Advertisements
Advertisements
Question
Discuss the factors that determine the choice of form of organisation.
Advertisements
Solution
Factors determining Choice of a Business Form
The following are the factors that determine the choice of a business organisation.
(a) Nature of business activity: Any individual first needs to decide upon the nature or kind of business activity that he or she desires to undertake. In case the business type requires direct personal contact with customers, then the sole proprietorship form of business proves beneficial. On the other hand, if direct personal contact is not required, then a partnership or a company form of business is more suitable.
(b) Degree of control: The choice of a business form also depends on the degree of control that a businessperson wants to exercise over its management. If a businessperson aims to have direct control over all the business operations, then sole proprietorship may be considered appropriate. However, if he or she does not mind sharing the decision-making powers with others, then a partnership or company form of business would be more suitable.
(c) Degree and specialisation of managerial abilities: If the business operations are large and require specialised and skilled professionals for managing them, then a company form of business may be selected. However, if the business operations are not very complex and the scale of operations is also not very large, then sole proprietorship proves to be a better alternative.
APPEARS IN
RELATED QUESTIONS
Multinational companies have a network of subsidiaries in _________.
Match the correct pairs.
| Group “A” | Group “B” | ||
| a) | Private company | 1) | Compulsory |
| b) | Public company | 2) | Minimum 7 members |
| c) | Common Seal | 3) | Maximum 50 members |
| d) | Registration of a company | 4) | 61% share capital |
| e) | Government company | 5) | 51% share capital |
| 6) | Symbol of a company | ||
| 7) | Optional | ||
| 8) | Simple formation | ||
| 9) | Easy dissolution | ||
| 10) | Hindu succession Act 1956 |
Write a word or a phrase or a term which can substitute the following.
An elected body of representatives of a co-operative organization for its day-to-day administration.
Write short note on the following.
Demerits of Co-operative society
State with reasons whether the following statement true or false.
The maximum number of members in a Joint Hindu family is 20.
State with reasons whether the following statement true or false.
Company form of organization has developed before industrial revolution.
State with reasons whether the following statement is true or false.
The owner of the sole proprietorship is the sole decision maker of his business.
Write short answer of the following.
State the types of partnership firm.
Write short answer of the following.
State the point of choice of forms of business organization.
Long answer type question.
Define a Joint Hindu family firm. Explain features of joint Hindu family firm.
Long answer type question.
Define Joint Stock Company. Explain its merits and demerits.
Why is it important to choose an appropriate form of organisation?
Which business type is described as "owned by one person"?
What is the main difference in share transfer between a private and a public company?
