BUSINESS ORGANIZATION PRIVATE SECTOR UNDERTAKINGS PUBLIC SECTOR UNDERTAKINGS JOINT SECTOR UNDERTAKINGS

PRIVATE SECTOR UNDERTAKINGS

 Owned, Controlled and Financed by private businessmen.  No Government Participation  Main motive is to earn profits.

FEATURES

1. OWNERSHIP & CONTROL

 Fully owned & controlled by Private Entrepreneurs.  Owned by one individual or by a group of individuals.

2.PROFIT MOTIVE

3. NO STATE PARTICIPATION

4. PRIVATE FINANCE

 Capital is arranged by private owners.  Sole trader contributes the capital in Sole Proprietorship.  In Partnership, capital is invested by partners.  A Joint stock Company, raises its capital by the issue of shares & debentures.

5. INDEPENDENT MANAGEMENT

 Managed by owners.  In Sole Proprietorship and Partnership, the owners, directly manage the firm.  In Joint stock Company, management lies in the hands of directors, who are the elected representatives of the shareholders.

PUBLIC SECTOR UNDERTAKINGS

FEATURES

1. STATE OWNERSHIP

 Fully owned by the Government or some Public Authority.

2. GOVERNMENT CONTROL

3. SERVICE MOTIVE

4. STATE FINANCING

 Capital and Funds through appropriation from Government Budget  Loan Financing.

5. BUREAUCRATIC MANAGEMENT

 Managed and Governed within the policy framework and rules framed by the Government.

6. PUBLIC ACCOUNTABILITY

 Accountable to public for performance.  Annual Audit of Public Sector Undertakings is conducted by the Comptroller & Auditor General of India.  Annual Reports are subject to discussion in the parliament or State Legislature.

JOINT SECTOR UNDERTAKINGS

WITHOUT FOREIGN PORTFOLIO :  Ownership, Control & Management is shared jointly by the Government, Private Entrepreneurs and Public at large.  Proportionate Shareholding : Government- 26% Private entrepreneurs- 25% Public- 49%

WITH FOREIGN PORTFOLIO : Proportionate Shareholding : Government- 25% Private entrepreneurs- 20% Foreign Investors- 20% Public- 35%

FEATURES

1. MIXED OWNERSHIP

 Government, Private Entrepreneurs and Public at large.

2. COMBINED MANAGEMENT

3. SHARE CAPITAL

PRIVATE SECTOR ORGANIZATION SOLE PROP. JOINT HINDU FAMILY BUSNS PARTNERSHIP JOINT STOCK COMPANY COOP. SOCIETY

SOLE PROPRIETORSHIP

 One individual provides capital, bears all risks and independently manages the business.

JOINT HINDU FAMILY BUSINESS

 Owned & Controlled by a Joint Hindu Family, which consists of father, son, grandson and the great grandson.  Head of the family, called Karta, manages the business.  Liability of every member of the family, except Karta, is limited to his share in the family’s assets.

PARTNERSHIP

 Two or more persons enter into a contract to carry on some lawful business jointly and share profits.  Each partner is jointly and individually liable for the debts of the firm.  Liability of every partner is unlimited.  Controlled and managed by Partners.

JOINT STOCK COMPANY

 Incorporated association of two or more persons.  Distinct legal entity.  Continuity is independent of the lives of its members.  Management & Control lies in the hands of Board of Directors.

COOPERATIVE SOCIETY

 Organized on the principle of Mutual- Self- help.  Incorporated association, with distinct identity.  Limited liability of its members.  Managed & Controlled by Board of Directors.