P.S.R.

Engineering College Sivakasi

SEMINAR III
Topic: Ownership Structure in Entrepreneurship Guided by : Ms. S.P.Subhashini AP/MBA

Submitted To, Mr. K. KARTHIKEYAN, AP/MBA, Mrs. J. Hema, AP/MBA.

Submitted by, Ramachandran.R 12BA035.

INTRODUCTION TO ENTREPRENEURSHIP
Entrepreneurship involves the creation

process, creating something new of value.

The creation has to have value to the entrepreneur and value to the audience for which it is developed. Entrepreneurship is the dynamic process of creating incremental wealth.

DEFINITION OF AN ENTREPRENEUR
An entrepreneur is one who organizes and manages a business undertaking, assuming the risk, for the sake of profit. The entrepreneur evaluates perceived opportunities and strives to make the decisions that will enable the firm to realize sustained growth.

ENTREPRENEURSHIP DEVELOPMENT
Entrepreneurship development (ED) refers to the process of enhancing entrepreneurial skills and knowledge through structured training and institution-building programmes. Entrepreneurship development focuses on the individual who wishes to start or expand a business.

CHARACTERISTICS OF AN ENTREPRENEUR
Ability to learn from others Self confidence Innovative Self motivation Showing initiative Analytical abilities Ability to make decisions Bear Risks

OWNERSHIP STRUCTURES IN ENTREPRENEURSHIP

Sole Proprietorship Partnership Firms Joint Stock Companies Co-operative Societies.

Sole - Proprietorship
Definition: The sole proprietorship is a form of organization in which an individual introduces his own capital, uses his own skill and intelligence, and is entirely responsible for the results of its operations. (or) A business carried on by a single person exclusively by and for himself.

Sole Proprietorship - Features

1. One-man Ownership and Control 2. Capital Contribution 3. Unlimited Liability 4. Enjoyment of Entire Profit 5. No Separate Legal Entity 6. Registration 7. Simplicity 8. Duration 9. Small Capital

Sole Proprietorship
Advantages 1. Easy Formation 2. Direct Motivation 3. Flexibility 4. Retention of Business Secrets 5. Quick Decision 6. Higher reward 7. Inexpensive management 8. Increase in Sales Disadvantages 1. Limited capital 2. Limited Managerial Ability 3. Unlimited Liability 4. Hasty Decisions 5. Uneconomic Size

PARTNERSHIP
Definition: Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all
.

(or)

Partnership is the relation existing between persons, competent to make contracts, who have agreed to carry on a lawful business in common with a view to private gain .

PARTNERSHIP MAIN FEATURES

1. Agreement 2. Multiplicity of Person 3. Contractual Relation 4. Lawful Business 5. Sharing of Profits 6. Agency Relationship 7. Joint and Several Liability 8. Non-Transferability of Interest

PARTNERSHIP
Advantages 1. Easy Formation 2. Registration not compulsory 3. Larger Financial Resources 4. Greater Managerial Talent 5. More Credit Standing 6. Quicker and Better Business Decisions 7. Sharing of Risk 8. Close Supervision Disadvantages 1. Unlimited Liability 2. Limited Resources 3. Danger of Implied Agency 4. Distrust 5. Limitation on Transfer of Share 6. Lack of Continuity

Partnership Deed
1. Name of the firm. 2. Date of agreement. 3. Principal place of business. 4. Names and addresses of all the partners. 5. Nature of business. 6. Duration of the partnership, if any. 7. Amount of capital contributed by each partner. 8. Amount of withdrawal of each partner. 9. Profit sharing ratio 10. Salary payable to active partner 11. Interest on capital 12. Interest on drawings 13. Procedure for admission or retirement of partners. 14. Manner of dissolving the firm 15. Mode of settlement. 16. Maintenance of books of accounts 17. Interest to be allowed on partners loans 18. Mode of valuation of 19. Procedure for settlement of disputes among partners by arbitration.

KINDS OF PARTNERS
1. Active Partner 2. Sleeping Partner or Dormant Partner 3. Nominal or Ostensible Partner 4. Partners in Profit Only 5. Partner by Estoppel 6. Partner by Holding out 7. Sub-Partner 8. Minor as a Partner

Partnership
REGISTRATION OF FIRM 1. Name of the firm 2. Principal place of its business 3. Name and address of each partner 4. Date of admission of each partner 5. Date of commencement of business of the firm 6. Duration of the firm DISSOLUTION OF FIRM
1. Dissolution by Agreement (Sec.40) 2. Compulsory dissolution (Sec 41) 3. Dissolution on the happening of certain contingencies (Sec 42) 4. Dissolution by notice of partnership-at-will (Sec 43) 5. Dissolution through Court (Sec.44)
Partners Insanity Permanent Incapacity Persistent Breach of Agreement Misconduct of a Partner Transfer of Share

JOINT STOCK COMPANY

Definition: An association of many persons who contribute money or moneys worth to a common stock and employ it in some trade or business and also share the profit and loss, as the case may be, arising there from.
(or)

A company is an incorporated association; it is an artificial person created by law, having a separate entity, with a perpetual succession and a common seal.

COMPANY MAIN FEATURES

1. Separate legal entity 2. Perpetual Succession- Continuity of Life 3. Common Seal 4. Limited Liability 5. Easy Transferability of Shares

Company
Advantages 1. Stability (Perpetual Succession- Continuity of Life) 2. Limited Liability 3. Easy Transferability of Shares 4. Better credit Disadvantages 1. Complicated legal formalities 2. Heavy cost of Floating a company 3. Separation of Ownership and Control 4. Fraudulent Promoters

TYPES OF COMPANIES (based on its no. of members)

Public Company Minimum - 7members Maximum unlimited Directors 3 directors Transfer of shares Easy Name Limited Minimum Paid up Capital Rs. 5 lakhs Private Company Minimum 2members Maximum 50 members Directors 2 directors Transfer of shares - Restrict Name Private Limited Minimum Paid up Capital Rs. 1 lakhs

CO-OPERATIVE SOCIETY
Definition: A society which has its objectives for promotion of the interests of its members in accordance with the principles of co-operation

(or)
A co-operative society is a form of organisation wherein persons voluntarily associate together as human beings on the basis of equality for the promotion of economic interests of themselves.

CO-OPERATIVE SOCIETY MAIN FEATURES

1. Voluntary Organisation 2. Equality 3. Democratic Managements 4. Combination of resources 5. Concentrated Effort 6. Spirit of service 7. Plural Membership 8. Legal Capacity

CO-OPERATIVE SOCIETY
Advantages
1. Easy formation 2. Unlimited membership 3. Democratic management 4. Limited liability 5. Stability 6. Cheaper service 7. Tax concession 8. Social benefit 9. Saving habit 10. Fall in prices

Disadvantages 1. Inefficient management 2. Limited capital 3. Lack of motivation 4. Lack of co-operation 5. Non-transferability of interest 6. Lack of secrecy 7. No credit facility

Nature of business Area of business Degree of Control Capital Requirements Risks Duration of business Government Regulations

FACTORS DETERMINING AN APPROPRIATE OWNERSHIP STRUCTURE

Conclusion
The entrepreneur has the suitable skills to choose an appropriate business structure. He knows all the advantages and disadvantages of all the business structure. Choosing correct business structure will results to attains get success and also results to attain more profit in the entrepreneurship business.