We can divide business organizations into five categories according to their functions and people. Those five categories are:
- Sole proprietorship
- Joint Hindu Family Business
- Cooperative societies
- Joint Stock Company
Let us discuss all types of business organization in detail:-
1) Sole proprietorship
If we split the word, sole means only and proprietor means owner. That is, a business in which there is only one owner who owned, controlled, and managed the whole business, then that business will be called business under sole proprietorship. For example- A shop owner. In this, all the profits and loss are enjoyed by only one person.
Things that the person enjoys in sole proprietorship
a) No one else controls the business
b) Fast and quick decisions will be made
c) enjoy own monopoly and control in the business
d) get high profits in less investment
Problems faced by an individual in Sole Proprietorship
a) Cannot expand the business on a large scale as the person is the only one who is handling the business
b) Revenue and Income will be limited
c) If something happen with the owner business will be shut down.
d) Unlimited liability- During a loss in business, the owner will also have to sell his personal belongings at the time of loan repayment.
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2) Joint Hindu Family Business
Joint Hindu Family business is a type of business in which members of family run the business together but business is controlled by the head of the family who is the eldest member. If the person carrying on the business leaves the business or dies for any reason, his successor will manage and control the business. This type of business is found only in India. This is one of the oldest form of business organization in India.
The family person who is actual owner of the business will be known as Karta and his liability would be unlimited and liability of rest of the family member in the business would be limited. In this type of business, there is a large number of family members of the Hindu Undivided Family (HUF) and all members run the business together. For example- Haldiram.
A partnership is a type of business in which two or more members control and manage the business. In partnership members should not be less than 2 and more than 100. If the members exceed 100 then it will no longer be called a partnership, it will be called a company.
Things that the person enjoys in Partnership
a) Enjoy the high profits as business runs on large scale
b) two or more mind work together and generate more Ideas
c) Enhance the creativity in the business
d) Workers will do their work perfectly as there will be two or more boss in the business.
Problems faced by the person in Partnership
a) Not full control in the business
b) Delay in taking decisions as other partner can Interfere in your decisions if he did not like your decision
c) All partners will have unlimited liability
d) Profits will be divided in two or more parts
4) Cooperative Society
Cooperative Society is a business in which people work together for a common purpose. For example- Amul. In amul, the common problem among the people was that they wanted to eliminate the middleman as the middleman used to charge the high commission from the people. So a group of people facing the same problem formed their own cooperative society and started providing milk directly to the customer. To start the business of co-operative society, there should be at least 10 members.
The main motive of this type of business is to provide good services to the people instead of earning profits. This business is a voluntary association of persons, who join together with the motive of welfare of the members. In cooperative society business, it is compulsory required that the business should be registered under the Cooperative Societies Act 1912.
5) Joint Stock Company
Joint Stock company is a artificial person which has its own separate identity from its owner. For example- Reliance, TATA. The company has a common seal which is used by the company to give approval. Today every company is following the rules and regulations of the Companies Act, 2013.
Being a separate legal entity (a separate identity in the eyes of the law) whenever there is a conflict against the company, the aggrieved will sue the company in court instead of the owner of the company. Along with this in the company owner enjoys the benefit of limited liability. If company face losses in the future and disable to pay back all its debt then creditors has right to sell the things of company and recover their amount as much as possible but they cannot even touch the things of company’s owner to recover their amount.
In Joint Stock Company, owner called as Company’s director and in each company there should be minimum 2 directors compulsory to form a company. Every director has his share percent in the company as per of that they get their salary. For example- There are 5 directors in a company, one director holds 10% share of the company, one hold 8% share, now as per of these share percentage they get their salary. Director who has more percent of share will get more salary. The percent of share among the shareholders is decided on the basis of their investment in the company. Director who invest high in the company will get high percent of share.
Types of company
There are two types of joint stock company:-
1) Private Company- Private companies are the type of companies that does not registered in stock exchanges. Normal people cannot buy share of these companies and cannot invest in these companies. In private company minimum number of people should 2 and maximum number of people should 200. The name of each private company should be accompanied by the title of Pvt.Ltd (Private Limited). For example- Dominos Pvt.Ltd.
2) Public Company- Public companies are the type of companies that are registered in stock exchanges and normal people can buy and sell their shares and invest in these companies. For example- TATA, TATA is registered in national stock exchange (NSE) and Bombay stock exchange (BSE). Every day many people buy and sell TATA share in share market. In public company, there should be minimum 7 member and maximum no limit. The name of each public company should be accompanied by the title of Ltd (Limited). There is no Pvt. in the name of public companies. For example- TATA Ltd., Reliance Ltd.
characteristics of a successful entrepreneur
If any person starts a business then we can tell by his action whether he will become successful in business or not. A man works hard to become a good entrepreneur. While working hard, he develops some such characters in himself which will be found only in a successful entrepreneur. In this article, we will know about all those characters that a successful entrepreneur develops within himself while making his business a success. Let’s start:-
Time does not matter
This is most important character that find in every successful entrepreneur. Time really does not matter for them. If their business want 24 hours from them then they are always ahead to give 24 hours to their business. You must have heard from the mouth of every successful entrepreneur in the interview that they hardly sleep when they are expanding their business. This is the thing that make them unique from other people and they constantly growing in their life.
know how to control yourself
Everyone has their own comfort zone and their body tries to work according to their comfort zone. This is the reason when people try to pull themselves from their comfort zone they face many difficulties and their mind try to divert them to do that work in which it feels enjoyment and entertainment. But the person who successfully walks out of the comfort zone is the most successful person in life. After stepping out of the comfort zone the person realizes that till now his action was controlling him and not he was controlling his action and this is one of the biggest realization a person have because after this realization person will know how to take actions as per situation.
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Knowing what is important and not what is urgent
Every successful entrepreneur knows what is important at what time, not what is urgent. Let understand this point from an example- Every student study hard during the exam days whether they study the whole year or not because it is urgent if they will not study they will get fail in the exam but Studying in small portions every day is important thing for every student as this thing will give them good marks in exam and reduce the burden of exam stress.
People who know what is important to them and what is urgent and act according to what is important will always have excellent results and a better life in the future, those who act according to the urgency. Important thing will not force the person to do the work. It is totally depend upon person mentality and he need to force himself to do the important things first but urgent things will force the person to do the work because in urgent thing person know if he will not do the work now then they have to face many negative effect in the future.
Always acts as the leader rather than the boss
Do you know what is the difference between leader and boss? To any person both the words sound alike but there are small differences between them which make these two words different. The boss always thinks about his advantage in every situation but a leader always thinks about his own benefit and also thinks about the benefit of his worker. A good leader always works by taking his workers along and also discusses with them about the ideas of his company. That is why a company which has a leader instead of a boss grows more in the market and the workers of the company are also happy with the company and work well.
Doing everything with proper planning
Every successful entrepreneur always makes a proper plan before taking any action as he knows the value of time, money and efforts that he and his employees will put in to make it work. He devises a complete strategy about how he can make his new plan a success.
Work with people
A successful entrepreneur knows that he alone cannot run the business properly because he knows that he alone cannot handle the whole business so he gathers some people like him and works with them. This will distribute the work among the people and also reduce the workload.
Finding solutions instead of complaining about things
Problems are part of our life and whenever they come in our life we start complaining. But the people who try to find the solution of the problem are the real person who can be successful in business because the most important concept of business is to find and identify the problems from the life of the person and provide them the best solution to that problem. This thing will make the life of the person more comfortable and will increase the value of the entrepreneur in the hearts of the people.
Focus on main thing
A successful entrepreneur knows what to focus on and what not so he always ignores those things which are not important and giving them time would be a waste of time.