Ways to Overcome Organizational Crisis
Sequence of unwanted events leading to uncertainty at the workplace is called as crisis. Crisis leads to major disturbances at the workplace and creates unrest amongst the employees. Employees must not lose hope during crisis. It is important for them to face inevitable threats with courage, determination and smile. Let us go through various ways […]
Socialism and Prosperity in the Nordic Countries
The United States Democratic Party has been praising the economic arrangement in Nordic nations for a very long time. Right from Bill Clinton to President Obama, they were all fans of the so-called Nordic socialism and wanted to introduce the model in America as well. The Democratic primaries were riddled with both Hillary Clinton as […]
Techniques for Assessment of Performance and the Factors Affecting Assessments
A performance management process involves an assessment or an analysis of what has been achieved and forms a basis for career planning, potential development, performance agreements and development plans like Douglas Mc. Gregor suggested that emphasis should be on analysis and not on appraisal. Performance management process is forward looking. Performance assessments depend upon the […]
The ABC’s of Insurance Fraud in India
India is one of the biggest markets for insurance companies across the world. However, it also needs to be understood that operating an insurance business in India is not free from risks. This is because insurance companies in India face an abnormally large number of fraud cases. In fact, it is estimated that the Indian […]
Effect of Endocrine System on Human Behaviour
Nervous system protects our body from various dangers by following a sequence of interpretation and reaction to the stimuli. Endocrine system secretes chemicals called hormones throughout our body which influence our feelings, moods and behaviour. Endocrine system is composed of glands which is a group of cells that secrete hormones. Various glands perform various functions […]
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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