Business Studies Project

Business studies project
CONTENT : PRIVATE SECTOR ENTERPRICES.
MEANING
SOLE PROPRIETERSHIP
CHARECTRISTICS
FEATURES
UTILITY
MERITS
DEMERITS
DONE BY: K.S. BHARAT RAJ

CLASS : 11 D
 SOLE PROPRIETORSHIP:
 CHARACTERISTICS : A) EASE OF FORMATION .
 B) SINGLE OWNERSHIP.
 C) ONE MANS CAPITAL .
 D) ONE MANS CONTROL.
 E) NO SHARING OF CAPITAL AND LOSS.
 D) UNLIMITED LIABILITY.
 FEATURES:
SINGLE OWNERSHIP: THE SOLE PROPRIETERSHIP FIRM IS OWNED BY AN
INDIVIDUAL ONLY. ALL THE CAPITAL IS SUPLIED BY THE INDIVIDUAL FROM HIS
OWN WEALTH.
 FORMATION AND CLOSURE: THERE ARE NO ILLEGAL FORMALATIES REQUIRED TO START
ANDCLOSE LAW GOVERNING THIS FORM OF BUISNESS.
 UNLIMITED LIABILITY: IN SOLE PROPRIETERSHIP FIRM THE PROPRIETER IS PERSONALY
UNABLE FOR ALL DEBITS OF THE BUSINESS. IN CASE OF BUISENESS LOSSES, THE
BUSINESS ASSETS ARE NOT SUFFICIENT TO MEET ALL THE BUISNESS LIABLITIES, THE
PROPRIETER MAY HAVE TO SELL HIS PERSONAL PROPERTY TO PAY OFF THE LISBLITIES.
 INDIVIDUAL RISK BEARING AND PROFIT RECIPIANT: IN SOLEPROPRIETERSHIP FIRM
WHOLE RISK IS BORNE BY A SINGLE INDIVIDUAL ONLY. THE SOLEPROPRIETER OF ALL
THE REWARD IS ONE INDIVIDUAL ONLY.
 ONE MAN CONTROL: THE PROPRIETER IS THE SOLE OWNER OF FIRM AND HAS FULL
CONTROL OVER IT.THE OWNERSHIP AND MANAGEMENT LIES IN ONE PERSONS HAND
ONLY.
 NO SEPARATE LEGAL ENTITY: a SOLE PROPRITERSHIP HAS ANY LEGAL IDENTITY
SEPARATE FROM THAT OF ITS OWNER. LAW MAKES NO DIFFERENCE BETWEEN THE
OWNER AND THE ENTERPRISE.BUSINESS AND OWNER EXIT TOGETHER.
 MERITS\ADVANTAGEGES:
 QUICK DECISION: ALL THE DECISION ARE TAKEN BY THE

PROPRIETOR HIMSELF.BY QUICK DECISION, IMMEDIATE
ACTION CAN BRING WHICH FLEXIBLITY OF OPEREATION.
 CONFIDENTAIALITY: THE SOLE PRPRIETER IS NOT
EXPECTED TO SHARE HIS SECRATE WITH OTHERS. THERE
US NO LEGAL COMPULTIONJ FOR A SOLE PROPRIETER TO
PUBLISH HIS ACCOUNTS. ALL THE DECISION IS TAKEN BY
THE PROPRIETOR.
 EASY TO FORM AND DISSOLVE: A SOLE PROPRIETER
ORGANISATION IS EASY TO FORM. NO LEGAL FOMALITIES
ARE INVOLVED IN SETTING UP THIS TYPE OF
ORGANISATION. IT IS GOVERNED BY ANY SPECIFIC LAW.
 DEMERITS / DISADVANTAGE:
 LIMITED RESOURCES: THER IS A LIMIT TO THE
CREDIT RIASING CAPACITY OF SINGLE PERSON
ONLY. THIS REDUCES THE SCOPE OFOR BUSINESS
GROWTH.
 LIMITED LIFE OF A BUSINESS: SURVIVALAND
CONTINUES OF SO; LE PRORPRITER FALLS ILL OR
BECOMES INSOLVENT THEN THE BUSINESS MAY
COME TO AN EN.
 UNLIMITED LIABILITY: THE SOLE PROPRIETR IS
PERSONALLY LIABLE FOR ALL THE DEBTS. HEAVY
LOSSES PROPRIETOR WILL NOT ONLY LOSE ALL HIS
BUSINESS ASSETS BUT HE MAY HAVE TO SELL HIS
PERSONAL PROPERTY TO PAY BACK HIS DEBTS.
 SUIT ABILITY OD PRPRIETORSHIP:WHEN MARKET IS
LOCAL.
A) WHEN WITH CUSTOMERS REQUIRED
B) WHERE PROMPTNESS IS REQUIRED IN DECISION
MARKETING.
C) WHERE ONE LESS BEING HIS OWN BOSS
D) WHERE THE NATURE OF BUSINESS IS SIMPLE
E) WHERE CAPITAL REQUIRMENT IS SMALL AND
RISK INVOLVEMENT IS HEAVY.
DIFERENCE BETWEEN PRIVATE SECTOR ANDENTERPRICES AND PUBLIC SECTOR ENTERPRICES:
BASIS OF DIFERENCE PRIVATE SECTOR PUBLIC SECTOR ENTERPRICES

ENTERPRICES
OBJECTIVE. MAXIMITATION OF PROFIT. MAXIMISE SOCIAL WELFARE
ANDENSURE BALANCE
ECONOMIC DEVELOPMENT.
OWNERSHIP. OWNED BY INDIVIDUAL. OWNED BY GOVERNMENT.
MANAGEMENT. MANAGED BY OWNERS AND MANAGED BY GOVERNMENT.
PROFETIONAL MANAGERS.
CAPITAL . RISED BY OWNERS BY LONS RISED FROM GOVERNMENT
PRIVATE SOURCES AND FUNDSAND SOMETIME
PUBLIC ISSUES THROUGH PUBLIC ISSUES.
AREA OF OPERATION. OPERATION IN ALL AREAS OPERATION IN BASIS AND
ADEQUATE RETURN ON PUBLIC UTILITY SECTOR.
INVESTMENT.
Private sector enterprises

Mea
ning:
The private sector is the part of the economy that is run by individuals and
companies for profit and is not state controlled. Therefore, it encompasses all
for-profit businesses that are not owned or operated by the government. A
Private Limited Company is a company which is privately held for small
businesses. The liability of the members of a Private Limited Company is limited
to the number of shares respectively held by them. Shares of Private Limited
Company cannot be publicly traded.
 Features Of Private Sector Companies:

The main feature of the private sector is its management by private individuals
without government involvement, but there are more features of the private
sector:
 Profit motive
 Private ownership and control
 No state participation
 Independent management
 Private finance
 Profit motive:
The primary focus of companies in the private sector is risk taken and the
required return on capital. making a profit. Companies in the private sector
typically manage to realize more profits compared to firms in the public sector.
Additionally, profits provide reward for the risk taken.
 Private ownership and control:

Private entrepreneurs are responsible for owning, controlling and managing the
private sector. The management may be either by a single individual or by a
group of people. When the ownership belongs to a single person, the private
sector company is referred to as a sole proprietorship. Alternatively, a group of
persons may jointly own a firm in the form of a cooperative society, partnership
or a joint-stock company.
 No state participation: Private sector entities have less exposure to
government interference. There is no participation by the state or central
governments in the ownership and control of a private sector
undertaking.
 Independent management: The management of the private sector relies
entirely on its owners. In the case of a sole proprietorship, the manager
makes all of the decisions and acts on behalf of the company in legal
matters. On the other hand, the management of a joint-stock company
depends on a group of directors who are elected representatives of the
shareholders.
 Private finance: The private sector obtains capital from its owners or
shareholders. Different types of private sector undertakings have varied
means of raising capital. A sole trader contributes capital for a sole
proprietorship, and partners invest capital in case of a partnership.
Alternatively, a joint-stock company raises capital through the issue of
share and debentures (a type of long-term debt). Requesting loans for
long- and short-term needs or funds is also another way the private sector
raises capital.
Private sector companies receive very little financial support from the
government unless they are large and significant for a country. Depending on
the financial strength of the private sector, companies with stronger financials
have better capacities to mobilize more funds from the market.
 Merits Of Private Sector Companies:
No Minimum Capital: No minimum capital is required to form a Private Limited
Company. A Private Limited Company can be registered with a mere sum of Rs.
10,000 as total Authorized Share capital.
Separate Legal Entity: A Private Limited Company is a separate legal identity in

the court of the law, meaning assets and liabilities of the business are not the
same as the assets and liabilities of the directors. Both are counted as different.
A private limited company separates Management and Ownership and thus,
managers are responsible for the company’s success and are also answerable for
the company’s loss.Limited Liability: If the company undergoes financial distress
because of whatsoever reasons, the personal assets of members will not be used
to pay the debts of the Company as the liability of the person is limited.For e.g. If
a Private Limited company takes any loan and is unable to pay off, the members
are responsible to pay only that much how much they own towards their own
shareholding i.e. the unpaid share value. Which means, if you have no balance
payable towards the amount of shares you hold, you are not payable towards
any debt payable by the company even if the debt/credit amount remains
unpaid.
 Free &F Easy transfer of shares: Shares of a company limited by shares are
transferable by a shareholder t any other person. The transfer is easy as
compared to the transfer of an interest in a business run as a proprietary
concern or a partnership. Filing and signing a share transfer form and
handing over the buyer of the shares along with share certificate can
easily transfer shares.
 Limitations Of Private Sector Companies:
Smaller resources: A private company cannot have more than fifty members. Its
credit standing is lower than that of a public company. Therefore, the financial
and managerial resources of a private company are comparatively limited.
 Lack of Public Confidence:
Public has little confidence on private companies because its affairs are
unknown and its not subject to strict control under the law.
 Lack of transferability of shares:

There are restrictions on the transfer of shares in a private company. As a result,
a shareholder cannot leave a private company easily and quickly.
Example of Private Sector Companies In india:

 Reliance Industries Limited.
 Tata Consultancy Services (TCS)
 Infosys Technologies Ltd.
CASE STUDY ON RELIANCE INDUSTRIES LIMITED::
HISTORY OF RELIANCE:
The company was co-founded by dhirubai ambani and Champaklal Damani in
1960's as Reliance Commercial Corporation. In 1965, the partnership ended
and Dhirubhai continued the in 1977. The issue was over-subscribed by seven
times.] In 1979, a textiles company Sidhpur Mpolyester business of the firm.[11] In
1966, Reliance Textiles Engineers Pvt. Ltd. was incorporated in maharasyra. It
established a synthetic fabrics mill in the same year at Naroda in Gujarat. On 8
May 1973, it became Reliance Industries Limited. In 1975, the company
expanded its business into textiles, with "Vimal" becoming its major brand in
later years. The company held its Initial public offeringills was amalgamated
with the company.
In 1985, the name of the company was changed from Reliance Textiles

Industries Ltd. to Reliance Industries Ltd. During the years 1985 to 1992, the
company expanded its installed capacity for producing polyester yarn by over
1,45,000 tonnes per annum.In 2001, Reliance Industries Ltd. and Reliance
Petroleum Ltd. became India's two largest companies in terms of all major
financial parameters. In 2001–02, Reliance Petroleum was merged with
Reliance Industries.In 2006, Reliance entered the organised retail market in
India with the launch of its retail store format under the brand name of
'Reliance Fresh By the end of 2008, Reliance retail had close to 600 stores across
57 cities in India. In 2010, Reliance entered the broadband services market with
acquisition of Infotel Broadband Services Limited, which was the only successful
bidder for pan-India fourth-generation (4G) spectrum auction held by the
government of India. In the same year, Reliance and announced a partnership in
the oil and gas business. BP took a 30 per cent stake in 23 oil and gas production
sharing contracts that Reliance operates in India, including the KG-D6 block for
$7.2 billion.] Reliance also formed a 50:50 joint venture with BP for sourcing and
marketing of gas in India.
In 2017, RIL set up a joint venture with Russian Company Sibur for setting up

a Butyl rubber plant in Jamnagar, Gujarat, to be operational by 2018.
In August 2019, Reliance added Fynd primarily for its consumer businesses and
mobile phone services in the e-commerce space.

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CONTENT : PRIVATE SECTOR ENTERPRICES.

DONE BY: K.S. BHARAT RAJ

 QUICK DECISION: ALL THE DECISION ARE TAKEN BY THE

DIFERENCE BETWEEN PRIVATE SECTOR ANDENTERPRICES AND PUBLIC SECTOR ENTERPRICES:

BASIS OF DIFERENCE PRIVATE SECTOR PUBLIC SECTOR ENTERPRICES

Private sector enterprises

 Features Of Private Sector Companies:

 Private ownership and control:

Separate Legal Entity: A Private Limited Company is a separate legal identity in

 Lack of Public Confidence:

 Lack of transferability of shares:

Example of Private Sector Companies In india:

CASE STUDY ON RELIANCE INDUSTRIES LIMITED::

In 1985, the name of the company was changed from Reliance Textiles

In 2017, RIL set up a joint venture with Russian Company Sibur for setting up

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