Partner
Secret Partner
Sub-Partner
Partner by Holding out
Minor Partner

21. Joint Hindu
Family Firm

22. It comes into existence by the operation
of law and not by an agreement or a
contract.
The members of a Hindu undivided family
who are called co-parceners.
Joint Hindu Family Firm

23. Hindu Law of Inheritance
The
Dayabhaga
System
The
System

24. Merits
of
JHFF
Continuity
Assured shares to all members
Training to younger members
Unrestricted membership
Unity in management
Division of labour
Limited Liability
Better Credit

25. Demerits
of JHFF
Limited Capital
Lack of Incentive
Lack of Stability
Misuse of powers by the Karta

26. Joint Hindu Family Firm
Formation
Admission of members
Maximum Membership
Female member
Minor member

27. Joint Hindu Family Firm
Liability of members
Management of the business
Inspection of books of accounts
Death of a member
Governing body

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