CSE-21 Chapter-1.ppt business related topic

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1. Components/ Branches of business
Business
Industry
•Primary industry
•Secondary industry
Commerce
•Trade
•Banking
•Transportation
•Warehousing
•Insurance
Direct Services

2. What is Business
A business is an organization that engages in
economic activities to produce and/or provide
goods and services to the community, with the aim
of earning profits.
•Key Activities:
Business encompasses various activities such as:
•Industry: The production of goods.
•Trade: The exchange of goods and services.
•Commerce: The broader term that includes trade and
related activities like transportation, storage, and
distribution.

3. Types of industry
1.Primary Sector: The primary sector involves activities
focused on the extraction and harvesting of resources from
the natural environment. This sector includes industries
such as agriculture, fishing, forestry, and mining.
2. Secondary Sector: The secondary sector encompasses
manufacturing and processing activities that transform raw
materials into finished goods. It includes industries like
factories, construction, and manufacturing plants.

4. Hindrances removed by commerce

5. Sole Proprietorship
Sole proprietorship is a form of organization in which
an individual produces independently with his own
capital, skill and intelligence and is entitled to receive
all the profits and assumes all the risks of ownership.

6. Characteristics of a sole-proprietorship:
Single ownership
Easy formation
Small capital
No separate entity
Unlimited liability
Individual risk and control
Uncertain stability

7. Advantages of Sole-proprietorship
Ease of starting
Sole participation in profits and losses
Promptness in decision making
Secrecy
Ease of dissolving
Minimum govt. regulation
Catering for individual taste
Flexibility in operation

8. Disadvantages of Sole-proprietorship
Unlimited liability
Difficulty in raising capital
Limitations in managerial ability
Lack of stability
Demands on time
Difficulty in hiring and keeping high achievement
employees.

9. Partnership
An association of individuals competent to contract
who agree to carry on a lawful business in common
with the object of sharing profit is a partnership.
The relation between persons who have agreed to
share profits of a business carried on by all or any of
them acting for all. (Partnership Act 1932)

10. Characteristics of partnership
Contractual relationship
Plurality of person
Existence of business
Sharing of profit
Mutual agency
Legal position
Taxation
Extent of liability
Utmost good faith
Implied authority
Unanimity of consent
Non transferability of
shares
Dissolution

11. Eligibility of a partner
Any person competent to contract.
List of incompetents :
Minor
Insane
Insolvent
Ambassador
Alien enemy
Institute or association
Govt. employee

12. Advantages and Disadvantages

13. Partnership Contract
A partnership contract is also known as a partnership
agreement.
It is
 a legally binding document outlining the terms of a
business relationship between two or more partners,
including their rights, responsibilities, and obligations.
 
 The Purpose of a partnership contract is to clarify how
the business will operate, including how profits and
losses will be shared, how decisions will be made, and
what happens if a partner leaves or dies.