Aspiring for a Career in Finance? Here are Some Things that Would Help You Prepare
The Glitz and Glamour of Finance Beckons Many Many management graduates and those working towards entering business schools often aspire to be financial professionals and dream of being an investment banker, private equity specialist, stock analyst, or a pure play banker in the plain vanilla banking. Indeed, with the globalization of finance and the integration […]
Why are Industrial Companies Acquiring Tech Startups?
Mergers and acquisitions used to be fairly straightforward in the yesteryears. This is because companies would only make acquisitions within their own industry. This meant that if a technology-based startup were up for grabs, the list of potential suitors would only include companies like Google and Microsoft. This has completely changed now. Traditional companies like […]
Inventory Migration – Meaning, its need and importance
The need for Inventory Migration from one warehouse to another warehouse does not come about very often in Supply Chain Operations. However, sometimes the business demands necessitate a change of warehousing location, setting up a new location or even a change of business model. The occasion and need for an inventory migration can come about […]
Privatization of Water
The world is facing a scarcity of water. Each year about 3.4 million people die due to the scarcity of water! Several million more fall sick due to the poor sanitary conditions of the water supplied. The current situation is proof of the fact that the global water supply is not being managed properly. Many […]
Emerging Platforms – Cloud Computing
Emerging platforms are new technology developments and business models for which a theory is yet to be formulated, and yet there are rapid, radical innovations happening in their field. In this article, we will learn about one such platform – Cloud Computing by doing a critical assessment of its current trends, appreciate the challenges in […]
Businesses may all look the same when you look at the building in which they operate, the employees they hire and the product they sell. However, they can be very different when it comes to their legal structure. The legal structure determines the type of entity they are which in turn determines the rules that will be applied to them. Here is a list of the types of entities and their relevance to accounting.
Sole Proprietorship is when there is one owner of the business. The owner does not need to register his firm with the government. The proprietor has unlimited liability. The proprietor can withdraw funds from the organization at will. This is called drawings. The proprietor need not seek anybody’s permission before making such withdrawals.
Partnership is when there are multiple owners of a business. The partners may have a equal share of profit or loss or as decided amongst them. Partners in profits only are also legally allowed. The partners too have joint unlimited liability. Their withdrawals from the firm are however controlled. They can withdraw money only to the extent decided in the partnership agreement. If they require more than the above amount, they may be required to attain explicit consent of the other partners.
Hindu Undivided Family (HUF) is a type of entity which exists in India only. It has a head of the business called the “karta” who has decision making powers and unlimited liability. In a HUF, the rules for the functioning of the organization are laid down by the “Karta”. These rules include rules on drawings.
Joint Venture is when two organizations come together for a specific purpose. It is like a partnership, except for the fact that it is meant to achieve a common purpose after which the parties to the joint venture proceed their own way.
The most common type of organizations today is corporations. This is because corporations have limited liability. This feature helps their owners separate the ownership and management of the business. There are two types of corporations:
Apart from the following there are co-operative organizations, not for profit organizations etc. They too are different types of entities. The type of entity has a profound effect on the accounting system of the organization.
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