Business Studies · Ch 2 — Forms of Business Organisation

Key Terms

Sole proprietorship — a business owned, managed and controlled by a single individual who bears all risks and receives all profits.
Partnership — the relation between two or more persons who agree to carry on a business together and share its profits and losses.
Joint Hindu Family — a business owned and run by the members of a Hindu Undivided Family, governed by Hindu Law, with membership acquired by birth.
Mutual agency — the feature by which every partner is both an agent and a principal, able to bind the firm and be bound by the acts of other partners.
Cooperative Societies — a voluntary association of persons registered under law, formed to protect their common economic interests democratically.
Joint Stock Company — an association of persons with a separate legal identity, an artificial person having perpetual succession and a common seal.
Perpetual succession — the continued existence of a company unaffected by the death or exit of its members; it ends only through the legal process of winding up.
Artificial person — a company created by law that can own property, contract, sue and be sued, but has no physical existence.
Holding company — a company that controls another company (its subsidiary). …