The document discusses different types of business organizations including sole proprietorships, partnerships, corporations, and cooperatives. It covers the key characteristics of each type of business organization such as sole proprietorships being owned by one individual, partnerships having two or more owners who share profits and liability, corporations being legally separate entities from their owners with transferable shares, and cooperatives being jointly-owned organizations that provide services to their members. The document also compares the advantages and disadvantages of each type of business organization and factors to consider when choosing between them such as capital requirements, liability, and tax implications.

1. BUSINESS ADMINISTRATION
ASSIGNMENT 1
Ronal Pillay
Roll No:79
S.Y.Bcom

2. BUSINESS ORGANIZATION
• Sole proprietorship
• Corporations
• Partnerships
• Cooperatives
Business
organization

3. BUSINESS ORGANIZATION
Business organization, an entity
formed for the purpose of carrying on
commercial enterprise. Such an
organization is predicated on systems of
law governing contract and exchange,
property rights, and incorporation.

4. TYPES OF BUSINESS ORGANIZATION
• Three main Types of Business organizations:
➢ Sole proprietorship
➢Partnership firm
➢Corporation
➢Financial Cooperative
• There are several forms of corporations and
partnerships.
• The biggest difference between all of the types of
business organization is liability.

5. CHOOSING A FORM OF BUSINESS ORGANIZATION
The choice of the form of the business is governed
by several interrelated and interdependent
factors:-
• The nature of business is the most important
factor
• Scale of operations i.e. volume of
business(large, medium, small) and size of the
market area (local, national, international)
• The degree of control desired by the owner(s)
• Amount of capital required for the
establishment and operation of a business
• Comparative tax liability

6. SOLE PROPRIETORSHIP
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licensed under CC BY-NC
A sole proprietorship—also referred to as a sole trader or a
proprietorship—is an unincorporated business that has just one
owner who pays personal income tax on profits earned from the
business.
CHARACTERISTICS OF SOLE PROPRIETORSHIP
• The business enterprise is owned by one single individual( i.e.
both profit and risk belong to him)
• Owner is the manager
• Owner is the only source of capital

7. ADVANTAGES OF SOLE PROPRIETORSHIP
• Easy formation
• Better control(prompt decision making and flexibility in operations)
• Subject to fewer regulations
• Not subject to corporate tax
• Ownership of all profit

8. DISADVANTAGES OF SOLE PROPRIETORSHIP
Risk of Wrong Decisions
Weak Bargaining Position
Limitation of
Management Skills
Limitation of
Capital
Limited Scope
for Expansion
Lack of Continuity

9. PARTNERSHIP
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A partnership is a kind of business where a formal
agreement between two or more people is made who
agree to be the co-owners, distribute responsibilities for
running an organization and share the income or losses
that the business generates.

10. FEATURES OF PARTNERSHIP
Partnership
Agreement
between
Partners
Two or
More
Persons
Sharing
of Profit
.Business
Motive
Mutual
Business
Unlimited
Liability:
• Agreement between Partners: It is an association of
two or more individuals, and a partnership arises from
an agreement or a contract
• Two or More Persons: In order to manifest a
partnership, there should be at least two (2) persons
possessing a common goal.
• Sharing of Profit: Another significant component of
the partnership is, the accord between partners has to
share gains and losses of a trading concern
• Business Motive: It is important for a firm to carry
some kind of business and should have a profit
gaining motive.
• Mutual Business: The partners are the owners as well
as the agent of their firm. Any act performed by one
partner can affect other partners and the firm.
• Unlimited Liability: Every partner in a partnership has
unlimited liability

11. TYPES OF PARTNERSHIPS
•General Partnership
A general partnership comprises two or more
owners to run a business. In this partnership,
each partner represents the firm with equal
right. All partners can participate in
management activities, decision making, and
have the right to control the business. Similarly,
profits, debts, and liabilities are equally shared
and divided equally.
• Limited Partnership
In this partnership, includes both the general
and limited partners. The general partner has
unlimited liability, manages the business and
the other limited partners. Limited partners
have limited control over the business (limited
to his investment). They are not associated
with the everyday operations of the firm.

12. TYPES OF PARTNERSHIPS
•Limited Liability Partnership
In Limited Liability Partnership (LLP), all the partners
have limited liability. Each partner is guarded against
other partners legal and financial mistakes. A limited
liability partnership is almost similar to a Limited
Liability Company (LLC) but different from a limited
partnership or a general partnership.
•Partnership at Will
Partnership at Will can be defined as when there is no
clause mentioned about the expiration of a partnership
firm. Under section 7 of the Indian Partnership Act 1932,
the two conditions that have to be fulfilled by a firm to
become a Partnership at Will are:
•The partnership agreement should have not any fixed
expiration date.
•No particular determination of the partnership should be
mentioned.
Partnership
Limited
Liability
Partnership
Partnership
at Will
Limited
Partnership
General
Partnership

13. ADVANTAGES OF PARTNERSHIPS
Advantages of Partnership:
•Easy Formation – An agreement can be made oral or printed as an agreement to
enter as a partner and establish a firm.
•Large Resources – Unlike sole proprietor where every contribution is made by one
person, in partnership, partners of the firm can contribute more capital and other
resources as required.
•Flexibility – The partners can initiate any changes if they think it is required to meet
the desired result or change circumstances.
•Sharing Risk – All loss incurred by the firm is equally distributed amongst each
partner.
•Combination of different skills – The partnership firm has the advantage of
knowledge, skill, experience and talents of different partners.

14. DISADVANTAGES OF PARTNERSHIP
1. Liabilities- In addition to sharing profits and assets, a partnership also entails
sharing any business losses, as well as responsibility for any debts, even if they are
incurred by the other partner. This can place a burden on your personal finances and
assets.
2. Loss of Autonomy- While you likely enjoy being in total control of your business, in a
partnership, you would now share control with a partner and important decisions
would be made jointly.
3.Emotional Issues- A host of issues can surface that may make working with a
partner difficult. For example, conflicts can arise from differences of opinion or from
unequal effort put into the business.
4. Future Selling Complications- As circumstances change in the future, you or your
partner may wish to sell the business. This could present difficulties if one of the
partners isn't interested in selling.

15. CORPORATIONS
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BY-SA
What Is a Corporation?
A corporation is a legal entity that is separate and distinct from its
owners.1 Under law, corporations possess many of the same rights and
responsibilities as individuals. They can enter contracts, loan and borrow
money, sue and be sued, hire employees, own assets, and pay taxes.
•
A corporation is legally a separate and distinct entity from its owners.
Corporations possess many of the same legal rights and
responsibilities as individuals.
• An important element of a corporation is limited liability, which
means that its shareholders are not personally responsible for the
company's debts.
• A corporation may be created by an individual or a group of people
with a shared goal. That does not always involve making a profit.

16. CHARACTERISTICS OF A CORPORATION
Separate
Legal
Existence
Continuous
Life
Ability to
Acquire
Capital
Limited
Liability.
Government
Regulations

17. ADVANTAGES OF A CORPORATION
Access to
capital
Tax
benefits
Business
security
and
perpetuity
Personal
liability
protection
Personal liability protection- A corporation provides
more personal asset liability protection to its owners
than any other entity type.
Business security and perpetuity-Corporation
ownership is based on percentage of stock ownership,
which offers much more flexibility than other entity
types in terms of transferring ownership and
perpetuating the business for the long term.
Access to capital- Since most corporations sell
ownership through publicly traded stock, they can
easily raise funds by selling stock. This access to
funding is a luxury that other entity types don't have.
Tax benefits- Although some corporations (C
corporations) are subject to double taxation, other
corporation structures (S corporations) have tax
benefits, depending on how their income is
distributed.

18. DISADVANTAGES OF A CORPORATION
Lengthy
application
process
Rigid
formalities,
protocols
and
structure
Double
taxation
Expensive
• Filing your articles of incorporation with your secretary of
state can be quick, but the overall process of incorporating
is often a long one.
• The lengthy application process is the amount of time and
energy necessary to properly maintain a corporation and
adhere to legal requirements
• Most corporations (like C-corps) face double taxation,
which means that the business income is taxed at the
entity level as well as the shareholder level (based on their
percentage of profits earned).
• Corporations are expensive to form and operate. It might
be easy for established corporations to raise capital by
selling shares, but forming and maintaining a corporation
can be costly.

19. TYPES OF CORPORATIONS
Private Company
▪Closely held by a few people
▪Minimum 2 and maximum 50
shareholders
▪Stocks cannot be traded on exchanges
and private equity cannot be raised
▪Less regulations as compared to Public
Companies
Public Company
▪Stock are held by a large number of
people
▪Minimum 7 shareholders and no limit for
maximum
▪Can be listed on stock exchange and
can go public
▪Have to follow many laws with regards
to the board composition and AGM.

20. COOPERATIVE
1. A financial cooperative (co-op) is a
type of financial institution that is
owned and operated by its members.
2. The goal of a financial cooperative is
to act on behalf of a unified group to
offer traditional banking services.
3. These institutions attempt to
differentiate themselves by offering
above-average services along with
competitive rates in the areas of
insurance, lending, and investment
dealings.

21. UNDERSTANDING FINANCIAL
COOPERATIVES
1. Credit unions are the most popular form
of financial cooperative because they
are owned and operated by their
members.
2. These financial institutions often pay
higher-than-average interest rates and
are only accessible to those that have
accounts.
3. The size of financial cooperatives can
vary from only a handful of branches to
being widespread with thousands of
locations. Many financial cooperatives
offer products and services that are
comparable to those offered by the
major diversified banks.
4. Financial cooperatives have open
membership, and unlike banks, they may be
more interested in seeing to the financial
wellness of their members rather than
turning a profit.
5. Control of the cooperative takes a
democratic form with each member getting
one vote.
6.Their individual financial standing is not
relevant, and they do not hold different
layers of control based on the ownership of
shares.

22. ADVANTAGES OF COOPERATIVES
Easy to Form
Open
Membership
Limited
Liability
Democratic
Management
Economical
Operations
• Easy to Form- A cooperative society is a voluntary
association and may be formed with a minimum of
ten adult members.
• Open Membership- Membership in a cooperative
organization is open to all people having a common
interest. A person can become a member at any time
he likes and can leave the society at any time by
returning his shares, without affecting its continuity.
• Democratic Management- A cooperative society
is managed in a democratic manner. It is based on
the principle of ‘one man one vote’. All members
have equal rights and can have a voice in its
management.
• Limited Liability- The liability of the members of
a co-operative society is limited to the extent of
capital contributed by them. They do not have to
bear personal liability for the debts of the society.
• Economical Operations- The operation of a
cooperative society is quite economical due to
elimination of middlemen and the voluntary services
provided by its members.

23. DISADVANTAGES OF FINANCIAL COOPERATIVES
Limited Capital
Rigid Rules and
Regulations-
Differences and
Factionalism
among Members
Absence of
Motivation
Inefficient
Management
Limited Capital- Cooperatives are usually at a disadvantage
in raising capital because of the low rate of return on capital
invested by the members.
Inefficient Management- The management of a co-
operative society is generally inefficient because the managing
committee consists of part-time and inexperienced people.
Absence of Motivation- A cooperative society is formed for
mutual benefit and the interest of individual members is not
fully satisfied. There is no direct link between effort and
reward.
Differences and Factionalism among Members- Once
the initial enthusiasm about the co-operative ideal is
exhausted, differences and group conflicts arise among
members. Then, it becomes difficult to get full co-operation
from the members.
Rigid Rules and Regulations- Excessive Government
regulation and control over co-operatives affect their
functioning.

24. POINTS COVERED
Business
organization
Sole
proprietorship
Partnership firm
Corporations
Public
company
Private
company
Cooperative
Society
• Business organization
o Types of business organization
o Choosing a form of business organization
• Sole proprietorship
o Advantages of sole proprietorship
o Disadvantages of sole proprietorship
• Partnership
o Features of Partnership
o Types of partnerships
o Advantages of partnerships
• Corporations
o Characteristics of a corporation
o Advantages of a corporation
o Disadvantages of a corporation
o Types of corporations
▪ Private Company
▪ Public Company
• Cooperative
o Cooperative Understanding Financial Cooperatives
o Disadvantages of financial cooperatives

25. THANKYOU! Ronal Pillay