Business- Forms

Sole Proprietorship

A form of business organization owned, managed, and controlled by one individual who bears all the risks and profits.

Unlimited Liability

The condition where the business owner's personal assets are at risk if the business incurs debt or fails.

Partnership

A relation between individuals who agree to share the profits of a business operated by all or one acting for all.

Partnership Act 1932

Legislation that outlines the rules and provisions governing the formation and operation of partnerships.

Cooperative Society

An organization formed by volunteers to protect members’ economic and social interests, regulated under the Cooperative Societies Act, 1912.

Joint Stock Company

An artificial person with a separate legal identity, perpetual succession, and a common seal, formed under the Companies Act, 2013.

Partnership Deed

A written document detailing the terms and conditions of a partnership, including duties, profit-sharing, and duration.

Limited Partnership

A type of partnership where only one member has unlimited liability, and other members have limited liability.

General Partnership

A type of partnership where all partners share joint and unlimited liability.

Private Company

A company with a minimum of 2 and a maximum of 200 members, restricted from raising funds from the public.

Public Company

A company with a minimum of 7 members, having no maximum limit and able to raise funds from the public.

Active Partner

A partner who contributes capital, shares profits and losses, and participates in management.

Sleeping Partner

A partner who contributes capital but does not participate in the management; has unlimited liability.

Secret Partner

A partner who contributes to profits and participates in management secretly.

Nominal Partner

A partner who does not contribute capital or share profits but allows their name to be used in the business.

Perpetual Succession

The continuous existence of a company regardless of changes in ownership.

Decision-Making Authority

The power to make decisions in a cooperative society, rest with an elected managing committee chosen by the members.

Limited Liability

A business structure where the owner's liability is limited to their investment in the company.

Continuity of Business

The stability of a business's operations regardless of changes in ownership or management.

Registration of Partnership

The optional process of recording a partnership with the Registrar of Firms, which can affect the legal standing of the firm.

One-Man-One-Vote Principle

A voting system in cooperative societies where each member has one vote regardless of their capital contribution.

Economic Interests

The financial and material needs that cooperative societies aim to protect and promote for their members.

Business Secrecy

The ability of a sole proprietor or partnership to keep their business operations confidential.

Dissolution of Firm

The process of legally ending a partnership, as outlined in the partnership deed.

Legal Formalities

The legal requirements necessary for the formation and dissolution of a business entity.

Funding Sources

The financial means through which a business gathers capital, such as owner's savings or external loans.

Conflict Resolution

Mechanisms for addressing disagreements between partners or society members.