Studentsopedia

  Merits and Limitations of Company The company form of organisation has been popular and successful in almost all the countries. This form is suitable where large resources are required and the production has to be carried out on a large scale. The number of joint stock companies has shown a phenomenal increase in the twentieth century. Let us now discuss the merits and limitations of the company form of organisation. Merits 1 Large capital: Since company form of organisations are allowed to have a large number of shareholders, it is possible to raise capital in large amounts. Whenever new capital is required, it can issue shares and debentures. For this reason, only the company form of organisation is best suited. 2 Limited liability: The liability of shareholders, unless and otherwise stated, is limited to the face value of the shares held by them or guarantee given by them. Their private property is not attachable to recover the dues of the company. Thus, this form of...

  COOPERATIVE FORM OF ORGANISATION Cooperative organisations are generally started by the poor and the economically week sections to promote their common economic interests through business propositions. The basic philosophy of cooperative organisation is self-help and mutual help. The primary objective of any cooperative organisation is to render service to. its members. In this respect, it is different from the other three forms of organisations which are primarily meant for making profits. The important features of the cooperative organisation are service in place of profit, mutual help in place of competition, self-help in place of dependence. and moral solidarity in place of unethical business practices. As defined by International Labour Office "Cooperative organisation is an association of persons, usually of limited means, who have voluntarily joined together to achieve a common economic end through the formation of a democratically controlled business organisation, ma...

  AN ENTREPRENEUR An entrepreneur is one in whose mind the idea of doing business of a particular type first takes shape. He is on the look-out for business opportunities and is a good judge of which products will sell. He is imaginative and is guided by a strong sense of achievement. He is not afraid of future uncertainties. He is prepared to take risk and face challenges. Above all. an entrepreneur is one who creates something new, something different. He innovates and combines resources in the form of men, materials and money and brings them together to make the business venture profitable. Entrepreneurship What the entrepreneurs do may be regarded as 'Entrepreneurship'. In other words, entrepreneurship.is the act of being an entrepreneur. The word entrepreneurship is actually derived from the French term 'entrepreneur' which means to undertake, to pursue opportunities, to fulfil needs and wants of people through innovation and starting business. The entreprene...

  PROMOTION A business enterprise does not come into existence on its own. It is the result of the efforts of an entrepreneur who conceives the idea based on his knowledge of business opportunities and takes necessary steps to launch the business venture. He is also known as promoter. As a promoter, he assembles the required funds and people, and serves both as a mother and mid-wife to the enterprise. Thus, the promoter is the Kingpin of business as he/she undertakes the risk and gives a concrete shape to business propositions. Promotion may be undertaken for the purpose of setting up a new business, for the expansion of an existing business, or for combing two or more business firms. Distinction between Entrepreneur and Promoter Sometimes a distinction is made between 'entrepreneurs' and 'promoters' of business. Those who are innovators and risk-bearers are strictly known as 'entrepreneurs' while those who take steps to set up the business and make it op...

  Registration of a Company Registration of a company is also known as incorporation. A company is said to be incorporated when it receives the certificate of incorporation from the Registrar of Companies. The certificate of incorporation is a conclusive proof of the fact that a company, bearing a specific name has been lawfully formed. The promoter has to take the following steps for obtaining the Certificate of Incorporation-- 1 Selecting a name for the company 2 Preparation and printing the documents to be filled 3 Filing the documents with the Registrar of Companies Let us now take up these aspects one by one. 1 Selecting a name: Every company to he registered should have a name by which be known for legal and business purposes. The promoters generally select a few names and ascertain from the Registrar's office whether these names are available. For this purpose, an application on a prescribed form is submitted to the Company Law Administration, Government of Indi...

  NEED FOR AND IMPORTANCE OF FINANCE We all know that every business activity requires money to run it. Take the case of manufacturers. They must have a place to produce goods. They must buy machinery and raw materials, engage workers and managers, pay for electricity and water supply, and incur expenses for delivery of goods to their customers. Similarly, take the case of traders. They must buy goods and have godown to keep them. They have to arrange for the delivery of the goods to their customers. They must employ people for loading and unloading of goods, for keeping accounts as well as for bill collection. Take another example of goods transportation business. The transporters must buy trucks, must engage drivers and helpers, incur expenses on diesel, repair, and servicing of the vehicle, and so on. All these can be undertaken only with the help of finance. Thus, money is required for all types of business activities be it manufacturing or trading or transportation or any ot...

  Capital Market The meaning of capital market is not the same as or similar to that of a market place where goods are bought and sold. Capital market actually denotes the arrangements whereby transactions of money capital (not capital goods) are facilitated. In other words, transactions involving procurement of funds and supply of funds which take place among individuals and various organisations may be regarded as the capital market. Thus, the capital market is not located in a particular place. Nor there are fixed categories of investors and dealers in the capital market, that is, those who supply funds and those who procure funds for investment. You may have heard or read about another type of market in connection with business finance, known as the money market. Money market refers to transactions involving borrowing and lending of money for short periods for which again there is not definite place set aside in a town. Thus, we can say that money market is the market for s...