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Transcript of Industrial Ownership(IM)
Industrial Enterprises Private sector Industrial Ownership To classify firms by their legal form is Ownership Firm is classified by their product.Which type of industry is.... India is a mixed economy where both public and private sector exists.Hense industrial undertakings are classified sector-wise. Sole Trader
Joint Hindu Family Business
Joint Stock Company
Public ltd. &Private ltd.Company
Co operative society Public Sector Departmental Organization Public Corporation Government Company Joint Sector Capital is held jointly by Government
Public Presentation of
Industrial management Topic - Industrial Ownership Group Members Arya Mitra
Anuj Aggarwal According to Haney
"The sole proprietorship is form of business organization at the head of which stands an individual who is responsible, who directs its operations and who alone runs the risk of failure.”
It is the simplest and oldest form of business. Features
1.No separate entity or Common identity
5.One man control
6.Profits and Losses Suitability Where small capital is required to start a business Where the risk level is less Merits 1.Easy Formation
7.Independent way of life
9.No Government intervention Limitations 1.Limited Capital
2.Lack of managerial skills
4.Uncertain life of Business
5.High stress level
6.Lack of specialized knowledge in more than 2 areas Joint Hindu Family
Business It is a form of family business goverened by Hindu law If the business setup by a person is carried on by male members of his family after his death , it is called Joint Hindu Family Business Business is run by the head of the family known as 'KARTA'. Liability of karta is unlimited. Other members of the family business are known as COPARCENERS DAYABHAGA LAW System prevails only in west bengal
Under this system male as well as female members can become copartners MITAKASHARA LAW This system prevails all over india except west bengal Under this system only male members can become co parceners Features Male Members
Membership By Birth
Dissolution of Business
Goverened bt Hindu Law
Continuity Limited partnerships are created in order to limit liability of the partners and to facilitate the contribution of capital.
Lets partners carry on as co-owners, with certain partners having more responsibility and power than others.
The general partners carry more liability than the limited partners, whose roles are also limited.
The limitations of limited partners involve both liability and management obligations. Limited Partnership All partners participate actively in operating the business.
All partners share the responsibilities involved in running the firm.
Unlimited liability, which increases corresponding to the expansion of the business
The management becomes complex, as too many partners are involved in decision making. General Partnership Each partner is liable for the debts of the organization.
Raising capital can be difficult.
As the business grows, management becomes difficult.
There is limited opportunity for employees and the rights of control and ownership reside with the partners.
Death, imprisonment, or insanity automatically terminate the firm unless the partnership agreement states otherwise.
Risk of sharing loss. Disadvantages Partnerships are not difficult to form.
All partners are owners and therefore there is a share in the profits.
All partners have the right and freedom to manage the business.
There are few legal restrictions.
The organization is easy to dissolve.
Partners are taxed individually and not as a business. Advantages
The time spend of partnership firm depend upon the will of all the partners. There are two basic kinds of partnerships:
Partners active in the operation of the business
Shares all responsibilities, profits, and liabilities
Partner does not take active part in the management of the business
Has limited liability Partnership Types The owners of a partnership business are individually known as the "partners" and collectively as a "firm". A partnership is an association of two or more people (up to 20) who carry on as co-owners of a business for sharing profits. A partnership is formed by an agreement, which may be either written or oral. When the written agreement is duly stamped and registered, it is known as "Partnership Deed". A Cooperative society is a voluntary association of persons of moderate means,who unite together to protect and promote their common economic and social intrests Features Voluntary Assotiation
Suited for economically weaker section
Open Membership Advantages Ease of formation
Promotion of social values
Government Support Disadvantages Limited Capital
Inefficiency in management
Lack of Motivation
Conflicts among Members Types of
Cooperative Societies Consumer
Cooperative Private & Public
Companies Private limited
Company RESTRICTS THE RIGHT OF MEMBERS TO TRANSFER ITS SHARES.
HAS A MINIMUM OF 2 AND A MAXIMUM OF 50 MEMBERS.
DOESN'T INVITE PUBLIC TO SUBSCRIBE TO ITS SHARE CAPITAL.
MINIMUM PAID-UP CAPITAL OF RS. 1 LAKH. Public Limited
Company HAS NO RESTRICTION ON TRANSFER OF SHARES.
HAS A MINIMUM OF 7 AND NO LIMIT ON MAXIMUM MEMBERS.
IS NOT PROHIBITED FROM INVITING PUBLIC TO SUBSCRIBE TO ITS SHARE CAPITAL.
MINIMUM PAID-UP CAPITAL OF RS. 5 LAKH. Private company vs Public company 1. No of share holders
2. Commencement of business
3. Issue of prospectus
4. Allotment of shares
5. Transfer of shares
6. Number of directors
8. Articles of association
9. Minimum paid up capital
10. Index of members Joint Stock
Company Voluntary association of individuals for the profits,having a capital divided into transferable shares,the ownership of which is the condition og membership Private & Public
Ownership Private sector
Enterprise Public Sector
Enterprise Joint Sector
Enterprise Private sector enterprise is owned, controlled and managed by individuals or group of individuals known as Entrepreneurs. Examples include --
Ranbaxy etc. Characterstics It is owned by private individuals or groups of individuals who provide capital to the business firm.
Its financial management is in hands of its owners.
Day to day administration is in the hands of owners.
The main objective is to earn profit and generate wealth for the owners.
Mainly constitutes consumer goods industries where profit possibilities are high.
It does not undertake any risky ventures having low profit margins. Advantages More Profit
Better Customer service
Less wastage of labour and material
Prompt Decision making
Competent person occupy high level Disadvantages Private enterprise leads to unbalanced growth of industries.
Profit is the main motive which may lead to exploitation of workers and unfair deal to customers. According to A.H. Hansen "A public enterprice means government ownership of a business undertaking " It is Owned, Controlled & Managed by the Government Capital is contributed either 'singly or jointly' by Central, state or local government Examples Life insurance coorporation of india(LIC)
Hindustan Machine tools(HMT)
Food coorporation of india(FCI) Public Welfare or service is main motive. Profit motive is secondary Ownership , management & control are jointly shared by government, private Entrepreneurs &the public Capital is divided as Government -26%
Private Entrepreneurs - 25%
General Public - 49% It is an attempt by the government to encourage Private Entrepreneurs to undertake big industries.
Combines both Social & profit obj. Examples- Indian OIL coorporation
Gujarat State Fertilizers Advantages Help in growth of industry which require huge capital & which cannot flowish under private sector
Profit Earned can be used for General welfare of Community
Offer Equal Employment oppertunity Disadvantages Can rarely attain efficiency of a private enterprise
Too much Interference by the govt. & politicians
Delay in Decisions
Incompitant persons may occupy High levels Thank You..