In broad sense business includes industry commerce & trade. Its main aim is to increase wealth.
Business may be defined as ‘an enterprise engage at in production & distribution of good for sale in market.
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Types of Business Organization
Several Types if businesses organization are exiting in order to satisfy various social, economic & rumen requirements. Following are the main types of business organization.
A. Private Sector
B. Public Sector
C. Joint Sector
Ownership & control shared by private entrepreneur. State and public.
1. Individual Ownership:
As the name suggests, such type of business is owned & operated by one person. This is the oldest and simplest form of business organization. The businessman invests capital, employs labor & machines. Stance owner alone enjoys the profits and suffer the losses in his business. Therefore, he is the supreme authority to decide into different matters concerning it his business and has unlimited freedom of action within legal jurisdiction.
Overall control in single hand helps him in quick decision efficient administration and working. Such organization owner himself is responsible for the liabilties. Hence the creditor can collect the money even from the personal property.
Uncertainty of duration I-e death imprisonment or insanity automatically terminates the firm possibility that overall direction may become a burden on owner when business grows.
2. Partnership Organization:
Limited financial resources & heavy burden of risk involved in both of the previous forms of organization has led to the formation of joint stock companies these have limited dilutives.
The capital is raised by selling shares of different values. Persons who purchase the shares are called shareholder. The managing body known as; Board of Directors; is responsible for policy making important financial & technical decisions.
There are two main types of joint stock Companies.
This type company can be formed by two or more persons. Te maximum number of member ship is limited to 50. In this transfer of shares is limited to members only. The government also does not interfere in the working of the compan
Public Limited Company: Its is one whose membership is open to genera public. The minimum number required to form such company is seven, but there is no upper limit. Such company’s can advertise to offer its share to genera public through a prospectus. These public limited companies are subjected to greater control & supervision of control.
Such ownership is the only serious competitor to the joint stock companies. This form is most suitable for the establishment & development of modern industries, because of facilities like owner, transport; Credit, insurance etc. are easily available to them.
The private ownership & the joint stock company gave rise to exploitation of labors & of the consumers.
Government either starts or nation aliases certain industries to prevent the economic unbalance in the nation. It serves as a means to obstruct the monopolistic tendencies.
Main reason for thedrawbaks in the above mentioned state ownership is that they cannot be bundled like private enterprise.
1. Government Departmental Organizations:
It is managed by the officials of the government under the chare of the secretary of the ministry concerned. The examples are posts & Telegraphic, Railways, Defense, Industries, Broadcasting.
In certain organization cooperation is required from several ministries; Therefore a board or committee of representatives from concerning ministries is formed so that co-operation consultation & quick decisions may be taken.
All the governmental organizations have following essential characteristics;
2. Public Corporations:
A public corporation is wholly owned by the Government centre to state. It is established usually by a Special Act of the parliament. Special statute also prescribes its management pattern power duties & jurisdictions. Though the total capital is provided by the Government, they have separate entity & enjoy independence in matters related to appointments, promotions etc.
3. Government Companies:
A state enterprise can also be organized in the form of a Joint stock company; A government company is any company in which of the share capital is held by the central government or partly by central government & party by one to more state governments. It is managed b the elected board of directors which may include private individuals. These are accountable for its working to the concerned ministry or department & its annual report is required to be placed ever year on the table of the parliament or state legislatures along with the comments of the government to concerned department.