Revision: Forms of Business Organisation - 1 OCM HSC Commerce (English Medium) 11th Standard Maharashtra State Board

1.  According to Prof. J. Hansen, ‘‘ Sometimes known as one-man business, it is a type of business unit where one person is solely responsible for providing the capital, for bearing the risk of the enterprise and for the risk of ownership.’’
2.  According to Prof. James Lundy, ‘‘The sole proprietorship is an informal type of business owned by one person.’’

1. Section 4 of the Indian Partnership Act, 1932, defines partnership as -
   “Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”
2. Prof. L. H. Haney defined Partnership as -
   “Partnership is the relation existing between persons competent to make contracts, who have agreed to carry on a lawful business in common with a view to private gain.”

A Joint Hindu Family Business is a family concern that operates under the provisions of the Hindu Law and the Hindu Succession Act 1956. It may be defined as a business organisation which is inherited or owned, conducted and managed by the members of a Hindu undivided family, pointedly under the direction and control of the senior-most member of the family, called karta, for earning profits.

Under Hindu Law, an HUF is a family that consists of all persons lineally descended from a common ancestor and includes their wives and unmarried daughters. An HUF cannot be created under a contract.

1. According to The International Labour Organisation:
   ‘‘A cooperative organisation is an association of persons, usually of limited means, who have voluntarily joined together to achieve a common economic end through the formation of a democratically controlled organisation, making equitable distributions to the capital required and accepting a fair share of risk and benefits of the undertaking.’’
2. According to the Indian Co-operative Society’s Act, 1912:
   ‘‘Co-operative Society is a society which has its objectives for the promotion of economic interest of its members in accordance with cooperative principles’’.

1. “A Joint Stock Company is a voluntary association of individuals for profit having capital divided into transferable Shares, the ownership of which is the condition on membership.” – Prof. L. H. Haney.
2. “A Company is a person, artificial, invisible, intangible, and existing only in the eyes of the law. Being a mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence.” – Chief Justice Marshal
3. According to The Companies Act 2013, Section 2 (20), the term “Company” means “a Company incorporated under the Companies Act 2013 or any previous Company law.”

According to the Companies Act, 2013,
A private company is a company which, by its articles, restricts the right to transfer its shares, if any, limits the number of its members to 200, and prohibits any invitation to the public to subscribe for any shares or debentures of the company.

According to the Company Act 2013, A public company is a company that is not a private company and has a minimum paid-up capital as may be prescribed by the Act, and has the right to transfer the shares of a company.

• Meaning: A Joint Stock Company is a business organisation where ownership is divided into transferable shares held by shareholders.
• Origin: It emerged during the Industrial Revolution to overcome the limitations of partnerships, such as unlimited liability and limited capital, by raising funds from the public.
• Legal Status: A Joint Stock Company is an artificial legal person with a separate legal identity and perpetual succession, created under company law.
• Merits: It provides benefits like large capital, limited liability, expert management, public confidence, and better scope for expansion.
• Types: Companies can be Chartered, Statutory, or Registered, and further classified as Public, Private, Limited, or Unlimited.