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 managed 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 features like implied agency and unlimited liability of partners. They allow for larger capital but can lack stability.
- Joint Hindu family firms are formed by operation of law between members of a Hindu undivided family. They provide continuity but can have restricted membership and lack of incentive or stability.
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
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
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
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