Lesson Notes By Weeks and Term - Junior Secondary School 1

FORM OF BUSINESS ORGANIZATION

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TERM: 2nd TERM

SUBJECT: BUSINESS STUDIES                                  

CLASS:  JSS 1

WEEK SEVEN

TOPIC: FORM OF BUSINESS ORGANIZATION

CONTENTS

  1. Types of business organization
  2. Advantages of various business organizations
  3. Disadvantages of various business organizations

 

TYPES OR FORMS OF BUSINESS ORGANIZATIONS

The various forms / types of business organization can best be illustrate with the diagram below

 

TYPES /FORMS OF BUSINESS

Sole ProprietorshipPartnershipCo-operative society
PrivatePublic
Shoe mendingmanufacturingThrift Co-opLimited Liability CompanyPublic Limited Company
Kiosk ownershipfarmingFarmersWABP LTDZenith Bank
FarmingEstate Management
ConsumersFrank & SonsFirst Bank
SupermarketConsultancyMulti Purpose Co-opAddox Pet. Dev. LtdUnited Bank For Africa
    Unilever
     

 

Advantages and Disadvantages of Sole Proprietorship

ADVANTAGESDISADVANTAGES
It requires small capital to establish 

The capital is usually small because it is Personal  saving.

The owner maintains close contact with customersThe sole proprietor may not have the required knowledge / experience
The business is easy to establish 
The owner makes all decisions about the business

The business may not stand the competition of bigger ones

All the profit belongs to the owner, etc. 
 When the owner dies, the business may also die.
The liability of the sole proprietor is unlimited. 

 

EVALUATION

  1. State three(3) advantages of a sole proprietorship business
  2. List and explain three (3) disadvantages  of  sole proprietorship

 

ADVANTAGES / DISADVANTAGES OF PARTNERSHIP

ADVANTAGESDISADVANTAGES
Two or more persons contribute capitalThe mistake of one partner affects all others
Two or more persons combine knowledge/ExperienceDecision-making is slow.
The risk of the business is borne by the partners

No new partner can be admitted without the    consent of other partners

Division of labour  can be practised in administration 
Better decisions are made by the partnershipAny partner can bring the partnership to an end

 

EVALUATION

  1. Define a sole proprietorship.
  2. What is partnership?

 

ADVANTAGES/DISADVANTAGES OF CO-OPERATIVE SOCIETY

ADVANTAGESDISADVANTAGES
It is run democratically so each member has one vote.
Capital is limited to the ability of members to pay.
It encourages saving habits among membersThere can be mismanagement by unqualified people.
Profits are shared in proportion to contributions

The decision-making process is longer compared with the sole  proprietor.

Members are able  to solve problems beyond their individual means because of  co-operation.Lack of proper planning and ignorance may  affect the success of the society.
Every member is bound to benefit from the Co-operative society; it caters for the welfare of membersThe society may fail due to lack of commitment from elected officials

 

EVALUATION

  1. Define a co-operative society.
  2. State three (3)  advantages and three disadvantage of a co-operative society

 

Advantages and Disadvantages of Private Limited Liability Companies.

AdvantagesDisadvantages
It is separate from its ownersIt is relatively more difficult to form than a sole proprietorship.
Owners or shareholders enjoy Limited Liability.
Ownership  is separate from management.
Capital is easier to accumulate than than that of a sole proprietorship.
Decision making is relatively slow because of size.

It is not compulsory to publish its financial records.

It cannot invite the public to contribute to its capital.

             

ADVANTAGES AND DISADVANTAGES OF PUBLIC LIMITED LIABILITY COMPANIES

AdvantagesDisadvantages
It can invite the public to buy its  sharesIt must publish its financial  statement in national dailies.
It can employ experts.    It must submit its financial plans to the Nigerian Stock Exchange
It can engage in research and development.Establishment of a public Limited company is complex and involving.
It can enjoy perpetual existence.Ownership is separate from the management of the companies
Shares are transferrable easily. 

 

EVALUATION

  1. State two differences between a private limited liability company  and a public limited liability

company.

  1. List three advantages and two disadvantages of a public limited liability company.

 

GENERAL EVALUATION QUESTION

  1. Define a company.
  2. List four different types of  business units in Nigeria
  3. State three advantages and three disadvantages of a private limited liability company.
  4. State two similarities between a co-operative society and a public limited company.
  5. List three advantages and three disadvantages of a sole proprietorship.

 

Reading Assignment

Read JSS Business Studies by (WABP) Ehiametalor, Osu-Nwuifo, etc pages 65 to 70 Book 1.

 

WEEKEND ASSIGNMENT – SECTION A

  1. The business unit that must publish its financial statements in the national newspaper is A. Partnership B. Private company C. Public Company  D. Sole proprietorship
  2. The business that are separate from their owners (i.e separate legal entities) are A. Partnership and sole proprietorship B. Partnership and private companies    C. Sole Proprietorship and public Company D. Private and public companies
  3. The business owner who does not share profit with anybody is A. Sole trader B. Partnership C. Private company D. Share holders
  4. ______ is formed to carter for the welfare of its members A. Partnership    B. Co-operative society    C. Sole proprietorship    D. Public  company
  5. Dividend is a share of profit to ______ A. Debtors    B. Creditors    C. Partners    D. shareholders

 

Section B

  1. List five forms of business unit you know in Nigeria
  2. State three advantages and three disadvantages of a partnership’ business


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