BUSINESS STUDIES PROJECT

CONTENT : PRIVATE SECTOR ENTERPRICES.

o MEANING
o SOLE
o FEATURES PROPRIETERSHIP
o CHARECTRISTICS
o UTILITY
o MERITS
o DEMERITS

DONE BY: Aayush kumar

CLASS : 11 D
SOLE PROPRIETORSHIP:

 CHARACTERISTICS : A) EASE OF FORMATION .

 B) SINGLE OWNERSHIP.
 C) ONE MANS CAPITAL .
 D) ONE MANS CONTROL.
 E) NO SHARING OF CAPITAL AND LOSS.
 D) UNLIMITED LIABILITY.
 FEATURES:
SINGLE OWNERSHIP: THE SOLE PROPRIETERSHIP FIRM IS OWNED BY
AN INDIVIDUAL ONLY. ALL THE CAPITAL IS SUPLIED BY THE INDIVIDUAL
FROM HIS OWN WEALTH.
 FORMATION AND CLOSURE: THERE ARE NO ILLEGAL FORMALATIES
REQUIRED TO START ANDCLOSE LAW GOVERNING THIS FORM OF
BUISNESS.
 UNLIMITED LIABILITY: IN SOLE PROPRIETERSHIP FIRM THE PROPRIETER IS
PERSONALY UNABLE FOR ALL DEBITS OF THE BUSINESS. IN CASE OF
BUISENESS LOSSES, THE BUSINESS ASSETS ARE NOT SUFFICIENT TO MEET
ALL THE BUISNESS LIABLITIES, THE PROPRIETER MAY HAVE TO SELL HIS
PERSONAL PROPERTY TO PAY OFF THE LISBLITIES.
 INDIVIDUAL RISK BEARING AND PROFIT RECIPIANT: IN
SOLEPROPRIETERSHIP FIRM WHOLE RISK IS BORNE BY A SINGLE
INDIVIDUAL ONLY. THE SOLEPROPRIETER OF ALL THE REWARD IS ONE
INDIVIDUAL ONLY.
 ONE MAN CONTROL: THE PROPRIETER IS THE SOLE OWNER OF FIRM AND
HAS FULL CONTROL OVER IT.THE OWNERSHIP AND MANAGEMENT LIES IN
ONE PERSONS HAND ONLY.
 NO SEPARATE LEGAL ENTITY: a SOLE PROPRITERSHIP HAS ANY LEGAL
IDENTITY SEPARATE FROM THAT OF ITS OWNER. LAW MAKES NO
DIFFERENCE BETWEEN THE OWNER AND THE ENTERPRISE.BUSINESS AND
OWNER EXIT TOGETHER.

 MERITS\ADVANTAGEGES:

o QUICK DECISION: ALL THE DECISION ARE TAKEN BY THE PROPRIETOR

HIMSELF.BY QUICK DECISION, IMMEDIATE ACTION CAN BRING WHICH
FLEXIBLITY OF OPEREATION.
o CONFIDENTAIALITY: THE SOLE PRPRIETER IS NOT EXPECTED TO SHARE
HIS SECRATE WITH OTHERS. THERE US NO LEGAL COMPULTIONJ FOR A
 SOLE PROPRIETER TO PUBLISH HIS ACCOUNTS. ALL THE DECISION IS
TAKEN BY THE PROPRIETOR.
o EASY TO FORM AND DISSOLVE: A SOLE PROPRIETER ORGANISATION IS
EASY TO FORM. NO LEGAL FOMALITIES ARE INVOLVED IN SETTING UP
THIS TYPE OF ORGANISATION. IT IS GOVERNED BY ANY SPECIFIC LAW.

 DEMERITS / DISADVANTAGE:
LIMITED RESOURCES: THER IS A LIMIT TO THE CREDIT RIASING
CAPACITY OF SINGLE PERSON ONLY. THIS REDUCES THE SCOPE OFOR
BUSINESS GROWTH.
LIMITED LIFE OF A BUSINESS: SURVIVALAND CONTINUES OF SO; LE
PRORPRITER FALLS ILL OR BECOMES INSOLVENT THEN THE BUSINESS
MAY COME TO AN EN.
UNLIMITED LIABILITY: THE SOLE PROPRIETR IS PERSONALLY LIABLE
FOR ALL THE DEBTS. HEAVY LOSSES PROPRIETOR WILL NOT ONLY
LOSE ALL HIS BUSINESS ASSETS BUT HE MAY HAVE TO SELL HIS
PERSONAL PROPERTY TO PAY BACK HIS DEBTS.
SUIT ABILITY OD PRPRIETORSHIP:WHEN MARKET IS LOCAL.
A) WHEN WITH CUSTOMERS REQUIRED
B) WHERE PROMPTNESS IS REQUIRED IN DECISION
MARKETING.
C) WHERE ONE LESS BEING HIS OWN BOSS
D) WHERE THE NATURE OF BUSINESS IS SIMPLE
E) WHERE CAPITAL REQUIRMENT IS SMALL AND RISK
INVOLVEMENT IS HEAVY.

DIFERENCE BETWEEN PRIVATE SECTOR ANDENTERPRICES AND PUBLIC SECTOR

ENTERPRICES:
BASIS OF DIFERENCE PRIVATE SECTOR PUBLIC SECTOR
ENTERPRICES ENTERPRICES
OBJECTIVE. MAXIMITATION OF MAXIMISE SOCIAL
PROFIT. WELFARE ANDENSURE
BALANCE ECONOMIC
 DEVELOPMENT.
OWNERSHIP. OWNED BY INDIVIDUAL. OWNED BY
GOVERNMENT.
MANAGEMENT. MANAGED BY OWNERS MANAGED BY
AND PROFETIONAL GOVERNMENT.
MANAGERS.
CAPITAL . RISED BY OWNERS BY RISED FROM
LONS PRIVATE SOURCES GOVERNMENT
AND PUBLIC ISSUES FUNDSAND SOMETIME
THROUGH PUBLIC ISSUES.
AREA OF OPERATION. OPERATION IN ALL AREAS OPERATION IN BASIS AND
ADEQUATE RETURN ON PUBLIC UTILITY SECTOR.
INVESTMENT.

S OLE PROPRIETORSHIP EXAMPLE : COCA COLA , AMAZON , APPLE , ETC .

H ISTORY OF COCA COLA COMPANY :

In July 1886, pharmacist John Stith Pemberton from Columbus, Georgia invented

the original Coca-Cola drink, which was advertised as helpful in the relief of
headache, to be placed primarily on sale in drugstores as a medicinal beverage,
Pemberton continued mixing experiments, and reached during the month of May
his goal, the new product as yet unnamed nor a carbonated drink, was ready for
the market and was made available for sale. [2] Pemberton's bookkeeper, Frank
M. Robinson, is credited with naming the product and creating its logo.
[3]
 Robinson chose the name Coca-Cola because of its two main ingredients (coca
leaves and kola nuts) and because it sounded like an alliteration. John
Pemberton had taken a break and left Robinson to make and promote, as well as
sell Coca-Cola on his own. He promoted the drink with the limited budget that he
had, and succeeded.[4]
In 1889, American businessman Asa G. Candler completed his purchase of the
Coca-Cola formula and brand from Pemberton's heirs. [citation needed] In 1892, the
Coca-Cola Company was formally founded in Atlanta by Candler. By 1895, Coca-
Cola was being sold in every state in the union. [5] In 1919, the company was sold
to Ernest Woodruff's Trust Company of Georgia.[6]
Coca-Cola's first ad read "Coca Cola. Delicious! Refreshing! Exhilarating!
Invigorating!"[4] Candler was one of the first businessmen to use merchandising
in his advertising strategy.[citation needed] As of 1948, Coca-Cola had claimed about
60% of its market share.[5] By 1984, The Coca-Cola Company's market share
decreased to 21.8% due to new competitors, namely Pepsi.[5]

P RIVATE SECTOR ENTERPRISES

Meaning:

The private sector is the part of the economy that is run by individuals and
companies for profit and is not state controlled. Therefore, it encompasses all
for-profit businesses that are not owned or operated by the government. A
Private Limited Company is a company which is privately held for small
businesses. The liability of the members of a Private Limited Company is
limited to the number of shares respectively held by them. Shares of Private
Limited Company cannot be publicly traded.

 Features Of Private Sector Companies:

The main feature of the private sector is its management by private

individuals without government involvement, but there are more features of
the private sector:

 Profit motive
 Private ownership and control
 No state participation
 Independent management
 Private finance

 Profit motive:
The primary focus of companies in the private sector is risk taken and the
required return on capital. making a profit. Companies in the private sector
typically manage to realize more profits compared to firms in the public
sector. Additionally, profits provide reward for the risk taken.

 Private ownership and control:

Private entrepreneurs are responsible for owning, controlling and managing
the private sector. The management may be either by a single individual or by
a group of people. When the ownership belongs to a single person, the private
sector company is referred to as a sole proprietorship. Alternatively, a group
of persons may jointly own a firm in the form of a cooperative society,
partnership or a joint-stock company.
 No state participation: Private sector entities have less exposure to
government interference. There is no participation by the state or
central governments in the ownership and control of a private sector
undertaking.
 Independent management: The management of the private sector relies
entirely on its owners. In the case of a sole proprietorship, the manager
makes all of the decisions and acts on behalf of the company in legal
matters. On the other hand, the management of a joint-stock company
depends on a group of directors who are elected representatives of the
shareholders.
 Private finance: The private sector obtains capital from its owners or
shareholders. Different types of private sector undertakings have varied
means of raising capital. A sole trader contributes capital for a sole
proprietorship, and partners invest capital in case of a partnership.
Alternatively, a joint-stock company raises capital through the issue of
share and debentures (a type of long-term debt). Requesting loans for
long- and short-term needs or funds is also another way the private
sector raises capital.
Private sector companies receive very little financial support from the
government unless they are large and significant for a country. Depending on
the financial strength of the private sector, companies with stronger financials
have better capacities to mobilize more funds from the market.
 Merits Of Private Sector Companies:

No Minimum Capital: No minimum capital is required to form a Private Limited

Company. A Private Limited Company can be registered with a mere sum of
Rs. 10,000 as total Authorized Share capital.

Separate Legal Entity:  A Private Limited Company is a separate legal identity in

the court of the law, meaning assets and liabilities of the business are not the
same as the assets and liabilities of the directors. Both are counted as
different. A private limited company separates Management and Ownership
and thus, managers are responsible for the company’s success and are also
answerable for the company’s loss.Limited Liability: If the company undergoes
financial distress because of whatsoever reasons, the personal assets of
members will not be used to pay the debts of the Company as the liability of
the person is limited.For e.g. If a Private Limited company takes any loan and
is unable to pay off, the members are responsible to pay only that much how
much they own towards their own shareholding i.e. the unpaid share value.
Which means, if you have no balance payable towards the amount of shares
you hold, you are not payable towards any debt payable by the company even
if the debt/credit amount remains unpaid.

 Free &F Easy transfer of shares: Shares of a company limited by shares

are transferable by a shareholder t any other person. The transfer is
easy as compared to the transfer of an interest in a business run as a
proprietary concern or a partnership. Filing and signing a share transfer
form and handing over the buyer of the shares along with share
certificate can easily transfer shares.
 Limitations Of Private Sector Companies:

Smaller resources: A private company cannot have more than fifty members.
Its credit standing is lower than that of a public company. Therefore, the
financial and managerial resources of a private company are comparatively
limited.

 Lack of Public Confidence:

Public has little confidence on private companies because its affairs are
unknown and its not subject to strict control under the law.

 Lack of transferability of shares:

There are restrictions on the transfer of shares in a private company. As a result,
a shareholder cannot leave a private company easily and quickly.

EXAMPLE OF PRIVATE SECTOR COMPANIES IN INDIA:

 Reliance Industries Limited.
 Tata Consultancy Services (TCS)
 Infosys Technologies Ltd.

CASE STUDY ON RELIANCE INDUSTRIES LIMITED::

HISTORY OF RELIANCE:

The company was co-founded

by dhirubai ambani and Champaklal Damani in 1960's as Reliance
Commercial Corporation. In 1965, the partnership ended and Dhirubhai
continued the   in 1977. The issue was over-subscribed by seven times. ] In 1979, a
 textiles company Sidhpur Mpolyester business of the firm.[11] In 1966, Reliance
Textiles Engineers Pvt. Ltd. was incorporated in maharasyra. It established
a synthetic fabrics mill in the same year at Naroda in Gujarat. On 8 May 1973, it
became Reliance Industries Limited. In 1975, the company expanded its business
into textiles, with "Vimal" becoming its major brand in later years. The company
held its Initial public offeringills was amalgamated with the company.

In 1985, the name of the company was changed from Reliance Textiles

Industries Ltd. to Reliance Industries Ltd. During the years 1985 to 1992, the
company expanded its installed capacity for producing polyester yarn by over
1,45,000 tonnes per annum.In 2001, Reliance Industries Ltd. and Reliance
Petroleum Ltd. became India's two largest companies in terms of all major
financial parameters.[18] In 2001–02, Reliance Petroleum was merged with
Reliance Industries.In 2006, Reliance entered the organised retail market in
India with the launch of its retail store format under the brand name of
'Reliance Fresh By the end of 2008, Reliance retail had close to 600 stores across
57 cities in India. In 2010, Reliance entered the broadband services market with
acquisition of Infotel Broadband Services Limited, which was the only successful
bidder for pan-India fourth-generation (4G) spectrum auction held by the
government of India. In the same year, Reliance and  announced a partnership
in the oil and gas business. BP took a 30 per cent stake in 23 oil and gas
production sharing contracts that Reliance operates in India, including the KG-
D6 block for $7.2 billion.] Reliance also formed a 50:50 joint venture with BP for

sourcing and marketing of gas in India.

In 2017, RIL set up a joint venture with Russian Company Sibur  for setting up
a Butyl rubber plant in Jamnagar, Gujarat, to be operational by 2018.
In August 2019, Reliance added Fynd primarily for its consumer businesses and
mobile phone services in the e-commerce space.