Forms of Business
Concept of sole trading concern:
Sole trading concern is the oldest and simplest form of business organization, it is a business organization in which an individual invests all the required capital, manages and controls the business himself, takes responsibility for himself all risks, enjoys all of its benefits, or suffers all losses. He alone plays the role of honor, a manager, a controller, a decision-maker, and a bearer of risk. The owner uses his skills, intelligence, knowledge, and skills for the smooth running and management of the business. It is also referred to as ownership, sole proprietorship, sole proprietorship, sole proprietorship, and sole proprietorship.
Features / Characteristics of a sole trading concern
1.
Soul Investment
2.
Sole management
3.
Sole risk taking
4.
No Separate legal entity
5.
Unlimited liability
6.
Independence
7.
Limited operation
Advantages of al sole trading Concern.
1.
Easy to start and close
2.
Quick decision
3.
Secrecy
4.
Incentive
5.
Personal relations
6.
Flexibility
7.
Economy
8.
Social benefit
Disadvantages of Sole Trading.
1.
Unlimited liability
2.
Limited capital
3 .
Limited skills
4.
Uncertain life
5.
Limited expansion
6.
Loss in absence
7. Limited opportunity
Partnership firm
Meaning of Partnership firm:
Partnership organization in-fact has emerged to
overcome the major limitations of a sole trading concern has grown out of the
need for more capital, more effective supervision and control and greater
division of owners. Thus, partnership is an form of organization in which there
are at least two or more owners who agree to invest capital in a lawful
business, supervise it and share its profit or loss. In other word, it is an
agreement between two or more than two for carrying on a lawful business for
carrying profit.
Features of Partnership firm
1.
Agreement
2.
Joint Ownership
3.
Joint management
4.
Sharing of profit
5.
Unlimited liability
6.
Restriction in transferring interest
7.
Role of principal and agents
8.
Uncertain life
Advantages of Partnership firm
1.
Easy to Start and dissolve
2.
Larger capital
3.
Effective Supervision
4.
Secrecy
5.
Flexibility
6.
Credit facility
7.
Incentives
8.
Less risky
Disadvantages of partnership firm
1.
Chances of conflict
2.
Uncertain life
3.
Absence of legal status
4.
Unlimited liability
5.
Non transferable interest
6.
Delay in decisions
7.
Lack of public confidence
8.
Problem of inefficient partner
Types of partners
1.
General partner
2.
Limited partner
3.
Active partner
4.
Passive partner
5.
Passive partner
6.
Incoming partner
7.
Outgoing partner
8.
Secret partner
9.
Minor partner
10. Nominal
partner
Rights of a partner
1.
Right to manage
2.
Right to express opinion
3.
Right to share profit
4.
Right to get compensation
5.
Right to get interest
6.
Right to use properties
7.
Right to judge in an emergency
8.
Right to leave the firm
Duties of a partner
1.
To work honestly
2.
To present true accounts
3.
To provide true information
4.
To use firm's properties
5.
To work within authority
6.
To Indemnify
7.
To bear losses
8.
Not to transfer interest
Partnership deed
Meaning: A partneRship is formed and operated with
mutual understanding and co-operation of partners. Each partner has certain
rights, duties and obligation. To maintain mutual understanding and
co-operation and to legalized the rights, duties obligation all partners must
enter into written agreement. This written agreement which defines rights,
duties, obligation and mutual relationship of partners is called partnership
deed as agreement. It is the document which mention rules and regulation and
the way of operation, management and control of the attraction of the firm. A
partnership deed is the main document of partnership which is required for it's
registrations.
Contents of partnership deed:
- Name and address.
- Nature and
objectives
- Duration
- Capital and drawing
- Interest
- Profit sharing
ratio
- Rights and duties
- Admission and
retirement
- Death of partner
- Accounts and audit
- Salary
- Valuation of
goodwill
- Dissolution of
partnership
- Arbitration clause.
Joint stock company
Meaning and definition of joint stock company
Joint stock company has come into existence to overcome
the limitation of sole trading and partnership firm. A joint stock company is a
voluntary association of person for establishing a business under a company act
2063. It is a distinct legal person created by law. Its capital is divided into
a large number of part with equal value. Each part of capital is called a
share. The company collects the capital bu selling the shares to individuals
and organizations. The shares are freely transferable. The person who hold the
shares are called shareholders of the company. The liability of the shareholder
is limited to the face value the shares held by them.
Characteristics of Joint Stock company:
1.
legal personality
2.
Perpetual existence
3.
Limited Liability
4.
Representative management
5.
Democratic management
6.
Transferability of shares
7.
Common seal
8.
Publication of financial statement
9.
Issues of Shares for capital collection
Advantages of Joint stock Company (Imp)
1.
Huge amount of capital
2.
Limited Liability
3.
Perpetual existence
4.
Transferability of shares
5.
Effective management
6.
Democratic management
7.
Credit worthiness
8.
Accountability
Disadvantages of Joint stock company,
1.
Difficult to formation
2.
Lack of motivation
3.
Lack of quick decisions
4.
Lack of secrecy
5.
Exploitation by majority shareholders
6.
Corrupt management
7.
Excessive legal provision
8.
Social evils
Types of Joint Stock Company.
A. Public limited Company: A public limited
company is a company the membership of which is opened to the general public
under me provision of it's articles.
B. Private limited Company: It is one of the
registered company incorporated according to the company act in the concerned
department.
Agenda and Resolution
a. Agenda: It is a statement of the business to be discussed and
transacted at a meeting. So, the subject which are to be discussed in the meeting
are known as the agenda. It consists of a list of things to be done and the points
to be discussed in the meeting. An agenda must be clear, summary of the
business to be transacted in the meeting.
b. Resolution: Resolution is the subject matter presented
in the company meeting for discussion and decision. It can be accepted or
rejected by voting. It is a formal decision. The activities of a company are
conducted by resolutions passed in meetings. All decisions are taken into form
of resolution. According to the company act 2063 resolutions can be divided
into two types. They are as follows:
- Ordinary resolution
- Special resolution
Public Enterprises
Meaning and definition:
A public enterprise is a form of business organization,
financed, operated and controlled by the government for the purpose of providing
goods and service at reasonable price. It is wholly or partially owned, managed
and controlled by government. It is an autonomous corporate body which is
incorporated under the law. Its operation are managed and controlled by the
government. In simple words, a public enterprise or a government undertaking is
a government owned and controlled business enterprise with distinct legal
entity having a corporate status. For eg, Nepal Airlines Corporation, Nepal
Electricity Corporation etc
Characteristics of public enterprise
1.
Government ownership
2.
Government management and control
3.
Service motive
4.
Financial autonomy
5.
Autonomous body
6.
Separate legal entity
7.
Public Accountability
8.
Perpetual Succession
Types of public enterprise
a. Department undertaking
b. Public corporation
c. Government Companies
Importance of public enterprises
1.
Establishment of major industries
2.
Planned development
3.
Balanced development
4.
Providing employment
5.
Development of infrastructure
6.
Source of government revenue
7.
Supply of essential product or service
Co-operative organization
Concept of cooperative organization.
A cooperative organization is formed with the aim of
working together for common benefit. The main purpose of this form organization
is one for all and all for one. The organization carries its authorities
borough mutual cooperation of all the members. The members participate in
different capacities as producers, consumers, workers and managers secure
the benefits of business activities through an equitable distribution business
income. A co-operative organization is a voluntary association of people who
join together for carrying out a business with the principle quality and mutual
help. It is also democratic organization which is operated for providing
service to its members.
Features of Co-Operative organization
1.
Voluntary organization
2.
Equality
3.
Democratic management
4.
Mutual help and co-operation
5.
Service motive
6.
Cash transaction
7.
Separate legal existence
8.
Open membership
Types of
co-operative organization
1.
Consumer's Co-operative
2.
Producer Co-operative
3.
Credit Co-operative
4.
Marketing Co-operative
5.
Housing co-operative
6.
Multipurpose co-operative
7.
Miscellaneous co-operative
Importance of co-operative organization in developing
countries.
1.
Distributing goods and services
2.
Forming saving habits
3.
Granting credit
4.
Marketing output
5.
Creating employment opportunities
6.
Developing moral and social culture
7.
Promotes democracy
8.
Developing rural areas
Multinational Companies
Concept of multinational companies:
A multinational companies / corporation is a large
scale enterprise scale enterprise that does the production or delivers
service in more than one company. They perform their business in international
level through their branches, subsidiaries or agents. Their headquarters beside
in their home countries and operate in several other countries which are known
as hast countries. Multinational companies involved in mass quality production,
distribution and promotion of their products and create the distinct brand
image of their company. East India company is me first modern multinational
company in the world. Most of the major multinational companies ares America,
Japanese, European, Such as like Coca-Cola, Walmart, Honda, Patanjali, Toshiba,
Apple, Samsung etc.
Features of Multinational companies:
1.
Large scale business
2.
Productive organization
3.
Global operation
4.
Mass production and distribution
5.
Professional management
6.
Advance technology
7.
Management and control
Advantages/ benefits /importance of multinational
companies:
1.
Transfer capital and technology
2.
Provide quality goods and services
3.
Create employment opportunities
4.
Increase government revenue
5.
Earn foreign currency
6.
Develop international relation
7.
Increase healthy completion
Disadvantages of Multinational Companies:
1.
Unemployment
2.
Gain monopoly position
3.
Dilute culture
4.
Outflow of foreign currencies
5.
Exploit resources
6.
Exploit consumers
7.
Increase dependence
Business support agencies in Nepal
Business support agencies in Nepal.
- Nepal chamber of
commerce (NCC)
- Federation Nepalese
Chamber of commerce & industries (FNCCI)
- Trade and export
promotion (TEPC)
Nepal Chamber of Commerce: The oldest business
support agency in Nepal is Nepal Chamber of Commerce. It was established in
1952(20009 BS) as the first chamber of commerce in Nepal. It is located in
Kathmandu. It is playing significant role in the business promotion in the
country. Beside it takes active part in the formulation of commercial,
industrial and fiscal policies of Nepal which make favorable impact on the new
start up to existing business.
Functions of NCC
1.
To foster good relationship
2.
To develop links
3.
To organize fairs and exhibitions
4.
To issue certificate of origin
5.
To conduct academic institution
Federation Nepalese Chamber of Commerce and Industries
(FNCCI)(Important)
The federation Nepalese chamber of commerce and
industries is an umbrella organization of Nepalese private sector. It was
established in 1965 with the vision of “leading the nation's economic progress
mission of facilitating Nepalese business become globally competitive. It aims
at promoting business and industry and protecting the rights and interest of
business and industrial communities. It play a key role in promoting business,
trade and Industry in the country. It provides different service to business
and government such as consultative, promotional, advisory, and representative
service and regularly organize training workshops and seminars. Therefore, it
represent in almost all national councils, boards, committees, policies,
advisory bodies that are concerned with business and industry.
Function of (FNCCI)
1.
To play developmental role
2.
To reinforce commitment
3.
To provide advice
4.
To foster co-operation
5.
To provide information
6.
To create awareness
Trade and export promotion centre (TEPC)
Trade and export promotion centre (TEPC) is a national
trade promotion organization of Nepal. The government of Nepal established TEPL
in 2006 as a focal point by merging previously existing public sector
institutions namely trade promotion centre (Estd 1970), export promotion board
(Estd 1994 )and carpet and wool development board (Estd 1994) with the
objective of promoting foreign trade and in general and export trade in
particular of the country.
Functions of TEPC (Trade and export promotion centre)
1.
To provide advice
2.
To strength economy
3.
To help alleviate poverty
4.
To conduct programmes for production
5.
Tо cooperate in opening institutions
6.
To execute programmes
7.
To identify trade related problems
