FORMS OF BUSINESS UNDERTAKINGS

– A number of forms of organizations exist to suit requirements of different business undertakings.

There are three types of business undertakings.– Private undertakings

– Public undertakings

– Joint Sector undertakings

PRIVATE UNDERTAKINGS

– These undertaking have the following types of organizations:

– Sole proprietorship

– Partnership

– Joint Venture

– Joint stock business

– Co-operative society

– Private companies

Sole Proprietorship– In this form of organization a single individual

promotes and controls the business undertaking and bears the whole risk himself.

– He supplies the entire capital for starting and running the business. He takes all profits and bears all the risks alone.

– This is the simple form of organization requiring no formalities to set it up.

Partnership–Partnership is an association of two

or more persons to carry on, as co-owners, a business and share its profits and losses. Partnership deed can be a gentleman agreement used to run business together.

Joint Venture Business– This is the form of business that is

transactional only, two or more persons come together in a certain opportunity to share profits and losses, as the transaction ends the persons distribute their capitals and gain or losses as agreed at the start of business.

Joint Stock Business– Is association of many persons who

contribute stock to a common stock and employ it in some business and share the profit and loss arising there from.

Co-operative societies– These are voluntary associations with the

aim of service to members.

– The co-operative societies are registered under the co-operative societies act and have governmental control than other organizations in private sector.

– None of the members has personal liability for the enterprise liabilities

Private companies

– The company which is incorporated through registration with the registrar of companies under the companies act is called a ‘Registered Company’.

– The companies act contains comprehensive provisions with regard to establishment, management and dissolution etc.

PUBLIC UNDERTAKINGS

– Business undertakings owned and operated by public authorities. In these undertakings, either whole or most of investment is done by the government.

– Departmental organization

– Public corporations

– Government companies

Departmental organizations

In this organization the enterprise work as a part of government and management is in the hands of civil servants.

The minister is accountable to parliament for the working of the department. Example in Tanzania is MSD

Public corporations

– They are created by special statute of state or government.

– The legislative act is passed by defining the sphere of work and mode of management of the undertakings.

– It is a separate legal entity created for specific purpose.

Government companies

– The companies owned by state/government.

– Either whole or majority shares are owned by the government.

– In these no special statute is required to form government companies.

– JOINT SECTOR UNDERTAKINGS

– This is a form of partnership between private and government where management will be generally be in the hands of private sector.

– The general or overall supervision will lie on the Board of Directors giving adequate representation to government representatives.