Navigating Solutions and Darkness

The need for management arises because to maintain effectiveness alongside minimum adverse consequences, group efforts are properly organized, directed and coordinated. The group of people who accept the responsibility of running an organization and directing its activities form the management of that organization. Objectives of management: Achieving maximum output with minimum effort optimum use of resources  maximum prosperity  human betterment and social justice  Schools of management: Empirical approach: Understanding of management develops from the study and analysis of cases and from a comparative approach.  Interpersonal Behaviour Approach: Study of management should be based on interpersonal relations. Group Behaviour Approach: Closely related to the interpersonal behaviour approach, but centred on studying the behavioural pattern of members and groups in an organization.  Decision Theory Approach: Rational decision making is the ...

S. 4:  Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Elements of Partnership: At least two persons A relationship arising out of an agreement between two or more persons to do a business. The agreement must be to share the profits of a business. The business must be carried on by all or any of them acting for all.  Mutual agency can be said to be the true test to determine whether something is a partnership. A partnership firm has no legal existence apart from its partners. It isn't a legal entity, nor does it have a separate personality as does a corporation - it merely represents the collective of its partners. A partnership arises through signing of the partnership deed by all partners.  Classification: Particular Partnership:  S. 8:  When two or more persons agree to do business in a particular adventure or undertaking or for a particular per...

S. 2(34), Companies Act, 2013:  A director appointed to the Board of a company - person appointed to perform the duties and functions of director of a company in accordance with provisions of the Companies Act, 2013. S. 2(10):  Board of Directors:  Collective body of the directors of the company. S. 149(1):  A minimum of 1 director in case of a One Person Company, 2 in case of a private company, and a maximum of 15 directors. More directors may be appointed after a special resolution in General Meeting.  There should be at least one female director appointed. S. 165:  Maximum number of directorships (including alternate directorships) held by a single person is 20. In addition, the number of directorships in public or private companies that are either holding or subsidiary companies of a public company shall be limited to 10. This limit may further reduced through a special resolution. S. 149(3):  Residence of a director in India is compuls...

The process of company formation can be divided into three stages: Promotion Incorporation by Registration Commencement of Business Promotion:  The process of conceiving an idea and developing it into a concrete proposition or project to be accomplished by the incorporation and floatation of the company. The person taking the necessary steps to accomplish these objectives is known as  promoter.  [S. 2(69), Indian Companies Act, 2013]  People in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act  are also treated as promoters.  A director/ officer/ employee who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise  is considered a promoter. In  Kelner vs. Baxter LR  (1886) 2 CP 174,  it was held that the company couldn't ratify contracts made by a promoter before incorporation. However, specific perf...

Companies can be classified by the manner in which they are limited into: Shares:  A registered company, whether public or private, having  the liability of its members limited by memorandum to the amount, if any, unpaid on the shares  respectively held by them. Guarantee:  A registered company having the liability of its members limited by its memorandum  to such an amount as the members may respectively undertake by the memorandum to contribute to the assets of the company  in the event of its being wound up. Liability here arises only upon winding up, and not while the company is a going concern. Unlimited:   A company not having any limit on the liability of its members.  Maximum liability in such cases can be to the full extent of their properties, to meet the obligations of the company by contributing to its assets. The members are not directly liable to creditors of the firm, unlike in a partnership, but to the company itself. A com...

The concept of  incorporation  involves giving a commercial entity a  separate legal personality.  In the eyes of the law, a company is considered an individual entity with its own agency, ability to own property, and generally conduct itself in matters of business as though it were a human person.  Advantages of incorporation Corporate personality:  A partnership firm has no existence aside from that of its members, but a company is  a distinct legal or juristic person independent of its members. Limited Liability:  In a partnership, each partner is liable to the full extent of their assets for the debts of the partnership. In the case of companies limited by shares, no member is bound to contribute anything more than the nominal value of the shares held by him which remains unpaid.  Perpetual Succession:  The existence or continuity of the company isn't affected by the death or insolvency of individual members. Transferab...

Company vs Partnership Company Partnership Distinct legal person Not distinct from persons who compose it Property belongs to company Property belongs to partners Creditors can proceed against company only Creditors can proceed against partners Members not agents of the company or each other Partners agents of the company and inter se Member of company can contract with firm Partner can’t contract with his firm Shares freely and ordinarily transferable Partner can’t transfer shares without consent of other partners Restrictions in articles bind the public Restrictions on partner’s authority in partnership contract don’t bind outsiders Liability limited by shares or by guarantee Unlimited liability Perpetual succession Death or insolvency of partner dissolves firm unless otherwise provided Any number of members. Private co – 2 – 50 members. Public company – min. 7 members Can’t have more than 100 members Legally required t...

Sources of English law 1. Common law 2. Law merchant 3. Principle of equity 4. Statute law Common law - Name given to those principles of law evolved by judges in making decisions on cases that are brought before them. - Built up over many years to form a complete statement of the law in particular areas. - The body of legal rules, the primary sources of which were the general immemorial customs, judicial decisions and textbooks on jurisprudence. Law Merchant - Most important source of Mercantile law - Those customs and usages binding on traders in their dealings with each other. - Should be ancient, general and notorious and commands universal compliance. - If not, has to be proved by the party claiming it. Principle of Equity - Body of rules, the primary source of which was neither custom nor written law, but the imperative dictates of conscience which has been set forth and developed in the Court of Chancery. - Procedure of Common Law courts was technical and d...

It is impractical to try and give a clear and concrete forever definition of law. Multiple definitions are formed according to changing thought and need of the hour. Classification of definitions: 1.  Natural  Most of the ancient definitions fall under this category - Ulpine, Cicero, Justinian's Digest etc.  Ancient Hindu law considered law to be the command of God. Prominent jurist  Salmond  defined law as  “the body of principles recognized and applied by the State in the administration of justice.”  That is to say, rules recognized and acted on by courts of justice. To understand the law, one should know its purpose. And in order to ascertain the true nature of the law, one should go to the courts, not the legislature. (I.e. go to the people who interpret the laws, not the ones that write them.) 2.  Positivistic  "Law is the aggregate of rules set by man is politically superior or sovereign to men as politically subject....

Finance:  Represents long and short term requirements and requires optimal management of limited resources.   Business finance:  those business activities concerned with the acquisition and conservation of capital funds in meeting the financial needs and overall objectives of business enterprises. Financial Managment:  Task of providing funds needed by the business or enterprise on terms that are most favorable in the light of its objectives – almost exclusively concerned with procurement of funds, could include instruments, institutions and practices of fund raising; also includes legal and accounting relationship between a company and its sources of funds. - Concerned with cash – everything that takes place in the conduct of a business (Broader term) - Procurement of funds and effective utilization – widest accepted theory Classification: Financing decision Investment decision Fixed capital management Working capital management  Dividend dec...

Business Function:  Concept used to define the role of the enterprise. Strategy -  The direction and scope of an organization over the long term. Exists at different levels: 1. Corporate strategy 2. Business unit strategy 3. Operational strategy Planning -  Mapping out exactly how to achieve a particular goal. Primary function of management. Budget:  A financial and/ or quantitative statement prepared and approved prior to a defined period of time of the policy to be pursued during that period for the purpose of attaining a given objective. May include income, expenditure and employment of capital. Budgeting:  The formulation of plans for a given future period in numerical terms. Budgetary control:  certain standards of performance are laid down, and used to monitor, measure and regulate actual performance. - Specific and time bound targets - Facilitates management by exception by stressing on those operations which deviate from budgeted s...

Ideally speaking, a business organization ought to have the following characteristics: Ease of formation Adequacy of capital - when raising capital from the public, the conditions involved are  safety of investment, fair return on investment and transferability of holding. Limited liability Direct relationship between ownership, control and management. Continuity and stability  Flexibility of operations Distinct ownership Lawful business Separate legal personality Dealing in goods and services  Forms of business organization: Sole Proprietorship -  single ownership, no sharing of either profit or loss, unlimited liability, minimal formality. HUF - Hindu Undivided Family, unique to India  - All members (co-parceners) own the business jointly, and it is managed by the " karta" , or head of the family. Governed by Hindu inheritance laws. Partnership  - 2-20 members; governed by the  Indian Partnership Act, 1932 .  Unlimited liabi...

Crossposted from Ditzy Derivatives here . Business:  An organized activity to achieve certain predetermined goals. Predetermined  goals of business  can include:   Making profit Important position in society Supply of goods and services Creation of job opportunities Offering better quality of life Contributing to the economic growth of society Change is an important part of business, and the  success of every business depends on adaptation . Specific and general forces  affect enterprises - the former (investors, customers, competitors) affect the day to day functioning of enterprises, whereas the latter (sociopolitical conditions, laws) are common to all enterprises and are probably indirect in nature. First mover advantage:  early recognition of opportunities  Threat identification:  corrective and improvement measures to survive competition. Adaptability : coping with rapid changes caused by the dynamic natur...