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OWNERSHIP ORGANISATION DECISION






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Organs Of Company Management

It is generally assumed that the control and the power of managing a business enterprise will lie where the ownership likes. His assumption arises from the legal position of forms or organisation like sole-proprietorship an partnership.

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Partnership vs. Private Company

When a sole-proprietary business expands and faces the problems of finance, liability, management, control, taxation, etc., the owner may think of entering into partnership with other entrepreneurs or may consider, converting it into a private company.

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Employment of Manager vs. Partnership

When a sole proprietor finds his business expanding he fells the need for assistance in management and more financial resources. He may think of solving the problem by employing a competent assistant or taking one or more partners.

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Problems of Expansions

When a business firm grows and expands the scale of its operations, it faces a number of problems which make it necessary to take another look at the existing form of organisation and consider change-over to another form of ownership organisation.

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The Initial Choice

The initial choice of the form of organisation depends basically on t nature of business proposed to be undertaken, the scale of operations in terms of volume of business proposed to be handled or the size of the market to be served and the personal decision of the entrepreneur to go it alone with his limited resources not minding the risk of unlimited liability or associating others for more capital, sharing of risks, and tax advantage not minding the sharing of the profits with them.

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