Fisheries Administration and Lagislation

Unit 1 Public administration

1.5 Forms of organization of enterprises
Administration- business organization
1. Sole proprietorship
One single person is managing the entire business. Following things required for registering the enterprise

• Bank account on the name of enterprise
• Application for license to City Corporation
• Full address and proof of address and PAN number are required
• Local self government will issue the license for establishing enterprise.
• License is also issued based on building bylaws (National Building Code) and Zoning regulation.
  

Eg: there should be open area between two buildings dimension of building, fire safety regulation etc.
Zoning regulation- commercial zone, residential zone, industrial zone, green belt zone (no construction)

2. Partnership
When more than one person is involved, partnerships are created. If there is a legal conflict against a partnership, one has to sue the individual partner become bankrupt then creditors of that partner could sue all other partners even if debt is unrelated with the partners.
When one partner leaves/dies the partnership the whole deal of partnership needs to be reconstituted.
Deed: Responsibilities and rights of individual partners and other terms and conditions. It is a registered document. In the case of partnership, liability is unlimited (i.e. repayment of loan debt doesn’t only depends on individual investment but also on individual assets).

3. Cooperatives
In India cooperatives is in state list but cooperative can be multistate subject.
Eg: CAMPCO (Central Area Marketing and Processing Cooperative Limited). It is under Kerala and Karnataka states which work under federal act. Cooperative society can be registered under the state cooperative societies act, Indian cooperative society act-1959. Federal act is a multi unit cooperative society’s act which is under central government. Cooperative society is owned by the partners and works for the benefit of partners. Cooperatives are divided into worker owned business and customer owned business Cooperatives can give loan to its members but not to non members one person can become member of cooperative society based on the following:

• The person should be residing in the area of that cooperative society
• The person should not be member of any other cooperative society

Features of cooperatives

• Open and voluntary membership
• Principle of democratic control
• Equitable distribution of surplus
• Patronage dividend- refers to the dividend for the business done by the individual partners.

In agricultural and cooperative society, government is also shareholder and one nominee from the government will be the executive member of the cooperative society and audit can be organized by the government periodically to check the account. Money lenders can’t be member of agricultural credit cooperative society because the mandate of agricultural credit cooperative society is that the person who has same work as that of credit cooperative society can’t be a member of the credit cooperative society. Souharda cooperation- no government involvement, private cooperatives.

4. Companies
Company is a legal personality with distinct legal status

• Limited liability (loss or profit is only paid from the share and not from their assets)
• Transferrable shares- shares can be transferred from one person to another person

Legal personality- one has to sue the company in case of legal conflict but they can’t sue the individual shareholder
It has originated in early 18th and 19th century. It is a legal person and liability is limited

• Private limited companies-a minimum of 7 persons along with promoters (who originally contribute for the company) sign and applied to registrar of companies’ office (Chennai). If a member wants quit then his share can’t be sold to non member, it can be sold only to other members
• Public limited companies- first the members contribute their share to start the company, if a person wants to quit he can sell his share in a stock market (he should have his share certificate). As a share holder person gets two types of income. (annual dividend and capital appreciation)
• Non profit companies- these are also registered under the companies act (section 6.25 companies’ act 1956). These are exempted from the taxes to be paid for income. Social organisations, NGOs etc go for nonprofit organizations.