Explain the features of an ideal form of business organisation. Which form can be considered to be an ideal in all respects?

 Some features of an ideal form of business organisation are:-

1.Easy to Form: A form of organisation requiring minimum formalities in starting it will be an ideal form of organisation.

An organisation requiring too much time in establishing a business will not be preferred. The passage of time will result in escalation of costs and loss of profit.

2. Scope for Raising Finances :-An ideal organisation is one which helps the enterprise to raise funds as per its requirements. If more funds are required then outsiders will have to be approached.

The cost of raising the funds should also be taken into account. The funds should not dilute the control of business from the owners.

There should be a scope for raising funds for expansion and developmental purposes at a later time.

3. Continuity:- An ideal form of organisation should ensure the continuity of the business. A business can ensure profitability and growth only if it continues to work uninterruptedly.

The change in managerial personnel or any other factor should not affect the working of the business.

4. Maintaining Secrecy:- The secrets of a business should be closely guarded. It is essential for the success of the business. The form of organisation should be such which can ensure the guarding of business secrets.

5. Tax Burden:- This is another factor which is taken into account while selecting a form of organisation. That form of organisation will be preferred in which tax burden is low.

6. Extent of Risk and Liability:An element of risk is present in every type of business. It is only the degree which differs. In a competitive world every producer tries to capture market for his product.

The rapid changes in technology are influencing the method of production. The consumer preferences are also changing every time.

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