An Overview of Other Forms of Business Organisation

Sole Proprietorship is only one of five forms of business organisation studied in the Andhra Pradesh Intermediate Commerce course. The other four are introduced briefly here and studied in full detail in the chapters that follow:

• Joint Hindu Family Business — a business owned by the members of a Hindu Undivided Family, managed by the senior-most member called the Karta, and governed by Hindu Law rather than any single business statute. Membership arises by birth into the family, not by agreement.
• Partnership — a business owned by two or more persons who agree to share the profits of a business carried on by all of them or by any of them acting for all. It is governed in India by the Indian Partnership Act, 1932, and needs a mutual agreement, usually recorded in a partnership deed.
• Cooperative Society — a voluntary association of persons who join together, on the principle of "each for all and all for each", to protect their common economic interests (for example, a consumer cooperative or a farming cooperative). It is a registered, separate legal entity working on democratic, one-member-one-vote lines.
• Joint Stock Company — an artificial legal person created by law, registered under the Companies Act, 2013, with an identity completely separate from its owners (called shareholders). It offers limited liability and perpetual succession, meaning it continues to exist even if its shareholders change.

The table below gives a quick comparison on three points that matter most when choosing a form: