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͞Organizational Structure is the formal system of
task and authority relationships that control
how people coordinate their actions and use
resources to achieve organizational goals. The
principal purpose of organizational structure is
one of control: to control the means used to
motivate people to achieve these goals.͟
- Gareth R. Jones
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Sole proprietorship is a form of business


organization in which an individual invests his
own capital, use his own skill and intelligence in
the management of its affairs and is solely
responsible for the result of its operation.
This form of organization is also known as
individual entrepreneurship.
Nearly 61% of the SSIs are proprietary concerns.
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: Sole ownership.
: One-man control.
: Unlimited risk.
: Undivided risk.
: No separate entity of the firm.
: No Government regulations.
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: Yasy and simple formation.
: Smooth management.
: Promptness in decision-making.
: Direct motivation and incentive to work.
: Personal touch with customers.
: Secrecy.
: Social advantage.
 
: pimited financial resources.
: pimited managerial ability.
: Unlimited liability.
: pac of continuity.
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: ?apital required is small.
: Risk involved is not heavy.
: Goods of artistic nature is to be produced.
: Personal touch with customers is necessary.
: An individual is able to control the affairs.
: Prompt decision is needed.
: Sales of production is relatively small.
: Operation is simple in character not needing
highly skilled management.

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: In India such organizations are governed by
the Indian Partnership Act, 1932.
: Section 4 of this Act defines a partnership as
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: Partnership is the relation between persons,
i.e., at least two persons must be there to
constitute a partnership.
: There should be an agreement between them.
: They should carry on some business.
: The business must be carried on by all or any
of them acting for all.
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: Number of persons.
: ?ontractual relationship.
: No legal distinction between firm and its partners.
: Unlimited liability.
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: Yasy formation.
: Flexibility.
: Pooling of resources and skill.
: Division of risk.
: Strong credit position.
: pess incidence of tax.
: Yncouragement of mutual trust, personal
element of business.
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: pimited resources.
: Unlimited liability.
: Instability.
: pack of harmony of interest.
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A /! , '" (+|) is a type
of corporation or partnership involving two or
more individuals that own shares of stock in
the company. ?ertificates of ownership ("shares")
are issued by the company in return for each
financial contribution, and the shareholders are
free to transfer their ownership interest at any
time by selling their shareholding to others.
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: pegal formation.
: Artificial person.
: Separate legal entity.
: ?ommon seal.
: Perpetual existence.
: pimited liability.
: Democratic management.
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: Private pimited
: Public pimited
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: parge financial resources:
: pimited piability
: Professional management
: parge-scale production
: ?ontribution to society
: Research and Development
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: Difficult to form.
: Yxcessive government control.
: Delay in policy decisions.
: ?oncentration of economic power and wealth
in few hands.
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The International pabour Organisation (IpO)
defines a cooperatives as ͞    
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: ?onsumers͛ ?o-operative Society.
: Producers͛ ?o-operative Society.
: ?o-operative Marketing Society.
: ?o-operative ?redit Society.
: ?o-operative Farming Society.
: Housing ?o-operative Society.
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: Open membership.
: Voluntary Association.
: State control.
: Sources of Finance.
: Democratic Management.
: Service motive.
: Separate pegal Yntity.
: Distribution of Surplus.
: Self-help through mutual cooperation.
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: Yasy Formation.
: Open Membership.
: Democratic ?ontrol.
: pimited piability.
: Ylimination of Middlemen͛s Profit.
: State Assistance.
: Stable pife.
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: pimited ?apital.
: Problems in Management.
: pack of Motivation
: pack of ?o-operation.
: Dependence on Government.
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1. Formation Yasiest, no legal Yasy, only an Difficult, some legal Very difficult, several
formalities arrangement required formalities legal formalities
2. Registration Not necessary Optional ?ompulsory ?ompulsory

3. Membership One man show single Minimum : 2 Maximum : Minimum :2 Minimum :7


membership 10 in banking and 20 in Maximum :50 Maximum : no pimit
others

4. pegal status No separate legal No separate legal Separate legal entity Separate legal entity
existence existence
5. piability of Unlimited, full risk Unlimited, joint and pimited pimited
Members several , risk shared
6. Financial pimited capital suitable Pooling of capital, parge capital, suitable Very large capital,
capacity & for small business suitable for medium size for medium scale suitable for large scale
suitability business operations

7. Sharing of All to the owner As per agreement On the basis of shares


profits held
8. Management Quick decision, no Unanimous decision, Board decisions, Board decision,
and control specialization, limited specialization, greater specialization, specialization, divorce
management and management lies where ownership and control between ownership
ownership lie in the ownership is go together and management
same hands
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9. Business Secrecy Perfect secrecy no Secret limited to Secret shared by Secrets shared with
audits or reports partners, no audit or members, audit and public, audit and
reports compulsory reports compulsory reports compulsory
10. State regulation Practically none, full Very little, sufficient ?onsiderably, Yxcessive, no
and flexibility flexibility of flexibility limited flexibility, flexibility
operations privileges, and
exemptions
11. Transferability of At will With mutual Restricted as Article Freely transferable
interest consent of Association
12. Tax burden pow at small level of pow at small level of pow at medium level pow at high level of
income, progressive income, progressive of income, flat rate, income, flat rate,
rate rate double taxation. double taxation

13. Stability or Unstable, life fully pess stable, may be Perpetual existence. Perpetual existence.
continuity dependent on the dissolved by death,
owner insolvency, etc. of a
partner
14. Winding up At will At will Under the Act Under the Act
15. Governing Act General law The Partnership Act, The ?ompanies Act, The ?ompanies Act,
1932 1956 1956

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