Business Organizations and Corporate Governance

A company begins its operations by opening a current account. The company operates the account through one or more authorised signatories who may even be changed by the Board of Directors.

The choice of the form of commercial organisation largely depends upon the given factors and many other factors such as continuity and stability, flexibility of operations, distinct ownership, etc.

A co-operative society after registration is recognised as separate legal entity by law. The income of co-operative society is legally taxable as per the Income Tax Act, 1961.

Transfer pricing enables multinational corporations to avoid taxes by manipulating prices in the case of intra-company transactions.

Free transferability of shares is the feature of a public company, not a private company.

As per the Companies Act, 2013, all other businesses can be transacted at an Annual General Meeting except the following: (i)     Consideration of financial statements and the reports of Board of Directors and auditors (ii)    Declaration of any dividend (iii)   Appointment of directors in place of those retiring (iv)   Appointment and fixing of the remuneration of auditors

According to this concept, business and businessman are two separate entities. Hence, the capital as well as drawings by the businessman should be properly recorded in the books of accounts. Matching concept states that the revenues of a particular period should be matched to the expenses incurred in that period in order to find out true profits. Accrual concept is concerned with recording cash as well as non-cash expenses and revenues in the books of accounting in order to find out true profits. Going concern concept states that business is assumed to exist for a long period of time.

Authorised Capital, i.e maximum amount a company can raise in its lifetime is to be mentioned in the Capital Clause of the Memorandum of Association.

Since a comapny is not a human being, its official stamp is considered as its signature. hence, common seal means the signature of the comapny.

Unit holders have extensive information rights - they can obtain information adverse to their investments, inspect major fund documents, and receive annual financial statements. However, unit holders do NOT have the right to approve investment decisions of the fund - that is the fiduciary responsibility of the fund managers.

Self Regulatory Organizations have limited regulatory authority that extends only to their own members. For example, NSE can regulate brokers and companies listed on its exchange, but it cannot regulate entities outside its membership or the entire market. This limited jurisdiction is a key characteristic of SROs.

Self Regulatory Organizations derive their regulatory authority from the apex regulatory authority. In India's capital markets, SEBI is the apex regulator that defines and delegates specific powers to SROs like stock exchanges, establishing the scope and limits of their regulatory authority.

The Board of Trustees acts as a protector of investor interests by supervising the AMC. They can dismiss the AMC and supervise its working, but they do NOT directly manage portfolios - that's the AMC's job.

All these are different types of business organisations in India.

A partnership is an arrangement in which parties agree to cooperate to advance their mutual interests. Under common law legal systems, the basic form of partnership is a general partnership in which all partners manage the business and are personally liable for its debts. In partnership, every member acts both as an agent and as a principal.