Co-operative society, Trust, Private limited Company or Public limited Company. A Brief description of different set-up is as under: - 3.1 (a) PROPRIETORSHIP/SOLE TRADERSHIP: The sole trader is a person who carries on business exclusively by and for him. The leading feature of this kind of concern is that the individual assumes full responsibility for all the risks connected with the conduct of the business. He is not only the owner of capital but is usually the organizer and manager and takes all the profits, responsibility for losses. There is no legal formality or need for registration to commence the business provided it is a lawful business. 3.1 (b) PARTNERSHIP FIRM: Partnership has two or members/persons but not more than 20 and 10 in the case of banking business. Each one has agreed to share the profit and loss of the business in a definite proportion. The business is carried on by all or any one of them acting for all. It is governed under the Indian Partnership Act, 1932. Partner should be a person competent to enter into a contract and business should be legal. Partnership can be created orally or written. Though the registration is not legally compulsory but registration can be affected at any time by sending a statement in the prescribed form with prescribed fee to the Registrar of Firms of the locality. Every partner is jointly and severally liable for all acts of the firm. 3.1 (c) JOINT HINDU FAMILY FIRMS (H.U.F): A joint Hindu family carried on a business inherited from its ancestors. It is governed by Hindu Law. The head of the family, the Karta, has full authority. It does not require registration. The composition changes by
Co-operative society, Trust, Private limited Company or Public limited Company. A Brief description of different set-up is as under: - 3.1 (a) PROPRIETORSHIP/SOLE TRADERSHIP: The sole trader is a person who carries on business exclusively by and for him. The leading feature of this kind of concern is that the individual assumes full responsibility for all the risks connected with the conduct of the business. He is not only the owner of capital but is usually the organizer and manager and takes all the profits, responsibility for losses. There is no legal formality or need for registration to commence the business provided it is a lawful business. 3.1 (b) PARTNERSHIP FIRM: Partnership has two or members/persons but not more than 20 and 10 in the case of banking business. Each one has agreed to share the profit and loss of the business in a definite proportion. The business is carried on by all or any one of them acting for all. It is governed under the Indian Partnership Act, 1932. Partner should be a person competent to enter into a contract and business should be legal. Partnership can be created orally or written. Though the registration is not legally compulsory but registration can be affected at any time by sending a statement in the prescribed form with prescribed fee to the Registrar of Firms of the locality. Every partner is jointly and severally liable for all acts of the firm. 3.1 (c) JOINT HINDU FAMILY FIRMS (H.U.F): A joint Hindu family carried on a business inherited from its ancestors. It is governed by Hindu Law. The head of the family, the Karta, has full authority. It does not require registration. The composition changes by
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