Question

Name 5 types of business organizations

Answer 1

FIVE FORMS OF BUSINESS ORGANISATIONS-

1. Partnership Firm:

Partnership refers to the forms of a business organisation where 2 or more person comes together for undertaking a business with common objective. when a business enterprise expands beyond the capacity of a single person, a group of persons have to come together and supply the necessary capital and skills.

2. Sole Proprietorship:

Sole proprietorship is a form of business concern owned and operated by one person. Sole proprietor is a person who carries on business by and for himself. He contributes the capital and skills all by himself and is solely responsible for the results of the enterprise.

3. Joint Stock Company:

Collection of huge financial and managerial resources became necessary to expan business in large scale. Proprietorship and partnership forms of ownership failed to meet these needs due to their limitations, e.g., unlimited liability, lack of continuity and limited resources.

Company form of business organisation overcome these limitations. Joint stock company has become the dominant form of ownership for large scale enterprises. It enables collection of huge financial and managerial resources with provision for limited liability and continuity of operations.

4. One Person Company (OPC):

One Person Company is a company registered under the Companies Act with just one member. It shall have ‘(OPC)’ added in to its name.

5. Limited Liability Partnership (LLP):

According to the Limited Liability Partnership Act, 2008, LLP is a body corporate formed and incorporated under this Act. LLP is a legal entity separate from that of its members.

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