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uiz Bee 1. Explain any two types of business.
2. What is hybrid business?
3. What do you mean by "service" in business?
FORMS OF BUSINESS ORGANISATIONS
There are majorly four Business Organisations. Let us learn about them.
Sole Proprietorship
Sole proprietorship is the simplest form of a business organisation which does not require any legal formalities for
registration. It is owned by a single person who has day-to-day responsibilities for running the business. Some of these
are local grocery shop, bakery store, a local clothes store, etc.
What are the pros and cons of sole proprietorship?
Advantages of Sole Proprietorship
Some advantages of sole proprietorship are:
• Single owner controls the business and makes all the decisions.
• All profits are taken by the owner.
• Easy to set up with minimum investment.
• Owner makes his own rules.
• Flexibility in running the business.
Disadvantages of Sole Proprietorship
Some disadvantages of sole proprietorship are:
• Owner is liable for business debts and failures.
• Personal assets are at risk.
• Limited resources and funds to manage a business.
Partnership
Business is legally owned and operated by two or more individuals (partners) for the purpose of earning profits. The
profits are shared amongst the partners as per the legal agreement. A partnership firm in India is governed under the
Indian Partnership Act, 1932.
Advantages of Partnership
Some advantages of partnership are:
• Can be easily formed and is free from legal restrictions.
• Profits and liabilities are shared by the partners.
• Shared resources provide more capital for the business.
• Has the ability, experience and talents of the partners.
• Less damages due to shared losses and risks.
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