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Sole proprietorship

Partnership firm

Joint Stock Company

Cooperative society

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Sole proprietorship

Features:

1. Sole ownership

2. No separate entity of the firm

3. No difference between manager and owner4. Unlimited liability

5. All profits or losses to proprietor

6. Less legal formalities

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Advantages1. Easy and simple formations

2. Direct control

3. Promptness in Decision Making

4. Direct motivation and incentive to work5. Maintenance of secrecy

6. Personal touch with customer

7. Economy in Management

8. Minimum Gov. Regulations

9. Socially significant

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Disadvantages

1. Limited financial resources

2. Limited managerial ability

3. Unlimited liability

4. Uncertainty of continuity5. Diseconomies of small scale

6. Limited growth

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2. Partnership

The Indian Partnership Act, 1932, Section 4

Partnership as an association of two or morepersons who have agreed to share the profits of abusiness which they run together . This businessmay be carried on by all or any one of them

acting for all.

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Features1. More persons

2. Profit and loss sharing

3. Contractual relationships

4. Existence of Lawful Business

5. Utmost good faith and honesty

6. Unlimited Liabilities (LLP- Limited liabilityPartnership)

7. Restrictions on transfer of share

8. Principal agent relationship

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Advantages1. Easy formation2. Larger Financial resources

3. Flexibility

4. Combined abilities and balanced judgement

5. Combined abilities and balanced judgement6. Direct motivation7. Division of risks8. Business secrecy9. Protection of minority interest10. Encouragement of mutual trust and

interdependence

11. Easy dissolution

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Disadvantages Unlimited Liabilities

Limited Resources

Instability

Non Transferability of Interest Lack of Public Confidence

Risk of Implied Authority

Lack of Centralised Authority

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3. Joint Stock Company

It is an artificial person created by Law, with adistinctive name, a common seal and perpetualsuccession of members. It can sue and be suedin its own name.

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Features Artificial legal person

Separate legal entity

Perpetual Succession

Limited liability Common Seal

Transferability of shares

Separation of ownership and management

Incorporated association of persons

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Distinction between Private andPublic Companies Numbers of members Name

Numbers of directors

Article of association

1. Memorandum of association2. Article of association

3. Prospectus

Public subscription

Prospectus Allotment of shares

Commencement of business

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Transfer of shares

Share warrants

Statutory meeting and reports

Directors Managerial remuneration

Index of members

Filing of balance sheet