Business Forms Concepts and Trade Procedures

Forms of Business Organization

Sole Proprietorship

Introduction and Definition

Introduction, Definition

Characteristics

• Single ownership
• No separate legal entity
• Less legal formality
• Unlimited liability
• Secrecy
• Flexibility
• Risk
• No sharing of profit or loss

Advantages

• Easy to form and wind up
• No profit sharing
• Better control
• Secrecy
• Flexibility
• Personal touch

Disadvantages

• Unlimited liability
• Limited capital
• Lack of managerial expertise
• Lack of continuity

Joint Stock Company (JSC)

Joint Stock Company Overview

• Introduction
• Definition
• Features
• Advantages
• Disadvantages
• Types of companies
• Incorporation of JSC
• Legal documents
• Management

Memorandum vs. Articles of Association

• Definition
• Main object
• Subject matter
• Obligation
• Registration
• Significance
• Relationship
• Provision
• Legal status

Private vs. Public Limited Company

• Members
• Capital raising
• Articles
• Prospectus
• Expansion
• Listing on stock exchange
• Use of suffix
• Director
• Quorum of General Meeting
• Allotment of shares
• Transferability of shares
• Accounts and audit
• Commencement of business

Joint Stock Company vs. Partnership

• Mode of creation
• Legal status
• Duration
• Nature
• Liability
• Resources
• General power
• Registration
• Number of members
• Share transferability
• Ownership
• Audit
• Statutory regulation
• Dissolution

Basic Business Concepts

• Business
• Commerce
• Trade
• Profession
• Industry

Scope of Business

Scope of Business has two types:

• Industry
• Commerce

Types of Commerce

• Primary: Extractive, Genetic
• Secondary: Manufacturing, Construction
• Tertiary Industry

Commerce Details

• Introduction
• Definition
• Scope of Commerce

Aids to Trade (Auxiliaries)

• Banking and Finance
• Transport
• Insurance
• Warehousing
• Packaging
• Advertising
• Mercantile Agent

Relationship Between Economy and Commerce

Starting a Business Considerations

• Kinds of Business
• Forms of Business Organizations
• Profitability
• Size of Business
• Finance
• Knowledge of Market
• Location
• Organization Structure
• Government Policies
• Staff of the Office
• Office Equipment

Qualities of a Good Businessman

• Physical Appearance
• Education
• Technical Skill
• Honesty
• Hard Working
• Courteous
• Steadfast
• Endurance
• Discipline
• Decision Making Ability
• Cooperative
• Trustworthiness
• Planning Ability
• Skills
• Innovativeness
• Foresight
• Financial Soundness
• Experience
• Communication Skills
• Leadership Qualities

Foreign Trade Procedures

Import Procedure

• Registration
• Obtaining the Import License
• Placing the Indent Order
• Opening the Letter of Credit
• Advice of Shipment
• Appointment of a Clearing Agent
• Payment of the Bill
• Customs Formalities
• Freight Charges
• Taking Delivery of Goods
• Dispatching Goods
• Closing the Transaction

Export Procedure

• Receiving Inquiries
• Receiving the Order
• Export License
• Determining the Export
• Writing to the Importer for the Letter of Credit
• Fixing the Rate of Foreign Exchange
• Assembling the Goods
• Packing and Marking the Goods
• Appointment of a Forwarding Agent
• Obtaining Shipping Orders
• Marine Insurance Policy
• Preparation of Documents
• Closing of Transactions