Which Types of Organization are Setting up Business in India


India is emerging as a hub full of opportunities and scopes for both foreign and Indian investors. Setting up business in India is becoming easier, as the government of India is offering liberalized policies, which are not only entrepreneur-friendly but can also boost further growth. We can very easily conclude that India is the next place to be when it comes to thinking about invasion and growth of a business. Before we decide to start a business, it is very important for us to prepare the blueprint of the business. This blueprint is nothing but the business plan, which helps in planning for the capital, the resources as well as the scope for the business. It is a formally written document, mentioning the mission, vision and strategy of the business.

The popular types of business organizations

Some of the popular types of business organizations, that we can set up in India are:

Individual entrepreneur:

This is one of the most coveted forms of business. More and more young Indians are aspiring to become entrepreneurs, due to flexibility in various entrepreneurial roles. This is the type of business organization, wherein the owner or the entrepreneur has to arrange for the entire amount of the capital, even if he has to borrow. He is also responsible for organizing and supervising the business and he is the sole person responsible for the results. Whether he gets a profit or earns a loss, he is held accountable for it. In order to get help, he can employ some people to provide him with assistance. There are certain disadvantages and advantages of this individual enterprise type of business. As the risk is absolutely the owner’s, he gets the incentive for his hard work. As he closely supervises every detail pertaining to the job, there is no question of others wasting his resources. The person is also responsible for customer satisfaction and takes a special interest in it. The primary disadvantage includes limited resources, weak competitive capacity and being accountable for suffering losses.


This form of business starts operating when there is a need to appoint someone else as it becomes unwise for only one man to carry on with the job. Often, a partnership is needed to start a business together. An agreement lays down the rules of the partnership as well as the rules which will be dissolving the business, in case it is required. Each partner is responsible for every kind of decision taken or the debts of the firm.

Joint-Stock Company:

The most important type of business organization, operating not only in India but in the whole world is the joint-stock company. The minimum number of persons required to form this kind of company is seven. These people draft the Memorandum of Association, containing the name of the company, the aims and objectives of the company, the location of the head office, the amount of share capital, the value of shares and their kind and a declaration of the limited liability of the organization. The promoters of this kind of company often advertise for selling their shares. The shares are of three kinds, the ordinary, the deferred and preference.

Co-operative organization:

This is another type of business organization, known as the co-operative enterprise. There are two types of co-operation, the producer’s co-operation and the consumer’s co-operation. When it is a producer’s co-operation, the workers are their own masters as the business is owned by them. The profits also get divided among them. In the consumer’s co-operation, the consumers who live in a particular place or work in a particular establishment, work together. Each of them contributes to capital and the goods are sold at market price.

Public Enterprise:

This is a type of business organization where the government, a municipality or a Zilla Parishad runs a business. This kind of business is responsible for providing public utility services like electricity, gas or water supply. Sufficient funds, pure supply and best talent are some of the advantages of these types of business.

Setting up business in India, of any kind, is possible with the recent business policies adopted by the central government. There are also wide possibilities of starting both public and private enterprises, at the same time. The policies of the Five Year Plans are of great help in this regard.