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    Business " Any Legal Activity Economic For The Basic Purpose of Earning Profit - But Keeping in View A Risk of Loss."

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    Ali Haris
    The document defines business as any legal economic activity undertaken with the basic purpose of earning a profit but with the risk of loss. It discusses the main types of business organizations - sole proprietorship, partnership, and company. A sole proprietorship is a single owner business where the owner is personally liable for any losses or debts. A partnership involves two or more owners where profits are shared according to an agreed ratio and liability is unlimited. A company is an artificial entity created by law with a common seal and limited liability, meaning owner's personal property is protected from debts of the business.

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    © All Rights Reserved
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    Business " Any Legal Activity Economic For The Basic Purpose of Earning Profit - But Keeping in View A Risk of Loss."

    Uploaded by

    Ali Haris
    35 views7 pages
    The document defines business as any legal economic activity undertaken with the basic purpose of earning a profit but with the risk of loss. It discusses the main types of business organizations - sole proprietorship, partnership, and company. A sole proprietorship is a single owner business where the owner is personally liable for any losses or debts. A partnership involves two or more owners where profits are shared according to an agreed ratio and liability is unlimited. A company is an artificial entity created by law with a common seal and limited liability, meaning owner's personal property is protected from debts of the business.

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    The document defines business as any legal economic activity undertaken with the basic purpose of earning a profit but with the risk of loss. It discusses the main types of business organizations - sole proprietorship, partnership, and company. A sole proprietorship is a single owner business where the owner is personally liable for any losses or debts. A partnership involves two or more owners where profits are shared according to an agreed ratio and liability is unlimited. A company is an artificial entity created by law with a common seal and limited liability, meaning owner's personal property is protected from debts of the business.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    35 views7 pages

    Business " Any Legal Activity Economic For The Basic Purpose of Earning Profit - But Keeping in View A Risk of Loss."

    Uploaded by

    Ali Haris
    The document defines business as any legal economic activity undertaken with the basic purpose of earning a profit but with the risk of loss. It discusses the main types of business organizations - sole proprietorship, partnership, and company. A sole proprietorship is a single owner business where the owner is personally liable for any losses or debts. A partnership involves two or more owners where profits are shared according to an agreed ratio and liability is unlimited. A company is an artificial entity created by law with a common seal and limited liability, meaning owner's personal property is protected from debts of the business.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 7

    Business “ Any legal activity economic for the

    basic purpose of earning profit.But keeping in


    view a risk of loss.”

    Types Of Bussiness :
    1) Sole tradership
    2) Partnership
    3) Company
    Sole Tradership:
    Single owner of a business etc . owner
    of grocery store
    Note : Liability of a sole tradership is unlimited
    Which means that if he has taken loan from a
    bank but unfortunately has a loss in business
    and cant repay
    In according to repay , his personal property
    will be sold bt law
    Partnership : Two or more person start the
    business in order to earn profit and such profit
    is shared as per agreed ratio.
    Imp points :
    1) There are min 2 and max 20 partners in
    business according to partnership act
    1890
    2) The liability of partners is unlimited

    Company :
    1) It is an artificial person
    2) Created by law
    3) It has a common seal (stamp)
    4) Liability of a company is limited
    which means that in loss and
    repaying the loan the personal
    property of members will not be
    sold
    TYPES OF COMPANIES :
    1) PUBLIC LIMITED COMPANY :
    It can trade its
    shares in Stock Exchange Market
    2) PRIVATE LIMITED COMPANY :
    It cant trade its
    shares in PSX but only with family friends and
    other relatives

    DEFINITIONS :
    ACCOUNTING : “It is the language of
    business Or Accounting is an art of recording
    classifying and summarizing business
    transactions and interpretation of results”

    TYPES OF BUSINESS TRANSACTIONS :


    Exchange of Good & Services between two
    entities in terms of money is called as
    Business transactions
    CASH TRANSACTION:
    In cash transaction a
    person buys something and pays at the
    spot
    1) In cash transaction cash is directly
    involved
    2) Two parties are known as buyer and
    seller
    3) Buyer and seller relationship is short
    term

    CREDIT TRANSACTION :
    When a business buys
    something and payment is made in some
    future time period is called as Credit
    transaction
    1) Cash is indirectly involved
    2) Two parties are known as deBtor and
    creditor
    3) Relationship between debtor and creditor
    is long term

    DEBTOR :
    Debtor is a person to whom business
    has sold something on credit and from whom
    money is receivable

    Creditor :
    It is a person from whom business
    has purchased something on credit and to
    whom money is payable

    CAPITAL :

    Money or Money Worth (property car


    etc.) invested by the owner in the business is
    known as capital
    DRAWINGS :
    Money or Money worth taken
    out by the owner for personal ise is known as
    drawings

    OWNER :
    Owner is a person who invests
    something money or money worth in
    business

    PURCHASES :
    Goods purchased for resale
    purpose

    SALES :
    When purchased goods are sold it
    becomes Sales

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