BASICS OF BUSINESS,
ENTREPRENEURSHIP &
TAXATION
Dr. SHAKTI A. CHAVAN
PhD, MMS,MCOM(BM),MCOM(ACCOUNTANCY),
NET(COMMERCE)
⦿ Definition – A Business is any entity or
organization which is involved professional,
commercial, industrial or charitable activities.
Businesses can be both – for profit or
not-for-profit.
⦿ Business involves a regular process of earning a
profit by satisfying the needs of target audiences
via goods and services.
⦿ Different forms of business are there to offer
goods or services for example a limited liability
company (LLC), a corporation, a sole
proprietorship, and a partnership.
⦿ Businesses are the organizational entities
involved in manufacturing, offering, and
marketing goods and services.
⦿ It refers to individuals’ activities to produce
and sell all the services and goods for profit.
⦿ A business organization generates revenues
by completing the needs of their consumers
through the manufacturing of goods, reselling
of products, providing services, or carrying
out all these activities together for
accomplishing the business objectives.
NATURE OF BUSINESS
⦿ The nature of business refers to the type or
category of activities an organization engages in to.
It describes what the business does, its industry,
and its core operations.
⦿ Examples:
⦿ Manufacturing: Producing physical goods (e.g., car
factory).
⦿ Trading: Buying and selling goods (e.g., retail store).
⦿ Service: Offering services (e.g., banking, consulting,
and healthcare).
⦿ Agriculture: Farming, poultry, fisheries.
⦿ Non-Profit: Social or charitable activities.
ORGANIZATION STRUCTURE
⦿ Organizational structure refers to how a company is
arranged—including the hierarchy, roles, responsibilities,
and communication flow.
⦿ It determines:
⦿ Who reports to whom
⦿ How tasks are divided
⦿ How decisions are made
⦿ Common types of organizational structures:
⦿ Functional structure: Departments based on functions
(HR, Finance, Marketing).
⦿ Divisional structure: Based on products, geography, or
markets.
⦿ Matrix structure: Combination of functional and
project-based reporting lines.
⦿ Flat structure: Few levels of management; promotes open
communication.
VISION AND MISSION
⦿ Vision Statement
⦿ A vision describes what the organization
wants to become in the future.
It is long-term, inspirational, and
forward-looking.
⦿ Examples:
⦿ “To be the leading provider of eco-friendly
technology solutions.”
⦿ “To create a world where education is
accessible to all.”
⦿ Mission Statement
⦿ A mission explains the organization’s purpose,
core activities, and what it aims to achieve
now.
⦿ Examples:
⦿ “To deliver high-quality educational content that
empowers learners.”
⦿ “To provide safe, affordable healthcare services
to our community.”
⦿ 1. Sole Proprietorship
⦿ Structure: Owned and run by one person; no
legal distinction between owner and business.
⦿ Pros: Easy & cheap to start, full control, simple
taxes.
⦿ Cons: Unlimited personal liability, hard to raise
capital, business ends with owner.
⦿ 2. Partnership
⦿ Structure: Two or more individuals share
profits/losses (2-20 partners in India).
⦿ Pros: Shared resources, combined skills, easier
to get capital than SP.
⦿ Cons: Unlimited liability (partners personally
responsible), potential for disputes, mutual
agency.
⦿ 3. Private Limited Company (Pvt Ltd)
⦿ Structure: Separate legal entity, owned by
shareholders, managed by directors; restricted
share transfer.
⦿ Pros: Limited liability for shareholders,
perpetual existence, credibility, easier funding.
⦿ Cons: More complex setup & compliance, higher
costs, less control for shareholders.
⦿ 4. Limited Liability Partnership (LLP)
⦿ Structure: Combines partnership flexibility with
corporate limited liability for partners.
⦿ Pros: Limited liability (up to contribution),
easier compliance than Pvt Ltd, separate legal
entity.
⦿ Cons: Requires minimum 2 partners, some
compliance needed.
⦿ 5. One Person Company (OPC)
⦿ Structure: Single member forms a private
limited company with a nominee; limited
liability.
⦿ Pros: Liability protection for single owner,
formal corporate structure, perceived
credibility.
⦿ Cons: Requires a nominee, more compliance
than SP/Partnership, restrictions on business
scope.
⦿ 6. Hindu Undivided Family (HUF)
⦿ Structure: Family-owned business (ancestral
property), managed by the eldest male (Karta).
⦿ Pros: Unique tax benefits (in India), continuity
across generations.
⦿ Cons: Based on family ties, Karta has absolute
control, limited to Hindu families.