Artificial legal person

A company is an artificial person created by law and existing only in contemplation of law. It is intangible and invisible having no body and so soul.c It is an artificial person because it does not come into existence through nature birth and if does not possess the physical attributes of a nature person. Like a nature person, it has right and obligations in terms of law. But it cannot do those acts which only a natural person can do, e.g., taking an oath in person, enjoying married life, going to jail, practicing profession, etc. A company is not a citizen and to enjoys no franchise or other fundamental rights.

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Advantages of Industrial Estates

An industrial estate provides seneral benefits to the entrepreneurs. First, it offers factory accommodation at a low cast. They do not have to make huge capital investment and need not incur cost of survey or finding a suitable location of the plant. Secondly, all service and facilities, e.g., banking transport, warehousing, insurance, are easily available to all the units at subsidized rates. Thirdly, all the member units enjoy the external economies, protection and assistance from public authorities and the government. Capital investment and risks of entrepreneurs are considerably reduced due to the provision of large variety of service and infrastructure by the sponsoring authorities. Lastly, an industrial estate offers social advantage. It help in the planned development of all regions, in promoting spirit of cooperation and joint effort, in generating employment on a large scale and in removing poverty and in improving the standard of living of the people.

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Flexcibility

Small industries are subject to wide variations in demand, e.g., manufacture of jewellery, fashion garments, etc. In such cases, greater flexibility of operations is required. Small firm are more flexible due to simple technology and low overheads. They are capable of being adapted to changing tasted and fashions. They can easily make changes in products and can shift to new lines of business whenever the need arises. Therefore, small firms are more suited in the production and distribution of special items having temporary demand. New techniques can be adopted without causing technological unemployment.



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Employment

Small scale firms use labour-intensive techniques and, therefore, they have high potential to provide employment to a larger number of people per unit of capital. For every worker employed in large scale industries, about three workers are engaged in small scale and cottage industries. Next to agriculture, small business constitutes the most popular occupation of people in India. small firms promote self-employment particularly among the educated and professional class. They also provide employment to agriculture who remain idle during a part of the year. In fact, the healthy growth of small scale industries can effective approach to the pressing problem of unemployment in the country. Several empirical studies have revealed that the employment generating capacity of small scale industries is about ten time more than that of the large scale industries.




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A business enterprise is subject to direct and indirect taxes of several types. Taxes influence the location, size and form of ownership of business as well as the type of securities issued to rise finance. The promoter must visualize in advance the various taxes which the enterprise will have to pay. through proper planning, the tax burden on the enterprise can be reduced and maximum benefits can be taken of tax incentives. Income tax and wealth-tax are the most important among the various types of taxes payable by a business enterprise.


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After selecting machinery and equipment, it is necessary to arrange the in an efficient manner. Arrangement of physical facilities in the plant is known as plant layout. Good layout is essential for efficient and economical operations. An efficient layout helps to reduce the costs of material handling, inventory, space, etc. The layout should be such that it results in the optimum utilization of machines, equipment, work force and space. Machinery and equipment should be placed in a proper sequence so as to permit a smooth flow of material through the necessary operations and in the most divert way possible. The layout should be flexible enough to adapt itself to changing conditions of business. Back-handling of material and other bottlenecks and delays in production process must be kept to minimum. The type or pattern of plant layout depends upon the nature of production system, space available, volume of output, types of equipment, etc



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Selection of line of Business

The first procedural decision involved in setting up of a new enterprise is to select the nature and type of business. The entrepreneur has to decide the type of business in terms of industrial, trading or service. Then he has to select the types of goods and service ha will produce or distribute. He has to consider several factors, e.g., nature and source of raw material, type of technology to be used, source of supply, distribute policy, etc. After deciding the nature of business activity, the promoter has to analyses and forecast the profitability of the proposed business on the basis of probable operating costs imply cost of procuring different inputs while sales revenue depends upon the size of the market, probable market share of the proposed undertaking, expected growth of total market, sales estimate these factor. Marketing research may be carried out to product analysis is made to determine the design, quality and style of the product to be manufactured. Decisions regarding product design, pricing policy, distribution channel and publicity should be made from the view point of propspective customers.


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