Form of ownership

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Form of ownership

  1. 1. Form of Ownership
  2. 2. • Choice of Suitable form of ownership – A Crucial Decision• The form of ownership determines the - • Division of Profits • Extent of liability • Extent of Risk • Division of Power • Control of Owner • Long term commitment, cannot be altered easiliy
  3. 3. Forms of Ownership1) Sole Proprietorship2) Joint Hindu Family Firm3) Partnership Firm4) Private Company5) Public Company6) Cooperative Society
  4. 4. Ideal Form of Ownership1. Ease of Formation2. Sufficient Finances3. Limited Liability4. Transferability of Interest5. Efficient Management
  5. 5. Ideal Form of Ownership – Contd. 6. Continuity and Stability 7. Flexibility of Operations 8. Minimum Govt. Control 9. Retention of Business Secrets 10. Low Tax Burden
  6. 6. Factors to Choice of Ownership1. Nature of Business2. Size and Area of Operations3. Degree of Control Desired4. Amount of Capital Required5. Degree of Risk Involves
  7. 7. Factors to Choice of Ownership –Contd..6. Division of Surplus7. Duration of Business8. Government regulation and control9. Managerial Requirements
  8. 8. Starting and Operating Small Ventures
  9. 9. DefinitionAccording to MSME Act, 2006-I. Small Scale Industrial Unit - Investment in P&M < 5 CrII. Ancillary Small Scale Unit - Sells > 50% of output to other undertakings, investment in P&M < 5 CrIII. Export Oriented Unit- Exports > 50 % Output; Investment in P&M < 5 CrIV. Tiny Units – Investment in P&M < 25 LacsV. Micro Enterprise – Investment < 1 Lac
  10. 10. Characteristics1) Personal Character- Single Entrepreneur2) Independent Management3) Limited Investment4) Simple Technology5) Local Area of Operations6) Closely-Held Ownership7) Unorganized Labor
  11. 11. Role of Small Business –Indian Economy Perspective1) Generation of Employment2) Balanced Regional Development3) Optimization of Capital4) Mobilization of Local Resources5) Exchange Earnings6) Development of Entrepreneurship7) Egalitarian Society8) Social Advantage
  12. 12. Problems1) Shortage of Materials and Power2) Lack of Adequate Finance3) Outdated Technology4) Inadequate Marketing Facilities5) Weak Orgn Management6) Lack of Trained Personnel
  13. 13. Measures taken by Govt.1. Protective Measures • Products reserved for exclusive production • Concessions in excise, sales tax • Govt. gives preference to products by SSI2. Promotional Measures • Imported raw materials are provided at reasonable rates • Development of industrial estates to provide sheds to SSI • Extension of price preference to products by SSI • Preference given to SSI in land allocation • Technical assistance by Central Small Industries Orgn • Financial assistance by banks and public financial institutes.
  14. 14. Questions????

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