FORMS OF BUSINESS ORGANIZATION

Business- is a human activity, which is undertaken to provide goods and services to the people with a view to earn profit. Organization- the word organization is generally divided into two parts. 1. material organization- is the determining and provision of necessary raw materials, tools, capital to enterprises for their smooth running and functioning. 2.human organization-it is the appointment of qualified staff and assigning them different duties and responsibilities for the sake of business organization.

The process of establishing effective cooperation among different people to achieve certain goals to earn profit WHAT IS BUSINESS ORGANIZATION?

 Sole proprietorship  Partnership  Corporation Types of business organization

 It is owned and controlled by an individual who is responsible of all profits and bearer of all risks SOLE PROPIETORSHIP

SOLE PROPRIETORSHIP ADVANTAGES  Easy and inexpensive to form.  The owner receives all the profit.  Owner has complete control over business. DISADVANTAGES  Unlimited personal liability  Difficult to raise capital.

 It is the arrangement of two or more people that share profits and liabilities for business venture.

Partnership Advantages.  Easy to form  Partners an combine expertise  Combine capital  Spread workload  Easier to raise fund Disadvantages  More people to share in the profit  Partners have unlimited liability  Disagreements can occur  Dissolves if partner died.

It is an agreement among partners which sets at the term on which they were agree to form a partnership.  How the business decisions will be made  How the partners will resolve disagreement  How the partners will divide the profits  How the partner cover the losses  How ownership changes will be handled  Who can legally bind the business through contracts  How to dissolve the partnership PARTNERSHIP AGREEMENT

 is a business entity that is owned by its shareholder(s), who elect a board of directors to oversee the organization's activities CORPORATION

ADVANTAGES  Limited liability  Flexible profit and loss distribution  Separation of management/ownership  More money for investment  Unlimited life of business DISADVANTAGES  Difficult to start  NOT simple to operate

Shareholders Board of directors President Chief Executive Officer Chief Financial Officer Chief Operating Officer

 The nature of business is the most important  Scale of operations and the size of the market area.  The degree of control desired by the owner.  The amount of capital required for the establishment and operation of the business.  The volume of risks and liabilities as well as the willingness of the owners to bear it.  Comparative tax ability Choosing a form of Business Organization

 Product growth  Efficient use of resources  Technological improvements  Creative thinking  Use of skilled salesman  Quick decisions  Recognition of problems  Fixing responsibility  Feed bank  Minimum cost IMPORTANCE OF BUSINESS ORGANIZATION

THANK YOU!