1. Ownership Structure

2. Ownership Structure
• Proprietorship : Is the oldest form of business
ownership in India. In a proprietorship, the
enterprise is owned and controlled by one
person.
• Proprietorship is the simplest and easiest to
form. It does not require legal recognition and
attendant formalities.

3. Proprietorship features
• One Man ownership: In proprietorship, only one
man is the owner of the business.
• No Separate Business Entity: No distinction is
made between the business concern and the
proprietor. Both are one and the same.
• No Separation between Ownership and
Management: In proprietorship, managements
rests with the proprietor himself/herself. The
proprietor is a manager also.

4. Proprietorship features
• Unlimited Liability: Unlimited liability means that
in case the enterprise incurs losses, the private
property of the proprietor can also be utilized for
meeting the business obligations to outside
parties.
• All Profits or Losses to the Proprietor: Being the
sole owner of the enterprise, the proprietor
enjoys all the profits earned and bears the full
burnt of all losses incurred by the enterprises.

5. Proprietorship features
• Less formalities: A proprietorship business can
be started without completing much legal
formalities. There are some businesses that
can be started simply after obtaining
necessary manufacturing license and permits.

6. Proprietorship Advantages
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Simple form of Organization
Owner’s Freedom to take Decisions
High Secrecy
Tax Advantage
Easy Dissolution

7. Partnership
• Partnership: Is defined as an association of
two or more persons to carry on as co-owners
a business for profit”

8. Main Features of Partnership
• More Persons: As against proprietorship, there
should be at least two persons subject to a
maximum of ten persons for banking business
and twenty for non-banking business to form
a partnership firm.
• Profit and Loss Sharing: There is an agreement
among the partners to share the profits
earned and losses incurred in partnership
business.

9. Main Features of Partnership
• Contractual Relationship: Partnership is
formed by an agreement oral or written
among the partners.
• Existence of Lawful Business: Partnership is
formed to carry on some lawful business and
share its profits or losses. If the purpose is to
carry some charitable works, for example it is
not regarded as partnership.

10. Main Features of Partnership
• Utmost Good faith and Honesty: A partnership
business solely rests on utmost good faith and
trust among the parties.
• Unlimited liability: Like proprietorship, each
partner has unlimited liability in the firm. This
means that if the assets of the partnership
firm fall short to meet the firm’s obligations,
the partners private assets will also be used
for the purpose.

11. Main Features of Partnership
• Restrictions on Transfer of share: No partner
can transfer his share to any one outside
person without seeking the consent of all
other partners.

12. Advantages of Partnership
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Easy formation
More capital Available
Combined Talent, Judgment and Skill
Diffusion of Risk
Flexibility
Tax Advantage.

13. Company
• A company is an artificial person being created
by law that has an existence separate and a
part from its owners. In other words, company
is an artificial person created by law, with a
distinctive name, a common seal and it can
sue and be sued in its own name.

14. Main features of Company
• Artificial legal Person: A company is an artificial
person created by law. Though it has no body, still
it exists as a person. Like a person, it can enter
into contracts in its own name and like wise may
sue and be sued by its own name.
• Separate legal Entity: A company has a distinct
entity separate from its members or
shareholders. Therefore, a shareholder of the
company can enter into contract with the
company .

15. Main features of Company
• Common seal: Being an artificial person,
company cannot sign the documents, hence it
uses a common seal on which its name is
engraved. Putting the common seal on papers
relating to company’s transactions makes them
binding on the company.
• Perceptual Existence: Unlike partnership, the
existence of a company is not affected by the
death, insolvency or retirement of its members or
directors. This is because company enjoys a legal
separate entity.

16. Main features of Company
• Limited liability