Prof. Dr. Zulfiqar Hasan
Business Organization
A business organization is an establishment intended to carry commercial business by producing goods or services and meet the customers' needs.
Most of the organizations have a standard such as social structure, purpose goals, utilization of resources, rules and regulations, etc.
03 Main forms of Business Organization
Sole proprietorship: A business owned by one person and operated for his or her own profit. “The sole proprietorship is the form of business ownership which is owned and controlled by a single individual”.-B. O. wheeler
Partnership: A partnership has roughly the same advantages and disadvantages as a sole proprietorship. Business formed by two or more owners is called Partnership.
Corporation: A business entity that legally functions separate and apart from its owners. A business firm which sells its shares in the financial market or already got the permission to sell its shares is called Corporation.
Suitable Field for Sole Proprietorship
- Business of minimum capital
- Product of limited demand
- Retain product
- Perishable goods
- Professional and service oriented
- Product of changing demand
- Small and cottage industry
- Business of industrial arts
- Business of limited risk
- Mobile and temporary business
Numerical Problems 01
A shopkeeper bought 5 dozen ball pen at Tk 450. He also spent Tk 60 as transportation costs. Calculate –
Cost of one ball pen.
a. Profit from one ball pen if he sells it Tk 10.5,
b. What will be the total profit from this business?
Solutions:
a. Total Costs = Total Purchase Price + Transportation Costs
= Tk 450 + Tk 60 = Tk 510
Cost price of one Ball Pen = Total Costs/Number of Ball Pen
= (Tk 510/60) = Tk 8.5
b. Profit from One Ball Pen = Selling Price – Cost Price
= Tk 10.5 – Tk 8.5 = Tk 2
Total Profit = Profit from One Ball Pen x Number of Ball Pen
= Tk 2 x 60 = Tk 120
