ECONOMICAL ACTIVITIES

PROFESION

EMPLOYMENT

BUSINESS

PROFESSION: Profession refers to the activity which requires special knowledge and skill to be applied by an individual in his work to earn a living. EMPLOYMENT: Employment refers to an activity in which an individual works regularly for another for an agreed remuneration under the rules of service. BUSINESS: A Business activity refers to the activities which are connected with the production or purchase and sale of goods or services with the objective of earning profit. CHARACTERISTICS OF BUSINESS: Deals in goods and services. Involves production or purchase and transfer or exchange or sale. Involves continuity and regularity. Based on profit motive. Involves elements of risks. OBJECTIVES OF BUSINESS : I. Economic objectives. II. Social objectives. III. Human objectives. IV. National objectives. I. ECONOMIC OBJECTIVES: Earning of profit.

 Creation of customers. Innovation. Best possible use of resources. SOCIAL OBJECTIVE: Supply of desired quality of products Avoidance of anti-social and unfair trade practices Generation of employment Welfare of employees Avoidance of slums and pollution Contributing to the general welfare of the society INDUSTRY: Industry means the place where production of goods takes place. TRADE: Trader is the person who purchases the goods and sale to the customers. Trade is an activity where purchase and sale of goods takes place.
INDUSTRY: It includes all those business activities which are connected eith raising, producing or processing of consumer goods or capital goods. COMMERCE: It includes all those activities which: Establish a link between the producers and consumers for goods Maintain a smooth and uninterrupted flow of goods from producers to the consumers To perform the above said activities the various preferences of person time, risks, finance, place and information are to be removed: Trade removes hinderence of person Transportation removes hinderence of place Storage and warehousing remmoves hinderence of time Insurance removes hinderence of risks Banking removes hinderence of finance

 Advt removes hinderence of knowledge and information TRADE: Trade refers ti sale, transfer or exchange of goods and servicces for a certain price. FEATURES OF SOLE PROPRIETERSHIP: I. Individual Ownership II. Individual Management and control III. Individual Financial IV. Individual Accountability V. Unlimited Liability VI. Minimum Government Regulation MERITS OF SOLE PROPRIETERSHIP: I. Easy Ownership II. Full control III. Quick Decisions IV. Flexible Management V. Full Secrecy VI. Sole Benifitially VII. Concenssion from Government VIII. Easy Dissolution DISADVANTAGES OF SOLE PROPRIETERSHIP: I. Limited Financial Resources II. Limited Managerial Skills III. Unlimited Liability IV. Lack of Stability V. Non-suitable for large scale operations PARTNERSHHIP: Partnership is an organisation of persons who agree to combine their financial resources and managerial abilities to carryon a business and share the profits in an agreed ratio.

According to Section 4 of The Indian Partnereship Act 1932, Partnership is the relationship between two or more persons eho have agreed to share the profits of a business carried on by all or any of them acting for all. FEATURES OF PARTNERSHIP: I. Two or more persons II. Aggrement III. Business IV. Sharing of profits V. Mutual Agency VI. Unlimited Liability VII. Joint ownership and control VIII. Non transferability of share IX. Duration of Partnership Merits:(i) Easy formation (ii) More financial resources (iii) More managerial skills (iv) More flexible management (v) Balance business decission (vi) Sharing risks Demerits:(i) Uncertanity of existence (ii) Risks of implied authority (iii) Risk of complex (iv) Lack of institutional conference (v) Limited capital (vi) Unlimited liability Cooperative form of organisation:Cooperative organisation is a voluntary association of person who come together to promote their common economic intrest through the principal of shelf health and visual health.

Definition:According to sec-4 of the Indian Cooperative Act 1912 cooperative society is a society which has its objectives the promotion of economic intrest of its members in accordance with cooperative principels. Features of cooperative society:(i) Voluntary association (ii) Equal voting rights (iii) Democratic management (iv) Separate legal entity (v) Service motive (vi) Distribution of surplus (vii) Capital Merits:(i) Easy formation (ii) Open membership (iii) Perpetual existence (iv) Limited liability (v) Economic operations (vi) Relief by the government Limitations:(i) Limited capital (ii) In-efficient management (iii) Absence of motivation (iv) Conflicts among members (v) Rigid government rules and regulations. Company:According to section 3(1)(i) of the companies act 1956, Companies means a company formed and registered under this act or an existing company. An existing company means a company formed and registered under any of the previous companies act. Definition:Meaning as per judicial pronouncements:-

According to chief justice Marshal the company is a person, artificial, indivisible, intangible, and existing only in the ice of law. Being a meer creation of law, it possess only those properties which the chapter of its creation confirst upon it, either expressing or as incidental to its very existence. According to Lord Haney:- A company is an incorporated association which is an artificial person created by law having a separate entity with the perpetrial existence and a common seal. Characteristics:(i) An artificial person created by law (ii) Separate legal entity (iii) Perpetrial existing (iv) Common seal (v) Limited liability (vi) Free transferability of shares (vii) Dispersal of ownership. Merits:(i) Limited liability (ii) Large financial resources (iii) Free transferability of shares (iv) Stability of existence (v) Scope of expansion and growth (vi) Efficient management (vii) Public confidence (viii) Democratic management (ix) Assumption of social responsibility Demerits:(i) Lengthy and expensive procedure for formation (ii) More government regulation (iii) Lack of personal intrest

(iv) (v) (vi) (vii) (viii) (ix)

Delay in decission making action Conflict of intrest Oligarchic Management Speculation by direction Growth of monopolistic techniques Influencing government decission

Classification of company:(i) Based on incorporation:Chartered Statutory Registered (ii) Based on liability:Company is limted by shares Company is limited by gurantee Unlimited companies (iii) Based on function:-