Business Essay

917 Words Feb 22nd, 2013 4 Pages
A business undertaking is an organisation which is engaged in some industrial or commercial activity. It represents an institutional arrangement for carrying on any kind of business activity. It may be owned and controlled by a single individual or by a group of individuals who have entered into a formal or informal agreement to jointly conduct the business.

Every business undertaking is a separate and distinct business unit. It has its own identity and separate ownership. It can be distinguished from other undertakings on the basis of its own­ership, management and control.

According to Wheeler, a business undertaking is a concern, company or enterprise which buys and sells, is owned by one person or a group of persons and is managed
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The management of one undertaking does not interfere in the working of other undertakings. The management of each undertaking takes independent decisions concerning different aspects of business.

4. Element of risk:

Every business undertaking involves risk. Profit is the reward for bearing risk. The risk of an undertaking is borne by its owners though some of the risks may be covered through insurance.

Types of Business Undertakings

Business undertakings may be classified into three broad categories as follows:

1. Private Sector Undertakings:

These undertakings are owned, controlled and financed by private businessmen. There is no Government participation in them. The main motive of private sector undertakings is to earn profits. Their main characteristics are as under:

(a) Private Ownership and Control:

A private sector undertaking is fully owned and con­trolled by the private entrepreneurs. It may be owned by one individual or by a group of individuals jointly. When owned by one person, it is called Sole Proprietorship.

A group of persons may joint own the firm in the form of joint Hindu family business, partnership, joint stock company or cooperative society.

(b) Profit Motive:

The main objective of private sector undertakings is earning profits. Prof­its provide the reward for the risk assumed and the required return on capital.

(c) No State Participation:

There is no…

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