ROUGH DRAFT

Topic: Forms of Business Structures

Submitted to: Dr. Geetika Walia

Submitted by: Shubham Tanwar
Roll no: 18020
Group no: 4
Introduction:
One of the first decisions that you’ll have to make as a business owners is how our business
should be structured. We need to know the advantages and disadvantages of each of the
different forms of business organization to make sure we’re making the right decision for our
new business. All businesses must adopt some legal configuration that defines the rights and
liabilities of participants in the business’s ownership, control, personal liability, lifespan and
financial structure. The form of business determines which income tax return form to file and
the company’s and owners legal liabilities. Business organisations may be owned and
managed by a single individual or group of individuals who may form a partnership firm or a
joint stock company. Such arrangement of ownership and management is termed as a form of
business organisation. A business organisation usually takes the following forms in India:

1. Sole proprietorship

A type of business unit where one person is solely responsible for providing the capital and
bearing the risk of the enterprise, and for the management of the business. A sole
proprietorship is a business owned by only one person. It is easy to set-up and is the least
costly among all forms of ownership. The owner faces unlimited liability; meaning, the
creditors of the business may go after the personal assets of the owner if the business cannot
pay them.

 Merits of Sole proprietorship

 Limitations of sole proprietorship

2. Partnership

A partnership is a business owned by two or more persons who contribute resources into the
entity. The partners divide the profits of the business among themselves.  In general
partnerships, all partners have unlimited liability. In limited partnerships, creditors cannot go
after the personal assets of the limited partners.

 Characteristics of partnership form of business organisation

 Merits of partnership form

 Limitations of partnership form

3. Joint Hindu family business

4. Corporation: A corporation is a business organization that has a separate legal

personality from its owners. Ownership in a stock corporation is represented by shares
of stock.

5. Limited Liability Company

6. Cooperative

7. Conclusion

8. Bibliography