Skip to main content

Various forms of business

 In this article, we will deal with the various forms of business. Below are the various forms of business we found in India-

  1. SOLE PROPRIETORSHIP-

Sole proprietorships businesses do not have the concept of a separate legal entity. It is owned by one individual and all the assets and profit generated belong to the proprietor. Similarly, all the liabilities of the business belong to the owner and it is unlimited and personal assets can also be sold to meet the liabilities. This kind of business does not have any separate law to govern it. Sole proprietorship business ends when the owner dies as it does not have the concept of perpetual succession.


  1. PARTNERSHIP BUSINESS-

Partnership business is governed under The Indian Partnership Act, 1932. A partnership can be termed as the relation between two or more persons carrying on business and agreeing to share profits. It is not separate from its owner and the partners carry unlimited liability i.e., individually and jointly.

Types of partners- a) Active partners- Active partner is one who participates in the business very actively. b) Dormant partner- This type of partner contributes to the capital and has shared in the profit but does not participate in the business. A dormant partner is also known as a sleeping partner. c) Secret partner- The public does not know anything about the sleeping partner and the sleeping partner cannot represent the company to outsiders. The liability, profits, capital will be similar to other members as per the agreement. d) Nominal partner- Nominal partner does not contribute to the capital and does not have any shares in the profit. 


  1. LIMITED LIABILITY PARTNERSHIP (LLP)- 

Limited liability is different from the partnership business. LLP has a separate legal entity and it is treated differently from its members. LLP has features of firm, company, and partnership as well.


  1. COMPANY- 

It is a business having a separate legal entity as it is separate from the person who owns it. The company has perpetual succession, as the members may come and members may go but the company will not wind up unless it is done by the due procedure of law. All the companies are governed under the Indian Companies Act, 2013.

Company is generally divided into two types- a) Public Limited Company- A public limited company is formed for a lawful purpose and must have a minimum paid share capital of rupees five lakhs. A public company can raise capital from the public through the stock market. The liability of the shareholders is limited up to the shares held. A public company should have at least 3 directors and there is no limit prescribed by the law for the maximum number of directors. b) Private Company- A private company is formed by a minimum of 2 members and can have up to 200 members. A private company shall have a minimum of 2 directors compulsorily. A private company cannot raise capital from the public. c) One-person company- The concept of one person company has been introduced in the Companies Act, 2013.  It is defined under section 2(62) of the Act. This is a company where there is only one person as a member.
Labels:

Comments

Post a Comment

Popular posts from this blog

Section 58B of The Advocates Act - Special provision relating to certain disciplinary proceedings

 Section 58B The Advocates Act Description (1) As from the 1st day of September, 1963, every proceeding in respect of any disciplinary matter in relation to an existing advocate of a High Court shall, save as provided in the first proviso to sub-section (2), be disposed of by the State Bar Council in relation to that High Court, as if the existing advocate had been enrolled as an advocate on its roll. (2) If immediately before the said date, there is any proceeding in respect of any disciplinary matter in relation to an existing advocate pending before any High Court under the Indian Bar Councils Act, 1926 (38 of 1926), such proceeding shall stand transferred to the State Bar Council in relation to that High Court, as if it were a proceeding pending before the corresponding Bar Council under clause (c) of sub-section (1) of section 56: Provided that where in respect of any such proceeding the High Court has received the finding of a Tribunal constituted under section 11 of the Indian B
Post a Comment
Read more

Case Laws related to Defamation in favour of ClaimantCase Laws related to Defamation in favour of Claimant. TOLLEY Vs, J.S FRY & SONS LTD – (1931) Facts The defendants were owners of chocolate manufacturing company. They advertised their products with a caricature of the claimant, who was a prominent amateur golfer, showing him with the defendants’ chocolate in his pocket while playing golf. The advertisement compared the excellence of the chocolate to the excellence of the claimant’s drive. The claimant did not consent to or knew about the advertisement. Issue The claimant alleged that the advertisement suggested that he agreed to his portrait being used for commercial purposes and for financial gain. He further claimed that the use of his image made him look like someone who prostituted his reputation for advertising purposes and was thus unworthy of his status. At trial, several golfers gave evidence to the effect that if an amateur sold himself for advertisement, he no longer maintained his amateur status and might be asked to resign from his respective club. Furthermore, there was evidence that the possible adverse effects of the caricature on the claimant’s reputation were brought to the defendants’ attention. The trial judge found that the caricature could have a defamatory meaning. The jury then found in favor of the claimant. Held The House of Lords held that in the circumstances of this case – as explained by the facts – the caricature was capable of constituting defamation. In other words, the publication could have the meaning alleged by the claimant. The Lords also ordered a new trial limited to the assessment of damages. NEWSTEAD V LANDON EXPRESS NEWSPAPER LTD, (1939) Facts: A newspaper published a defamatory article about Harold Newstead. However, another person with this name brought an action in libel. He claimed that the article had been misunderstood as leading to him. The defendant newspaper recognised that they published the article. Also, they denied that they had the intention of being defamatory of him. Consequently, the claimant argued that the newspaper was under a duty. The duty was to give a clear and complete description of the correct person. Moreover, the claimant argued that the defendants were in breach of the duty. Issues: The issue in Newstead v London Express Newspaper, was if the reasonable persons would have understood the words complained of to refer to the plaintiff. Held: The Court of Appeal stated that in accordance with the current law on libel, liability for libel does not depend on the intention of the defamer; but on the fact of the defamation. Accordingly, a reasonable man, in this case a newspaper publisher, must be aware of the possibility of individuals with the same name and must assume that the words published will be read by a reasonable man with reasonable care.

  Case Laws related to Defamation in favour of Claimant.  TOLLEY  Vs,  J.S FRY & SONS LTD – (1931) Facts The defendants were owners of chocolate manufacturing company. They advertised their products with a caricature of the claimant, who was a prominent amateur golfer, showing him with the defendants’ chocolate in his pocket while playing golf. The advertisement compared the excellence of the chocolate to the excellence of the claimant’s drive. The claimant did not consent to or knew about the advertisement.   Issue The claimant alleged that the advertisement suggested that he agreed to his portrait being used for commercial purposes and for financial gain. He further claimed that the use of his image made him look like someone who prostituted his reputation for advertising purposes and was thus unworthy of his status. At trial, several golfers gave evidence to the effect that if an amateur sold himself for advertisement, he no longer maintained his amateur status and might be aske
1 comment
Read more

Rules as to delivery of goods

                             Rules as to delivery of goods Section 2(2) of Sale of Goods Act defines ‘delivery’ as a ‘voluntary transfer of possession from one person to another.’ Thus, if the transfer of goods is not voluntary and is taken by theft, by fraud, or by force, then there is no ‘delivery. Moreover, the ‘delivery’ should have the effect of putting the goods in possession of the buyer. The essence of the delivery is a voluntary transfer of possession of goods from one person to another. There is no delivery of goods where they are obtained at pistol point or theft. 1. Mode of Delivery: According to Section 33, delivery of goods sold may be made by doing anything which the parties agree shall be treated as delivery or which has the effect of putting the goods in the possession of the buyer or of any person authorized to hold them on his behalf. Delivery of goods may be actual, symbolic or constructive. 2. Expenses of Delivery: According to Section 36(5), unless otherwise agree
Post a Comment
Read more