Types of organisation

1. Business Organization
- Forms, Structures and Functions
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2. Construction Company
• A construction company is a group of people
involved to share the knowledge to:
Design
Estimate
Bid
Procure/purchase and
obtain resources to complete the construction project.
- Primarily engaged in construction business with a aim
of making profit

3. Common Functions of a Construction Company
• General Administration
• Estimating/ Costing/ Tendering
• Contract Management
• Humana Resource Management/ Training
• Design/ Engineering
• Purchasing/ Procurement
• Accounting
• ERP/MIS
• Managing / Coordinating Site Execution

4. Other Stake-Holders
• Clients
• Architects
• PMC
• Other General Contractors
• Sub Contractors
• Manufacturers
• Material Suppliers/ Vendors
• Equipment providers
• Labour Gangs
• Government and the General Public

5. Broad Aim of An Organization
• To divide responsibility according to the
knowledge expertise
• To divide the responsibility by degrees of
executive capabilities
• For this organization has to provide
Authority
Responsibility
Accountability

6. Authority, Responsibility and Accountability
Authority: power granted to individual (by their
position) so that they can make decisions for others to
follow
Responsibility: The obligation expected to be incurred
by the individual in their roles in order to effectively
perform duties
Accountability: State of being totally answerable for the
satisfactory completion of the activity

7. FORMS OF BUSINESS ORGANIZATION
• Sole proprietorship
• Partnership
• Corporation
• Private Limited Company
• Public limited Company
• Government Enterprise
• Joint Ventures

8. Sole Proprietorship
• It is the most common form of business. It is a one-man organization where a
single individual owns, manages and controls the business. Its main features are :-
• Ease of formation - because it is not required to go through elaborate legal
formalities. No agreement and registration of the firm is also not essential.
However, the owner may be required to obtain a license specific to the line of
business from the local administration.
• The capital required to be arranged wholly by the owner himself and he depends
largely on his own savings and profits of his business.
• Owner has a complete control over all the aspects of his business and it is he who
takes all the decisions though he may engage the services of a few others to carry
out the day-to-day activities.
• Owner alone enjoys the benefits or profits of the business and he alone bears the
losses.
• The firm has no legal existence separate from its owner.
• The liability of the proprietor is unlimited i.e. it extends beyond the capital invested
in the firm.
• Lack of continuity i.e. the existence of a sole proprietorship business is dependent
on the life of the proprietor and illness, death etc. of the owner brings an end to the
business. The continuity of business operation is therefore uncertain.
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9. Sole Proprietorship
• Advantages
• Ease of formation
• Maximum incentive for work
• Secrecy of business
• Quick decisions and flexibility of operations
• Disadvantages
• Limited capital
• Limited managerial ability
• Limited life
• Unlimited liability
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10. Partnership
• The term 'partnership' is defined under section 4 of Indian
partnership act 1932 as under:
• "Partnership is an agreement between two or more persons who
have agreed to share profits and loses of the business carried on by
all or any one of them acting upon all."
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11. Partnership
• Advantages
• 1. Easy formation
• 2. Better Capital
• 3. Greater specialization
• 4. Credit-worthiness
• 5. Flexibility
• 6. Minimum legal restriction
• 7. Sharing of risks
• 8. Sound decision
• 9. Simple dissolution
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12. Partnership
• Disadvantages:
• 1. Lack of co-operation
• 2. Limited capital
• 3. Lack of public confidence
• 4. Unlimited liability
• 5. Non transferability of interest
• 6. Lack of faith
• 7. Lack of stability
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13. Corporation
• A corporation is an artificial being, invisible, intangible and existing
only in contemplation of law.
• It exist as separate legal entity and apart from its owners.
• Owner’s liability is limited to his or her investment.
• Capital required for the business can be raised in the name of
company.
• The ownership is evidenced by shares and are transferable and so
is the ownership.
• The organization continuous to exist.
• The disadvantage is the double taxation.
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14. Private limited Companies
These are closely held businesses usually by family, friends and
relatives.
• Private companies may issue stock and have shareholders.
However, their shares do not trade on public exchanges and are not
issued through an initial public offering.
• Shareholders may not be able to sell their shares without the
agreement of the other shareholders.
•
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15. • Advantages
• Limited Liability: It means that if the company experience financial distress
because of normal business activity, the personal assets of shareholders will
not be at risk of being seized by creditors.
• Continuity of existence: business not affected by the status of the owner.
• Minimum number of shareholders need to start the business are only2.
• More capital can be raised as the maximum number of shareholders allowed
is 50.
• Scope of expansion is higher because easy to raise capital from financial
institutions and the advantage of limited liability.
• Disadvantages
• Growth may be limited because maximum shareholders allowed are only 50.
• The shares in a private limited company cannot be sold or transferred to
anyone else without the agreement of other shareholders
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Private limited Companies

16. Public Limited Company
• It is a Company limited by shares in which there is no restrictions on the
maximum number of shareholders.
• It can offer its shares or debentures to Public, can make or accept
deposits from Public and there are no restrictions on the transfer of
shares.
• The liability of each shareholder is limited to the extent of the amount of
shares subscribed.
• However, the liability of a Director / Manager of such a Company can at
times be unlimited.
• The minimum number of shareholders is 7 and Directors is 3.
• It also has a minimum share capital requirement of Rs.500,000.
• A Public Limited Company should be registered with Registrar of
Companies (RoC) of the respective State under The Companies Act,
1956. Although the registration with RoC is on State level, it is free to do
Business anywhere in India.
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17. Government Enterprise
A state-owned enterprise (SOE) otherwise known as a: state-
owned company, government business enterprise, is a legal
entity that undertakes commercial activities on behalf of an
owner government.
The legal status of SOEs varies from being a part of the government
to being stock companies with the state as a regular stockholder.
The defining characteristics of SOEs are that they have a distinct legal
form and they are established to operate in commercial affairs.
• Government-owned corporations are common with natural
monopolies and infrastructure such as railways and
telecommunications, strategic goods and services (mail, weapons),
natural resources and energy, politically sensitive business,
broadcasting, demerit goods (alcohol), and merit goods
(healthcare).
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18. Joint venture
• A JV is a business agreement in which the parties agree to develop,
for a finite time, a new entity and new assets by contributing equity.
• They exercise control over the enterprise and consequently share
revenues, expenses and assets.
• There are other types of companies such as JV limited by
guarantee, joint ventures limited by guarantee with partners holding
shares.
• The venture can be for one specific project only - when the JV is
referred to more correctly as a consortium (as the building of the
Tunnel) - or a continuing business relationship.
• The consortium JV (also known as a cooperative agreement) is
formed where one party seeks technological expertise or technical
service arrangements, franchiseand brand use agreements, for one-
time contracts.
• The JV is dissolved when that goal is reached.
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