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Holiday homework of business studies

ch1- Nature and Purpose of Businessch2- Forms of Business Organisations

Made by- Ujjwal shah Class – XI section - G roll no. - 34

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(Slide 3-8) Ch1- Nature and purpose of business Concept of business Comparison between Business, Profession &Employment Classification of business activities Objectives of business Business risk and starting a business (Slide 9-14) Ch2- Forms of business organisations Basic introduction to all forms of business organisations Common features among all forms of business

organisations Distinguishing table between various forms of business

organisations Analysing data for choice of better form of business

organisations

Content in slides

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CH-1 Nature and purpose of business

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Business is an economic activity which is done for the sake of earning profit .

Business has some characteristics which are idol for a good business activity. These features are as follows :-

An economic activity Production or procurement of goods and services Sale or exchange of goods and services Dealing in goods and services on regular basis Profit earning and uncertainty of return Profit earning

Concept of Business

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Comparison between business ,profession and employment

BASIC BUSINESS PROFESSION EMPLOYEMENT

1. Mode of establishment

Entrepreneur decision and other legal

formalities

Membership of a professional body and

a certificate of practice

Appointment letter and service agreement

2. Nature of work

Provision of goods and services to public

Rendering of expert, personalized service

Performing work as per service contract

3. Qualification No minimum requirement

Expertise and training in specific profession

Qualification as per employer’s need

4. Reward or return Profit earned Professional fee Salary wages

5. Capital investment

As per size and nature of the

business

Limited capital needed for

establishmentNo capital

requirement

6. Risk Uncertainty of Profit leading to risk

Fees is regular and certain so less risk No or little risk

8. Code of conduct

No code of conduct is prescribed

Professional code of conduct is to be

followedNorms of behaviour as per the employer

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Classification of business activitiesbusiness

Extractive – iron & coal ore

Genetic – Evolution of plants & animals

Secondary Manufacturing

Analytic Synthetic

Construction

Processing

Assembling

Tertiary Banking, transportation, warehousing etc

TradeInternal - Wholesale and retail External – import , export and entrepot

Auxiliaries to trade

Transportation, warehousing, insurance, banking and finance, advertising

Indu

stry Primary

Commerce

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An business cannot work on a single objective of profit rather than why business have multiple objective.

Some of them are (WIMPPSE) :-o W- Workers performance and attitudeo I - Innovationso M-Manager performance and devlopmento P- Productivityo P- Physical and financial resourceso S- Social responsibilityo E- Earning profit

Objectives of business

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A Business risk is something which occurs due to uncertainty of profit and losses. It is mainly of 2 types Pure and Speculative.

Nature of business risk are :-

Its causes are natural, manmade, economic, others. Basic factors for starting business are :-

Business risk and starting a business

It arises due to uncertainties

It is an essential part of business

It depends upon the

nature and size of business

Profit is th reward for bearing the

risk

Selection of line of business Size of firm Form of ownership

Location of business Physical facilities Tax planning

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Ch-2 forms of business

organisations

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1. Sole proprietorship – when an person is the single reciptent of all profit and losses he is called the sole proprietor or single owner, it is considered to be best form.

2. Joint Hindu Family Business – when any business is carried by a Hindu Undivided Family using ancestral property. It is followed in India only.

3. Partnership – when two or more people carry out an business under an agreement.

4. Cooperative society – when group of people come together for a common purpose for e.g. - Amul cooperative society.

5. Joint stock company - it is an association of people carrying out a business. A company is said to have its own legal identity

Basic introduction to all forms of business organisations

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1. Formation and closure – it refers to the ease in formation or closure in any form of business organisation.

2. Membership – it tells about the kind of members and form of membership required for an form of business organisation.

3. Liability – it tells us about how much the owner or the members have to face liabilities in an business.

4. Management and control – it tells us about how much power an owner or members or partners have in a business.

5. Continuity – it tells about the capacity of a business whether it can survive longer or not .

6. Separate Entity – it tells whether a business organisation has its separate identity or it is just known by name of its owner.

Common features among all forms of business organisation

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Distinguishing table between various forms of business organisations

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1. Formation and closure – when ease of formation is referred the most convenient is sole proprietorship as it has least legal and capital requirements but at small scale but in large partnership is most preferable. As compared to companies and cooperative societies.

2. Capital consideration – when it is talked about the capacity of introducing capital and expansion of business company form is best as it can raise more funds by the help of members, partnership also has some advantage but it is only preferable at medium or small scale along with sole proprietor.

3. Liability – in the case of liability the sole proprietor and partnership forms are most affected as their personal assets can also be dissolved, even in HUF only karta is responsible for losses so all these have unlimited liability whereas in companies there is limited liability.

Analysing data for choice of a form of business organisations

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1. Management and control – sole proprietorship is not preferable for management but when it comes on power the proprietor is the head but in case of partnership and company advantage is more as there are professionals to deal with different problems and also if they agree decision making can become easier.

2. Continuity – in terms of continuity sole proprietorship and partnership are adversely effected by death, insolvency, insanity but it doesn’t occur in case of HUF, company or cooperative society so they are more preferable for a permanent structure.

3. Nature of business – when we want to have a direct contact with customers or run a small scale industry proprietorship is best whereas at large scale organisation form is preferable and when we need professional help partnership is best. Also the risk involves depends on the nature of an organisations.

Analysing data for choice of a form of business organisations

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