Sunday, August 25, 2019

Business Studies XI NEB Notes unit 1 -9



Unit 1 Introduction to Business
Concept of Business
Human beings are continuously engaged in some activity or other in order to satisfy their unlimited wants. Every day we come across the word ‘business’ or ‘businessman’ directly or indirectly. Business has become essential part of modern world. However, Business is an economic activity, which is related with continuous and regular production and distribution of goods and services for satisfying human wants.
All of us need food, clothing and shelter. These needs are the basic human needs. We also have many other household needs that are to be satisfied in our daily lives. We meet these requirements from the shopkeeper. The shopkeeper gets from wholesaler. The wholesaler gets from manufacturers. The shopkeeper, the wholesaler, the manufacturer are doing business and therefore they are called as Businessman.
Lewis Henry defines business as, “Human activity directed towards producing or acquiring wealth through buying and selling of goods.”
In short, all those economic activities which are concerned with earning profit and creating wealth through the production and exchange of goods and services is called business.
Characteristics of Business
1. Human activities:
Business cannot be performed without human efforts. The main aim of business is to produce goods and services to fulfill the requirement of human being internally associated in the production or the consumers.
2. Economic activities:
It is concerned with earning profits and generating wealth, which are measured in terms of money. Economic activities include production of goods and services, distribution of goods and services and the benefits generated from them.
3. Production of goods and services:
The main feature of business is to produce goods and services. Business is concerned with the production of goods and services to the society. In this process we get goods from shopkeeper, shopkeeper gets from wholesaler. The wholesaler gets from manufacturers. The shopkeeper, the wholesaler, the manufacturer are doing business to earn profit.
4. Risk and uncertainty:
There is no business if there is no risk but accidents never knock the door. In future anything may happen. So risk is a possibility that losses may occur. Introduction of new product, change in government policies, change in customer taste and preference etc are the risks
5. Profit motive:
Business has the main aim to earn profit. To get maximum profit revenue of business should be maximized.  Profit generation is vital for business survival and expansion. However, profit should be earned through legal and fair means and in ethical manner. Profit is the reward for the investors.
6. Continuous process:
Continuous process means to provide goods and services by the business to the customers continuously and regularly.  In business, the exchange of goods and services is a regular feature. A businessman regularly deals in a number of transactions and not just one or two transactions.
7. Satisfaction of customers:
The aim of business is to satisfy human demands by producing quality of goods and also to supply right product in right time at right place to meet the right needs. Quality goods should be provided at reasonable price.
8. Finance:
Finance is known as “life blood” of business. Business needs investment of capital and to run smoothly. For regular and continuous business finance is needed, finance includes purchase of raw materials, payment of wages, assets of business and so in.
9. Organizing:
It means integration of all activities. Co-ordination is very important for organizing. Allocation of limited resource, assigning job, authority and responsibility also comes under organizing.
Component of Business
Scope of business
Business covers wide area and all economic activities. It also includes all types of industry and commerce. Industries are related to the activities of production of goods and services and commerce is related to distribution of goods and services from producers (industries) and customers.
Types of industries
1. Genetic industries:
Genetic industries are also called heredity industries that involve in production of goods from plants and animals to earn profit. Those industries which produce medicines from herbs, perfume from flowers, milk and meat form animals are called genetic industries
2. Extraction industries:
Industries that are involved in extracting the resources from the sources of nature are called extraction industries. It supplies the raw material to other industries. These types of industries are generally based in mining, fishing etc.
3. Construction industries:
Those types of industries which are related to construction of different infrastructures are called construction industries. They basically construct road, bridges, houses and so on . It helps in development of country
4. Manufacturing industry:
It is related to produce finished goods. It processes raw materials into finished goods. There are mainly 4 types of manufacturing industry they are :
A. Analytical industry:
It is a industry which produces goods by analyzing raw materials in scientific way. In this industry various goods ate purchased by single materisl. For example dairy product (milk, ghee, butter, ice cream from milk)
B. Processing industry:
The industry which is involved for production of goods and services by using different steps or stage is called processing industry. For example for processing cotton into thread the processes of spinning, weaving, dying, bleaching is used.
C. Synthetic industry:
The industry which is involved for using various raw materials to produce a single good is called synthetic industry. For example to produce cement limestone, red soil, chemicals etc are used.
D. Assembling industry:
The industry which is involved for production of goods by combining different parts which are already manufactures by different industries is called assembling industry. For example TV, computer, mobile, watch manufacturing industries.

Commerce:
It is related with buying, selling and exchanging of goods and services. It is related to economic activities to earn profit. The role of bridge between manufacturer and customer is played by commerce
Types of commerce:
Trade:
Trade is related to buying and selling goods and services for earning profit. It supplies quality goods with reasonable price. Those activities which are related to buying, selling and distributing goods in market is known as trade
Types of trade
1. Home trade:
Home trade means national, domestic or internal trade i.e. Buying and selling within a nation. In home trade both buyer and seller are from the same nation. In home trade task is simple than foreign trade. It is classified into two types they are.
A. Wholesale trade:
When trader buy goods in bulk amount and resell to retail in small volume is called whole sale trade. In this trade goods are bought from manufacturer and are sold to retail. It acts as a middleman between manufacturer and retailer. It deals with special product
B. Retail trade:
When trader buy goods in bulk amount and resell to customer in small volume is called retail trade. In this trade goods are bought from wholesaler and are sold to customer. It acts as a middleman between wholesaler and customer. It deals with various types of product.
2. Foreign trade:
Foreign trade means international, global, external trade i.e. Buying and selling is between two or more nation. In foreign trade buyer and seller are from different nation. In foreign trade task is difficult than home trade. It is classified into three types they are.
A. Import:
A good or service brought into one country from another is called import. Along with exports, imports form the backbone of international trade. The higher the value of imports entering a country, compared to the value of exports, the more negative that country’s balance of trade becomes. Buying goods from India, china is called import.
B. Export:
A good or service sold to another country from one is called export. Along with imports, exports form the backbone of international trade. The higher the value of exports exiting a country, compared to the value of imports, the more positive that country’s balance of trade becomes. Exporting herbs, garments to Germany, India is the example of export
C. Entry port:
The trade in which a country purchases the goods from one country and sells it to another country is called entry port trade. The goods bought from a country is not used for self benefit but is rather exported to another country. For example India buys herbs from Nepal and sells it to china.

Auxiliaries of trade:
It supports or assists the trade activities. It helps to run business smoothly. It helps for transfer goods from production area to consumption area. It creates time and place utility.
1. Transportation:
It transfers goods from one place to another. There are many means of transportation that can assist business and trade activities. They are air travel. Bus route, sea route, rope route etc. It delivers right product and right time in right place. It creates time utility
2. Warehouse:
It is one of the auxiliary of trade. It helps to protect and store goods until customers uses them. It provides the goods hen demand is created. It also helps to provide unseasonal goods.
3. Insurance:
It acts as nutrition to trading activities. It helps to reduce risk and uncertainties. It is a contract between organization and their future. The system that takes the responsibility of compensation of certain risk is called insurance system.
4. Banking:
Banks are the financial institution that supports for traders. It provides loan, investment, credits facilities to the trading companies. It helps for expansion and flexibility of trade.
5. Advertising:
It is a supporter to trade. It provides information to customer about goods and services. Its aim is for creation of demand. It also acts as a promotional tool.
Functions of business

Organizing function:
It helps to organize all the activities. It organizes men, Machine, materials, money and methods. It performs different activities and all activities are organized properly
Financing function:
It is related to money. It helps in maximum utilization of resources. Bank is a financial company. All the activities related to money are defined in this function.
Production function:
The main function of business is to produce goods and commodities and transfer them to right place at right time. It helps to complete needs of human beings.
Distributing function:
It helps in the transfer of goods/services from producers to customers. It transfers right product at right time in right place.
Personnel function:
It deals with human activities. It is related o the utilization of people to perform different activities. It is also called staffing function. It helps in management of resources.
Managing function:
It helps in management of business. It includes planning, organizing, controlling, coordinating, decision making and so on. It helps making activities of people effective.
Research and development function:
It helps in improvement of product. It works under the taste, desire and preference of the customers. In it various marketing, strategies, skills, knowledge and experts are used. Research and development is the main way to achieve profit with customer satisfaction

Objectives of business
Economic objectives
The economic objectives are related to earning profit through customer satisfaction. It is to provide quality goods with reasonable price. Economic objectives can be defined in terms of money too. Some of the major economic objectives are:
Earning profit:
The main economic function of business is earning profit. It includes supply of quality goods and services to gain profit. T is done for the survival of business and it is also reward for the investors. It is required for expansion if business
Production of commodities:
Production of goods and services are to be done according to the customer demand and desired. Supply of commodities is also to be done according to needs of customer.
Creation of market:
Business can provide service only if demand of customers are fulfilled. When production is made according to the requirements of the customers then there is creation of new customer which creates new market. Creation of market helps in enlargement of production and promotes business expansion too
Technical improvement:
Use of modern technology is the base for successful operation o business. When modern tools, techniques and technologies are used then there is production of quality goods. Changes are the basic factor for flexibility and changes in terms of working methods is the main objective of business
Innovation:
New ideas, methods, men, tactics and technology create the ways of better production and services. It helps in survival of business too.


2.    Social objectives

Business is operated in society and use resource available in society. This is known social objectives. It fulfills social expectation. All business operations are established in society, grow in society and fulfill all its expectation in society. Some of the major social objectives of business are:
Supply quality food:
It provides better quality of goods and services by charging reasonable price. It provides right product at right time in right place. It involve in fulfillment of social objective.
Utilizing resources:
A business house can’t continue its operation without utilizing the resources available in the society. But there must be proper utilization of resources and no any destruction in name of utilization. Maintenance of environment is must.
Providing employment:
There are many people in the society. Human needs are the basic need for operation of business. Many personnel are require dot fulfill the job of a business. Therefore a business house without nepotism and favoritism must employ the human from the society and provide employment opportunities to the optimum level.
Avoiding social stigma:
Big industries are the cause of environmental pollution. Constant noise, smoke from the industries produces noise and air pollution. This is the social objective of the business to control pollution and wastages. There must be establishment of industries far from residential areas.



Human objectives

Human objectives are performed by different human activities. It is related with satisfaction of employees, investors and other personnel. Some of the major human objectives are
Satisfaction of employees:
The success of business depends on employees’ performance. It provides better working environment to satisfy the employees. It provides salary, bonus, provident funds and job security. It also provides financial and non financial supports.
Payment to creditors:
Creditors means supplier who supply goods and services. It is the objective to make duly payment. Satisfaction of creditors helps in further expansion of business.
Satisfaction of customers:
Production of goods and services are to be done according to the customer demand and desired. Supply of commodities is also to be done according to needs of customer. It provides better quality of goods and services by charging reasonable price
Satisfaction of shareholder:
It returns to investors the amount they have invested in business in the name of profit earn. They should be given reasonable returns of their investments. The objectives are to provide reasonable rate of return to shareholder. It also provides the information about plan of business.
Importance of business:

1. Economic development:
Business is important for economic development. Concept of true business is used in industries and commerce. Industries use men, money, materials, methods and machines and help to create employment. Commerce is the concept of exchange goods/services at national and international levels. It helps to earn foreign currency by export business too. Therefore, business helps in economic development

2. Utilizing natural resources
Every country has diverse natural resources. Business must be directed towards proper and efficient utilization of resources. Business utilizes the resources like water, minerals,   ores and so to achieve its own goals. But resources must be utilized without exploitation.

3. Creation of utility:
Business creates place and time utility. It helps to satisfy the needs of human beings. Financial utility is to be maximized.

4. Employment:
Business helps to provide job to people. It provides various types of managerial or technical job. Many types of business houses like hotels, industries, and transport companies are established for business which helps to solve the unemployment problem.

5. Revenue generation:
Business is the source of revenue generation. It pays taxes, royalties, fees, custom duties, and other things which help to generate government revenue.

6. Earning foreign currency:
It is the source of earning foreign currency. Business can earn foreign currency through exporting the goods and services.

7. Development of country:
Development of industries helps to utilize natural resources, create time and place utility, provide employment opportunities, help in revenue generation and earning foreign currency. All these things help in the development of the economy of the country and the economic development is the major factor that can develop the nation to a wider sense.

8. Provide investment opportunities:
Establishment of new industries and commercial fields are the major source of investment. Further the profit owned by the investors after the successful operation of business helps to ensure larger amount of saving which can be invested in the newer future for pension of current business or establishment of newer business. Thus business helps in providing investment opportunities.

9. International relations:
Business is the medium for development of national and international relationship. It helps to maintain harmonious relation among the various countries. There can be mutual understanding and better diplomatic relationship among the countries. Import and export is the major base for international relationship.

10. Self sufficiency:
It helps in achieving countries and individuals self sufficiency. It also helps in improving the living standard of people by reducing the dependency.
Social responsibility of business


Capital
Registration fee
Renewal fee
Registration fee
Up to 1,00,000
Rs 700
Rs 100
Rs 700
From 1,00,001 to 3,00,000
Rs 2100
Rs 125
Rs 2100
From 3,00,001 to 5,00,000
Rs 4100
Rs 150
Rs 4100
From 5,00,001 to 10,00,000
Rs 7600
Rs 200
Registration fee
Up to 10.00,001 to 50,00,000
Rs 10100
Rs 250
Rs 700
Above 50,00.000
Rs 15100
 Rs 300
Rs 2100
Sole trading concern
Partnership firm
1. low capital
1.high capital
2. one man management
2. two or more partners
3.quick and prompt decisions
3. delay in decisions
4. business secrets can be maintained
4. difficulty in maintaining business secrets
5. risk and losses are to be born by a single person
5. there is reduction of risk and losses because they are shared with proportion of capitals by partners
6.no chances of conflict
6. higher chances of conflict
7. lack of managerial ability

7. harmonization of managerial ability
8.chances of wrong decisions
8. specialization in decision making
Capital
Registration fee
Renewal fee
Registration fee
Up to 1,00,000
Rs 700
Rs 100
Rs 700
From 1,00,001 to 3,00,000
Rs 2100
Rs 125
Rs 2100
From 3,00,001 to 5,00,000
Rs 4100
Rs 150
Rs 4100
From 5,00,001 to 10,00,000
Rs 7600
Rs 200
Registration fee
Up to 10.00,001 to 50,00,000
Rs 10100
Rs 250
Rs 700
Above 50,00.000
Rs 15100
 Rs 300
Rs 2100


Bases of difference
Private company
Public company
Number of members
It needs at least 1 member for its formation. The maximum number can be 50.
It needs at least 7 members for its formation. The maximum number is not limited.
Invitation for capital
It cannot invite the public to buy its shares
It is free to invite the public to buy its shares
Commencement of business
It can commence the business immediately after the incorporation
It can commence the business after receiving the certificate of commencement of business.
Issue of prospectus
It does not need to issue prospectus
It must issue prospectus
Statutory meeting
It does not need to hold statutory meeting and file statutory report.
It must hold statutory meeting and file statutory report
Transfer of shares
The transferability of share is not allowed and hence its ownership cannot be transferred
The transferability of share is allowed and hence its ownership can be transferred
Use of word
It must use the word Pvt. Ltd. at the end of its name.
It must use the word Ltd. at the end of its name
It is voluntary association in which membership is open for all people with common interest. People can come together to satisfy the needs with common effort. In Nepal at least 25 members are required for establishment of cooperative organization.
It is based on democratic principle. It is based on equality of status of all members. Decisions and other bills are passed on the basis of majority votes.
Management is always in democratic lines. All member of organization elect its managing committee. One man can give only one vote. Managing committee will then work for common benefit of all members.
Its objective is to provide service to member. It’s not profit motive. Its aim is not to earn maximum profit as in all form of organization. Even though it can earn profit by extending their services to non members but they collectively work for service.
In Nepal, these types of organizations are established under cooperative act. There must be at least 25 members and they all must be guided through common objective
In this type of organization transactions are done only through cash. There are no credit transactions. It eliminates bad debt too.
It is service motive. Even though it can make surplus, the surplus amount is used for extending the surplus facility.
The success of organization depends upon the education of its members. They should be constantly educated with objectives.
Liability of member is limited. It should use the word “ltd” after its name.
The organization must follow the rules and regulations of the government.
Following things are mentioned in the application form Following things are mentioned in the application form


It was established in 1952 (2009 B.S). It was first chamber of commerce of Nepal. It is located in Kathmandu. It plays important role in formulation of commercial and industrial policies of Nepal government. It gives advice to Nepal government time to time. Nepal chamber of commerce involve in social welfare organization. It has good relationship with international organization i.e. WTO, UN. It conducts seminar and training related to business and economy collaboration.
1. Life member
2. Ordinary member
3. Affiliated member
4. Honorary member
All the activities of NCC are planned, programmed and implemented by executive committee includes 36 members. The executive committee is formed by
1. Elected by general assembly → 29 members
2. Immediate post president →1 member
3. Nominated from among affiliated → 4 members
4. Nominated from general member → 1 member
5. Nominated by NCC president → 1member
President, 1st and 2nd vice president, secretary, general treasurer, 2 secretary and joint treasurers are elected from among elected members of executive committee are the members.
6.   Elected by bi national → 11 members
7.   Elected by commodity associate → 12 members
8.   Elected from among associate → 16 members
9.   Nominated by president → 5 members
10. Elected chairperson of regional commerce and industry associate → 5 members
2. Auxiliary or administrative management functions
Receiving and collecting different types of information from the different types of sources is the primary function of an office. The information is received from two sources. They are internal and external. Letters, invoices, circulars, notices, memos are the internal sources and supplier, customers, government, banks are the external sources
It is the most significant function of an office. The information collected and recorded cannot be readily used for the decision-making and other purposes in the organization. Therefore, it must be processes and arranged. Processing information involves preparing notes, sorting, editing t. all information are to be arranged in a systematic way. After arranging and analyzing information it is ready to supply in the management. It provides necessary information to its member whenever it I required. This information helps in decision-making process.
Retention is defined as the preservation of records for future reference. It involves collection, preservation, classification and protection of records for future reference. It is maintained in files, computers etc. Every record has a life span. It is protected according to its importance. Retention of record depends upon nature of organization. The efficiency of office depends upon the way records are retained
To make any business successful there must be good management. Office helps in effective management. It includes planning, organizing, staffing, directing and controlling. It helps in smooth functioning of the organization.
There must be good public relation of the organization. The main purpose of public relation is to make the organization look trust worthy to all people who deal with it in all its action.
Every office develops a definite office system and a fixed routine. It helps in smooth flow of office work. The system is also known as procedure of office work.
All assets, movable and immovable, documents and office records must be guarded and protected. They can protest these assets through insurance policies, locker etc.
An office designs, develops and prepares many types of form needed for office management. It helps to get maximum benefits. These office forms are important tools for collection and storage of information.
Office stationery and supplies are essential for doing work. It helps in increasing the efficiency and improving quality of works done. Office should pay attention in purchasing right type of stationery and supplies
Office requires various types of office furniture and machine for efficient performance. The quantity, quality, consistency and completeness of work basically depend upon the ability and quality if assets like office furniture and machine.
Office is also related to recruiting, training, placing, promoting the employees. Employees help in the success of the organization.
An office is an information center which provides information relating to business transactions. Such information is very useful. It is used by management for the purpose of planning, organizing, staffing, directing and controlling.
Office not only keeps record of information but also plays the role of reliable channel of communicating the information. It is required for smooth functioning of the organization.
The success of business depends on the proper coordination of people and activities of the organization. It keeps relations with all departments and deal with information necessary for effective coordination; it is a mechanism or coordination.
An office acts as a control center. Controlling is the important function of management. It helps to monitor plans and policies which help in the implementation of proper working environment. It helps to prevent from unwanted deviations. It provides data for managing and correcting deviations.
An office works as a service center. It provides services to all the department of an organization. It provides necessary information to all the department of an organization. Business cannot operate successfully without better service system and office fulfills this requirement.
An office is the storehouse of records. It keeps the records of past and present. It provides necessary information for future. It helps to report letters, circulars, notifications, policies etc. It is known as ‘brain’ of organization.
An office provides wages, salaries to their employees. They also keep records of workers attendance, leave due, provident fund, and calculation of overtime. They also help to maintain the relationship between management and workers.
An office works as a middleman between department and outsiders. It links with supplier, customers, shareholders, government and general public. These office activities enhance the image of the firm.
Office management helps in increases office efficiency, smooth flow of work, maintaining public relations, minimization of cost, managing change and accepting the new challenges which help in achievement of goals of the organization.
Office management focuses on office activities and helps office in economical way.
Office management helps in performing efficient and effective office work. It helps in proper planning and effective control in office.
There must be good public relation of the organization. The main purpose of public relation is to make the organization look trust worthy to all people who deal with it in all its action. It helps in increasing the goodwill of the organization.
Office management guides the use of capital, natural, financial, human and other resources effectively without leakage and wastage which helps in minimization of cost.
Office management helps in implementation of plans in right time and in right way. Bu there may be change in resources, need, technology, preferences and so on which makes it necessary to bring about the change in plans. Office management makes the office flexible which helps to manage the change.
In an office, to achieve goals, many challenges should be faced. It helps in improving the research and information system. It helps in managing all the rigid matters.
 1. Shape and size of office building
It is one of the major factors that should be considered while selecting office building. It should have adequate space to accommodate all machines, equipment, and employee with furniture and enough space for flexibility. It should be considered taking the base of both present and future needs
An office building should have adequate lighting and ventilation. It helps a lot to increase efficiency and enhance worker’s morale. Well lighted and ventilated accommodation puts less pressure on the employees and also reduces the physical and mental strain and consequently the efficiency is higher.
While selecting office building it should consider the convenience of customer and employees. It should not be far from the related trade center, must have proper toilet and canteen services and food hospitality and utilities.
The cost of building effects on total budget of organization. The building purchased or built must be within the budget of organization. There should be balanced between requirement of space, capacity of the organization and the cost for covering the expanses.
Flexibility of office building in its shape and size should be considered while selecting the office building. It must also match the nature of organization.
The efficiency of men and machine depend upon the layout. The proper layout makes office attraction. For this furniture, machine and other goods are necessary. This also helps in the internal arrangement of office.
It is the first step to secure the blue print of office building to know about the space available of office works. It should be secured from top management. It’s blueprint is not available then the space should be measured and the sketch of building should be made
Need of all department should be identified. Managers should consult the department heads to access space requirement. Number of employees, method and nature of works, equipment and machines. Present and future requirement should be determined. It is the second step of designing the layout
It is the third step in designing the office layout. The manager should prepare model known as template. Templates are thin plates of board or metal that represents actual space with decorations. They provide tentative design of office space. Several adjustments, change might me made before final model is finalized.
While designing the office layout, electric wiring should be properly managed. The location should be properly wired to avoid the risk of short circuits and fluctuation of voltage.
After making plans and policies, it is submitted to the various departments. The plans must be discussed with the departmental heads and supervisors. They check the plans and finally approve it. Then only the plans are ready to be implemented
x


The major responsibilities of business are:
A. Employees
I. Provides better working environment to satisfy the employees
Ii. . It provides salary, bonus, provident funds and job security.
Iii. It also provides financial and non financial supports.
Iv. Enriches employees’ performance.
V. Provide training to develop their skills.
Vi listen and handle their complaints and issues

B. Creditors:
I. Make duly payment
Ii .satisfaction of creditors with proper relationship
Iii. Helping them to create their own market.
Iv. Entrusting the right of proper selling of goods and services of their goods
V. Copyright and other legal rights.

C. Customers/consumers:
I. Better quality of goods and services by charging reasonable price
Ii. Supply of commodities is also to be done according to needs of customer
Iii. Helps to achieve needs and wants
Iv. Provide right goods at right place in right time.
V. Provide proper pre-sale and post sale information
Vi. Provide proper information about new products

D. Investors:
I. True information about earning power of business
Ii. The objectives are to provide reasonable rate of return to shareholder.
ii. Provide the information about plan of business.
Iv. Ensure safe investment
V. Promote utilization of resources without leakage
Vi. Ensure transparency of business activities

E. Government
IIncrease in tax i.e. Increase in government revenue
Ii. Fulfill demand of government
Iii. Non violation of rules and regulation of government.
Iv. Avoid unfair trade
V. Provide essential information to the government.
Vi. Solve national problems like natural calamities.
Vii. Avoid malpractice like black marketing, adulteration, smuggling

F. Society
I. Good environment
Ii. Employment opportunities generation.
Iii. Socio cultural understanding
Iv. Apply anti pollution measures.


Unit 2  Evolution of business
Evolution of Business 
                                       The historical development of business and its processes of development up to now is called evolution of business. Business was not evolved in one or two days. It can be studied in two ways.

Evolution of industry
It is dated with the evolution of human beings. It is as old as human civilization. It was developed through various stages.

A. Hunting stage
In ancient times people lived in caves and fulfilled their basic needs of food an clothes through hunting the wild animals in forest. They were not civilized and hovered here and there. Their needs were also limited.

B. Pastoral stage
The stage of further development of human from barbarism is called pastoral stage. This stage is basically called the age of keeping animals. Animals were used for milk, meat, wool, skin and so on beyond food and clothes. The wants went on increasing and development also started.

C. Agriculture stage
Slowly, human beings became a little bit civilized and got idea about farming and keeping cattle. This stage was the major stage of development of industry. In this stage people started to do agriculture and live in river banks. They started to cultivate crops and domesticate the animals. Development of agriculture is divided into 5 stages they are
I. Handicraft stage:
It is the beginning of industrial era. It is the stage of development of industry. Simple hands made tools were also developed. Local resources were the major source of raw materials. In the beginning of this stage people were only limited to their own needs but later own surplus products were used to exchange the goods with the roods basically called barter system. Products were exchanged with product and market was starting to develop. Capital invested was minimized.

Ii. Guild stage:
It was the beginning of organized activities. Organized groups of traders, craftsmen, artisans used to collect various resources from the local areas and produced goods using them.

Iii. Age of domestic system
After the stage of guild the age of domestic system was initiated. Crafts men were not able to fulfill the unlimited and increasing wants of people by using the limited resource. So, use of hands and tools for producing quality goods was introduced. People were employed and were paid according to the units of goods produced. However salary was very low because the value of money was much higher at that time.

Iv. Industrial revolution:
It began with the replacement of old system. It is the turning point of modern industrialization. Domestic system of production was replaced by large scale factory system. There was invention, innovation .development of scientific techniques which encouraged mass production and distribution. There were numerous job opportunities. Salary was increased and quality was maintained.

V. Present age:
Today’s modern era with industrialization, use of technology, computerization, modernization robotizing is the most developed stage of industries. Goods are being produced meeting the demand of large number of people. There are huge number of industries producing large number of goods to meet large amount of needs and wants by providing many jobs and salaries.

Evolution of commerce:
It is related with the distribution and exchange of goods and services. It is related with transportation, communication, Banking, warehousing import export, trade and so on. It links between producer and consumer. It gradually develops along with the development of human and society. There are many stages of evolution of commerce

A. Self sufficiency stage
It is the initial stage of commercial evolution. The wants are very limited. In this stage people produced goods themselves to satisfy their own basic needs. They survived through hunting and gathering foods. There was no market. There was thus no exchange of goods. They were independent.,

B. Barter system:
The wants of people increased with development of society. There was both advancement and civilization of market. Self sufficiency stage didn’t remain with advancement. They started to exchange the goods they produced with goods that other people produced to fulfill other requirements. This is called barter system. There was exchange of goods and services with goods and services.

C. Origin of money:
From the beginning of barter, people felt that there was difficulty in deferred payment, commerce, divisibility and place of exchange .That’s why money was originated. People developed coins but there was difficulty in large payment. So paper money was introduced. Money was used as medium of exchange, Measurement of value, deferred payment, redistribution of income and wealth, credit system and many more. After the origin of money, national and international trade started.

D. National economy:
In this stage, buying and selling of goods and services was done within the country. The local market converted into regional and city market. There was division of work and specialization. Then goods were produce not only for local people but also for national market. There was also development in banking, advertising, insurance, warehouse and other auxiliaries,.

E. International economy:
International economy s called global economy. The globalization of trade introduced to speed up the activities of trade in the international level. It is not possible for a country to produce all demanded goods according to needs and wants. Therefore the countries started to import the goods and other countries exported. Slowly, import and export was introduced in all counties. Trade started to extend in world market. WTO (world trade organization) was also established to control the level of import, export and evils associated with them.
Consideration before starting the business

Business means the art of being busy. The aim of business is to earn profit. The higher number of industries has increased competition among the investors. Before starting the business, promoters must consider following factor in order to survive and expand the business.

1. Identification of business
The first factor that businessman must consider before starting a business is the identification of business. He has to decide about what type of business he wants to start. Identification and selection of particular business is very important for proper involvement and profit. It helps to give personal knowledge, interest, reduced level of risk, size and other values. It helps in expansion of business and earning the maximum profit.

2. Detailed investigation and research
Business cannot be started only by imagination. Proper and detailed study about the scope of business is very vital. It must consider present and future risks and competition. Market survey must be maintained. Investigation and study about raw material, finance, customer, market, employees and interest must be done.

3. Forms of business organization
There are different natures of business. The types of business vary with the differences in capital, interest, merits, demerits, risk sizes size and so on. It must be chosen from various different forms of organization like sole proprietorship, partnership firm, joint stock and so on.

4. Provision of capital
Capital means finance. Finance is the blood of business. Business cannot be established without sufficient capital. Volume of capital to be invested is dependant upon size of business firm. Source of capital must be properly taken into consideration. Capital is categorized into two groups.
I. .Fixed capital i.e. Land, building, furniture etc.
Ii. Working capital i.e.  Raw material, transactions etc.

5. Location of business
Location means place where the business establishes. It is very difficult to migrate from location of business after it has been set up. Location of business where it has been established must have better transportation. Communication, water, electricity and other utilities. Production and distribution must have low cost and sales must be high to minimize the profit. Selection of location must be perfect.

6. Selection of staff.
Business deals with human activities. It is related to the utilization of people to perform different activities. It is also called staffing function. It helps in management of human resources. Human activities are the major source to determine the efficiency of business. Staff should be selected according o the nature of business. Success of business depends upon selection of staff. Capable, skilled, experienced and honest employees must be selected.

7. Office equipment:
Office is the place from where all administrative work of business has to be done. Therefore, office needs proper equipments, machines and resources. For accurate, speedy performance office setup must be good.

8. Government policy:
Government makes business policy for the welfare of people. It must follow the policy of government. It must know all the legal rules and regulation formulated by the government.
Requisites of business success:

A. Establishment of objectives:
There must be proper establishment of objectives. Objectives are the aim of business. It determines the scope of future work. Objectives must be clearly defined. It provides guidelines for doing work. Objectives are defined for long term and short term.

B. Proper planning and policy:
Proper planning classifies the works done. Planning and policy formation should be done in efficient way. There must be clear set of policies and programs to complete the work. It helps in minimizing risk and maximizing profit.

C. Proper location layout and size of business:
Proper location layout and size of business is needed for progress of business. Layout means planting the business in such a way that production work can be carried out with efficiency and true manner. It helps in determination of proper size of business. Location also should be suitable. It must attract the market.

D. Sound organization:
There must be division of work among employees. There must be effective use of human sills and knowledge. Organization should help to answer various business problems. It ensures team work. It must ensure best communication channels for proper decision making.

E. Separate finance:
Finance is the blood of business. Business can’t be established without sufficient capital. Volume of capital to be invested is dependant upon size of business firm. Source of capital must be properly taken into consideration. It must be flexible. It should be suitable for both long term and short term business.

F. Efficient management:
Its main objective is to manage all activities of human and other resources. It must perform right job at right time in right place. It must use effective management technique.

G. Employees morale:
The success of business depends upon employee’s morale. The business should be used with intensity of employees. Employee should be encouraged, motivate. They could complete their work heartedly,

H. Modern technology:
It brings/ uses modern technology. It provides new idea and methods in production process. There should be proper labor and capital adjustment.

I. Research:
It helps in improvement of product. It works under the taste, desire and preference of the customers. In it various marketing, strategies, skills, knowledge and experts are used. Research and development is the main way to achieve profit with customer satisfaction

Business environment

Business establishes, grows or operates and dies in environment. It exchanges resources I environment. It collects inputs i.e. Man money, materials, machines etc. And provides output i.e. Goods and services in the environment. Environment means surrounding. Business environment defines as a force that affects on organizational performance. It includes internal an eternal factors. It provides opportunities and threats.
1.. Internal environment
It is defined as all the forces or conditions that are available within an environment that affects on organization and business. It is also known as controllable factors because business can control them. It includes

I. Employees
Business hires employees. It is the major internal factor. It works inside the business. It can be controlled by the business. Employees differ in skill, knowledge, morality, and attitude and so on. When managers and employees have difference in goals an beliefs then conflict may arise. The task of management is to divide the work and assign the work to the suitable employee and handle the conflict.

Ii. Shareholders:
Management deals with many shareholders. Shareholders have the right of ownership, power of management and voting right. The actual management of organization is carried out by elected representative of shareholders jointly known as boar of directors. Boards of directors have the responsibility of overseeing the management of organization. It plays the major role in formation of objectives, policies, strategies of the organization as well as their implementation.

Iii. Organization structure:
It is located inside the organization. The arrangement of various facilities, pattern of relationships among the various department, responsibility, authority and communication is the organization structure. It also included specialization and span of control.
Iv. Organization culture:
The sets of values that help the members to understand what organization stand for how it does work, what it considers, cultural values of business forces of business and so on. It helps in direction of activities.
2. External environment (PEST)

All the forces and condition that cannot be controlled by the business is called external environment. . It is also known as uncontrollable factors because business can’t control them. It is located outside the business. It affects on organizational performance.
It includes:
I. Economic environment.
It indicates the condition of economy in which business organization operates. It has continuous and great impact on business. It includes national income, production, inflation, savings, investment, price, government activities. Business person must have constant watch on this factor.

Ii. Political or legal environment
It is defined as rules and regulations determined by the government. Business must fulfill demand of government. There should be non violation of rules and regulation of government. Business should avoid unfair trade and should provide essential information to the government.
Iii. Social environment.
Business must have good environment where a business can be established neatly. Business also helps in employment opportunities generation. There should be socio cultural understanding and application of anti pollution measures.
Iv. Technological environment:
It defines about the methods available for converting resources into product or services. It transforms inputs into output. Inputs means material, capital, man, machine. It affects on business. It helps to change the level of job, skill, and product and so on. There can be innovation, development of scientific techniques which encouraged mass production and distribution.
Unit 3 Forms of Business Organizations
Concept of sole trading concern

Sole trading concern :-  
                                Sole proprietorship or individual proprietorship is the simplest, oldest and In some respect, the most natural form of business organization in private sector. In this form a single individual is solely responsible for providing the capital, for bearing the risk and for overall management and control of the enterprise. In is the one man show owned, managed and operated by one person. According to professor Henry, ” the individual proprietor is the form of business organization at the head of which stands an individual as one who is responsible, who directs its operations and who alone runs the risk of failure.”
Characteristics of sole trading concern
1. Single ownership:
A sole proprietorship is wholly owned by one individual. The individual supplies the total capital from which his own wealth or from borrowed funds.

2. One man control:
The proprietor alone takes all the decisions pertaining to the business. He is not required to consult anybody. Ownership and management are vested in a person.

3. No legal entity:
A sole proprietorship has no legal entity separate from its owner. The law makes no distinction between the proprietor and the business. The assets and liabilities of the business and its proprietor are not different.

4. Unlimited liability
Proprietor is liable for all the debts of the business. In case the assets are insufficient to meet the debts, the personal property of the proprietor can be attached.

5. No profit sharing:
The proprietor is all alone entitled for all the profits and the losses of the business. He bears the compete risk and there is nobody to share the risks, workload or any profit or losses.

6. Small size
The scale of operation carried out by sole proprietor is generally small.
Merits and demerits of sole trading concern
Merits
1. Easy to start and dissolve:
A sole proprietorship can be setup easily and quickly. No legal formalities and expenditures are involved in the establishment of a proprietorship. There is no need to associate others or to enter any agreement. Only a license may be needed in special cases. The owner can start business operations as and when he desires. Similarly, a sole proprietorship can be closed down very easily and quickly.

2. Motivation to work:
The proprietor is all alone entitled for all the profits and the losses of the business. He bears the complete risk and there is nobody to share the risks, workload or any profit or losses. There is direct relationship with efforts and reward. There is an incentive to work hard. The proprietor is motivated to make the best possible use of his skills and resources to maximize the profits.

3. Quick decisions:
The sole proprietor is completely free to take all decisions and to implement the. He doesn’t need to consult or seek others approval. Quick decisions and prompt actions are helpful to improve the efficiency of business operations.
4. Independent control:
The proprietor alone takes all the decisions pertaining to the business. He is not required to consult anybody. Ownership and management are vested in a person. There is no governmental intervention in day to day activities.

5. Business secrets:
The sole proprietor can keep the secrets to himself and these secrets are not known to competitors or others.

6. Personal contact:
A sole proprietor is in a position to maintain intimate contacts with his customers and employees. He can enter to the requirements of each and every customer. Close personal touch increases the competitive strength of the business.

7. Flexibility:
A sole proprietorship is small in size and has a simple management functions. Therefore, it can be adapted easily to suit the changing conditions of the market. The line of business can be easily changed or modified.
8. Economy:
The management of sole proprietorship is inexpensive. As sole proprietor himself is the manager, the cost of management is very low. Borrowing capacity is high owing to the unlimited personal liability of the owner.

9. Social utility:
Sole proprietorship provides an opportunity for gainful self employment for the people with limited money. It offers a way of earning an honorable living for those who do ot ant to work under other. It also facilitates equitable distribution of income and wealth.



Demerits
1. Sole proprietorship has limited capital
2. Sole proprietor only uses his ideas and innovation capacity. So there is limited managerial ability
3. Sole proprietor must work more to earn more profit .higher profit generation is important. So, there is dull and monotonous wok.
4. Death of sole proprietor causes death of sole proprietorship.
5. There is no specialization in decision taking. So there can be chances of taking wrong decisions
6. There is low investment resulting in limited areas of operation.
Registration and renewal of sole trading concern in Nepal

Sole trading concerns are registered under private firm registration act 2014.


Procedures of registration

1. Apply for registration.
Application form is needed to be filled up and apply for registration. The application must include the following things
A. Name of firm
B. Address of the firm
C. Objective of the firm
D. Name and address of owner including father’s and grandfather’s name.
E. Other particular things.

Rs. 5 and attached citizenship are required.

2. Deposit registration fee:
Registration fee may or may not be deposited in the Nepal Rastra Bank. Voucher is needed for the deposit of registration fee. It should be enclosed in application form.
3. Receiving the certificate of registration
Concerned department receive the application. Then an authorized officer will examine. It satisfied then the form is approved and legal business can be operated.


Procedure of renewal

The entire registered firm should be renewed each year within 35 days of time period. He should fill application for renewal with renewal fee to the concerned department. This amount is dependant upon the capital invested.

Effect of non-registration and non renewal
If the sole trading concern is operated without registration and renewal then it is considered illegal. It can’t get loan from any financial institution. This department will charge from rs 5 to rs 50 as fee. The effect of non-registration and non renewal is if the is not registered and renewed then fee is charged. If same crime is done for 3 times, additional r 10 is to be paid. If it is committed gain hen sol trading concern is closed and no any concern can be established under his name.



Unit 3 Partnership firm

Concept of partnership

Partnership is a form of business organization which as evolved to overcome the shortcomings of sole proprietor. As the size of business expands, one person is unable to provide the necessary capital and managerial skills. Therefore, two or more than two persons form a partnership to carry on business by pooling their financial resources and managerial skills. Thus,  partnership is an extension of sole trading concern.
Characteristics of partnership firm

Unlimited liability
Proprietor is liable for all the debts of the business. In case the assets are insufficient to meet the debts, the personal property of the proprietor can be attached.

Difficulty in transfer of shares
Partners cannot transfer their share without the consent of other partners. There may be conflict when done otherwise.

Higher capital
Many partners invest capitals and there is higher flexibility in capital because new partner can be agreed to be associated and investing can be increased.

Reduced risk
Partners have right to take part in management. They have the duty to bear risk with proportion too.

Association of two or more persons
It must be two or more person to enter into contract. Association of two or more persons can only create partnership. In association of two or more persons, maximum and minimum number of persons is not mentioned.

Agreement
It is set up by agreement between partners. It must be written and legal agreement so that it will reduce dispute.
ifferences between sole trading and partnership firm


Merits of partnership firm

Easy to start and dissolve
A partnership firm can be setup easily and quickly. There is not much legal formalities and expenditures are involved in the establishment of a partnership. Similarly, a partnership firm can be closed down very easily and quickly.

Higher capital
Many partners invest capitals and there is higher flexibility in capital because new partner can be agreed to be associated and investing can be increased.

Higher innovation
Many partners use their own ideas and innovation capacity. So there is unlimited managerial ability

Reduction of work load
Partners mustn’t work more to earn more profit. Higher profit generation is important. So, there is no dull and monotonous work. In case of monotony, health problem to any partner then other partners can help and reduce absenteeism.

Better decision
There is specialization in decision taking. So there can be less chances of taking wrong decisions

Harmonization of different ability
There are many partners in this firm and many partners have different skills, knowledge and capacity

Credit facility
In this liability of partners becomes unlimited. It will help to arrange more capital. And that’s why it has more credit. It improves more financial function

Close supervision
There is effective management and effective supervision. They look the business themselves.

Flexible
There can be change in management, capital and production. This change can be made by mutual agreement of partners

Reduced risk
Partners have right to take part in management. They have the duty to bear risk with proportion too.

 Demerits of partnership firm

No Business secrets
The partner can keep the secrets to himself but these secrets can be known to competitors or others when there is conflict among the partners

Uncertain existence
Death of any partner can sometime cause death of entire firm. Dishonesty, conflict and lack of resource also can collapse the firm

No Personal contact
A partner can’t be in a position to maintain intimate contacts with his customers and employees. He cannot be able enter to the requirements of each and every customer. Then there is no close personal touch which decreases the competitive strength of the business.

Unlimited liability
Proprietor is liable for all the debts of the business. In case the assets are insufficient to meet the debts, the personal property of the proprietor can be attached.

Delay in decisions
The partnership firm is completely not free to take all decisions and to implement the. The partners need to consult or seek others approval. Delay in decisions reduces the efficiency of business.

Danger of conflict
Many persons are the owners of partnership firm. There can be misunderstanding and jealousy among them and these cause problems in operation of business and profit making

Difficulty in transfer of shares
Partners cannot transfer their share without the consent of other partners. There may be conflict when done otherwise.

Limited resources
There is low investment, may be higher than in sole trading but not sufficient for large scale production resulting in limited areas of operation.
Types of partners:

General partners
They provide capital and play active part in business

Inactive partner:
They provide capital to business and share profit and loss to firm but do not take part in management and day to day activities.

Nominal partners:
They act only as a partner and give their name to the firm. They do not take part in management and day to day activities and share profit and loss to firm

Secret partner:
Their membership is kept secret to the outside world. They can take part in management

Partner in profit only:
They share profit only but no loss is shared. They are generally inactive but have relation in money and goodwill.

Minor partners:
They do not enter into contract and can’t be made partner in real sense but if there is consent of all partners then their partnership can be taken into consideration

Retrieval partners:
Even if this partner leaves the firm other partners continue to operate business. They are liable for all debtor and share profit too. But they do not take part in management and day to day activities.

 Incoming partners:
If there is consent of all partners then their partnership can be taken into consideration. They aren’t held liable for debt before approval of all partners.

Types of partnership

1. General partnership
Partners have equal rights and all of them participate in management. It is jointly involved to operate the business. There are the types of general partnership.

A. Partnership at will
It continues up to time of partner. It is dissolved when all partners want dissolution. They can leave the firm at will. There is no fixation of duration of firm

B. Particular partnership
It is established for definite workers at definite period. When task is finished partnership is dissolved in particular partnership.

2. Limited partnership
A limited partnership is that type of partnership in which there is one or more partners having limited liability. The liability of limited partners is limited to their capital invested. They can’t participate in the managerial activities but they can advice. They also don’t have right to make decision and close the firm
Rights and duties of partners

Rights of partners
Every partner has right to take part in planning, implementation and control activities of the firm
Every partner has right to express his opinion, give advices and view on any subject
Every partner has right to inspect and enquire about the account and ask for the duplicate copy
Every partner has right to share the profit according to the agreement
Every partner has right to get interest on loan and advances
Every partner has right to use the properties of the firm but only for the benefit of the firm not or personal use
Every partner has right to leave the firm with consent of remaining partner
Every partner has right to have interest on the property but should not sell the property to anyone without the consent of other partners
Every partner has right to dissolve the firm with the consent of other partners


Duties of the partners
It is the duty of every partners to share the loss occurred in a firm
It is the duty of every partners to work honestly and faithfully and work for common benefit of all partners and firm
It is the duty of every partners to work and make decisions within the authority
It is the duty of every partners to maintain the financial status of the firm.
It is the duty of every partners to stop the leakage in firm. There should not make any secret profit.
It is the duty of every partners to compensate on the loss and damage of firm.

Partnership deed

The written agreement duly signed by the partners is known as partnership deed. It is also known as agreement or article of partnership. It is the document, which mentions the rules and regulations, way o operation of management and way of control of activities of the firm. It is also required at the time of registration. It helps to minimize conflict and misunderstanding among the partners.

Content of partnership deed
Name and address of the firm
Name and address o the partners
Nature of rim’s business
Duration of partnership
Amount of capital invested by the partners.
Interest on capital
Division of profit
Salary and commission
Right and duties of partner
Admission and removal of partnership
Valuation of capital and goodwill at the time of admission, death and retirement of partners
Accounts and audits
Dissolution of partnership.
Registration and renewal of partnership firm in Nepal

Partnership concerns are registered under partnership act 2020.

Procedures of registration
 1. Apply for registration.

Application form is needed to be filled up and apply for registration. The application must include the following things
A. Name of firm
B. Address of the firm
C. Objective of the firm
D. Name and address of partners and address of the partners
E. Type of partnership
F. Amount of capital invested by each partner
G. Method of sharing profit and loss
H. Duration of business.
I. Other particular things.: necessary documents, registration fees, copy of citizenship

2. Deposit registration fee
Registration fee should be deposited in the Nepal Rastra Bank. Voucher is needed for the deposit of registration fee. It should be enclosed in application form. If the firm is commercial then recommendation letter from Nepal chamber of commerce is required.



3. Receiving the certificate of registration
Concerned department receive the application. Than an authorized officer will examine. It satisfied then the form is approved and “certificate of registration” is issued and then legal business can be operated.

Procedure of renewal
The entire registered firm should be renewed each year within 35 days of time period. He should fill application for renewal with renewal fee to the concerned department. This amount is dependant upon the capital invested.

Effect of non-registration and non renewal

If the partnership firm is operated without registration and renewal then it is considered illegal. It can’t get loan from any financial institution. This department will charge from rs 5 to rs 50 as fee. The effect of non-registration and non renewal is if the is not registered and renewed then fee is charged. If same crime is done for 3 times, additional rs 10 are to be paid. If it is committed gain then partnership firm is closed and no any concern can be established under any partners’ name.
Dissolution of partnership firm in Nepal

Existing partners can dissolve the firm by another agreement
Dissolution by notice, any partner can dissolve the firm by giving notice to all the partners
If any partner is unable to take responsibility of partnership deed.
If partner do not pay the amount payable to the firm
If shares are transferred without consent of other partners
If right of partners is taken over by the court of compensation
Liable for negligence
Death of partner
Dissolved by concerned department
Commits illegal work or violate the rules of the firm
If not renewed in given time.
Unit – 4 Joint Stock Company
Meaning of Joint Stock Company

Joint stock companies first came into being in the 18th century in Britain, and were mainly concerned with foreign trade. Initially, the organizational form was viewed with suspicion, it being supposed that it encouraged managerial efficiency and corruption. A corporation, chartered by the state in which it is headquartered is considered by law to be unique entity, separate and apart from those who own it. A corporation can be taxed; it can be sued; it can enter into contractual agreements. The owners of a corporation are its shareholders. The shareholders elect a board of directors (BOD) to oversee the major policies and decisions. The company has a life of its own and does not dissolve when ownership changes.
A company is a voluntary association, an incorporated association, an artificial person created by law, having a common seal and perpetual succession. Shareholders are owners of the company but management lies in the hands of BOD. Company means a company registered under an act.
According to H.L Haney: “A joint company is a voluntary association of individual for profit, having its capital divided into transferable shares the ownership of which is the condition of membership.”
Characteristics of Joint Stock Company

Compulsory incorporation:
A company is a voluntary association of persons formed and incorporated under the existing Corrine law. Only when it gets certificate o incorporation it comes into existence as a body corporate.

Artificial person:
A company is an artificial person created by law. It is created by legal process and not by natural birth. Even though it has no natural personality, it has legal personality. Therefore, it can enter into contracts, sue and can be sued, own property, appoint employees and borrow money like any other natural person.

Common seal:
Since a company is an artificial person having no physical features like a natural person, it cannot sign. Hence every company by law must have a common seal in which its name is engraved. The common seal can serve as its signature. The common seal is fixed on all important documents and contracts which is witnessed by signature of two directors and countersigned by secretary where ever required. The common seal is kept under the custody of directors.

Perpetual succession:
Since every company has separate existence from its members, directors and employees, their death, insolvency or insanity will not affect its life and existence. Men may come and they may go but a company remains forever. It can be wound up under the provision of the act.

Limited liability:
Usually the liability of members of a company is limited to the extent of uncalled or unpaid shares held by them. Their personal property cannot be seized to meet the company’s liability beyond the above mentioned liability.

Share capital:
The capital required by the company is raised by the issue of its shares. The share is a document that acknowledges the ownership of the company. The members who hold the share of a company can transfer its ownership to any other person, without the company’s permission.

Separation of ownership and capital:
In company organization the ownership and management are separate. The shareholders who are the owners do not take active part in the everyday affairs of the company. Instead they elect their representative known as directors, who with the help of managers and employees manage the company. Thus, there is division of labor and specialization.

Legal entity:
Since the company is created by law, it has separate legal existence compared to its members. Therefore the members cannot be personally held responsible for the acts of company and company cannot be held liable for the acts of the members.

Large membership:
The Company is owned by a large number of members- maximum of 50 in the case of private limited company and unlimited number of member in the case of public limited company.
Advantages of joint stock company

Large capital:
A company can collect huge capital for the business through shares and debentures, public deposits, loans etc. Due to huge capital the company can conduct business on a large scale.

Limited liability:
Usually the liability of members of a company is limited to the extent of uncalled or unpaid shares held by them. Their personal property cannot be seized to meet the company’s liability beyond the above mentioned liability.

Continuity and stability:
Death, insolvency or insanity of any member of the company will not affect its life and existence. Men may come and they may go but a company remains forever. It can be wound up under the provision of the act.

Professional management:
The Company appoints experienced, competent and expert to manage the business. Their services lead to managerial and administrative efficiency and accuracy.

Economies of scale:
A company operates on a high scale and so it enjoys economies in production, distribution, management and financing.
Bargaining power:
Compared to other forms of organization, a joint stock company is a strong power in buying as well as in selling of goods because of its large scale production.

Legal status:
Since the company is created by law, it has separate legal existence compared to its members. Therefore the members cannot be personally held responsible for the acts of company and company cannot be held liable for the acts of the members.

Large membership:
The Company is owned by a large number of members- maximum of 50 in the case of private limited company and unlimited number of member in the case of public limited company.

Transferability of shares:
Shares of Joint Stock Company, especially public companies, are freely transferable. A member who wants to sell his shares can easily do so in the stock market. This encourages the public and other to invest in shares.

Employment:
Joint Stock Company provides employment to a large number of people directly and indirectly. This leads to higher national income for the country and higher living standard of living for the people.

Government revenue:
Joint Stock Companies provide revenue to the government in the form of taxes charged directly and indirectly.

Research and development:
Joint Stock Companies undertakes R&D continuously thus bringing about new and improved products which benefits people.

Economic development:
Because of Joint Stock Companies there is all round development of trade, commerce and industry. The society in general gains the benefit of the industrial development. Large capital, government revenue, economic development etc. are the advantages of Joint Stock Companies.

Disadvantages of Joint Stock Company
Difficult formation:
Formation of Joint Stock Company is an expensive and time consuming process as a number of legal formalities have to be undertaken in order to register the company.

Lacks flexibility:
The working of a Joint Stock Company is less flexible s compared to other organizations. For very small thing they either have to follow a detailed procedure or obtain sanctions from various authorities. This results in lack of flexibility.

No business secrecy:
This form of organization lacks business secrecy because it is compulsory for the company to publish accounts and other records

Excessive government regulation:
The Company is a subject to excessive government control. It has to follow the numerous provision of the companies act. This makes working difficult.

Delay in decision:
The Joint Stock Company is completely not free to take all decisions and to implement the decisions. Due to excessive government control and democratic set up all decisions are taken in meetings and some decisions require shareholder’s approval. All this leads to delay in decisions.

Lack of contact with customer:
A company can’t be in a position to maintain intimate contacts with customers. It cannot be able enter to the requirements of each and every customer. Then there is no close personal touch which decreases the competitive strength of the business due to large scale operation.

Lack of contact with employees:
The top management may not have contact with their employees. This may cause friction and disputes amongst the management and the employees with may affect the worker’s and employee’s morale.

Conflict of interest:
Many persons are the owners of Joint Stock Company. There can be misunderstanding and jealousy among them and these cause problems in operation of business and profit making

Not suitable for all type of business:
This type of organization is not suitable for business where personalized services are required.

Exploitation of shareholders:
Sometimes the BOD may misappropriate the fund and mislead the shareholders by window dress report. The directors may even manipulate the trading on the stock exchange. Thus shareholders can be exploited by corrupt directors.
Types of companies

On the basis of incorporation:

Chartered company
A chartered company is established by the royal charter or a special sanction granted by the head of the state. East India company, Hudson’s bay are the examples of this type of company. This type of company is no more popular today.

Statutory company
A company created by the special act of the parliament is called statutory company. Its objectives, powers and activities are defined by the act. Nepal Rastra Bank, Agriculture Development Bank, Nepal Industrial Development Corporation are some examples.
Registered company
It is formed under company act of the country. The working of registered company is governed by the provision of the company act. Himal Cement Company, Gorkha Biscuits Pvt Ltd is some of the examples.

On the basis of liability:
Unlimited company
It is a company in which the liability of the members is unlimited like that of partnership firm. If the assets of the company are not sufficient for satisfying the claims of the creditors, the shareholders are liable to pay more than the face or nominal value of shares held by them even form their personal property.

Company limited by shares.
A company limited by shares is registered under the provisions of the Company act with a specific amount of share capital divided into a definite number of shares. The liability of shareholders is limited to the extent of face value of the shares they have paid for. This type of company is quite common these days.

Company limited by guarantee:
The company, under which each shareholder promises to pay a specific sum as guarantee at the time of winding up of company, is called company limited by guarantee. Such guarantee is specified in the Memorandum of Association of the company. The amount of such guarantee may differ from member to member.

On the basis of ownership

Government companies
A government company is a company in which no less than 51 % of the paid up share capital is held by the government

Non government companies:
A company which is not a government undertaking is called non government company. Generally, company owned, managed and controlled by the private sector come under this category.

On the basis of number of members

Private company
A private company is a company which, by its Memorandum Of Association, limits the number of its members not exceeding 50 and prohibits the sales of its shares to the general public. A private company must use the words ‘private limited (Pvt. Ltd.) in its name.

Privileges of private company
Established by single person
Does not need to publish prospectus at the time of issue of its shares
It can refuse transfer of shares form one member to another.
It is not necessary for such a company to obtain the certificate of commencement of business before starting its business activities
It is not necessary to held statutory meeting.


Public company
A public company is a company which, by its Memorandum of Association, limits the number of its members not to be at least 7 and to open the boundary of having the maximum number of shareholders to the fullest. It doesn’t prohibit the sales of its shares to the general public but rather it allows collecting major capital by offering shares to the public. The public company is governed by the authorized capital with which is registered. The shares are transferable. A public company must use the word ‘limited (Ltd.) in its name.

Privileges of public company
Established by at least 7 promoters
Needs to publish prospectus at the time of issue of its shares
It cannot refuse transfer of shares form one member to another.
It is necessary for such a company to obtain the certificate of commencement of business before starting its business activities
It is necessary to held statutory meeting.
ifference between private company and public company

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Difference between private company and public company






































Memorandum of association

It is the main document of the company. It defines the objectives, powers and its relationship with the outside world. The company works within the framework of the memorandum. The memorandum of association sets out the constitution of the company. It is so to speak, the charter of the company and provides the foundation on which the structure of the company is built. It enables persons who deal with the company to know its permitted range of activities.

The main content of memorandum of association are:
Name clause:
It includes about the name of the company. Name of the company should end with word ‘limited’ or ‘private limited’. Care should be taken while enclosing name of the company. The names that already registered should not be used. Change in name of the company requires special resolution and approval from the concerned department.

Situation clause:
It is also dominant clause. It must have registered office. All the official communication may be sent by concerned office or other organizations in a specified location. Therefore there is need to maintain registered office location. Once the location is set then it is very difficult to change the location.

Object clause:
It is important part of memorandum. It must clearly state the objective of the company foe which it was established. It informs the members about the objectives. It can carry out only those activities which meet the objectives in the memorandum.

Functional clause:
It includes the functions of the objectives of the company. It should be within the objectives.

Capital clause:
It includes the amount of authorized capital which can be utilized by the company. It includes the amount of share capital and the considerations of issuing and subscribing the share capital. It must include the nature of shares and face value of share with the prices of shares.

Liability clause:
Memorandum must clearly state that the liability of shareholders up to the extent of face value of shares. In company limited by guarantee it must state the guarantee sum too.

Association and subscription clause:
It states that the member themselves agreed to organize and carry out business. In case of private company at least one signature from promoter and in case of public company at least 7 signatures is needed.

Agreement clause:
According to company act 2063, clause 18 .p., public company is desired to do following things.
If promoter or any other partner is entitled to subscribe share, they must pay in each.
If Company is to enquire any property from promoter at the time of commencement of its transaction.
If Company itself is to bear expenses incurred on the corporation.


Articles of association
It is another important document of company. The document which defines the rights, powers and duties of the management, the modes and manners of carrying the company’s business, is called articles of association. It shows the relation between the company and its members and relation among the members. It is subordinate to memorandum. The information related is:

Director related
Number of directors
Provision of alternative directors
Minimum number of shares to be directors of the company
In case of public company, qualification and number of independent directors
Power and duties of BOD
Authorities of directors
Delegation of authority
Provisions relating salary, allowances and facilities of directors

Meeting related
Procedure for conducting general meeting and notice for such meeting
Provision relating to decisions of general meeting and BOD and duplicate copies and inspection
Quorum for meeting of BOD, notice and proceeding of meeting.

Share related
Right, powers and restriction attached to share
Provision relating to transferability of share
Matters on altering the authorized share capital
Matter of forfeiture and reissue of share.

Other particulars
Appointment of company’s secretary
Account books and audits of the company
Provision on power to raise the loans


Prospectus
It is an invitation to the public to purchase shares or debentures of the company. Any circular, advertisement, offer or any other document by which a company gives invitation to the public to subscribe to its shares and debentures is known as prospectus. According to the company act 2063, the prospectus contains the following matters.

Information related to management and the objectives of the company
The number of shares to the subscribed by directors and the cash to be received from them.
Capital structure of the company divided into authorized, issued, subscribed and paid up share capital.
Terms and mode of payment, issue of shares on discount or premium
Details about brokerage, underwriting commission and preliminary expenses.
Estimated expenditures for the company and estimated income at least for coming 3 years.
Other necessary particulars.
Incorporation of joint stock company in Nepal

Following things are to be observed for incorporation of Joint Stock Company in Nepal:

1. File an application
It is the first step. In any company registration, promoters have to file application in company registrar office. The application has to be signed by at least 1 promoter in case of private company and at least 7 in case of public company. Along with application, following document should be submitted,
Memorandum of association
Article of association
Copy of agreement (public company)
Copy of consensus agreement (private company)
License
Promoters certified copy of citizenship (Nepalese)
Permission letter obtained under law to make investment or run business in Nepal (foreigner)
Citizenship of concerned country
2. Submitting registration fee
Registration fee should be deposited in the Nepal Rastra Bank. Voucher is needed for the deposit of registration fee. It should be enclosed in application form

3. Certificate of incorporation:
After submitting the application form along with necessary document and registration fee, the office of the registration examines all these documents submitted by the promoters and it will register company name within 15 days the receipt of the application. After registering the office, the registrar issues the certificate of incorporation to the company. Now a private company can run its business.
4. Certificate of commencement of business
A report of proof about the full payment of shares by the promoters with signature by at least 1 director and 7 promoters must be filled. The registrar examines all the documents. If it gets satisfied then it issues certificate of commencement of business. Then only public company is legally able to run business and it can issue prospectus also.
5. Allotment of shares
After receiving certificate of commencement of business, public company can issue prospectus. It helps to attract investors for investing the money in the company. Then they send application with application money. Generally application form is attached with prospectus. The time of subscription must be kept open for at least 7 days. After receiving application shares are allotted. The BOD makes the allotment. There can be full allotment or pro-rata allotment. Shares must be allotted within 3 months after application is called. There must be more than 50% o share allotment. If allotment couldn’t be made within 3 months then promoters must apply application for extending time with reasons. The time is again extended for 3 months. If company couldn’t allot the share for extended period then the company must return all the money with interest.
Company meeting

Company is an artificial legal person. It is not capable to think or decide any important matter. But through meeting it can think and easily make any decisions. Meeting means gathering of people who are connected with the company for discussion in certain place. It can be defined as assembly of number of person for predominated purpose and by previous notice for discussion and decision on the same business matter.

Types of meeting

General meeting 
The meeting of shareholders is known as general meeting. The types of general meeting are

1. First or preliminary general meeting
First official meeting of shareholder is known as first general meeting. It is also known as preliminary general meeting. It must be conducted within one year after receiving certificate of commencement of business. It occurs only once in the lifetime of public company. Its main aim is to give details of company to all shareholders about the number of shares issued. Share holders must be pre-noticed about place, time, date and agenda in advance of 21 days of conducting the meeting. Following things are discussed in the meeting.
Authorized capital
Number of share
Issued share capital of company
Paid up capital
Total amount of installment paid
Loan borrowed from any bank
Financial institution
Name and address of current director
2. Annual general meeting
It is held in each financial year within six months from the date of expiry of its financial year. It is held to inform shareholders about progress of the company, about the ongoing performance and future plan of company. . Share holders must be pre-noticed about place, time, date and agenda in advance of 21 days of conducting the meeting. Following things are discussed in the meeting
Annual financial statement
Audit and directors report
Matter related to the distribution of dividends
Appointed of any directors
Appointment of any auditor

The information and report may be printed in newspaper too. If any shareholder request for the copy of annual financial statement, director’s repost and auditor report then company should provide it.
3. Extra ordinary general meeting:
If any important matter arise and it should be discussed sooner and cant be waited till the annual general meeting then this meeting is held. It is also called special circumstances and is held when special and urgent decisions have to be made. . Share holders must be pre-noticed about place, time, date and agenda in advance of 15 days of conducting the meeting. This meeting is conducted by

a. By board of directors
In case of emergency

b. By auditor
In auditing the account there can be need of shareholder’s idea and so auditor calls this meeting with a reasonable cause
In case BOD fail to call meeting then auditor may submit application to company registrar offices for stating reasons about not conducting meeting.

c. By shareholder
10% of paid up capital or at least 25% of total shareholders demand to call this meeting with reasonable cause. They request to board and submit application. If there is no meeting within 30 days then application is submitted to company registrar with reasonable reason. Then registrar office can call a meeting.
Extra ordinary general meeting is called for following purposes
Increasing authorized capital of the company
Decreasing the share capital of the company
Altering name or objective of the company
Issuing bonus shares
Selling shares at discount
Converting private company into public company or vice versa
2. Board of directors (BOD) meeting
It is also called meeting of directors. Board means collective name for directors. When directors of company come together to determine its policy and to take decisions according to its act then the meeting of BOD is called. It is held at regular interval. In public company it is held when there is attendance of 51% of total number of directors. Its main agenda are management of company about share, recommendation of dividend, appointment of officers and fixation of data. Decisions are taken by passing resolution. If any director is not satisfied with decision then s/he can write the note of dissent of proof of his rejection.
Agenda

It is the most important base for all meeting. It includes the subjects to be discussed in the meeting. It is prepared with consultancy of chairman. Its main objective is to conduct meeting in a systematic way without missing any item. It is the deal about the subject mater of the meeting and is informed to all meeting members. It allows the member to have sufficient time in preparation of their own matter of discussion on the topic of the agenda before the meeting.


Resolution:
Resolution is all the activities of company which are conducted after the resolution is passed in various meeting of shareholders and directors. All the decisions that are taken in the meeting are in the form of resolution. It can be defined as the resolve to do or not to do things. When any proposal is accepted by required majority in the meeting then the proposal becomes resolution. There are two types of resolution. They are

1. Ordinary resolution
It is passed by simple majority of member present a general meeting. Majority is taken by voting. For this purpose, in this meeting, in the public company, there must be presence of 50% share with at least 3 shareholders are presented. It cannot be held due to quorum
They are passed for following purpose
Profit and loss account
Balance sheet of previous years
Declaration of dividends
Appointment of directors and auditors
Salary and facility for directors and auditor

2. Special resolution 
The resolution requires passing 75% majority of members. It must be submitted to take decisions for following matters
Increasing authorized capital of the company
Decreasing the share capital of the company
Altering name or objective of the company
Issuing bonus shares
Selling shares at discount
Converting private company into public company or vice versa
Winding up of Joint Stock Company

Winding up of Joint Stock Company is the process of bringing the existence of the company to the end. It refers to the closure of business forever. In this time company being a legal person created by law can dissolve its own business in the following way

1. By company registrar office
According to company act, registrar office may order to wind up company under following condition:
If promoters of the company makes application showing reasons for failure to commence the business of company
If company is in default in submitting office return notice, information and facts to pay fine as required by the act

2. By voluntarily
In the following condition company can wind up;
Company has become insolvent with accordance with law on insolvency
Shareholders of company can wind up the company either by adopting special resolution in general meeting
If company is able to pay its debts and other liabilities in fault.
If directors of company have after due, company makes declaration in written form that the company is able to pay its debts or other liabilities in full.

Concept of cooperative organization
Meaning and concept
Co-operative organization is the form of organization where in persons voluntarily associate together as business being a basis of equality for promotion of economic interest of themselves. It is a voluntary association of persons with same interest. It is guided by service motive. It is established for economical and social development of weaker section of the society. It tries to solve similar problems. In all form of business organizations, the objective of owner is to make profit. But its objective is to provide services. Its motto is all for one and one for all. It helps through mental support too. it can be defined as voluntary association of person usually of limited means forming together in equal basis for promotion of certain economic or business interest.
Features of cooperative organization
Features:
1. Voluntary association and open membership
2. Equal voting right
3. Democratic management
4. Service motive:


5. Legal existence:
6. Cash transactions
7. Disposal of surplus:
8. Education
9. Liability:
10. Government control
Types of cooperative organization

Types of cooperatives:

Producer co-operatives: Some co-operatives process and market their members’ products and services directly while others may also sell the input necessary to their members’ economic activities. Examples: Agriculture co-operatives, pooling of equipment, advisory services, etc.

Multi-stakeholder co-operatives: The membership of these co-operatives is made of different categories of members who share a common interest in the organization. Examples: home care services, health services, community services, etc.


Worker co-operatives: The purpose of these co-operatives is to provide their members with work by operating an enterprise. The co-operatives are owned by their employee members. Examples: forestry, leisure, production and manufacturing, tourism, communications and marketing, etc.

Worker-Shareholder co-operatives: These are incorporated co-operatives that hold partial ownership of the business in which the co-op’s members are employed. Because of its share capital, the co-operative may participate in the management of the business and the workers may influence work organization. Examples: production and manufacturing, technology, etc.

Consumer co-operatives: They provide their members with goods and services for their personal use. Examples: Food, credit unions, housing, insurance co-operatives, etc.
Role of cooperative organization in developing countries

Role of cooperatives in developing countries
Works for the economic progress of the nation
Uplifts the poor people.
Develop the weaker section of the country
Bring balance between economic and social development of the country
Mobilization of resources in rural areas
Employment of the people in agricultural sector
Provide better qualities of seeds, fertilizers, pesticides, insecticides to the farmers
Help to get agricultural loan.
Helps to establish business in low capital
Enhance the economic activities like banking, shares, investment and so on
Encouragement in saving
Farmers, employee, and small retailers who are often neglected for loan are provided credit facilities.
Provides loan to poor farmers at low interest rate.
Elimination of poverty
Increase the living standard of people
Registration of cooperative organization in Nepal

Registration of cooperatives in Nepal
A cooperative organization can carry out its functions only after its registration under the cooperative act 2048. For registration of cooperatives following procedures should be followed.
1. Preliminary meeting:
According to the cooperative act 2048 there should be at least 25 members to form a cooperative society. Preliminary meeting must be held before applying for the registration. The meeting is held in the presence of 25 members under 1 chairman among them. The following things should be discussed in the meeting:
Commencement of the business
The name and address of the society
The objectives of the society
The value of each share
Membership fee



2. Filing an application for registration
After preparing and passing proposed by laws and working schemes in the preliminary general meeting. In application should be submitted to the office of registrar, department of cooperatives, and government of Nepal
Proposed name of society
Address
Objectives
Working areas
Liabilities
Total share capital
Total number of shares to be paid
Two copies of law of proposed society
Original copy of working scheme
Copies of citizen certificate
Application must be signed by chairman

3. Receiving the certificate of registration
After filing application for registration, certificate of registration is to be received. After applying application along with document, they are submitted at the registration office. Then the registrar checks all the documents. If the documents are satisfactory then registrar will issue certificate of registration. After receiving certificate of registration, the society can operate.

Legal provisions for dissolution of co-operative society
According to the cooperative act 2048 cooperative society can be dissolved under following circumstances
Two third majority of total number of society can take decisions of dissolution.
Registrar can dissolve it, if application with reasonable clause is received.
Registrar can dissolve it, if the society is found inactive and not operating since two years.
The registrar can dissolve it, if it is found operating against the law and objectives of it.

Registration of cooperative organization in Nepal

Registration of cooperatives in Nepal
A cooperative organization can carry out its functions only after its registration under the cooperative act 2048. For registration of cooperatives following procedures should be followed.
1. Preliminary meeting:
According to the cooperative act 2048 there should be at least 25 members to form a cooperative society. Preliminary meeting must be held before applying for the registration. The meeting is held in the presence of 25 members under 1 chairman among them. The following things should be discussed in the meeting:
Commencement of the business
The name and address of the society
The objectives of the society
The value of each share
Membership fee



2. Filing an application for registration
After preparing and passing proposed by laws and working schemes in the preliminary general meeting. In application should be submitted to the office of registrar, department of cooperatives, and government of Nepal
Proposed name of society
Address
Objectives
Working areas
Liabilities
Total share capital
Total number of shares to be paid
Two copies of law of proposed society
Original copy of working scheme
Copies of citizen certificate
Application must be signed by chairman

3. Receiving the certificate of registration
After filing application for registration, certificate of registration is to be received. After applying application along with document, they are submitted at the registration office. Then the registrar checks all the documents. If the documents are satisfactory then registrar will issue certificate of registration. After receiving certificate of registration, the society can operate.

Legal provisions for dissolution of co-operative society
According to the cooperative act 2048 cooperative society can be dissolved under following circumstances
Two third majority of total number of society can take decisions of dissolution.
Registrar can dissolve it, if application with reasonable clause is received.
Registrar can dissolve it, if the society is found inactive and not operating since two years.
The registrar can dissolve it, if it is found operating against the law and objectives of it.




National cooperative development board : formations and functions

 National cooperative development board (NCDB)
It was established an enacted in kartik 21, 2049. It has been established for economical and social development of weaker section of the society according to the cooperative principles under the co-operative development board act, 2049. It is established under national cooperative development act, 2049. It is autonomous and corporate boy with perpetual existence. It has its own common seal. Board can purchase, sale or manage property. It is managed by an executive committee under the chairperson of the minister of agriculture and corporate.
Features
It is established under national cooperative development act, 2049.
It is autonomous and corporate boy with perpetual existence.
It has its own common seal.
Board can purchase, sale or manage property.
It is managed by an executive committee under the chairperson of the minister of agriculture and corporate.


Formation of NCDB
NCDB was established on kartik 21, 2049. Its main aim is to support economical and social development of weaker section of the society by formulating plan, policies and programs etc. The board is managed by an executive committee of 25 members. It consists of following member
Minister of agriculture → chairman
Person appointed by the mister of agriculture → joint chairman
Chairman, national cooperative → member.
Governor of Nepal Rastra Bank → member
Secretary ministry of finance → member
Secretary ministry of supply → member
Secretary ministry of industry → member
Secretary ministry of agriculture → member
Secretary ministry of local development → member
Representative from national planning commission → member
Registrar of cooperative department → member
Any two chairmen elected among chairman of central cooperative association→ members
Any 5 person nominated by government from among cooperative (1 from each development region) → members
One from female cooperative worker → member
Any two expert → members
General Manager of agricultural development bank → member
Person nominated by Nepal’s government → member secretary

Functions of NCDB:

To formulate plan and policies
Promotion for development of cooperative societies
Provide cooperation to government for policy formation
To prepare and implement the development plans and policies
To undertake research studies for the development of cooperatives
To invest in cooperative society
To provide necessary security if cooperative society demands for issuing debentures or obtaining loan from the bank and financial institution
To provide technical cooperative for the promotion and protection of cooperative society
To make agreement for joint investment with local and foreign investor

Concept of public enterprises

Concept
Public enterprise is an organization which is owned, managed and controlled by the government. It is necessary for the active participation of government in individual and commercial level. It is financed and operated by the government. It provides service to the public. It provides goods and services to the public at reasonable price. It is guide by service motive but it can earn nominal profit. It helps in maintaining the state of ownership and operation of industrial, agricultural, financial and commercial undertaking. It is one autonomous body which is managed and owned by government and which provide goods/ services for public.
Characteristics of public enterprises

Features
Government ownership: It is totally owned by government. Its majority shares are taken up by the government. In this enterprise, sometimes 50% of share is owned by the government.

Government management and control: It is one autonomous body which is managed and owned by government. Government controls and manages organization by appointing key personnel. It is like board of directors, managing directors, chairman and so on which manage the appointing, transfer of members and so on.

Public accountability: They are operated by government fund. It is also accountable to general public. It is carried out by the parliament and helps in providing goods and services for public.


Service motive: It provides service to the public. It provides goods and services to the public at reasonable price. It is guide by service motive but it can earn nominal profit.

Autonomous: It is one autonomous body which is managed and owned by government. It receives fund from the government. But government doesn’t interfere in the day-to-day activities of the organization.

Monopoly: Government has monopoly in this sector.

Separate legal entity: It is established under acts and is rum under a law. It can purchase and sell securities, can enter into any contract, can sue and can be sued.

Stability: It is generally stable and perpetual in nature.
Importance of public enterprises
Importance
Planned development: Its main aim is to promote economic and social development in the weaker section. It helps to run all the works of development in an efficient manner. It follows government plans and policies. It generally focuses on private sector. It also earns profit. It provides planned development by setting up industries too.

Balanced development: Development works are done in planned and balanced way. It also provides decentralization of industries. It tries to develop all regions in harmonious ways. Balanced development is the main aim of public enterprise.

Accelerating the rate of economic growth: In developing countries, increasing the rate of economic growth always gets the first priority. It tries to remove deficiency of economy. It provides infrastructural facilities for economic development. It provides employment opportunities. Government invests the money. Amount of capital, technical empowerment and other facilities can be easily arranged by the government.

Public utilities: Public enterprises provide the utility of transportation, water supply, irrigation, electricity, communication, education, health facilities and so on to the general public.


Supply essential goods and services: public enterprise provides goods and services to the public at reasonable price. The government helps in manufacture and distribution of goods. These types of services are not done for earning profit.

Provide job opportunities: They help to create the employment opportunities in the society and work as the model employer. They help in uplifting the living standard of the people.

Reducing economic inequality: It removes economic inequality. It helps to develop different regions of the country. Therefore, it maintains living standard of the public.

Establishment of social welfare: They help in planned development and balanced development of the country. They also try in accelerating the rate of economic growth. They are also established for supply essential goods and services. They help in providing job opportunities to many people. They further help in reducing economic inequality. Thus, they establish social welfare.
Concept of multinational companies

MEANING OF MULTINATIONAL COMPANIES
Multinational companies are those companies whose management, ownership and control are spread in more than one country. It does business in two or more countries. It is a large industrial organization. They are established in one country as parent country and in other countries as subsidiaries or as host countries. They produce and distribute goods and services in all these countries where they operate. The main aim of these companies is to operate business in most of the part of the world. Popular multinational companies of the world are IBM Company (USA), Sony Company. Wai wai, nestle company, coca cola company.

Merits of multinational companies

Merits of multinational companies
Quality: it provides and produces quality goods. It produces goods which can satisfy the international customers too. It has huge investment and consists of trained and qualified personnel and specialists. It uses advanced technology to produce quality goods.
Mass production: it produces huge number of quality goods to satisfy the customers from all around the world. It must supply the goods constantly worldwide. Advanced technologies are used for mass production.
Low cost of production: the cost of production is also low. It produces goods in huge quantity which increases the rate of return and decreases in the cost of production. Low cost of production is the major benefit for multinational companies
Employment: it provides employment opportunities to large number of people from all around the world. Most of the host countries can help to solve the unemployment problems. It helps to maintain the living standard of people. It helps in consumer satisfaction too.
Increase in government revenue: multinational companies produce and sell the goods in large number of quantities. It earns abnormal profit. Government from both parent and host countries can collect custom duty, income tax, sales tax etc. In that way, government can earn more revenue.
Increase in export:  it produces commodities in international standard. They are not produced to meet the needs of local people only. Host countries have the benefit of exporting the goods in other many countries of the world where the company has been or not established. It helps largely in the export business
Industrialization: multinational companies help in industrialization. It brings more capital in the business and help to establish industries. It also uses advance technologies to establish industries. It helps in establishment of industries in host country too.
Defects of multinational companies

Defect of multinational countries:
Outflow of foreign exchange: It uses local capital for their industrial development. They earn industrial development. They earn huge amount of dividend too. The foreign currencies from host countries also go out in the form of royalty and technical fees.
Negative effect on local industries: Multinational companies have huge market in national as well as international market. This has negatively effected on local industries. They have increased competition on local industries and are slowly replaced by multinational companies.
Economic exploitation: The main aim of multinational companies is to earn maximum profit. They use unused natural resources and labor, . They produce goods and services at lower cost but the market price is very high. They earn maximum profit by unfair exploitation of host country
Exploitation of consumers: Multinational companies produce goods and services at lower costs by using cheap local resources and labor in the host country. Due to the high cost of royalties of these commodities they charge higher price to the local consumers. As a result, local consumers are exploited.
Inequality of employment: There is distinction on employee between parent and host country. They provide minimum employment to local people. They provide minimum wages to the local people. They use advanced technology for the production of goods so that only highly skilled manpower which may not be available in the host countries are employed. They appoint low level employee from host countries and give low salary and high level employees from their own country and give high salary. This creates inequality in employment.

Nepal chamber of commerce : formation and functions

Nepal chamber of commerce (NCC)
 
Formation 
Any individual firm, Company Corporation engaged in trade, industry and commerce can receive membership of Nepal chamber of commerce. It has introduced 4 types of membership.

Function
Help in economic development of the country.
Promote and protect the trade, commerce and industries
Maintain good relationship with trading community and industrialist
Develop link with commercial and industrial communities around the world.
Cooperation among all trading, commercial and industrial communities for betterment of economy
Conduct and organize industrial and trade markets and fare
Issue the certificate of origin for Nepalese product
Establish academic institution regarding trade, commerce and industries
Finance technical management
Conduct seminar, training, workshop and research programs
Federation of Nepalese chamber of commerce and industries: formation and functions

Federation of Nepalese chamber of commerce and industry (FNCCI)
It was established in 1965. It is umbrella organization of private sector. It was established for promoting, protecting right and interest of business communities. It provides information advice, consultation and promotional services to business. It organizes training, workshop, seminar and research programs.
Formation of FNCCI
It’s all activities, functions, plans policy are managed and controlled by executive committee. Its executive committee consists of 74 members. It is formed in following way

Types of membership
Ordinary member
Associate member
Specific member
Foreign member
Honorary member

Elected by general assembly from ordinary member and associate members → 1 president
Immediate post president → 1 member
Elected from various groups → 5 vice presidents
Elected from various sector of commerce and industry associating representing each region
EDR → 3 members
CDR → 3 members
WDR → 3 members
MWDR → 3 members
FWDR → 2 members
5.   Elected by commerce and industry association → 14 members
Presidents, post president, vice president, chairperson of committee from standing committee are the members. Standing committee take the urgent things on behalf of executive committee.
Functions:
It plays a catalytic role in the business and industrial development and establish sound industrial relationship in the country
it reinforces business community’s commitment for the society
it gives advice to Nepal government time to time about formulation of plans and policies regarding industry and commerce
it provides up to date data and information services to business and government.
It creates awareness and support for business and industry effort on issues affecting business like social responsibility
it fosters cooperation with related national and foreign organizations
it provides business information and research services
it provides expertise service for exporter, importer as well as investor.
It helps to promote joint venture.
It facilitates participation in national and international trade and seminars
It organizes training, workshop, seminar and research programs.
Trade and export promotion center : functions

Trade and export promotion center (TEPC)
Trade and export promotion center is a national trade promotion organization of Nepal. It was established in 2006. It is formed by merging three organizations. They are;
Trade promotion center
Export promotion center
Carpet and wool development board.
Its main aim is to prevent foreign trade and export trade. It helps increase country’s export capacity. At initial stage it was limited with few countries. Afterwards, trade was extended with India. It helps to identify, promote trade. It helps in developing new market. It also helps in establishment of relationship between exporter and importer. It tries to maintain positive result. It links Nepalese product in international market.
Functions:

It provides advice to the government of Nepal in formulation of policies for the development and expansion of trade and export
It helps in expansion of export business and increases national economy
It tries to reduce poverty through developing rural economy by enhancing internal and external market for agro based and other products
It conducts programs for increasing the products of exportable products
It assists to diversify trade by identifying potential market for exportable products
It cooperates in operating institutions for export promotion and diversified trade and extend support to such institutions
It pleads for technical assistance with national and international organizations for improving quality and standard of exportable products
It organizes buyer and seller meet and conduct training seminar and workshop
It assists in market test of exportable products
It studies and identifies the problems of foreign trade and advises the government of Nepal with appropriate measures to solve those problems
Concept of an office

Definition of an office
 Office is an important pace of the organization where different functions are performed to achieve the objectives of the organization. It is the integral part of any business. If business starts to be rigid and complex, office helps by simplifying the activities and promotes the expansion of business. It is set up to handle the information and daily transactions in s systematic way. The definition of office can be interpreted in two ways. They are traditional and modern viewpoint. In traditional view, office is defined as the place where clerical functions like receiving, recording, processing and supplying information are performed. In modern view it is defined as the part of organization which involves in performing all management as well as administrative functions such as planning, policy making, organizational activities, coordination and communicating in order to achieve the objectives of the organization.
Functions of an office
Functions of an office
1. Primary or basic functions
1. Primary or basic functions
An office basically performs those functions that are related to information management. It helps in receiving, recording, arranging, analyzing and transmitting information
A. Receiving and collecting information
B. Processing and arranging information


C. Supplying information
D. Retention of records
2. Auxiliary or administrative management function
A. Management process
B. Public relations
C. Development of office system and procedure
D. Safe guarding the assets
E. Form designing and control:
F. Purchasing stationery and supplies
G. Purchasing office furniture and machine
H. Personnel function
Importance of an office
1. Information center
2. Channel of communication
3. Coordinating center
4. Control center
5. Service center


6. Memory center
7. Help employees
8. Office as intermediary
Importance of office management

1. Achievement of goals
2. Increases office efficiency
3. Smooth flow of work
4. Public relations.


5. Minimization of cost
6. Managing change
7. New challenges
Office accommodation and layout

Meaning of office accommodation
It is the process of selecting appropriate building in a favorable location, establishing different sections and departments, proving or arranging resources in a scientific way. The purpose of office accommodation is to create sound working environment and to bring efficiency and rapidness in office work. It is important for both employees and outsider. Office employees spend a long time office. Bad accommodation can cause boredom and frustration among employees. Bad environment also may cause bad impression to outsiders.
Selection of office building
 
2. Lighting and ventilation
3. Convenience to customers and employees


4. Cost
5. Flexibility
6. Layout facility
Selection of office location:
 Nearness to customer: The office should be accessible to customers. They do not like long distances to make business inquiries. The office should be accessible to other parties who are in regular contact.
 Nearness to related business: It is desirable to locate the office near the offices of related business. It should be established in the same line of trade.
 Availability of infrastructure: The infrastructure should be available in office location. It consists of transport, communication, power, water and parking facilities.
 Nature of business: The nature of business affects location of office. Office of manufacturing business in located near the source of raw materials, labor and service facilities. Office of trading and banking business is located in commercial centers near the customers. Office of perishable goods business is located near the market for such goods.
 Availability of human resources: Needed human resources should be available for office. They can be skilled, semi-skilled and unskilled. All facilities must be available for employees
 Environment: The office location should have healthy environment. It should not be near polluted rivers or waste disposal sites. It should be free from noise, dust and pollution.
 Cost of space: Sufficient space should be available at reasonable cost for the office. Space should be available for future expansion.
 Government laws: The selection of location should comply with government laws and regulation at national and local levels.

Office layout
Meaning of office layout
It is systematic arrangement of office amenities. It is arrangement of staffs, machines, equipment, furniture and other physical facilities within the limit of available floor space. Its purposes are to utilize space in the best possible manners, to make the outlook of the office attractive and to increase efficiency of the staff. It is defined as arrangement and placing of men, material, machines and money to the optimum level.
Main aims are
To utilize the floor space properly
To run the office work smoothly
To help for the motivation of person.
To help for the minimization of physical hazards and accident
To make proper supervision
To maintain the attractiveness for impressing the customers and visitor.
To try for the provision of comfort and satisfaction of employees
To help to provide security
Principle of office layout

Principle of flow of work:
It is the layout which helps for smooth and effective flow of office works. Simple, easy and prompt work flow and essential for work progress

Principle of free movement and observation:
Office layout should allow the free movement of employees. There should also be proper supervision and observation of works of movement too

Principle of effective supervision:
There should be free supervision of flow of works, movement of personnel, cost, wastage, balance of budget, quality of office works etc.

Principle of departmental relationships:
For the office layout related departments are inter related and those inter related departments should be placed side by side.

Principle of flexibility:
Office should be flexible enough to facilitate the expansion in the future.

Principle of maximum utilization:
As the time flows, there is increase in cost of every thing as per the situation of the economy if the country and the area where office is established. There are very les cases of deflation basically in developing countries. Therefore, when office is set up then there must be maximum utilization of employees, materials, space, machines and resources. There should be reduction of wastage.

Principle of pleasing appearance:
Interior design, lighting, ventilation and cleanliness should be maintained. Office must be well furnished and pleasing enough to make it attractive to all the customers and visitors

Principle of good ventilation:
Office must have enough doors, windows, and ventilation for constant supply of fresh air.

Principle of good lighting:
Office should try to provide natural light that is sunlight. Dark places should be avoided for establishment of office.

Principle of safety:
An office layout must be based on the safety. It should reduce office accidents like theft, fire, damage and so on .office machine must be implemented properly

Principle of service facilities:
There must be provisions of good canteen, lights, lifts, telephone, and toilets.

Principle of providing private offices:
In an office. Separate rooms should be provided to some important employees. If the work is confidential in nature then private room should be provided. It is better to use movable partition to provide privacy
Steps in designing office layout: 
1. Securing the blue print of the organization
2. Assessing the need of the organization
3. Arranging templates:
4. Indicating the electric wiring:
5. Submitting the plan to top management for approval:



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