Unit II

Business Enterprise

Question bank

Q1) Define sole proprietorship. What are the features of it?                      8

A1)  To give you a transparent picture of your organization's only sort of trade, here are some important definitions.

(I) L.H. Haney:

"Individual entrepreneurship may be a sort of business that takes responsibility, directs the business, and puts the individual in danger of failure alone in its head." consistent with Haney, the business isn't only its management, but its management. It’s within the hands of 1 one that is additionally liable for the risks.

(II) James Stephenson:

A sole proprietor may be a one that runs a business on his own, not only the owner of the capital of the business, but also usually organizes, manages and assumes responsibility for all profits or losses. James Stevenson emphasizes that the only trade business is funded by him and is administered alone consistent with his management capabilities. He’s also liable for the success or failure of this business.

(Illness) S.R. Davor:

"A sole proprietor is someone who runs his own business without the assistance of a partner. He brings in his own capital and uses all his workforce. He also pays as a gift. I’m being helped by others. "

According to Davar, the only proprietor uses only his resources and doesn't get the assistance of his partner. With the rise in jobs, he may hire some people to assist him get purchased their jobs. Adding a partner changes the form of the organization because it becomes a Partnership issue.

A sole proprietor is someone who uses mm's resources to start out a business, hire people to manage the business on their own, and bear all the advantages and risks of the business on its own.

Characteristics of Personal Business:

(I) Individual Initiatives:

This business starts with the initiative of 1 person. He prepares a blueprint for the venture and coordinates various factors of production. He may hire others to assist, but he has ultimate authority and responsibility. All profits and losses are taken by one individual.

(II) Unlimited Liability:

In a single trade, business liability is unlimited. The owner is liable for all losses arising from the business. Responsibility isn't only the investment in his business, but also his personal property is liable for his business obligations.

(III) Management and Control:

The owner manages the whole business on his own. He makes various plans and executes them under his own supervision. Someone may help him, but the last word control lies with the owner.

(IV) Motivation:

One is the only owner of the business. He receives all profits and suffers losses, if any. There is a direct relationship between effort and reward. The more he works, the more he will earn. He is eager to expand his business activities. He doesn't want to enter the speculative business because of the high risk.

(V) Secret:

All important decisions are made by the owner himself. He keeps all business secrets only to him. Business secrets are very important for small businesses. By keeping the business secret, he prevents competitors from entering the same business.

(VI) There is one sole proprietor and one sole proprietor.

Legally, sole proprietorships and their businesses are not separate entities. The loss of his business is his loss and the debt of his business is his debt.

(VII) Owners and businesses coexist:

In a single trade business, there is no independent business with the owner. Business and owner exist together. If the owner dies, goes bankrupt, or is removed from the scene, the business will be dissolved.

(VIII) Limited Business Area:

The sole proprietorship generally has a limited business area, because of the limited resources and management capabilities of the sole proprietor. He can only arrange limited funds and can oversee small businesses. All decisions are to be made by the owner, so the area of   business is limited by his management ability.

(IX) No legal Proceedings:

You can start a stand-alone trading business without any legal proceedings. No formation or registration is required.

(X) Any start and end:

The sole proprietor may start the business at his will and may dissolve it at his discretion as well.

(XI) Freedom in trade choices:

Sole proprietors are free to decide what type of business they want to start. He is not supposed to consult anyone to make such a decision.

(XII) Profit Sharing:

The sole proprietor is the single owner of the business and he receives all the benefits himself. He puts all his efforts into the business and enjoys all the fruits of his work.

Q2) What is the purpose of sole proprietorship?     5

A2) Purpose of Independent Trade Business:

A single trade business is established by one person with his or her own resources.

This form of organization is set up for the following purposes:

(I) Channel Individual funds:

Individuals have a small surplus with them. These funds are not enough to set up a large company. People may not like to risk their money in businesses that have no say or control. Instead of keeping your money idle, it's better to set up a small business. Therefore, a single trade business provides a channel for the productive use of individual funds.

(II) Strengthening Distribution Channels:

The only trading business is generally small-scale. People have set up small retail stores under the sole proprietorship. Retailers are an important link in the distribution chain. He is in direct contact with consumers. Without the active involvement of only one trader, the distribution channel from producer to consumer cannot be successful.

(III) Serving Consumers:

Small traders come into direct contact with consumers. Consumers want to buy their daily requirements from the nearest location. The only trader has a store wherever it is available to consumers. Consumers save time by purchasing daily necessities from the nearest retail store.

(IV) Create self-employed Opportunities:

By launching the only trading business, the owner created jobs for himself. Instead of looking for a job outside, this is a form of organization that helps people create their own jobs.

(V) Avoid Concentration of Wealth:

To avoid the concentration of wealth in a small number of funds, a single trading business helps its distribution among many people. When a large number of people enter different businesses, it may be small, but it helps to distribute economic wealth.

(VI) Supporting Large Companies:

The success of large businesses is also related to the support provided by small business units. Smaller units provide ancillary services to larger units. Larger units require many smaller components, from smaller units. As such, a single trade business serves large units by providing everything they do not want to manufacture in-house. In Japan, all large units rely on supply from small units.

Q3) Explain the legal position of a single trade business.   8

A3) The following points explain the legal position of a single trade business.

(I) There is no specific law that requires registration, etc. for this business. The joint-stock company must be established under the Companies Act of 1956, the Partnership company is subject to the Partnership Act of 1932, and the only trading business is not subject to anything. Such a decree. Therefore, this business may be started and dissolved at the discretion of the owner, regardless of statutory provisions.

(II) Single trade business is subject to general land law. If there is a provision to obtain a license to start a specific business, the sole proprietor also obtains a license before starting such a business. Those who want to start a wine shop are expected to get a license from the state government. Sole proprietors who want to enter this business are certainly expected to comply with this law.

(III) The sole proprietor and her business are the same. Business exists only with sole proprietors. If he dies or otherwise disappears from the scene, the business will be dissolved. The owner and his business have one personality.

(IV) The sole proprietorship's liability is unlimited. When a business is dissolved, there is no distinction between business assets and private assets of a sole proprietor, and business loans and personal loans.

Self-Employed Suitability:

The amount of capital and management skills required for a particular business influences decisions about the shape of the organization. Smaller businesses have fewer capital requirements and sole proprietorships are the most appropriate form of organization.

The need for capital is increasing due to the improvement of industrial technology and the devising of new production methods. Other forms of organizations such as Partnerships and corporations have also become popular. There are certain types of companies where the sole proprietorship is still the most appropriate form of organization. This type of organization is also suitable for certain situations.

These situations are as follows:

(I) If the market is local:

If the market for products is confined to a particular location, the scale of business operations will be small. The amount of capital required is low and normal management skills are sufficient. In this situation, the sole proprietorship is best. Most retailers are managed by only one trader.

(II) If you need personal contact with the customer:

Personal contact with the customer may be required. Customers may have preferences or preferences for certain things. In this situation, a self-employed organization is suitable. Doctors and lawyers need to be in direct contact with patients and clients. Customers may like to sew their clothes together. Therefore, in all of these cases, the sole proprietor will be more useful.

(III) Speculative Business:

In a speculative business, product demand and prices change rapidly. Businessmen need to make quick decisions. Sole proprietors can make immediate decisions depending on the situation. He doesn't have to talk to anyone else. So, he can decide things for himself. No other organization is as speculative as the sole proprietorship.

Q4) What are the social needs of a private business?    8

A4) The social need is due to the following reasons.

(I) Employment of a large number of people:

This form of organization can be started alone, but he takes others to help. The number of only traders is very large in all countries and they employ many as their helpers. Therefore, sole proprietors can provide employment to a large number of people.

(II) Need for less capital:

This form of organization can be undertaken by anyone by any means. Even people with few resources can start a business on a small scale. Vegetable sellers can start a business for hundreds of rupees and regain capital at the end of the day. Therefore, this type of form encourages people to do independent business.

(III) Low risk:

In general, the sole proprietorship is started on a small scale and less investment is made. Because of the low risk, you can change your business if it is not appropriate.

(IV) Offering low-priced products:

In this way, we provide consumers with products at low prices. The only number of traders is large, they are in fierce competition with each other, and consumers are offered products at competitive rates. In general, business expenses are low. This allows the only trader to sell their products at a lower price.

(V) Equal Distribution of Income:

This form of organization acts as a constraint on the monopoly tendencies of other forms of organization. Many people enter the business. Therefore, this results in an equal distribution of income. Everyone can invest their savings and get a fair return on it. When a business is in the hands of a few, it brings a concentration of wealth in the hands of only some.

(VI) Useful for small producers:

The only trader buys goods from small producers and sells them to consumers. Many intermediaries are excluded from distribution channels. Some of the profits that the intermediary earns in the form of commissions are left to the producers and some are passed on to consumers in the form of low prices.

(VII) Helping Consumers:

Consumers are helped by some traders in making their purchases. The only trader opens a store on the street so that consumers can buy from nearby stores. Merchants supply products even at the front door.

(VIII) Functions as a training center.

The only trading business offers the opportunity to learn business techniques. With less investment, you can afford to learn by trial and error. You can expand it later by bearing the various strengths and weaknesses of your business. Therefore, this is a good organizational form for receiving business training.

Q5) What are the advantages and disadvantages of private business? 12

A5) The advantages of a private business are:

1. Easy to form: Forming and organizing a sole proprietor’s business is very easy and easy. There is no legal procedure.

2. Easy to manage: A small organization. The owner can easily manage it.

3. Profit incentives: Sole proprietors enjoy all the benefits for themselves. The motivation for this profit is an incentive to work hard.

4. Quick decision: He is the only organizer, so he can make quick decisions. He can act swiftly in response to changes in the market.

5. Customer contact: He is the owner and manager of concern. By building good relationships with our customers, we will be in a position to personally study their tastes and needs.

6. Business secrets: He can keep business secrets for himself. Keeping confidential is an important issue for all types of corporate organizations.

7. Smooth operation: Since he is a sole proprietor, there is no disagreement or controversy. It helps the smooth execution of concerns.

8. Efficiency and economy: Organizations are small. He can be a close director. He can reduce the cost of management and all sorts of waste. He can run his business efficiently.

9. Flexibility: Business changes can be adopted at any time. Flexibility is promoted with a small investment. It can be moved from place to place very easily.

10. Family Training: He gets the help of his family members in maintaining business. His children are trained in business activities.

11. Self-Employed: Easy to get started with small units. Nationalized banks are also supporting this direction.

12. Social Benefits: It offers many individuals an opportunity. Many can become entrepreneurs with limited resources.

13. Tax Benefits: Income tax is levied on the sole proprietor's personal income, not on the interests of concern. Therefore, it is advantageous.

Restrictions or Disadvantages of Sole Proprietors

The Sole Proprietorship also suffers from certain serious limitations (weaknesses).

1. Limited Capital: The use of limited capital means only limited profits. If you need to grow your business, you may not have enough resources.

2. Limited Skills: Since there is only one man, management ability is limited.

3. Limited Borrowing Capacity: The sole proprietor's borrowing capacity is limited to the extent of his financial position.

4. Unlimited liability: The creditor can withdraw the loan amount not only from the assets of the business, but also from his personal assets. Therefore, his liability is unlimited.

5. Make Hurry Decisions: The sole proprietor makes all the decisions himself. So, there may be a hasty and thoughtless decision

6. Short-lived: If the sole proprietor has no children, or if his children are not interested in continuing the business, the business will be terminated. We do not guarantee a continuous presence in this type of business.

7. No division of labour: Since it is a small unit, it is not possible to introduce a division of labour into management.

8. Employee reliance: With business expansion, it is inevitable that owners will rely on paid managers.

9. Limited Business Area: The business is small. Therefore, the activity cannot go beyond a specific area.

10. Lack of Economies of Scale: Sole proprietors have only small businesses. He is unable to do a large business due to lack of financial resources. Therefore, he cannot enjoy the economy of large-scale production, buying and selling.

Q6) What is one person company?       5

A6) The Indian Companies Act was revolutionized by the 2013 Companies Act, introducing a variety of new concepts that did not exist before. The introduction of the One Person Company concept was one of the game changers. A whole new way of starting a business has been recognized, giving the flexibility that an entity like a company can offer. It also protected the limited liability that partnerships and sole proprietors lacked.

Prior to the enactment of the new Companies Act of 2013, the ability of individuals to set up a company had already been confirmed by various other countries such as the United States, China, Singapore, the United Kingdom and Australia.

Definition of one company

A one-person company is a company with only one member based on Article 2, Paragraph 62 of the Companies Act 2013. One Person Company (OPC) is functionally a company with only one shareholder, as members of the company are recognized as shareholders of the company or members of the Memorandum of Understanding.

OPCs are usually formed when a business has only one founder or promoter. Because of the many benefits of OPC, entrepreneurs in the early stages of their business prioritize creating OPCs over sole proprietors.

Q7) What are the features of one person company?    12

A7) Characteristics of a one-man company

The outline of One Person Company is as follows.

1. Private enterprises

Sections 3 (1) (c) of the Companies Act 2013 states that one person can set up a company for any purpose permitted by law. OPC is further described as a private sector.

2.     Single-Member

Unlike other private companies, OPC can only have one shareholder or member.

3.     Candidate

The only member of the company nominates candidates when registering the company. This is a unique feature of OPC and unlike all other types of enterprises.

4.     There is no permanent inheritance

Due to the death of the only member of the company, the candidate can choose to refuse or become the only member. Other types of companies have adopted the concept of permanent inheritance.

5.     At least one director

There must be at least one OPC director in this case. There can be up to 15 directors.

6.     No minimum paid-up capital

For OPC, the minimum paid-up capital is not stipulated by the Companies Act 2013.

7.     Special privilege

OPCs under the Companies Act enjoy many privileges and tax exemptions not granted to other types of companies.

8.     A company's financial statements consist of an income statement, a balance sheet, and account notes. The cash flow statement may not be included in the financial statements.

9.     Only one director is required to sign the financial statements / board report.

10. One company must submit a copy of its financial statements to the registrar within 180 days of the end of the fiscal year.

11. The annual report of a one-person company shall be signed by the company secretary or, in the absence of the company secretary, the directors of the company.

12. You must notify the registrar of all contracts entered into. It must also be recorded in the minutes of the meeting within 15 days of the approval date of the board of directors.

13. An individual shall not be eligible to establish more than one private company or be a candidate for more than one such company.

14. Minors cannot be members or candidates of the One Person Company. You can also hold shares with beneficial profits.

15. One Person Company may not engage in non-bank financial investment activities, including investment in corporate securities.

16. All business traded by the Board of Directors shall be recorded in the minutes maintained under Article 118.

17. A single company may not voluntarily convert to any type of company until two years have passed since its establishment. However, this does not apply when the paid-up capital exceeds 50 Raku or when the average sales for the period exceed 2 crores.

18. The Memorandum of Understanding of a one-person company shall indicate the names of other persons / candidates who will be members of the company until the date of transfer of shares to the statutory heir in the event of the death or non-contract of the subscriber.

19. Written consent, along with the Articles of Incorporation and Articles of Incorporation, shall be submitted to the registrar at the time of establishment of the One Person Company.

20. Candidate / others may withdraw his consent at any time.

21. Candidates are subject to change at any time by notifying others and staying intimate with the company. Next, the company needs to do the same intimately with the registrar.

Q8) Write the difference between One Person Company and Sole Proprietor ship                                                                                                                                                                        8

A8)

Q9) What is Joint Hindu Family? What are its features?    12

A9) The joint Hindu own circle of relative’s commercial enterprise is a completely unique organizational shape in India. The joint Hindu own circle of relative’s organisation is created via way of means of the operation of the regulation. There isn't any separate prison entity break free the member prison entity.

The joint Hindu own circle of relative’s commercial enterprise is controlled below Hindu regulation in place of partnership regulation. Membership on this shape of commercial enterprise organisation can most effective be received via way of means of start or via way of means of marriage to a person who's already a member of the joint Hindu own circle of relatives.

"This own circle of relatives is called a stepfamily while or extra households stay and paintings together, make investments their assets and body of workers in a joint stock, and conform to proportion earnings and losses together.. "

There are  colleges in Hindu regulation. One is Dayabaga, that is famous in Bengal and Assam, and the alternative is Mitakushara, that is famous in different countries. According to Mitakushara's regulation, the belongings of a communal own circle of relatives has the proper of a son via way of means of start. This way that after a son is born in a town circle of relatives, he profits hobby withinside the belongings at the same time owned via way of means of the own circle of relatives.

The joint Hindu own circle of relative’s commercial enterprise is controlled and controlled via way of means of a unmarried individual known as a "karuta" or "supervisor". The karuta or supervisor works in session with different participants of the own circle of relatives, however in the end he has the very last say. Karta's legal responsibility is limitless; however, the legal responsibility of different participants is restricted to their stocks withinside the commercial enterprise.

Features of the Joint Hindu Family Business:

The predominant capabilities of the joint Hindu own circle of relative’s commercial enterprise are:

1. Compliant with Hindu regulation:

The joint Hindu own circle of relative’s commercial enterprise is controlled below Hindu regulation.

There are colleges in Hindu regulation.

(I) Dayabaga, and

(Ii) Mitakushara.

2. Management:

Everything withinside the joint Hindu own circle of relatives is controlled via way of means of one individual called the "karuta" or "supervisor". Karuta is the oldest male family member. He works in session with different participants of his own circle of relatives, however in the long run he has the very last say.

Family participants have entire self-assurance and self-assurance in Karuta. Only Karuta has the proper to address outsiders. However, different participants can most effectively address outsiders with the permission of Karuta.

3. Birth club:

Family club can most effective be received via way of means of start. As quickly as a male infant is born withinside the own circle of relatives, he turns into a member. Membership does now no longer require consent or consent.

4. Responsibility:

With the exception of Karta, the legal responsibility of all different participants is restricted to their stocks withinside the commercial enterprise. Karta isn't most effective accountable for the quantity of his proportion withinside the commercial enterprise; however his separate property may be connected as well, and the quantity of debt may be recovered from his separate property.

5. Permanent lifestyles:

The death, insanity or financial ruin of a family member does now no longer have an effect on the lifestyles of a joint Hindu own circle of relative’s commercial enterprise. The own circle of relatives keeps to paintings.

6. Karuta Implicit Authority:

In a joint own circle of relative’s organisation, most effective Carta has the implicit authority to settlement debt and pledge the organisation's credit score and belongings for the ordinary functions of the organisation's commercial enterprise.

7. Minor additionally partner:

Partnerships may also permit minors to enjoy the partnership, however they cannot be co-partners. In a joint Hindu own circle of relative’s organisation, minors are partners.

8. Dissolution:

The joint Hindu own circle of relative’s commercial enterprise can most effective be dissolved at the desire of the whole own circle of relatives. An unmarried member does now no longer have the proper to dissolve the commercial enterprise.

Q10) Explain the advantages and disadvantages of Joint Hindu Family. 12

A10) Benefits of a joint Hindu own circle of relative’s commercial enterprise:

1. Easy to get started:

Starting a joint Hindu own circle of relative’s commercial enterprise may be very easy. You do not should face prison court cases along with registration. No consent required.

2. Efficient control:

The control of the joint Hindu own circle of relative’s commercial enterprise is focused withinside the arms of the own circle of relatives karuta. In this commercial enterprise, Karta makes all of the choices and implements them with the assist of different participants. Other participants do now no longer intervene together along with his control.

3. Secret:

In a joint Hindu own circle of relative’s commercial enterprise, all choices are made via way of means of the "karuta" itself. He is able to preserve all matters to himself and preserve entire secrets and techniques in all matters.

4. Quick decision:

Karta is the most effective individual who manages and directs the commercial enterprise. He cannot speak to everyone while creating a decision. This ensures a brief or brief decision. As the most effective master, he makes brief choices and takes benefit of that opportunity.

5. Economy:

The economic system is important to the fulfilment of any commercial enterprise. It is balanced and maintained in a joint Hindu own circle of relative’s commercial enterprise. Family playing cards spend cash with amazing care and economic system.

6. Credit Facility:

In a joint Hindu own circle of relative’s commercial enterprise, there are extra credit score lines. One of the motives for that is that "karuta" has limitless legal responsibility. Karuta has a private courting with others, which additionally enables to construct credibility.

7. Natural love among contributors:

In a joint Hindu own circle of relative’s enterprise, it is the herbal affection that contributors have with every different. It allows you run your enterprise greater correctly and smoothly.

8. Freedom to pick an enterprise:

Karta is loose to pick the enterprise of her choice. He does not must depend upon others.

Disadvantages of Joint Hindu Family Business:

The risks of the joint Hindu own circle of relative’s enterprise are:

1. Limited club:

Business club is limited to own circle of relative’s contributors simplest. Outsiders can't be contributors of a joint Hindu own circle of relative’s enterprise.

2. Limited investment sources:

Capital is constrained to the assets of simplest one own circle of relatives. This isn't sufficient to fulfil the enterprise necessities of the expansion. Therefore, the dimensions of the enterprise stay small. Karta can't take gain of the big economic system because of constrained investment.

3. Limited control skills:

All control capabilities which might be critical to the achievement of your enterprise are finished with the aid of using your own circle of relatives's cards. Karta won't be capable of carry out all control capabilities because of time, electricity and ability restrictions. Due to constrained enterprise length and monetary assets, it could now no longer be feasible to stable the offerings of experts in numerous fields along with purchasing, manufacturing and marketing.

4. Unlimited legal responsibility:

Karta's legal responsibility is unlimited. Karta isn't simplest liable for the volume of his proportion withinside the enterprise; however, his separate belongings may be connected as well, and the quantity of debt may be recovered from his separate belongings. This component caps enterprise boom and expansion.

5. Misuse of strength:

The control of the joint Hindu own circle of relative’s enterprise is focused withinside the fingers of the own circle of relatives karuta. No different member can intervene together along with his control. This can result in misuse of strength, and Carta might also additionally use strength for his non-public benefit.

Q11) What is Partnership? What are its features?     5

A11)  A Partnership is a type of business in which a formal agreement is reached between two or more people who agree to be co-owners, share the responsibility of running the organization, and share the income or loss generated by the business.

In India, all aspects and functions of the Partnership are managed under the 1932 India Partnership Act. This particular law is a Partnership between two or more individuals or parties that accepts to share the benefits generated by the business under the supervision of all members or on behalf of other members. It explains.

Partnership Features:

Some of the features of the Partnership are:

1. Agreement between partners: It is a group of two or more individuals, and a Partnership arises from an agreement or contract. Agreements form the basis of associations between partners. Such an agreement is in writing. Oral agreements are fair and legal. To avoid controversy, it's always good if the partner has a copy of the written agreement.

2. Two or more: At least two people must have a common goal in order to articulate the Partnership. In other words, the minimum number of partners in a company is two. However, there is a limit to the maximum number of people.

3. Profit Sharing: Another important element of Partnership is that agreements between partners must share the benefits and losses of trading concerns. However, the definition held by the Partnership law is clear. Partnerships are associations between people who have agreed to share business interests, and loss sharing is implicit. Therefore, it is important to share profits and losses.

4. Business Motivation: It is important for a company to run any business and should have a motivation to make a profit.

5. Mutual Business: Partners are both owners and agents of the company. Actions taken by one partner can affect other partners and companies. We can conclude that this serves as a test of Partnership for all partners.

6. Unlimited Liability: All partners in the Partnership have unlimited liability.

Q12) State the types of Partnership.       5

A12) Types of Partnership

Partnerships can be divided into different types by state or place of business. Here are some general aspects of the three most common types of Partnerships.

General Partnership

A Partnership is made up of two or more owners who run the business. In this Partnership, each partner represents a company with equal rights. All partners have the right to participate in management activities, decision making and manage the business. Similarly, profits, liabilities, and liabilities are evenly shared and evenly divided.

In other words, the definition of a Partnership can be described as a Partnership in which rights and responsibilities are equally shared in terms of management and decision making. Each partner must take full responsibility for the debts and responsibilities incurred by the other partners. If one partner is sued, all other partners are considered responsible. The creditor or court holds the personal assets of the partner. Therefore, most partners do not choose this Partnership.

Limited Partnership

This Partnership includes both general and limited partners. The General Partner has unlimited liability and manages the business and other limited liability partners. A limited liability company has limited control over its business (limited to his investment). They have nothing to do with the day-to-day operations of the company.

In most cases, Limited Partners only invest and share profits. They are not interested in participating in management or decision making. This non-involvement means that they do not have the right to compensate for the loss of Partnership from the income tax return.

Limited Liability Partnership

In a limited liability Partnership (LLP), all partners have limited liability. Each partner is protected from the legal and financial mistakes of the other partners. Limited liability Partnerships are similar to limited liability companies (LLCs), but not limited liability Partnerships or Partnerships.

Voluntary Partnership

A voluntary Partnership can be defined as if the expiration of the Partnership company is not mentioned. Under Section 7 of the Indian Partnership Act of 1932, the two conditions that a company must meet in order to become a voluntary Partnership are:

1. Partnership agreements must not have a fixed expiration date.
2. No special Partnership decisions should be mentioned.

Therefore, if the term and decision are stated in the contract, it is not a voluntary Partnership. Also, if the expiration date of the company is initially set, but the operation of the company continues beyond the above date. It is free to be considered a Partnership.

Q13) What are the advantages and disadvantages of a Partnership?  12

A13) Forming partnerships offers unique benefits that can affect every aspect of your business, from finances and taxes to work-life balance and productivity.

1. Not subject to income tax

Partnerships must submit information about their annual financial performance (income, profits, losses, profits, etc.) to the IRS, but they do not have to pay income tax directly.

Instead, partnerships "pass through" profits (or losses) to partners. Similarly, all partners must include a share of the profits or losses incurred in their business on their personal tax returns.

2. Access to complementary skills and knowledge

Partnerships can provide access to important skills and experiences, especially in areas of lack. Most successful partnerships work well because partners have complementary skill sets and help each other to bridge the gap in expertise.

For example, you may have sales and business development experience, but your partner may be a certified accountant.

3. Split overhead and other costs

Overheads are one of the biggest challenges in building a new business. Sharing start-up and other costs is an attractive aspect of a partnership.

4. Increased productivity and expansion opportunities

Partners not only take on new business workloads and other responsibilities, but also help you connect with other business professionals and grow your business in ways you never imagined.

5. Improvement of work-life balance

With a partner, you don't have to deal with every detail of your business. In this way, having a partner can improve your work-life balance. Studies have shown that this leads to increased productivity.

If the Associate is interested in leaving the partnership, the Partnership Benefit Allocation can be used to transfer the right to receive benefits to the new partner.

6. Second perspective

One of the main benefits of a partnership is that there is someone at a different level of perspective who can provide valuable information when making important decisions.

7. Less form and obligation

Unlike limited liability companies and companies, partnerships do not need to be registered with the Secretary of State. Most states legally recognize partnerships when they start a business.

8. Easy to convert to other business structures

Converting a partnership to an LLC is easy if you later decide that you need to protect your business further. The official conversion document must be submitted to the Secretary of State to begin the process.

9. Equal ownership and management

Co., Ltd. And corporate operators can meet the demands of shareholders and the board of directors, but business partnerships include more freedom. Members only respond to each other and don't have to worry about outside decision makers.

10. Privacy and confidentiality

Partnerships do not need to disclose financial or organizational information. Companies and businesses, on the other hand, need to make this information available to the IRS and shareholders.

For example, a listed company must distribute its annual report to shareholders and post it on its website for public disclosure.

Disadvantages of partnership

Partnerships have some freedom, but they also have drawbacks. The disadvantages of partnerships highlight why it is important to choose a reliable partner.

1. Increased responsibility

One of the main drawbacks of partnerships is the equal liability of each partner for losses and debts.

Each partner has unlimited personal liability. In other words, you are responsible for any bad business transactions your partner makes. Every decision your partner makes has potential consequences for your personal wealth and finances.

For example, if your business is unprofitable and you can't pay with a loan borrowed by your partner, creditors can sue you and rob you of your personal assets such as your bank account, car, or home.

2. Decreased autonomy

Partners have equal decision-making power (unless otherwise specified in the amendments to the partnership agreement. Decisions must be made jointly, which means compromises may be required.

3. Possibility of partner-to-partner conflict

Partnerships, like most relationships, can quickly become complex if employees disagree. This is especially true when there are only two partners, and no one breaks the relationship due to disagreement. It is important to outline how the partnership agreement resolves the discrepancy.

4. Complications associated with future sales

Incorporate exit strategies into your documentation when forming a partnership business. Problems can occur if one partner wants to sell and the other does not.

5. Poor stability

Partnerships offer a high degree of freedom, as opposed to the stability provided by legal entities. Given that the business is completely dependent on the partner, living conditions such as death, childbirth, illness, and other unexpected events can have a significant impact on the functioning of the company.

6. Lack of recognized fame

For many, the limited liability structure is a sign of fame. Some informals are attractive to those involved in the organization, but they can be worried about investors investing money or collaborating with businesses.

7. Shared profit

Partners need to share profits in the same way they share labor and overhead costs. Partners mean more opportunities to increase revenue, but they also mean that they need to share revenue according to the terms of the contract.

Q14) What is Joint Stock Company? What are its features?   8

A14) Businesses owned by investors or shareholders are known as joint-stock companies. A joint-stock company is a voluntary organization of individuals who provide money or monetary value for a common purpose. No one can enter this business without his / her interest.

You can raise public funds by issuing shares. To make large investments, public funds are used for operations such as the production, expansion and purchase of assets.

Definition of Company:

"A corporation is intended as an organization of many people who donate money or the value of money to common stock and use it for some common purpose."

-Justice Lindley

"A corporation is an artificial person who is invisible, intangible, and exists only from a legal point of view."

-Chief Justice Marshall

"A joint-stock company is a voluntary association of individuals for profit that divides capital into transferable shares and whose ownership is a condition of membership."

Features of the Company:

To clarify more about a corporation, let's move on to the following characteristics.

1. Corporate joint-stock company:

The company and its members are separate individuals. All business of the company is done under its own name and you can buy and sell assets under your own name. In the corporate form, the board of directors can use the stamp of a company that cannot use its name instead of the company name to control all operations of the business.

2. Artificial person:

The company is an artificial person created by law. It can be said that all business activities are carried out by all human resources, but that does not mean that the company is a natural person. When doing business, we use the company name.

3. Registration:

This is the legal form required to establish a company. If you do not register your company, you will not be able to proceed smoothly.

Under the Companies Act of 1956, all companies are required to register in order to do business without problems.

4. Common seal:

The company cannot sign itself. All activities are carried out through a group of people associated with the company. Therefore, anyone who acts on behalf of the company can use a common stamp instead of the company's signature.

Documents without stamps or common seals are not considered legal documents of the company.

5. Transferability of shares:

Members can freely transfer the shares of the company. Any member who wants to sell their shares is free to sell and cancel their membership from the company.

In the case of a public company, the transfer of shares is easy, but in the case of a private company, members cannot sell or easily transfer their shares.

6. Ownership and management:

The company and its members are separate from each other, and when it comes to ownership, shareholders are the owners who own and invest in the company. When talking about control, shareholders elect a board of directors that controls the overall operation of the business.

Therefore, ownership and management are different. The company is owned by shareholders and the management of the operation of the company is in the hands of the board of directors elected by the owner of the company.

7. Responsibility:

In the company, members have limited liability within the scope of the stock capital provided by the members.

Example: If a person buys 2000 shares each worth 10 rupees, that person's liability is limited to 20,000 Rs only.

8. Continuous existence:

The company survives and is independent of its members. Members can enter and leave, but it does not affect the operation of the company. The company can only be dissolved through legal proceedings.

Q15) Explain the stages of formation of Joint Stock Company.   5

A15) Important Stages in the formation of a company

The whole process of company formation can be divided into four stages as given below.

1. Promotion of a Company
2. Registration of a Company
3. Certificate of Incorporation; and
4. Commencement of the Business.

1. Company promotion:

A company cannot be established by itself. It is the result of the efforts of individuals or groups of people or institutions. That is, it must be promoted by some people. The process of promoting a business begins with the idea of   an idea and ends when the idea is put into action. That is, the establishment of a company and the start of a business.

Who is the promoter of the company?

Successful promoters are wealth creators and economic prophets. People who are involved in the promotion of a company are called promoters. He came up with the idea of   starting a business and took all the steps necessary to make a company a reality.

For example, Dhirubhai Ambani is the promoter of Reliance Industries.

Promoters find ways to raise money, research business ideas, arrange funding, raise resources, and establish a going concern.

The Company’s Act does not give promoters legal status. He is in the position of a trustee.

Promoter type

There are various types of promoters, including professional promoters, temporary promoters, promoter companies, financial promoters, entrepreneurs, lawyers and engineers.

2. Company registration

It is registration that gives birth to a company. A company is only properly formed if it is officially registered under the Companies Act.

Registration Procedure

The important documents that you need to submit to the company registrar to register your company are:

a. Basic Articles of Incorporation: A minimum of 7 people must sign a public company and 2 people must sign a public company. Must be stamped properly.

b. Articles of Incorporation: This document is signed by everyone who has signed the Articles of Association.

c. List of Directors: Make a list of directors' names, addresses and occupations and submit them to the company's registration body.

d. Written Consent of Directors: Written consent of a director who has agreed to act as a director must be submitted to the Registrar with a written commitment to acquire and pay qualified shares.

e. Notification of registered office address: It is also customary to submit a notification of the address of the company's registered office when the company is established. It will be issued within 30 days from the date of establishment.

f. Legal Declaration: Legal Declaration by Defender of the Supreme Court or high court or a lawyer or counsel qualified to appear in the High Court. Practicing a certified accountant in India, engaged in the establishment of a company, or

It is mentioned that the legal requirements and the rules below are being observed by the person listed in the article as a director, managing director, secretary or manager of the company. This must be submitted to the company's registration authority.

Once the required documents have been submitted to the registrar with a prescribed fee, the registrar will scrutinize the documents. When the registrar is filled, the name of the company is entered in the register. The registrar then issues a certificate called the Certificate of Incorporation.

3. Establishment certificate

Upon registration of the Articles of Incorporation, Articles of Incorporation and other documents, the registrar issues a certificate called the "Certificate of Establishment". Issuing a certificate is proof of the fact that the company has been established and is in compliance with the requirements of the Companies Act.

4. Business start certificate

Private companies can start their business as soon as they obtain a proof of establishment. A public company can only start a business after obtaining a "business start certificate". After the company obtains the certificate of establishment, the public company issues a prospectus to invite the general public to join its equity capital. Modify the minimum subscription. Next, you need to sell the minimum number of shares listed in the prospectus.

Once the required number of shares has been sold, a proof of receipt of all the money will be sent to the registrar along with a letter from the bank.

The registrar then scrutinizes the document. If he is happy, he will issue a certificate known as a "business start certificate". This is the definitive proof of starting a business.

Q16) What is a Co-operative society? What are its features?   12

A16) Cooperatives are voluntary organizations that started with the purpose of serving members. This is a form of business in which individuals in the same class work together to promote a common goal.

These are generally formed by the poor or weak parts of society. It reflects the desire of the poor to stand on their feet and to have their own strengths.

His philosophy on the formation of a co-operative society is "for all, and for all." Cooperation works as if you were helping others.

Co-operatives are a special type of society, established by economically vulnerable people to improve and enhance their economic condition with the help of each other.

Many corporate organizations have the main motivation to make a profit and exploit their customers.

However, this organization is based on helping each other through the available resources, offering products to members of society without profit or at a low price.

Simply put, we know that cooperation means working together to improve their financial condition. This organization is based on "for all, and for all."

Therefore, this organization works with the mutual cooperation of all members. In this organization, all members are equal and their rights are freely available. Therefore, the "one man, one vote" system will become widespread in this society.

Many companies were founded to make money, but co-operatives have the incentive to serve members of society for social welfare so as not to make money.

The first co-operative was founded in 1844 by Robert Owen under the name "Rochdale Society of Episers".

The main purpose of this society was to save the poor who offer goods at lower prices than the market price, eliminate half-hearted madness and provide better service to its members.

In other words, a co-operative is a group of people who actively participate in an organization to protect their economic and social interests.

Co-operatives are free to join and leave the co-operative if they wish, but they cannot transfer their contributions.

Co-operatives are a society whose purpose is to promote the financial interests of its members in accordance with the principles of co-operatives.

According to Culvert, co-operatives are a form of organization in which people voluntarily connect as human beings on the basis of equality to promote their financial interests.

Co-operatives are just one aspect of a vast movement that promotes the voluntary association of individuals with a common need to join together to achieve a common economic goal.

Characteristics of co-operatives

Based on the above definition, the following characteristics of the co-operative organization can be derived.

1. Voluntary association

Anyone with a common interest is free to join the co-operative. There are no restrictions on caste, creed, religion, colour, etc. Anyone can leave at any time after notifying society.

It is the specialty of every co-operative. The co-operative requires a minimum of 10 members, but there is no maximum membership limit.

b.    Independent corporation

After registration, the co-operative is recognized by law as a separate legal entity. It acquires a very clear and independent identity that its members can purchase, dispose of, sue, and sue.

c.     Democratic management

Equality is the essence of co-operative enterprises governed by the principles of democracy. All members have equal rights to the functional management of the society.

Therefore, each member has only a single voting right, regardless of the number of shares held or the investment.

In the case of co-operatives, "one man, one vote" is a rule of thumb, so members do not detect functional conditions.

d.    Service motive

The main purpose of forming a co-operative is for mutual benefit through self-help and collective efforts. Profit is not on the agenda of co-operatives.

But if members like it, they can do the activities they choose to create surpluses to cover their daily expenses.

e.     Utilization of surplus

A part of the surplus generated by the business operation will be recorded in another reserve, and a part will be distributed as a dividend to the members.

f.       Cash transaction

One exception to co-operative societies is, like any other business, when you don't go for credit sales. We sell products only in cash.

As a result, co-operatives are unlikely to face financial difficulties because they do not collect membership fees. Members can only purchase on credit basis, which is an exception to the current rules.

Q17) What are the principles of cooperative society?    8

A17) Cooperative Principles

Below are a number of the concepts that co-operatives stand for.

1. Voluntary association

Co-operative club is voluntary and open to all adults with not unusual place hobbies. Anyone may be a member of a business enterprise, irrespective of caste, creed, colour, gender, or religion.

b.    Autonomy

Cooperatives are self-governing bodies. It enjoys the reputation of autonomy due to the fact it's far a self-sufficient, self-renewal, and self-controlled business enterprise. It survives as it isn't laid low with the dying of running people.

c.     Capital

Co-operative capital is raised withinside the shape of fairness capital from its contributors. Equity capital isn't sufficient to cowl working costs, so we borrow loans from the authorities or pinnacle co-operative corporations.

d.    Service motive

It is prepared to offer carrier to its contributors and now no longer to make a profit.

e.     Democratic control

The operation of the co-operative is on the road of democracy. Management belongs to the Steering Committee band elected with the aid of using the contributors.

The contributors as an entire decide control guidelines and guidelines, and the steerage committee capabilities withinside the framework of the concepts set with the aid of using the whole.

f.       Government manages

Because co-operatives are registered, they may be challenge to authorities’ guidelines and guidelines.

g.    Member reputation

In co-operatives, every member is given one vote, irrespective of the range of stocks they own. No one on this business enterprise can manage society primarily based totally on his inventory capital.

h.    Distribution of surplus

Co-operative profits are shipped to contributors primarily based totally on their capital contributions.

i.       Cash transaction

Cooperative transactions are carried out in cash. It in no way permits the precept of credit score in its alternate practices.

j.       Mutual support

It is continually aimed toward fostering a spirit of cooperation among contributors. All contributors of society want to behave withinside the high-quality hobbies of others. It is primarily based totally at the precept of "for all and for all".

Q18) Discuss the role of cooperative.       12

A18) The role of co-operatives

1. Creation of unity

"Unity is power" is a co-operative guideline. To this end, co-operatives unite the vulnerable and guide them to promote mutual cooperation that helps endure social relationships.

b.    Awaken the enthusiasm to work

Cooperative societies help awaken the spirit of new work in the minds of those who have been defeated and lost in the struggle of life.

Co-operatives encourage people to dream new dreams and work with new inspiration.

c.     Bringing welfare to members

Co-operatives have been established solely to provide financial and social welfare to their members. To this end, co-operative societies develop not only the mental state of their members, but also the way they work in thinking.

In addition to that, by giving them the opportunity to retire and pay dividends. It ensures economic development.

d.    Reduce wealth inequality

Capitalism creates wealth inequality, and co-operatives not only reduce it, but also help equal distribution of wealth.

It creates self-employed opportunities and encourages members to compete with others.

e.     Establishing equal rights

To establish equal rights, the co-operative has set restrictions on the purchase of shares. In addition to this, democracy and equal voting rights are protected. Equal rights contribute to the establishment of social order and justice.

f.       Teaching of moral principles

Cooperative societies play an important role in spiritual improvement by teaching moral principles such as unity, trust, honesty, order and cooperation to ensure social order.

g.    Skill improvement

Co-operatives play a major role by providing training programs to improve the skills of uneducated poor and unskilled members.

h.    Dismissal of middleman

Co-operatives help protect the middle- and middle-class people in bond-holding societies from the greedy clutches of lucrative, capitalists, and middle-class people.

This society produces or collects goods from manufacturers and supplies these goods to its members at low rates. In this way, it achieves its purpose.

i.       Loan facility

Poor producers are suffering from capital problems. Cooperative Credit Associations, Multipurpose Cooperatives lend money to these people at very low interest rates.

j.       Economic development

By developing agriculture and irrigation systems and providing financing and counselling to small industries and cottages. It also helps to eliminate poverty and secure the country's economic development.

Q19) What are the benefits of cooperative?

A19) Benefits of co-operatives

The following are important benefits or benefits of co-operatives:

1. Easy formation

Creating a co-operative is much easier than a corporation. The simple requirement is that at least 10 members must apply in writing to the registrar using the four copies of the Articles of Association.

b.    Open membership

Co-operatives operate on the principle of open membership. Therefore, many people can be members. Membership is not limited to a small number of people.

c.     Democratic management

All members of the co-operative are called the whole, and the members who run the co-operative are jointly called the steering committee.

They manage the co-operative society democratically. The rule is "one person, one vote", and members can have a say in the management team.

d.    Limited liability

Members' responsibilities remain limited to the scope of capital they provide. He is not obliged to pay the co-operative responsibility personally. In general, his liability is limited to the par value of the stock.

e.     Stability and continuity

Co-operatives are permanently inherited because they are not affected by the death, bankruptcy or madness of their members. Since it is a voluntary organization where old members may go and new members may come, it does not affect social life.

f.       Cheap price

The profit margins of co-operatives are so low that they can make goods and services available at a reasonable cost. Sold to manufacturers or producers and customers.

g.    Mutual help

The basic purpose of co-operatives is mutual assistance. Some members who understand this principle provide services in honour. This reduces administrative costs.

h.    Social advantage

Co-operative societies discourage monopoly; result in a higher distribution of wealth, paintings at the standards of carrier and control exploitation.

We additionally use surplus earnings for social advantages thru the status quo of charitable hospitals and faculties to enhance social welfare.

i.       Mobilization of financial savings

Cooperatives are financial savings and mortgage associations. It affords an powerful method of pooling the assets of the susceptible elements of society together.

By checking for luxury, you train humans the dependency of saving. Such mobilized assets are used for optimistic purposes.

j.       Remove the issues in capitalism

This shape of organisation gets rid of sure essential flaws in capitalism.

For example, monopoly, immoderate awareness of wealth in some hands, profitability, black markets, exploitation of employees and consumers.

These apparent flaws in capitalism aren't beneath the co-operative organisation. Eliminate intermediaries thru the procedure of integration.

k.    Cash transaction

Co-operatives observe the precept of "coins and carry".

As a end result, there aren’t any horrific money owed and you could gain from diverse reductions and concessions. It additionally teaches financial savings conduct amongst individuals.

l.       Government support

Cooperatives are a motion of humans. In addition, it promotes moral, social and academic value. It additionally facilitates humans’ economic enlistment.

As an end result, the authorities have given the organisation many concessions and privileges.

Q20) What are the disadvantages of cooperative?     5

A20) Causes of dangers or barriers or weaknesses or deficiencies of co-operative failure

The dangers of co-operatives are:

1. Capital restrictions

In a co-operative society, there may be a capital restriction due to the fact individuals are circuitously constrained to locals only. Members additionally usually belong to bad training.

b.    State manages

Co-operatives are difficulty to the Co-operative Law or the provisions of the law.

Maintaining records, filing audited returns, and forcing authorities’ inspections are the approaches states manage society.

c.     Inefficient control

The operation of co-operatives is inefficient due to the fact individuals of the steerage committee won't display a eager hobby in social sports.

Members usually belong to the decrease training and consequently lack control talents and intelligence.

d.    Lack of alternate secrets

Co-operative officials are usually uncovered to their individuals, which makes it hard to preserve right confidentiality and calls for them to submit their annual and annual reviews in newspapers.

e.     Lack of motivation

There is a loss of motivation for the Steering Committee and different group of workers because of the dearth of effort-praise relationships. The dividend fee is likewise restrained to 15%. This discourages the overall public from becoming a member of co-operatives.

f.       Political interference

The co-operative acts as an area of political hobby at some stage in the election of the Steering Committee, related to a few political events and finishing the simple standards of the co-operative.

This also can result in corruption of social electricity and money that can result in conflicts and controversies amongst individuals.

g.    Limited range

Unlike capitalism, the co-operative gadget cannot be prolonged to consist of the complete monetary gadget.

The scope is restrained withinside the experience that it cannot cowl the complete monetary gadget. The precept of cooperation does now no longer practice properly for organizing all sorts of monetary sports.

For example, co-operatives aren't appropriate for organizing massive businesses. It is likewise now no longer appropriate whilst hypothesis performs a dominant function or whilst generating finer sorts with most skill.

h.    Internal quarrel and competition

Internal conflicts and conflicts among individuals are some other hassles of co-operative businesses.

As an end result of those inner quarrels, conflicts and tensions, individuals of the overall frame emerge as much less inquisitive about the sports of the organisation. All of this could in the long run damage the co-operative society.

i.       Lack of public consider

In fashionable, humans do now no longer have the consider and self-belief in co-operative societies. People are hesitant to emerge as individuals of co-operative businesses due to the fact many co-operatives have failed.

People's fashionable indifference and indifference preclude the improvement of co-operative businesses.

j.       Lack of economies of scale

This organisation could be very small. No economic, administrative or technical assets. As an end result, the advantages of massive companies like businesses aren't to be had to this organisation.

k.    Number limit

According to current law, a co-operative cannot be formed unless it is available to at least 10 adult members. As a result, the growth has been confirmed because less than 10 members cannot form a society.

Q21) What are the types of co-operatives?      5

A21) Types of co-operatives

Co-operatives may fall into different categories based on the purpose, purpose and nature of the activities they carry out.

When several co-operative units are formed to achieve a particular economic goal, the other co-operative units are for the purpose of social uplifting of their members or for consumers, smallholders, or small producers. It is formed for the purpose of supporting.

Based on that, the main types of co-operatives are:

1. Consumers’ Cooperatives.
2. Credit Cooperatives.
3. Cooperative Farming Societies.
4. Cooperative Better Farming Societies.
5. Cooperative Joint Farming Societies.
6. Tenant & Joint Farming Societies.
7. Collective Farming Societies.

1. Consumers’ Cooperatives

These societies are formed by members to offer goods and services at lower rates by eliminating brokerage fees by establishing direct relationships with manufacturers and wholesalers.

They buy bulk goods and services directly from manufacturers and wholesalers and sell them among members of small stalls.

Usually, the benefits of a wholesaler or their dream of owning a home.

These societies were engaged in acquiring land from the general public, developing them, building houses according to the members' choices, and transferring the houses in their favour.

Considering that members pay for their homes, it can easily be an instalment payment over the years.

Cooperatives may arrange loans / loans to members of various financial institutions to cover the cost of the home.

Some societies also sell parcels to their members to build homes at their level.

b.    Credit union

Cooperatives were established to fund poor farmers and the poor in society at low interest rates.

The association raises funds in the form of equity capital from its members and receives deposits from the general public. Loans from state co-operative banks are also available.

The funds raised in this way are used to provide loans to the poor, generally members, on simple terms, as loans or as prepayments.

This process of funding people usually saves them from exploitation by lending, which imposes high interest rates and strict conditions.

There are two types of credit unions: agricultural credit unions and non-agricultural credit unions. Agricultural credit cooperatives extend credit to rural people for both productive and non-productive purposes.

The non-agrarian society is aimed at the masses of the city and meets its short-term financial requirements.

c.     Cooperative Agricultural Cooperative

To achieve higher rates of return from economies of scale, smallholders and marginal farmers in a particular region can work hand in hand to form co-operatives and go to mass farming rather than individual farming.

They contribute to capital, land and labour and jointly participate in all farm activities. This is beneficial to members in many ways, including:

Mass production,

Maximum output,

Advanced technology, fertilizer, and application of manuals,

Pooled resources, land, workforce, etc.

Proper irrigation,

There is no capital shortage to cover daily expenses.

Better agricultural society of co-operatives

These societies have been started to improve the way incitement among members. They arrange machinery, seeds and fertilizers for the farmers. Farmers get higher production by using the same thing.

Members pay some fees for this service provided by society. Therefore, both members and society are benefiting from it.

d.    Cooperative Agricultural Cooperative

In this type of society, the land of individual members is taken away by the society, but ownership remains with the members. Members are allowed to spare no effort in their work, given the wages to work on the land.

The output is sold by society and the realized profits are distributed to the members in proportion to the land prices of the members.

e.     Tenant & Joint Agricultural Society

This type of agricultural society acquires land on the basis of leasehold or free ownership. The land is distributed to nri6i * ribers, who cultivate those lands and grow their produce.

Members pay rent for the use of land. Workers without manpowered lands benefit more from this type of society.

In communal agriculture, ownership belongs to society. All the products produced belong to society.

However, in peasant farming, working people enjoy the products produced on the land owned by others and only pay a fixed fee to cultivate the land of others.

f.       Collective farming society

The land is owned by society. Members work together on land.

Members are paid with wages. Social surplus, if any, is distributed to members in proportion to wages.

It differs from a communal agricultural society in terms of land ownership.