Business Organization and Sole Trading Concern

Concept of Business Organization

Source: www.slideshare.net
Source: www.slideshare.net

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 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. Business organization can be classified into following terms:

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

Sole Trading Concern

Source:www.slideshare.net
Source:www.slideshare.net

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 run sole trading is called sole trader or sole proprietor.

According to Petersen and Plowman," a sole proprietorship is a business unit whose ownerships 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 the enterprises which are invested, managed by the single person. In this business, sole-proprietor take all risk and responsibility of business. The profit of a business is also enjoyed by the single person. In this business, sole-proprietor take all risk and responsibility of business. The profit of a business is also enjoyed by the 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 form registration act 2014. According to private form registration act 2014, a sole trading concern should be registered in the department of commerce and industry by providing required document. 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

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 following information:

  1. Name and address of applicant
  2. Name and address of business
  3. Nature and objective of business
  4. Amount of Investment
  5. Other details as prescribed by 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 registration charge as prescribed by department. 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 concern department. According to private form registration act 2014, the registration fee of sole trading concern is as following:

S.No

Capital

Fees(Rs)

1.

Up to Rs 1,00,000

700

2.

Rs 1,00,001 to Rs 3,00,000

2,100

3.

Rs 3,00,001 to Rs 5,00,000

4,100

4.

Rs 5,00,001 to Rs 8,00,000

7,600

5.

Rs 8,00,001 to Rs 12,00,000

10,100

6.

Rs 12,00,001 to Rs 15,00,000

15,100

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 be issue the certificate of registration if all information is satisfactory.

Renewable of 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.

S.N.

Capital

Renewable Fees

1.

Capital up to Rs.1,00,000

100

2.

Rs.1,00,001 - Rs.3,00,000

125

3.

Rs.3,00,001 - Rs.5,00,000

150

4.

Rs.5,00,001 - Rs.10,00,000

200

5.

Rs.10,00,001 - Rs.50,00,000

250

6.

More than Rs.50,00,000

300

Non-renewable of sole trading concern within the prescribed time, extra 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.

  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

 

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. Some business organizations are formed to earn income for owners. Other business organizations, called nonprofits, are formed for public purposes. These businesses often raise money and utilize other resources to provide or support public programs. 

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 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. Business organization can be classified into following terms:

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

Sole trading concern is the simplest, oldest and in some respect, the most natural form of business organization in the private sector.  The person who starts run sole trading is called sole trader or sole proprietor. The proprietor uses his own skills, intelligence, knowledge, and capability for the successful  operation and management of the firm.

"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.”

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


Characteristics of Sole Trading Concern:

Sole investment
Sole management
sole risk-taking
No separate legal entality
Unlimited liability
Independence

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 form registration act 2014. According to Act, a private firm refers to any industrial enterprise , which is conducted by an individual in his own name or in the name of relative.  

The procedure of registration renewable of sole trading concern is explained below:

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

The procedure of registration renewable of sole trading concern is explained below:

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

Filling an application:
It is the first stage of sole trading concern registration. An individual who wants to establish sole trading concern should file an application to the concerned department of the government. An individual should mention all the particulars clearly, correctly, and honestly  in the application firm. The application form includes following particulars:

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

The applicant should submit the attached copies of the citizenship certificate and recommendation of the Federation of  Nepalese Chambers of Commerce  And Industry.(FNCCI).

Paying Registration Fee:

 The applicant has to pay registration charge as prescribed by department Registration fee will variable according to the amount of capital invested. The registrationare required to be deposited in the concerned department

. According to private form registration act 2014, the registration fee of sole trading concern is as following:

S.No

Capital

Fees(Rs)

1.

Up to Rs 1,00,000

700

2.

Rs 1,00,001 to Rs 3,00,000

2,100

3.

Rs 3,00,001 to Rs 5,00,000

4,100

4.

Rs 5,00,001 to Rs 8,00,000

7,600

5.

Rs 8,00,001 to Rs 12,00,000

10,100

6.

Rs 12,00,001 to Rs 15,00,000

15,100


Certificate of Registration:
After submitting the application form along with bank deposit slip, the department will verify all the information on it.  If the official is satisfied with all  the  information provided by the applicant, he issues a Certificate of Registration. And the registration gives the legal recognition to the firm.


Renewable of sole trading concern:

Every year the registered firm should renew itself. The proprietor of the sole trading concern should file an application for renewal to the concerned department within 35 days of the beginning of financial year. The amount of capital invested in the business determines the amount of renewal fee. 

At the present the renewable schedule of renewable fee for sole trading concern are listed below:

S.N.

Capital

Renewable Fees

1.

Capital up to Rs.1,00,000

100

2.

Rs.1,00,001 - Rs.3,00,000

125

3.

Rs.3,00,001 - Rs.5,00,000

150

4.

Rs.5,00,001 - Rs.10,00,000

200

5.

Rs.10,00,001 - Rs.50,00,000

250

6.

More than Rs.50,00,000

300

Non-renewable of sole trading concern within the prescribed time, extra 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.

 

 

0%
  • On the basis of their ownership and management can be classifies into______forms.

    7
    6
    4
    3
  • ____________are the classified of business oganization.

    Joint Stock Company
    Partnership
    Sole Trading Concern
    All
  • According to ______,"Business organization is a concern,company or enterprise which buys and sells,is owned by one person or group of persons and is managed under a specific set of operating policies____________are the classified of business oganization".

    L.H Haney
    Keith Davis
    Wheeler
    Robbins and Coulter
  • According to_______"Business organiation is the act of bringing into effective cooperation the available resources for prouction and distribution of goods with view to earn money".

    Robbins and Coulter
    A.N Agrawal
    L.H Haney
    Keith Davis
  • The concern which is_____________by a single person is called Sole proprietorship business.

    managed
    controlled
    All
    owned
  • According to_________"A sole proprietorship is a business unit whose ownership and management are vested in one person.This individual assumes all the risks of loss or failure of the enterprise and receives all profit from its successful operations."

    Wheeler
    James Stephenson
    Peterson andd plowman
    R.N ownes
  • According to________"A business initiated and operated by one individual who carris all financial and administrative responsibilities employing such assistances as may be necessary"

    James Stephenson
    Edward T.Elbourne
    Wheeler
    Keith Davis
  • According to________"A person who establishes and manages a business for his own account and risk is known as a sole proprietorship businesss"

    Wheeler
    A.N Agrawal
    R.N ownes
    L.H Haney
  • The concern which is owned,managed and controlled and invested by a single person is called___________.

    Public Enterprises
    Joint Stock Company
    Sole Trading Concern
    Partnership
  • You scored /9


    Take test again

Any Questions on Business Organization and Sole Trading Concern ?

Please Wait...

Discussions about this note

Forum Time Replies Report
soletrading

characteristcs of soletrading