Business Organization and Sole Trading Concern

Concept of Business Organization

The business organization is an institution which may be owned and controlled by single or a group of individuals to carry the certain business activities for earning a profit. The business organization is the combination of two words i.e. Business and organization where business denotes an economic activity directed to earn profit through the production, distribution, and exchange of goods. Similarly, the organization refers to the act of bringing necessary resources for the production and distribution of goods and services and utilizing them in the best possible manner for achieving the objectives.

According to Wheeler, “Business organization is the concern, company or enterprises which buy and sells, is owned by one person or group of persons and is managed under a specific, set of operating policies."

According to A.N Agrawal, “Business organization is the act of bringing into effective cooperation the available resources for production and distribution of goods with a view to earning a profit."

It is clear from the above definition that a business organization is a system of bringing together the available resources like men, materials, money, and machines for the production and marketing of goods and services with the purpose of earning profits. A business organization can be classified into the following types:

• Sole Trading Concern
• Partnership
• Joint Stock Companies
• Co-operative organization
• Public Enterprises
• Multinational Companies

Sole Trading Concern

The business which is started, invested and managed by the single person is called sole trading concern. It is a one-man business. This form of business is one of the oldest forms of business organization. The person who starts and runs sole trading is called sole trader or sole proprietor.

According to Peterson and Plowman," A sole proprietorship is a business unit whose ownership and management are vested in one person. This individual assumes all risk and failure of enterprises and receives profit from its successful operation."

In conclusion, a sole trading concern is an enterprise which is invested, managed by a single person. In this business, sole-proprietor take all risk and responsibility of business. The profit of a business is also enjoyed by a single person. In this business, sole-proprietor take all risk and responsibility of business. The profit of a business is also enjoyed by a single person.

Registration of Sole Trading Concern in Nepal

In Nepal, there is no specific law regarding regulation of sole trading concern but it is guided by Private Firm Registration Act, 2014. According to Private Firm Registration Act 2014, a sole trading concern should be registered in the department of commerce and industry by providing the required documentation. A sole trading concern which is related to manufacturing must be registered in the department of industry whereas the sole trading concern related trade must be registered in the department of commerce. The procedure of registration and renewable of sole trading concern is explained below:

1. Filling an Application
2. Deposit of Fees
3. Certificate of Registration
4. Renewable of Sole Trading Concern

Filling an Application:

It is the first stage of sole trading concern registration. A sole trader who wants to register the business must fill up the application form provided by the concerned department. The applicant must provide the following information:

1. Name and address of the applicant
2. Name and address of the business
3. Nature and objective of business
4. Amount of Investment
5. Other details as prescribed by the concerned department

Along with this application, form applicant must provide a copy of citizenship certificates photo.

Deposit of Fees:

Once the application form is filled up, the applicant has to pay a registration charge as prescribed by the department. The registration fee will vary according to the amount of capital invested. The applicant is required to deposit the required registration fee amount at NR Bank in the name of the concerned department. According to private form registration act 2014, the registration fee of sole trading concern is as following:

Certificate of Registration:

After submitting the application form along with bank deposit slip, the department will verify all the information on it. The department will issue the certificate of registration if all information is satisfactory.

Renewable of a Sole Trading Concern:

A sole trading concern must be renewed within the 35 days of the beginning of every new financial year. A sole trader has to submit the application for renewable along with necessary documents and renewable fee. The following is the renewable schedule of renewable fee for sole trading concern.

Non-renewable of sole trading concern within the prescribed time, the extra amount of Rs 35 will be charged to the last date of Ashwin after the termination of Ashwin extra fine of rupees Rs 150 will be charged.

References:

Khanal, Soma Raj, Surendra Thapa Aslami and Sitaram Dhakal. Business Studies. Kathmandu: Taleju Prakashan, 2067.

Pant, Prem R., et al. Business Studies. Kathmandu: Buddha Academic Publishers and Distributors Pvt. Ltd., 2010.

Things to remember

1. A sole trading concern must be renewed within the 35 days of the beginning of every new financial year.

Business organization can be classified under the following types:

1. Sole Trading Concern
2. Partnership
3. Joint Stock Companies
4. Co-operative organization
5. Public Enterprises
6. Multinational Companies

Procedure for the registration of sole trading concern

1. Filling an application
2. Deposit of fees
3. Certificate of Registration

• It includes every relationship which established among the people.
• There can be more than one community in a society. Community smaller than society.
• It is a network of social relationships which cannot see or touched.
• common interests and common objectives are not necessary for society.

Questions and Answers