Form of Legal ownership (Private Sector)

The process of production and distribution are carried out by lakhs of establishments at work. These business units differ in form of ownership and in the way they are organized for corporation. A persons, who wishes to start a new business has many forms of organization to choose from. From the point of view of ownership, there are in the private sector, four main forms of organization to run a business unit. They are as follows:

a)      Individuals or sole proprietorship,

b)      Partnership,

c)      Joint stock company, and

d)     Cooperative undertaking

To these may be added joint Hindu Family although this form is fast losing ground as a form of business organization.

In the public sector an enterprise may be owned and managed by Government Department Organization, Public Corporation Company or Commission. A business enterprise in the private sector may be owned by anyone of the above, but usually one form is more suitable than others for a particular enterprise because of its distinguishing characteristics of each type of organization.