List the features of an ideal form of business organisation?

The main features of an ideal form of business organization are as follows:

Scope of raising capital: One can make the choice of organization by depending on the amount of capital needed to start off the business. Amount of capital depends upon the nature of business and scale of operations. For example to start a retail shop, less capital is required. But if someone wants to set up a factory, he may require a large amount.

Extent of liability: Normally, businessmen prefer limited liability.. It is often said that a good form of organization has got limited liability. Limited liability helps to curtail the risk factor. Risk is somewhat important for a business so as to maintain initiative, drive and involvement in business.

Flexibility of operations: The organization should be a flexible one and should be able to meet all the requirements or changing business conditions without much difficulty. For example if one wants to expand his business, organization should be able to adapt itself to the changing business conditions.

Stability and continuity: Owners, employees and even customers always prefer a stable  and continuous business. Customers can get a regular supply of goods to meet their needs, if the business continues for a long time. Employees like working in a stable and continuous firm. The owners can evens make future plans if they run a stable and continuous business.and continuous business. Customers can get a regular supply of goods to meet their needs, if the business continues for a long time. Employees like working in a stable and continuous firm. The owners can evens make future plans if they run a stable and continuous business.

Effectiveness of management: If the management is efficient, the business can easily succeed. Skills, motivation, flexibility etc, are very important in order to make management efficient. A single person cannot have all the qualities mentioned above. That is why many people work together to run a business.

Business secrets: Competitors should not come to know your business secrets. Businessmen prefer that form of organization where business secrets can be preserved easily and not revealed to the competitors.

Tax burden: That form of organization is said to be ideal which attracts minimum amount of tax liability. Businessmen have to pay taxes like sales tax, excise duty, customs duty etc on certain products and services. Company form of organization is best suited for this purpose because it enjoys a number of tax reliefs which are not present in other forms of organization.

Extent of government control and regulations: ‘Businessmen are usually not in favor of those forms of organization which involve too much of government’s interference. It is so because interference can hamper the working of their business and can even lower down their initiative. Other than entrepreneurs, creditors, customers, investors trust those organizations which are controlled and regulated by the government. So, an ideal form of business organization is one which is free from the control and regulations of the government.

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