12BA035 - Ownership Structure in Entrepreneurship

7/29/2019 12BA035 - Ownership Structure in Entrepreneurship

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P.S.R. Engineering College

Sivakasi

SEMINAR III

Topic: Ownership Structure in Entrepreneurship

Guided by : Ms. S.P.Subhashini AP/MBA

Submitted To, Submitted by,

Mr. K. KARTHIKEYAN, AP/MBA, Ramachandran.R

Mrs. J. Hema, AP/MBA. 12BA035.


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INTRODUCTION TO

ENTREPRENEURSHIP

Entrepreneurship involves the creationprocess, creating something new of value.

The creation has to have value to theentrepreneur and value to the audience forwhich it is developed.

Entrepreneurship is the dynamic process ofcreating incremental wealth.


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DEFINITION OF AN ENTREPRENEUR

An entrepreneur is one who organizes and

manages a business undertaking, assuming

the risk, for the sake of profit. The

entrepreneur evaluates perceived

opportunities and strives to make the

decisions that will enable the firm to realize

sustained growth.


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ENTREPRENEURSHIP DEVELOPMENT

Entrepreneurship development (ED) refers to

the process of enhancing entrepreneurial skills

and knowledge through structured training

and institution-building programmes.

Entrepreneurship development focuses on the

individual who wishes to start or expand a

business.


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CHARACTERISTICS OF AN

ENTREPRENEUR

Ability to learn from others

Self confidence

Innovative

Self motivation

Showing initiative

Analytical abilities

Ability to make decisions

Bear Risks


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OWNERSHIP STRUCTURES IN

ENTREPRENEURSHIP

Sole Proprietorship

Partnership Firms Joint Stock Companies

Co-operative Societies.


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Sole - Proprietorship

Definition:-

The sole proprietorship is a form of organization

in which an individual introduces his own capital,

uses his own skill and intelligence, and is entirelyresponsible for the results of its operations.

(or)

A business carried on by a single personexclusively by and for himself.


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Sole Proprietorship - Features

1.One-man Ownership and Control

2. Capital Contribution

3. Unlimited Liability

4. Enjoyment of Entire Profit5. No Separate Legal Entity

6. Registration

7. Simplicity

8. Duration

9. Small Capital


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Sole Proprietorship

Advantages

1.Easy Formation

2. Direct Motivation

3. Flexibility

4. Retention of Business

Secrets

5. Quick Decision

6. Higher reward

7. Inexpensive management

8. Increase in Sales

Disadvantages

1. Limited capital

2. Limited Managerial Ability


4. Hasty Decisions

5. Uneconomic Size


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PARTNERSHIP

Definition:-

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 .

(or)

Partnership is the relation existing between

persons, competent to make contracts, who haveagreed to carry on a lawful business in common

with a view to private gain.


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PARTNERSHIP MAIN FEATURES

1. Agreement

2. Multiplicity of Person

3. Contractual Relation

4. Lawful Business

5. Sharing of Profits

6. Agency Relationship

7. Joint and Several Liability

8. Non-Transferability of Interest


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PARTNERSHIP

Advantages

1. Easy Formation

2. Registration not compulsory

3. Larger Financial Resources

4. Greater Managerial Talent

5. More Credit Standing

6. Quicker and Better Business

Decisions

7. Sharing of Risk

8. Close Supervision

Disadvantages


2. Limited Resources

3. Danger of Implied Agency

4. Distrust

5. Limitation on Transfer of

Share

6. Lack of Continuity


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Partnership Deed

1. Name of the firm.

2. Date of agreement.

3. Principal place of business.

4. Names and addresses of all thepartners.

5. Nature of business.6. Duration of the partnership, if any.

7. Amount of capital contributed byeach partner.

8. Amount of withdrawal of eachpartner.

9. Profit sharing ratio

10. Salary payable to active partner

11. Interest on capital

12. Interest on drawings

13. Procedure for admission orretirement of partners.

14. Manner of dissolving the firm

15. Mode of settlement.16. Maintenance of books of

accounts

17. Interest to be allowed onpartners loans

18. Mode of valuation of

19. Procedure for settlement ofdisputes among partners byarbitration.


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KINDS OF PARTNERS

1. Active Partner

2. Sleeping Partner or Dormant Partner

3. Nominal or Ostensible Partner

4. Partners in Profit Only

5. Partner by Estoppel

6. Partner by Holding out

7. Sub-Partner

8. Minor as a Partner


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Partnership

REGISTRATION OF FIRM

1. Name of the firm

2. Principal place of its

business3. Name and address of each

partner

4. Date of admission of eachpartner

5. Date of commencement ofbusiness of the firm

6. Duration of the firm

DISSOLUTION OF FIRM

1. Dissolution by Agreement(Sec.40)

2. Compulsory dissolution (Sec 41)

3. Dissolution on the happening ofcertain contingencies (Sec 42)

4. Dissolution by notice ofpartnership-at-will (Sec 43)

5. Dissolution through Court

(Sec.44) Partners Insanity

Permanent Incapacity

Persistent Breach of Agreement

Misconduct of a Partner

Transfer of Share


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JOINT STOCK COMPANY

Definition:-

An association of many persons who contributemoney or moneys worth to a common stock andemploy it in some trade or business and also share theprofit and loss, as the case may be, arising therefrom.

(or)

A company is an incorporated association; it is an

artificial person created by law, having a separateentity, with a perpetual succession and a commonseal.


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COMPANY MAIN FEATURES

1. Separate legal entity

2. Perpetual Succession- Continuity of Life

3. Common Seal4. Limited Liability

5. Easy Transferability of Shares


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Company

Advantages

1. Stability (Perpetual

Succession- Continuity of

Life)2. Limited Liability

3. Easy Transferability of

Shares

4. Better credit

Disadvantages

1. Complicated legal

formalities

2. Heavy cost of Floating acompany

3. Separation of Ownership

and Control

4. Fraudulent Promoters


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TYPES OF COMPANIES (based on its

no. of members)

Public Company

Minimum - 7members

Maximum unlimited

Directors 3 directors

Transfer of shares Easy

Name Limited

Minimum Paid up Capital

Rs. 5 lakhs

Private Company

Minimum 2members

Maximum 50 members

Directors 2 directors

Transfer of shares - Restrict

Name Private Limited

Minimum Paid up Capital

Rs. 1 lakhs


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CO-OPERATIVE SOCIETY

Definition:-

A society which has its objectives for promotion

of the interests of its members in accordance with

the principles of co-operation

(or)

A co-operative society is a form of organisation

wherein persons voluntarily associate together ashuman beings on the basis of equality for the

promotion of economic interests of themselves.


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CO-OPERATIVE SOCIETY MAIN

FEATURES

1. Voluntary Organisation

2. Equality

3. Democratic Managements

4. Combination of resources

5. Concentrated Effort

6. Spirit of service

7. Plural Membership

8. Legal Capacity


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CO-OPERATIVE SOCIETY

Advantages

1. Easy formation

2. Unlimited membership

3. Democratic management

4. Limited liability

5. Stability

6. Cheaper service

7. Tax concession

8. Social benefit

9. Saving habit

10. Fall in prices

Disadvantages

1. Inefficient management

2. Limited capital

3. Lack of motivation

4. Lack of co-operation

5. Non-transferability of

interest

6. Lack of secrecy

7. No credit facility

FACTORS DETERMINING AN


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FACTORS DETERMINING AN

APPROPRIATE OWNERSHIP

STRUCTURE Nature of business

Area of business

Degree of Control Capital Requirements

Risks

Duration of business Government Regulations


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Conclusion

The entrepreneur has the suitable skills to

choose an appropriate business structure.

He knows all the advantages and

disadvantages of all the business structure.

Choosing correct business structure will

results to attains get success and also results

to attain more profit in the entrepreneurship

business.

Documents

12BA035 - Ownership Structure in Entrepreneurship