Question

Short Answer Type Questions: State the various types of organisations in the private sector.

Answer 1

The private sector comprises of commercial enterprises owned by an individual or a group of individuals. The main motive of a private sector is profitability. Funding is raised with the help of individual investments or through shareholders. It mainly comprises of:

(i) Sole Proprietorship: It refers to the form of organisation where business is owned by a single individual. He manages and controls and bears all the risks arising from the business.

(ii) Partnership: It is defined as an association of two or more persons who agree to carry the business together and share the profit as well as bear the risks together.

(iii) Joint Hindu Family: This business is owned and carried on by the member of a Hindu Undivided Family which is governed by the Hindu Law.

(iv) Company: It may be defined as an artificial person existing only in the eyes of law with perpetual succession, having a separate legal entity and common seal. It is of two types -(a) Private and (b) Public.

(v) Multinational Corporations: These companies have their operation spread across one or more countries other than its host country. Ex: Google.