Forms of Business Organisations Test - 4

Nominal Partner is actually not a partner but allows the firm to project him/her as a business partner. He/she neither contributes capital nor has any share in business profits or losses. Has unlimited liability in business.

In Limited Partnership, the liability of at least one partner is ulimited. All othher partners may have limited liability. Continuity of Limited Partnership does not get affected by thhe death, lunacy or insolvency of the partner with limited liability.  Registration compulsory.

The Indian Cooperatives Act 1912 defines Cooperative Societies

"As a society whch has its objectives for the pormotion of economic interest of its members in accordance with cooperative principles."

Explanation:

This means the self-acquired property of Karta may be attached to pay business debts.

A sleeping partner may not contribute in business decision making but is bound by acts of all other partners. He has unlimited liability in 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.

A Compay must be registered under Companies act, 1956.

A secret partner is associated with the business but outsiders have no knowledge about his status in the business. He carries business activities on behalf of other partners and is bound by activities of other partners as well.

Corporations allow for the separation of ownership and management. That means that owners do not need to be managers and managers do not need to be owners. It is often the case that someone is both. In most small corporations, the owners typically manage the company but it is not necessary that owners run the company or are even involved in the day-to-day operations of the company.

Private company can work with just two directors as compared to three directors under public company.

Joint Hindu Family Business is governed by the provisions of the Hindu Law ( the Hinud Succession Act, 1956)

By its Articles of Association Private Company prohibits any nvitation to the general public to subscribe for its shares.

shares are  the smallest  part of share capital which can be transferred freely from one shareholder to anothher person (except in a private company).

Cooperatives are run in a democratic manner, the affairs are manged by the elected managing committee through One-Man-One-Vote

in the eyes of the law, owner and the business are considered one and the same.  so, sole proprietorship does not enjoy continuity of life. Illness, death or insolvency of the proprietor affects the business and can lead to its closure.

Housing cooperative societies help people with limited income to construct houses at reasonale costs.

According to Sec (3) of Companies Act 2013 the maximum limit of members in Private Co. is 200

A minimum of 10 adult persons(18 years and above)  are required to form a cooperative society.

Partner by holding out is one who is represented as a partner and he does not deny such impression, despite becoming aware of that fact.  Such a person becomes liable for the debts of the firm to outsiders who have sold goods on credit or lent money to the firm on the basis of such representation

Patnership at will continues at the will of all the partners. Business continue till all the partners mutually agree to do so. Business is discontinued when one or more partners wish to withdraw themselves as partners from the business.

Partnership business is not bound by any law.  It is not requred to submit or publish their financial results.  Also all the important decisions and major business activities are carried by partners only.  Hence the partnership business is able to maintain confidentiality of information relating to its operations.

Rule 10 of the Companies (Miscellaneous) Rule, 2014 provides that no partnership shall be formed, consisting of more 50 persons.  so, limit as of now is 50 partners.

A Partnership Deed/Agreement is a written or oral document which state the financial and non-financial terms and conditions related to functioning of partnership business.

the JHF business is managed and controlled by the eldest male member of family known as Karta.

Secret Partner contributes capital, takes part in theh management, shares its profits and losses and has unlimited liability towards the creditors.

Partnership gets automatically dissolved on the death retirement, insanity or insolvency of any of its partners.  However if the remaining partners desire to continue, then they may do so on the basis of a new agreement.

Since Sole proprietor is the sole owner who is responsible for all the business affairs. If the business is successful, he receives all the business profits as a direct reward for his risk bearing.

Company has a permanent or perpetual existence, i.e, its existence is not affected by death, insolvency, coming or going of the members.

Mutual agency relationship means each partner is the owner as well as the agent of the firm and agent to other partners. It means, every partner acts in the capacity of an 'agent' as well as a 'principal'.