Introduction to Business
Business: Definition, Elements, Functions, Features, Objectives, Importance
Next, to love and religion, business is considered as the most significant factor influencing human life. Although Allah (SWT) created us for “Obadiah” (Worship) under the guidance of Al-Quran and Sunnah, we are madly involved in serving our desires’ provoked by the traditional business firms under their ulterior motives! This is why human civilization there-...Functional Areas of Business
Even in the smallest business, several key tasks, or functions, that are to be done regularly. Stock must be bought, bills must be paid, customers must be served, and customer inquiries must be answered. In a small firm, all these jobs may be done by one or two people. In a large organization, people specialize...15 Qualities of a Good Businessman
In the modern age, we can see the various changes in the business field. Due to technological advancement, a good businessman must possess the essential skill and knowledge about his business. Following are the 15 important qualities of a good businessman: Honest It is the first quality of a good businessman that he should honest...13 Barriers to Business
Factors influencing business may become barriers to some firms and, at the same time, may open up opportunities for other firms. Those factors may be discussed as follows: Business Environment Every business needs to be responsive to the forces around them, whether they are social, technological, economic, political, or even ethical. Firms that can respond...Business Environment: Features, Importance
Business Environment refers to a set of forces and conditions inside and outside the organization’s boundaries that have the probability of affecting the way the organization runs. Understanding the environment within which the business has to operate is very important for running a business unit successfully at any place. Because the environmental factors influence almost...Types of Business
Business is a combination of industry and commerce based on functions. Industry includes activities involved in the conversion of raw materials into useful products. It processes raw materials or semi-finished goods into finished goods. For example, cotton is converted into cloth in textile industries, sugar is extracted from sugarcane in sugar industries, and automobiles are...Sole Proprietorship: Definition, Features, Characteristics, Advantage, Disadvantages
A Sole proprietorship, also called sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility...Partnership: Definition, Features, Advantages, Limitations
A partnership is a relation between two or more persons who join hands to form a business organization to earn a profit. The persons who join hands are individually known as ‘Partner’ and collectively a ‘Firm.’ The partners provide the necessary capital, run the business jointly, and share the responsibility. You must be thinking about...What is a Company? Definition, Characteristics, Advantages, Disadvantages
Companies Act of any country defines the word ‘company’ as a company formed and registered under the act or an existing company formed and registered under any of the previous company laws. Company Definition Former Chief Justice of the United States, Justice John Marshall, said, “A company is an artificial being, invisible intangible and existing...Private Limited Company: Definition, Advantages, Disadvantages
A private company is owned entirely by a relatively small group of individuals or other entities providing capital. By definition, private companies don’t raise money by selling shares to the investors close to the founders, banks, and funds that specifically invest in private companies. A privately held company has more flexibility in how it operates...Public Limited Company: Definition, Features, Advantages, Disadvantages
A public limited company is a voluntary association of members that are incorporated and, therefore has a separate legal existence and the liability of whose members is limited. Public limited companies are listed on the stock exchange where it’s share/stocks are traded publicly. Its main features are; The company has separate legal existence apart from...Forms of Business Ownership
From the standpoint of ownership, business organizations may be of the following types; Sole Proprietorship. Partnership. Company. Cooperative Society. State Enterprise. Sole Proprietorship A sole proprietorship is a for-profit business owned by one person. The owner may operate on his or her own or may employ others. The owner of the business has unlimited liability...Size of Business Unit: Definition, Measures, Factors, Concepts, Optimum Size of Business
The size of a business unit means the size of a business firm. It means the scale or volume of operation turned out by a single firm. The study of the size of a business is important because it significantly affects the efficiency and profitability of the firm. One of the most important entrepreneurial decisions...Cooperative Society: Definition, Characteristics, Principles, Advantages, Limitations
The philosophy of cooperative society is to serve the common man and to liberate him from the oppression of the economically strong people and organizations. Mutual assistance and service are the objectives as distinguished from the aim of the other forms of organization, which is primarily making of profit. It aims at encouraging self-help on...Government Company: Definition, Features, Advantages, Disadvantages of Government Companies
A government company is a company in which the Government or State Government holds 51% or more of the paid-up capital. Government Company, also called Public Enterprise, State Enterprise. It works as other companies registered under the Companies Act. Features of Government Companies The main features of Government companies are as follows: It is registered...State Enterprise: Definition, Objectives, Why State Enterprises are Successful
A government-owned corporation, state enterprise, or government business enterprise is a legal entity created by a government to undertake commercial activities on behalf of an owner government. It is usually considered to be an element or part of the state. What is State Enterprise? State ownership, also called public ownership, government ownership or state property,...Statutory Corporation: Definition, Features, Advantages, Disadvantages
Statutory Corporation (or Public Corporation) refers to such organizations that are incorporated under the special Acts of the Parliament/State Legislative Assemblies. Its management pattern, its powers, and functions, the area of activity, rules, and regulations for its employees and its relationship with government departments, etc. are specified in the concerned Act. For example, Central or...Business Combination: Definition, Types and Forms of Business Combinations, Advantages, Disadvantages
When a voluntary association of firms is formed to achieve common goals and to enjoy the monopoly advantages, that sort of initiative is called business combination. The combination may be formed by a written or oral agreement among the firms. Sometimes firms decide to merge themselves into one unit. The main object of the business...Business Location Analysis: Definition, Objectives, Factors
Location refers to the choice of region and the selection of a particular site for setting up a business or factory. But the choice is made only after considering the cost and benefits of different alternative sites. It is a strategic decision that cannot be changed once taken. If at all changed only at considerable...What is Amalgamation? Types of Amalgamation
Amalgamation is an arrangement where two or more companies consolidate their business to form a new firm or become a subsidiary of any one of the companies. For practical purposes, the amalgamation and merger of the terms are used interchangeably. However, there is a slight difference. The merger involves the fusion of two or more...Departmental Undertakings: Definition, Features, Advantages, Disadvantages
Departmental undertakings are the oldest among public enterprises. A departmental undertaking is organized, managed, and financed by the government. It is controlled by a specific department of the government. A minister heads each such department. The controlling ministry takes all policy matters and other important decisions. The parliament lays down the general policy for such...Mergers & Acquisitions: Meaning, Process, Example, Advantages, Disadvantages
Mergers & Acquisitions have become a common strategy to consolidate the business. The basic aim is to reduce cost, reap the benefits of economies of scale and, at the same time, expand market share. For many people, mergers simply mean sharing resources and costs to increase bottom lines. However, it is not as simple as...Partnership
Partnership: Definition, Features, Advantages, Limitations
A partnership is a relation between two or more persons who join hands to form a business organization to earn a profit. The persons who join hands are individually known as ‘Partner’ and collectively a ‘Firm.’ The partners provide the necessary capital, run the business jointly, and share the responsibility. You must be thinking about...Types of Partners in Partnership Business (Rights, Duties, Liabilities of Partners)
In a partnership firm, you can find different types of partners. Some may actively participate in the business while others prefer not to keep themselves engaged actively in the business activities after contributing to the required capital. Also, certain kinds of partners neither contribute capital nor actively participate in the day-to-day business operations. Let us...Limited Partnership: Definition, Advantages, Disadvantages of Limited Partnership
A limited partnership firm formed by general partners and limited partners, where the general partner(s) run the business and have liability and limited partner(s) has no day-to-day involvement in the business decision making. A limited partner’s liability for a partnership firm is limited to the invested amount in the company. There are two types of...Company
Types of Companies
Types of companies are based on the characteristics, ownership, liability, and the company act of various countries. There is no fixed type or classification of a company. So; the type or classification of a company depends on many things:- formation, incorporation, control, ownership, the number of members, liability, declaration by the leader of the country...What is a Company? Definition, Characteristics, Advantages, Disadvantages
Companies Act of any country defines the word ‘company’ as a company formed and registered under the act or an existing company formed and registered under any of the previous company laws. Company Definition Former Chief Justice of the United States, Justice John Marshall, said, “A company is an artificial being, invisible intangible and existing...Private Limited Company: Definition, Advantages, Disadvantages
A private company is owned entirely by a relatively small group of individuals or other entities providing capital. By definition, private companies don’t raise money by selling shares to the investors close to the founders, banks, and funds that specifically invest in private companies. A privately held company has more flexibility in how it operates...Shares: Definition, Type of Shares
Shares in the share capital of a company and include stock except where a distinction between stock and share is expressed or implied. Shares signify the following; The interest of a shareholder in the company the right to receive the dividend, attend meetings, vote at the meeting and share in the surplus assets of the...Types of Share Capital
It may be divided into the following types:- Authorized Registered or Nominal Capital This represents the total amount of the share capital authorized by the Memorandum of Association and which the company has the power to issue. Issued Capital This is the capital consisting of the number of shares that have been offered to the...Public Limited Company: Definition, Features, Advantages, Disadvantages
A public limited company is a voluntary association of members that are incorporated and, therefore has a separate legal existence and the liability of whose members is limited. Public limited companies are listed on the stock exchange where it’s share/stocks are traded publicly. Its main features are; The company has separate legal existence apart from...Debenture: Definition, Characteristic, Types of Debentures
Debenture includes debenture stock, bonds and any other securities of a company, whether constituting a charge on the assets of the company or not. Characteristic or Features of a Debenture Debentures are issued by a company and are usually in the form of a certificate, which is an acknowledgment of indebtedness. It is issued under...Company Meetings: 4 Types of Company Meetings
4 types of company meetings are; Statutory meeting, Annual general meeting, Extraordinary general meeting, Class meetings. Statutory Meeting Every company limited by shares and every company limited by guarantee and having a share capital shall, within not less than one month and not more than six months from the date at which the company is...Company Registration: Process, Advantages, Importance
A private or public limited company must be registered under the country’s Company Act. In the registration process, the proposed company must comply with different sections of the act. Now we would acquaint ourselves with the registration process. Process of the Registration of the Firm Registration of a firm is not compulsory by law. But...Doctrine of Ultra-Vires
The company’s activities are confined strictly to the objects mentioned in its memorandum, and if they go beyond these objects, then such acts will be ultra vires. The object of declaring such acts as ultra vires is to protect the interests of shareholders and all others who deal with the company. Ultra vires the directors...Articles of Association: Difference Between Memorandum and Articles of Association
The articles of association of a company and its bye-laws are regulations that govern the management of its internal affairs and the conduct of its business. They define the duties, rights, powers and authority of the shareholders and the directors in their respective capacities and the company, and the mode and form in which the...Memorandum of Association: Definition, Features, Purpose, Importance
What is the Memorandum of Association? The Memorandum of Association of a company is its charter, which contains the fundamental conditions upon which alone the company can be incorporated. It tells us the objects of the company’s formation and the utmost possible scope of its operations beyond which its actions cannot go. If anything is...Foreign Trade
Foreign Trade: Definition, Types of Foreign Trade
Foreign trade is the exchange of capital, goods, and services across international borders or territories. In most countries, it represents a significant share of gross domestic product (GDP). Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact on the international trade system. Increasing international trade is crucial to the continuance...Documents Used in Foreign Trade
In foreign trade, there is no element of the casualness sometimes present in transactions taking place in the local marketplace. If the documentation for a foreign shipment is wrong, even a small detail – the shipment may be refused by customs at the port of exit or port of entry; it may be delayed; it...What is Letter of Credit? Types, Characteristics, Importance
A letter of credit is a bank undertaking of payment separate from the sales or other contracts on which it is based. It is a way of reducing the payment risks associated with the movement of goods. Expressed more fully, it is a written undertaking by a bank (issuing bank) given to the seller (beneficiary)...Types of Negotiable Instruments (Features, Function, Practice)
Negotiable instruments are freely transferable commercial documents and each type of negotiable instrument has unique functions and features.
