FORM OF BUSINESS ORGANIZATION

The determination of the form of business organization is another important decision to be taken before starting a business. Sole proprietorship, partnership and joint stock company are the various forms of business organization. Each form of business organization has its own merits and demerits. Which type of business organization is suitable for the business depends upon various factors i.e. nature of the business, size, capital, risk, etc. If the business is risky and requires larger amount of capital then joint Stock Company is most suitable. If business is to be conducted on small scale, sole proprietorship may be ideal. Broadly speaking sole proprietorship for small business, partnership for medium business and the company for the big business is the most suitable form of business organization. All the three forms are more suitable to each other in varying circumstances.