Forms of Business Organisations Test - 64

Company registration is mandatory because it creates a distinct legal entity separate from its owners. This legal separation offers various advantages such as limited liability protection, legal recognition for business activities, ability to enter contracts, acquire assets, and conduct business in the company's name. Unlike sole proprietorships and partnerships, which may operate without mandatory registration in some jurisdictions, companies must register to access these legal benefits and comply with regulatory requirements.

Limited liability in a Joint Stock Company means that shareholders' liability is limited to the extent of their investment in the company. This reduces the risk for shareholders because their personal assets are protected, and they are not personally liable for the company's debts beyond their investment.

A company is a legal entity where ownership is separate from management. Shareholders own the company but don't manage its day-to-day operations; instead, they elect a board of directors to oversee management. This structure ensures accountability and allows for specialized expertise in running the business.

A sole proprietorship is the most basic business structure owned and operated by a single individual. It's easy to set up and manage with few legal requirements. The sole proprietor has direct control over decisions, management, profits, and liabilities. However, they also face unlimited personal liability for the business's debts and obligations.

In a sole proprietorship, the business is owned and operated by a single individual, known as the sole proprietor. The sole proprietor has full control over the business and does not have to share profits with anyone else. Unlike partnerships or joint Hindu family businesses where profits are shared among partners or family members, a sole proprietorship allows the sole proprietor to retain all profits earned by the business.

A sole proprietorship has no legal existence, i.e. in the eyes of the law, no distinction is made between the firm and the proprietor. As a result, owner is held responsible for all the activities of the business.

Franchises offer multiple advantages, including training and management assistance (a), personal ownership (b), and the use of a nationally recognized name (c). These combined benefits can contribute to the success and growth of a franchise business.

A housing cooperative is a type of cooperative society that aims to provide residential accommodation to its members at reasonable rates.

According to the India Partnership Act 1932, non-registration of a partnership firm leads to various consequences, including partners losing their right to file suits against third parties, the firm being unable to file a case against its partners, and partners losing their right to file suits against the firm or other partners.

A professional corporation is typically formed by licensed professionals (e.g., doctors, lawyers, accountants) and offers limited liability protection to its shareholders while ensuring compliance with professional regulations.