In this form of ownership, one person provides the entire capital, bears all the risks and independently manages the business.
The proprietor is personally liable for all the debts of the firm. Thus, sole proprietorship is a ‘one-man business’.
Joint Hindu Family Firm:
It is a business firm owned and controlled by a joint Hindu family. The members of the family jointly or collectively establish the business. The management and control of the family business rests with the senior-most male member of the family. He is known as the karta.
In this form of ownership two or more persons enter into a contract to carry on some lawful business jointly and to share its profits. Each partner is considered as the agent of the firm and of its partners. The firm has no legal entity separate from that of the partners.
Each partner is jointly and individually liable for the debts of the firm to an unlimited extent. The number of partners cannot be more than ten in case of a banking business and twenty in other types of business.
A partnership which is set up for a specified time period or for a specific object is known as a joint venture. It is automatically dissolved on the expiry of the period or on the completion of the specified object.
Joint Stock Company:
It is an incorporated association of two or more persons. It has a distinct legal entity which is separate from the identity of its members. Therefore, a company enjoys unlimited life. Its continuity is independent of the lives of its members.
Its management and control lies in the hands of the Board of Directors consisting of the elected representatives of the members. There are several types of companies.
It is a society organised with the purpose of rendering service to its members and to the public in general. It is organised on the principle of mutual self- help.
As an incorporated association of persons, it enjoys perpetual life. It has a distinct identity and the liability of its members is limited. There are several types of cooperative societies.