the slides include different forms of organization like joint stock company, partnership joint hind family business etc.

1. Forms of Business
Organisations
Subject- Drug Store Business Management
……………………..Swapnil Shankar Patil.
(M. Pharm- Pharmaceutics)

2. Contents

3. Forms of Business Organisation
 Sole proprietor ship
 Joint Hindu Family
Business
 Partnership
 Joint stock company
 Co-operative organisation

4. Sole Proprietorship
A business owned and managed by one
individual; the business and the owner are
one and the same in the eyes of the law
A sole trader is a person who carries on a business
exclusively on his own account and at his own
risk.

5. Sole Proprietorship
Advantages
 Simple to create
 Least costly form
 Profit incentive
 Total decision-making
 No special legal
restrictions
 Easy to discontinue

6. Sole Proprietorship
Disadvantages
 Unlimited personal
liability
 Limited skills and
abilities
 Feelings of isolation
 Limited access to capital
 Lack of continuity of
business

7. Joint Hindu Family Business
-According to Mitakshara School of Hindu law, the
property which is inherited by a Hindu from his Father,
Grandfather and great grandfather is ancestral property.
-A business which belongs to a single Hindu family and
conduct it as a family business is called joint Hindu family
business.
-No legal formalities are required to convert a business into
a joint family business. Only ‘Karta’ has right to mange the
family business.

8. Advantages
Karta has full freedom
Business is like insurance cover for
children
Business can run my male members
Except Karta limited liability to family
members.
No effect of death of family member

9. Disadvantages
Recourses are limited
Young members are disappointed
Continuity is depends upon the family
itself
Members can be irresponsible and lazy

10. Partnership
-An association of two or more
people who co-own a business
for the purpose of making a
profit.
According to the partnership Act
,1932,”A partnership is the
relation between persons who
have agreed to share the profits
of a business carried on by all or
any of them acting for all”

11. Partnership
Advantages
 Easy to establish
 Complementary skills
 Division of profits
 Larger pool of capital
 Ability to attract limited
partners
 Little governmental regulation
 Flexibility
 Taxation

12. Partnership
Disadvantages
 Unlimited liability of at least
one
 Difficulty in disposing of
interest
 Lack of continuity
 Potential for personality and
authority conflicts
 Partners bound by law of
agency

13. Kinds of Partnerships
Two major types of partnerships:
 General Partnership: (most common type) all partners are
responsible for management and the financial responsibilities of the
partnership.
 Limited Partnership: at least one partner is not active in the day to
day running of the business. They have limited liability.
Articles of Partnership: contract between partners spelling out the
rules of partnership.
Dividing profit
Dividing responsibility
Admitting new partners
Buying out partners

14. Joint stock company
-A company is governed by the Company Act 1956
and it has to follow various provisions of the act.
-A joint stock company is organised to carry on a
business on a large scale because its capital
requirements and risk obligations are too burdensome.

15. Advantages
Able to collect large amount of capital.
Attract wide range of investors
Effective management
Shares transferred without difficulties
Management is on democratic principle
Limited liability to members
Risk of member is reduced

16. Disadvantages
Formation of company is costly
Company can not take prompt decision –time
lag in meeting
Malpractices
Company is managed by directors not
proprietors

17. Cooperative society
Cooperative organization is a voluntary association
of person who are financially strong. They come
together with an aim not to get profits but to
overcome destability arising out of want of
adequate financial resources.
A separate legal entity apart from its owners which
receives the right to exist from the state in which
in which it is incorporated
 Domestic
 Foreign
 Alien
 Publicly held
 Closely held

18. Corporations
Certificate of Incorporation
 Name
 Statement of purpose
 Time horizon
 Names and addresses of incorporators
 Place of business
 Capital stock authorization’
 Capital required at time of incorporation
 Provisions for preemptive rights
 Restrictions on transfering shares
 Names and addresses of officers
 By-laws

19. Cooperative society
Advantages
 Limited liability of
stockholders
 Ability to attract
capital
 Ability to continue
indefinitely
 Transferable
ownership

20. Thank you