Different Forms of Business Organisation

Meaning of business organisation

Different Forms of Business Organisation is one which performs commercial activities for earning the profit. It provides goods & services to customers as per their needs. These have a well-defined structure and works according to that. The size of the business organizations differs as per their objectives.

It may be found & run by one or two or more persons. These runs to provide goods and services to people in exchange for payment. In simple words, it is termed as legal set up of business. These have certain laws to follow which differs as per region.

These have certain laws to follow which differs as per region. It tells the way how the business will achieve its objectives. Every business activity goes in line with these laws. It also tells whether the business is for-profit or not-for-profit. 

Forms of Business Organisation

Forms of Business Organisation
Forms of Business Organisation

Sole proprietorship

It is a one-man business and is owned by a single person. There is only one person to manage and run the business. It is very easy to set up and requires less cost among all. It is suitable for small businesses setup.
It avoids the cost of creating a corporation or partnership. Here the owner faces unlimited liability. Creditors can take personal assets of the owner if the business does not pay debts.

Advantages and Disadvantages of Sole Proprietorship

Joint Hindu Family business

It is the different form of business which exists only in India. It is not legal in the rest of the world. It is run and governed by the Hindu law. The eldest member of the family is head of a business.
The head of the business is called ‘Karta’. He manages all the finances of the business. Family members are the co-partners of business.


It is a business which is owned by two or more persons. They together contribute resources for the business. The profit of the business is divided by these partners.
Generally, in partnership, all partners have unlimited liability. They all are equally responsible for business debts.

Co-operative society

It is a business which is run by a group of persons. It is operated by them for their mutual benefit. These persons are called members of the business. It may be corporated or in-corporated.
Its members join the business by their own choice. Membership is open for all who have common goals. Minimum 10 members are required for this business. Profit of the business is divided among its members.

Joint-stock company

It is a business which is owned together by its shareholders. Shareholders are the one which buys some stock in the company. Profit is provided to them as per their shareholdings.
These persons join the company as per their choice. Finance of the company is provided by shareholders. These shareholders can transfer their ownership to another person.


It is a business which sells goods for earning money. It is run by two or more persons together. The profit is also divided by these persons. All its members are responsible for its debt and operation.
There are certain which governs the working of companies. Every company has its own mission & objectives. All its members work hard to achieve these goals.

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