Forms of Business Organisation

• Unlimited Liability (Sole Proprietorship): The business and the owner are not legally distinct entities. If business assets are insufficient to satisfy debts, the owner is personally liable, and courts can legally seize their personal property (personal bank accounts, house, vehicle) to repay business creditors.
• Limited Liability (Company): The company is a distinct legal entity. A shareholder's liability is strictly limited to the unpaid face value of the shares they own. Even if the company collapses into billions of debt, the shareholder's personal private assets can never be attached by creditors.

• (a) Members: Private company requires minimum 2 and maximum 200 members (excluding employees). Public company requires minimum 7 members with no maximum limit.
• (b) Transfer of Shares: Private company articles of association strictly restrict transferability of shares. Public company shares are freely transferable on stock exchanges.
• (c) Invitation to Public: Private company is strictly prohibited from inviting the public to subscribe to shares/debentures. Public company can freely invite the public through a prospectus.

Mutual Agency means every partner is simultaneously both an Agent (capable of binding all other partners by their individual business contracts) and a Principal (bound by the contracts made by any other partner).
Why high-risk: Because partners have joint and several unlimited liability, a single reckless, fraudulent, or incompetent decision by one partner legally binds all other partners, exposing their personal fortunes and properties to liquidation even if they were completely unaware of the contract.

• Mitakshara System: Prevalent throughout all of India except West Bengal and Assam. Under Mitakshara, male family members (and now daughters after the 2005 amendment) acquire an equal ownership interest in the family coparcenary business property by birth.
• Dayabhaga System: Prevalent exclusively in West Bengal and Assam. Children do NOT acquire ownership by birth; they acquire rights only upon the death of the father.

In a Cooperative Society, voting power is based on the democratic principle of human equality: every member possesses exactly one vote, regardless of the number of capital shares they own. A member with 1,000 shares has the exact same single vote as a member with 1 share.
In contrast, in a Joint Stock Company, voting power is proportional to capital ownership ("One Share, One Vote"): an investor owning 1,000,000 shares casts 1,000,000 votes, giving wealthy shareholders total control.

An LLP is a hybrid corporate legal structure incorporated under the Limited Liability Partnership Act, 2008 that combines the organizational flexibility of a partnership with the legal advantages of a company.
Two Advantages:
1. Limited Liability: Partners are not personally liable for the debts of the LLP; their liability is capped at their capital contribution.
2. Protection from Partner Misconduct: A partner is not liable for the independent wrongful acts or gross negligence of other partners, eliminating the dangerous downside of traditional mutual agency.

The Joint Stock Company (Public Limited Company) is the most suitable form.
Reasons:
1. Heavy Capital: A company can issue shares and debentures to millions of public investors without ceiling, pooling vast financial capital that sole traders or partners could never raise.
2. High Risk: Limited liability shields personal shareholder wealth, making investors willing to take capital risks in high-stakes technological or industrial projects.

1. Consumers' Cooperatives: Eliminate retailer/wholesaler middlemen to supply consumer goods at fair prices.
   2. Producers' Cooperatives: Procure raw materials and machinery to protect small manufacturers/artisans.
   3. Marketing Cooperatives: Pool agricultural produce to achieve collective bargaining power for farmers.
   4. Credit Cooperatives: Provide short-term micro-credit loans at reasonable interest to eliminate loan sharks.
   5. Housing Cooperatives: Procure residential land and construct affordable housing units for members.