Forms of Business Organisation – NCERT Class 11 Business Studies Chapter 2 Summary

Forms of Business Organisation – NCERT Class 11 Summary

Forms of Business Organisation – NCERT Class 11 Summary

In this chapter, students learn about different ways in which business units can be legally formed and operated. Each form has its own features, merits, and limitations.

🔹 1. Sole Proprietorship

  • Owned and managed by a single individual.
  • Simple formation and easy to operate.
  • Owner has unlimited liability.
  • Suitable for small-scale businesses.

🔹 2. Partnership

  • Owned by two or more persons (maximum 20 in general business).
  • Partners share profit, losses, and management responsibilities.
  • Regulated by the Indian Partnership Act, 1932.
  • Unlimited liability of partners.

🔹 3. Hindu Undivided Family (HUF)

  • Governed by Hindu Law.
  • Business is inherited by male members (coparceners).
  • Karta (eldest male member) manages the business.
  • Liability of coparceners is limited; Karta has unlimited liability.

🔹 4. Cooperative Society

  • Voluntary association of persons for mutual benefit.
  • Each member has one vote (democratic control).
  • Profits are distributed equally or reinvested.
  • Registered under Cooperative Societies Act.

🔹 5. Joint Stock Company

  • Separate legal entity from its owners.
  • Limited liability of shareholders.
  • Managed by board of directors.
  • Two types: Private Company and Public Company.

🔹 6. Choice of Business Organisation

Factors that affect the choice:

  • Capital requirements
  • Nature and size of business
  • Liability and risk
  • Control and decision-making power

📌 Conclusion

Choosing the right form of business is crucial. Each has benefits and risks depending on the scale, capital, and purpose of the business.

🔖 Labels:

Business Studies, NCERT Class 11, Forms of Business Organisation, Sole Proprietor, Partnership, Company, Chapter 2

Post by YourBlogName | Based on NCERT Class 11 Business Studies Chapter 2

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