Small scale, medium scale and large

scale enterprises.
Small scale enterprises
Small Scale Industries (SSI) are those industries in which the manufacturing,
production and rendering of services are done on a small or micro scale.
The Ministry of Small Scale Industries and the Ministry of Agro and Rural
Industries were merged to form the Ministry of Micro, Small and Medium
Enterprises. Thus, the SSIs are included under the Ministry of MSME.
 Characteristics of SSI
Ownership
SSI’s generally are under single ownership. So it can either be a sole
proprietorship or sometimes a partnership.
Management
Generally, both the management and the control is with the owner/owners.
Hence the owner is actively involved in the day-to-day activities of the
business.
Labor Intensive
SSI’s dependence on technology is pretty limited. Hence they tend to use
labour and manpower for their production activities.
Flexibility
SSI’s are more adaptable to their changing business environment. So in case of
amendments or unexpected developments, they are flexible enough to adapt
and carry on, unlike large industries.
Characteristics of SSI…
Limited Reach
Small scale industries have a restricted zone of operations. Hence, they can meet
their local and regional demand.
Resources Utilization
They use local and readily available resources which helps the local economy.
Employment
SSI’s are a major source of employment for developing countries like India. Because
of the limited technology and resource availability, they tend to use labour and
manpower for their production activities.
Total Production
These enterprises account for almost 40% of the total production of goods and
services in India. They are one of the main reasons for the growth and strengthening
of the economy.
Characteristics of SSI…
Make in India
SSI’s are the best examples for the Make in India initiative. They focus on the
mission to manufacture in India and sell the products worldwide. This also
helps create more demands from all over the world.
Export Contribution
India’s export industry majorly relies on these small industries for their
growth and development. Nearly half of the goods that are exported from
India are manufactured or produced by these industries.
Public Welfare
These industries have an opportunity to earn wealth and create employment.
SSIs are also important for the social growth and development of our country.
Seedbed for Large Scale Industries
SSI acts as the seedbed for Large Scale Industries (LSI) as it provides
conducive conditions for the development and growth of entrepreneurs.
Small enterprises require low investment and simple technology and use local
resources to meet local demands through personal contacts. Thus, it creates
scope for the growth and development of LSI.
Objectives of SSI
The objectives of the small scale industries are:

• To create more employment opportunities.

• To help develop the rural and less developed regions of the economy.
• To reduce regional imbalances.
• To ensure optimum utilisation of unexploited resources of the country.
• To improve the standard of living of people.
• To ensure equal distribution of income and wealth.
• To solve the unemployment problem.
• To attain self-reliance.
• To adopt the latest technology aimed at producing better quality
products at lower costs.
 Types of SSI
SSI are primarily categorized into 3 types :
Manufacturing Industries
The manufacturing industries manufacture finished goods for consumption or used further in
processing. Some examples are food processing units, power looms, engineering units etc.
Ancillary Industries
Ancillary industries manufacture components for other manufacturers. These manufacturers then
assemble the final product. Big companies manufacture finished goods, but they do not generally
make all the parts themselves. The vendors of such big companies are ancillary industries.
Service Industries
Service-based industries are not involved in any kind of manufacturing products. They provide
services such as repair, maintenance and upkeep of the products after-sales.
Other types of SSIs are as follows:
Export Units
An SSI is considered as an export unit when the exporting is more than 50% of its production.
Cottage Units
The cottage units are considered as SSIs when they do not involve a dedicated facility and are
carried out within living spaces or houses of the owners.
Village Industries
An SSI is considered village industries when they are established in rural areas and are not part of
the organised sector. Typically, these industries solely depend on human labour for production.
Pre-requisites for Establishing SSI
An entrepreneur should pass through the following stages for the establishment of
an SSI:
Decision on the Ownership
An entrepreneur wishing to establish an SSI must first decide on the ownership
structure of the SSI. The SSI can be established as a sole proprietorship firm,
partnership or company.
Product Selection
Next, entrepreneurs must decide whether the SSI will venture into manufacturing
or provide service, the product/product range that needs to be manufactured and
the quantity of production of products or the service that will be provided.
Location
The location must be selected where the unit is to be established. The size of the
plot, exact site, covered and open area must be decided. Once the location is
finalised, the SSI unit should be established in that location and the business
operation can start. The location of the established unit will be the registered
address/primary address of the SSI unit.
Pre-requisites for Establishing SSI
Registration
After the unit is established at the decided location, the SSI must obtain the Shop and
Establishment Act registration, company registration, or partnership firm registration, as
applicable. Once the registration is obtained, the establishment can start its business.
SSI Registration
SSI/MSME registration can be applied at any time after the unit obtains the Shop and
Establishment Act registration, company registration, or partnership firm registration. If
SSI registration is applied before production, the turnover and investment details must be
mentioned as zero in the registration application. If SSI registration is applied after the
SSI units start production, then the turnover and investment details will be automatically
filled in the registration application from the ITR of the unit.
Machinery and Equipment
The machinery and equipment required for manufacturing the chosen products or
providing services have to be decided. The machinery and equipment with the latest
technology must be procured and installed in the SSI unit.
Power and Water Connection
The plot where the enterprise is located or SSI unit is established should have adequate
power and water connections. If pollution board permissions are required, all such
permissions from the respective authorities must be obtained for the SSI unit.
Pre-requisites for Establishing SSI
Recruitment of Manpower
Once the machines and equipment are installed on the unit and the required
permissions are obtained, the need for manpower arises to run them. The required
manpower must be employed for starting and running the business unit.
Procurement of Raw Materials
Raw materials are important for running an enterprise. The manpower will require
raw materials to work upon the installed machinery or equipment to manufacture or
provide service.
Production
After procuring the raw materials, the SSIs can start production of the products of
the units. The products manufactured by the SSI can be sold in the market after
considerable units are produced.
Marketing
When the products are manufactured or services can be provided, the entrepreneurs
must market their products or services to gain customers and grow business.
Quality Assurance
Before marketing the products, the product quality certification from the respective
authorities such as BIS, AGMARK, HALLMARK, FSSAI, etc., must be obtained.
Registration of SSI
Registration of SSI
SSI registration is a registration provided by the Ministry of MSME. A
business should obtain SSI registration in order to be eligible for a
number of schemes, subsidies and other incentives provided by the
Government to such SSI’s. SSI registration can be obtained online too.
Overview of SSI Registration
SSI registration is provided by the Ministry of Micro, Small and Medium
Enterprises (MSME) through the Directorate of Industries of the State
Government. The main logic behind the SSI registration is to set up new
SSI businesses in India. SSI registration helps the business to be eligible
for a number of subsidies given by the Government. We can also get
SSI/MSME registration online through Udyam Registration.
Large scale Industries
Large scale industries are referred to as those industries that are having
huge infrastructure, raw material, high manpower requirements and large
capital requirements.
Features of a large scale industry

• More systematic in nature.

• Massive investment of capital
• Huge infrastructure requirement
• Manufacture products in bulk
• Produce their products more efficiently
• Contribute to the Economy effectively.
• Provide better employment opportunities with more job security.
• Invest money for research and design of new products.
Role of small enterprises in economic development.
Role of small enterprises in economic development
Small businesses, start-ups and entrepreneurs are some of the most important
influencers of economic growth because, in any economy, they represent more
than 90 per cent of all employers and create 60 to 80 per cent of all new jobs,
annually.
Small businesses create job opportunities and drive the country’s economic
growth in smaller geographic areas. They make the market more competitive.
Micro-Small and Medium enterprises (SMEs) in
India
The Indian micro, small and medium enterprises (MSMEs) sector has
emerged as a key sector in the growth of the Indian economy. The role of
SMEs in the Indian economy is significant. The sector has contributed
greatly to employment generation, exports, innovation and inclusive
growth of the economy.
In short, the Indian small and medium enterprise sector (SMEs) has been
the backbone of socio-economic development in India. It has made up
almost 45% of industrial production, 40% of total exports and makes a
significant contribution to India’s total Gross Domestic Product (GDP).
Role of MSMEs in India

• Small Scale Industries Provides Employment

• Facilitates Women Growth
• Brings Balanced Regional Development
• Helps in Mobilization of Local Resources
• Paves for Optimisation of Capital
• Promotes Exports
• Complements Large Scale Industries
• Meets Consumer Demands
• Ensures Social Advantage
• Develops Entrepreneurship
Problems Faced by Small Scale and Cottage
Industries
• Lack of timely and sufficient credit availability.
• Inadequate management
• Infrastructure gap
• Technological staleness
• Limited raw material availability
• Market-related issues
• Competition from big businesses and imports.
• Excessive municipal tax burden
Government Initiatives for Small Scale and Cottage Industries
• Various organizational measures, such as Industrial Estates, District Industries Centre (DIC),
National Small Industries Corporation (NSIC), etc. have been set up at various locations.
• In financial measures, the Government of India has set up National Equity Fund (NEF), Single
Window Scheme (SWS), Small Industries Development Fund (SIDF) and Small Industries
Development Bank of India (SIDBI).
• Small businesses with a revenue of up to Rs 1 crore are completely exempt from excise duty.
Products produced in the small-scale sector are given price and purchasing advantages in
government procurement programs.
• When specific types of raw materials and components used by SSIs are imported, they are
subject to the concessional rate of customs duties.
• As far as technical assistance is concerned, the government has set up the technological
upgradation and modernization models such as Small-scale Industries Development
Organisation (SIDO), Technology Development and Modernisation Fund (TDMF) and Council
for Advancement of Rural Technology (CART).
• For small scale industries, the government has also launched a Reservation of Items scheme.
By shielding them from the competition with large-scale units, the policy to reserve specific
items for the small-scale sector seeks to advance SSIs.
Forms of Business ownership
Business Structure
Structure of Business ownership
• Efficiency cannot exist without structure.
• Without structure, businesses would struggle to reach the goal.
• In business, this structure comes from ownership style. Because no business
is exactly the same, there are different types of business ownership, all with
different traits that make them suited for some companies and wrong for
others.
• One of the first decisions that to make as a business owners is how the
business should be structured. One should need to know the advantages and
disadvantages of each of the different forms of business organization to make
sure that he/she is making the right decision for his/her new business.
Key factors in deciding type of business ownership
• Rights and liabilities of participants in the ownership
• Control
• Personal liability
• Lifespan of business
• Financial structure.
• Tax implications of the different organizational structures.
• Expected profit (or loss) of the business.
Forms of Business ownership
Proprietorship
Proprietorship
Sole proprietorship is one of the oldest and easiest Business Structure to
start in India. A proprietorship is a type of business that is owned,
managed, and controlled by one person - who is the proprietor. As the
proprietorship and proprietor are one and the same, it is very easy to start
and there are very minimal compliance requirements.
Proprietorship : Features
• Simple form of Organization
• Owners freedom to take decisions
• High Secrecy
• Tax Advantage
• Easy dissolution
• Formation and Closure
• Sole Risk Bearer and Profit Recipient
• Control
Proprietorship-Disadvantages
• Limited resources
• Limited Ability
• Unlimited liability
• Limited life of enterprise form
Sole Proprietorship Registrations & Licenses

To run a proprietorship business in India, the proprietor will have to obtain

PAN and Aadhar. The proprietor must obtain GST registration, UDYAM
registration and open a bank current account. In some states, the
proprietor will also have to obtain Shops & Establishment Act registration.

In addition to the basic requirements above, additional licence and

permits may be required depending on the industry, state, and local
regulations.
Partnership
Partnership
A partnership is a form of business which enables two or more persons to
co-own an organization, and they agree to share the profits and losses of
the company. Each member of such a business is called a Partner, and
collectively they are known as a partnership firm.
Features of Partnership:
• Agreement between Partners:
• Two or More Persons:
• Sharing of Profit:
• Business Motive
• Mutual Business:
• Unlimited Liability
Types of Partnerships
• General Partnership :In this partnership, each partner represents the firm with equal
right. All partners can participate in management activities, decision making, and have
the right to control the business. Similarly, profits, debts, and liabilities are equally
shared and divided equally.
• Limited Partnership:In this partnership, includes both the general and limited partners.
The general partner has unlimited liability, manages the business and the other limited
partners. Limited partners have limited control over the business (limited to his
investment). They are not associated with the everyday operations of the firm.
• Limited Liability Partnership:In Limited Liability Partnership (LLP), all the partners have
limited liability. Each partner is guarded against other partners legal and financial
mistakes. A limited liability partnership is almost similar to a Limited Liability Company
(LLC) but different from a limited partnership or a general partnership.
Types of Partners
• Active Partner: As the name suggests he takes active participation in the business of the
firm. He contributes to the capital, has a share in the profit and also participates in the daily
activities of the firm. His liability in the firm will be unlimited. And he often will act as an
agent for the other partners.
• Dormant Partner: Also known as a sleeping partner, he will not participate in the daily
functioning of the business. But he will still have to make his share of contribution to the
capital. In return, he will have a share in the profits. His liability will also be unlimited.
• Secret Partner: Here the partner’s association with the firm is not public knowledge. He will
not represent the firm to outside agents or parties. Other than this his participation with
respect to capital, profits, management and liability will be the same as all the other
partners.
• Nominal Partner: This partner is only a partner in name. He allows the firm to use the name
of his firm, and the attached goodwill. But he in no way contributes to the capital and hence
has no share in the profits. He does not involve himself in the firm’s business. But his liability
too will be unlimited.
• Partner by Estoppel: If a person makes it out to be, through their conduct or behaviour, that
they are partners in a firm and he does not correct them, then he becomes a partner by
estoppel. However, this partner too will have unlimited liability.
Advantages of Partnership:

• Easy Formation – An agreement can be made oral or printed as an

agreement to enter as a partner and establish a firm.
• Large Resources – Unlike sole proprietor where every contribution is
made by one person, in partnership, partners of the firm can contribute
more capital and other resources as required.
• Flexibility – The partners can initiate any changes if they think it is
required to meet the desired result or change circumstances.
• Sharing Risk – All loss incurred by the firm is equally distributed amongst
each partner.
• Combination of different skills – The partnership firm has the advantage
of knowledge, skill, experience and talents of different partners.
Limited companies
Limited Companies
A limited company (LC) is a general form of incorporation that limits the
amount of liability undertaken by the company's shareholders. It refers to
a legal structure that ensures that the liability of company members or
subscribers is limited to their stake in the company by way of investments
or commitments.
It is a business with limited liability that does not require owners to use
their personal belongings to pay off any company debts.
Public & Private Limited Companies
Features of limited companies
Members :The Act provides that a private limited company must have a minimum of
two members, while the maximum members limit is 200.
Number of directors :The Act provides that a private limited company must have a
minimum of two directors, while the maximum number of directors is 15.
Limited liability: The liability of all members or shareholders of a private limited
company is limited. It means that when the company faces a loss under any
circumstance, its shareholders will not be liable to sell their personal assets for
payment.
Perpetual succession: Perpetual succession means the company will continue to
exist in the eyes of the law irrespective of insolvency, bankruptcy or death of any of
its members. The life of the company continues to exist forever.
Name :A private limited company name must have the words ‘private limited’ after
its name. For example, if the company name is ABC, it must write its name as ‘ABC
Pvt. Ltd’ in all its official communications and the company registration form.
Prospectus :A prospectus is a detailed statement providing the status of company
affairs. A company issues prospectus to the public to subscribe to the company
share.
Types of Private Limited Companies

Limited by shares: In this case, the liability of the members is limited to

the amount unpaid towards the company with regard to the shares held by
them.
Limited by guarantee: The liability is limited to the sum of money the
members guarantee to pay if the company is wound-up.
Unlimited liability: The liability of members is unlimited, which means
that members’ personal assets can be sold when the company is wound-
up.
Registration of Private Limited Company
Members :There must be a minimum number of two members or shareholders before applying for
registration of the company. However, the number of members cannot be more than 200.
Directors : There must be a minimum number of two directors for registering a private limited
company. All directors must have a Director Identification Number (DIN) issued by the Ministry of
Corporate Affairs (MCA). The company must have at least one director who is a resident of India.
Name :The company must send its name to the Registrar of Companies (ROC) for its approval. It
can get its name approved by reserving the name in the company registration form). However, the
company must choose a unique name that does not resemble any other company’s name. If the
company’s name resembles another registered company name, the ROC will reject the registration
application.
Registered office address :The company owner must provide the company’s registered office
address or temporary address when applying for registration. All correspondences from the ROC
will be sent to the address provided in the registration form. Thus, it is essential to have a
company office address.
Digital Signature Certificate (DSC):The company registration is entirely online. The company
registration form and documents must be digitally signed. Thus, all directors must obtain a DSC
before applying for registration.
Professional certification: For establishing a private limited company, certification by
professionals is necessary. A professional such as a chartered accountant, company secretary, or
cost accountant must make his/her certification when applying for company registration.
Documents Required to Register a Private Limited
Company
• An affidavit on a stamp paper given by the subscribers stating their
willingness to become the company shareholders
• Proof of office address (Rental agreement or sale deed or ownership
deed of the office premises)
• NOC from the property owner when the registered office is situated on a
rented/leased property
• Copies of utility bills such as water, electricity or gas bill, not older than
two months
• Identity and address proof of all the directors
Co-operatives
Co-operatives
Co-operatives
Cooperative is a form of business based on philosophy of self-help and
mutual help. It aims at rendering services in places of earning profits.
It is defined by democratic decision-making. Membership is voluntary and
open. The cooperative members, who maintain their autonomy and
independence, are co-owners and have a say in the management of the
cooperative.
Cooperative collaboration has been a rising trend across different sectors
over the last few years.
Features of cooperative entrepreneurship
1. Voluntary Association:
A cooperative society is a voluntary association of persons and not of capital. Any person
can join a cooperative society of his free will and can leave it at any time. When he
leaves, he can withdraw his capital from the society. He cannot transfer his share to
another person.
2. Spirit of Cooperation:
The spirit of cooperation works under the motto, ‘each for all and all for each.’ This
means that every member of a cooperative organisation shall work in the general interest
of the organisation as a whole and not for his self-interest. Under cooperation, service is
of supreme importance and self-interest is of secondary importance.
3. Democratic Management:
An individual member is considered not as a capitalist but as a human being and under
cooperation, economic equality is fully ensured by a general rule—one man one vote.
Whether one contributes 50 rupees or 100 rupees as share capital, all enjoy equal rights
and equal duties. A person having only one share can even become the president of
cooperative society.
Features of cooperative entrepreneurship
4. Capital:
Capital of a cooperative society is raised from members through share capital. Coop-
eratives are formed by relatively poorer sections of society; share capital is usually very
limited. Since it is a part of govt. policy to encourage cooperatives, a cooperative society
can increase its capital by taking loans from the State and Central Cooperative Banks.
5. Fixed Return on Capital:
In a cooperative organisation, we do not have the dividend hunting element. In a
consumers’ cooperative store, return on capital is fixed and it is usually not more than 12
p.c. per annum. The surplus profits are distributed in the form of bonus but it is directly
connected with the amount of purchases by the member in one year.
6. Moral Emphasis:
A cooperative organisation generally originates in the poorer section of population; hence
more emphasis is laid on the development of moral character of the individual member.
The absence of capital is compensated by honesty, integrity and loyalty. Under
cooperation, honesty is regarded as the best security. Thus cooperation prepares a band
of honest and selfless workers for the good of humanity.
Objectives of cooperative society
• The functioning of business activities are honest and genuine
• To implement supportive services to the members of the cooperative
society and never aims to gain the profit.
• The society produces, offer and deliver the quality /standard goods.
Also, they deliver goods to the end customers.
• To support each other mutually with a great understanding and not to
have competition among themselves.
 Formation of cooperative enterprise
A co-operative society needs to be established under the Co-operative Societies Act, 1912. It
can also be created under the applicable state co-operative society’s regulation. A co-operative
society can be created by a minimum of 10 adult members. The members are willing to build a
society which needs to have a common interest and bond between them. They may be the
citizens of similar locality or operators of some organisation. The fundamental thought is that
all the people planning to form society should have few mutual goals to accomplish.
The application for building society must have the following details:
✓ Name and address of the society
✓ Names and addresses of society members
✓ Objectives and aim of society.
✓ Share capital and its division.
✓ A form of admitting new members.
✓ A copy of the bye-laws of the society.
The demanded documents are registered in the official website of Registrar of Cooperative
Societies. The Registrar views the documents if documents fulfil all the demand documents as
per requirements then the society’s name is entered in the register. Certification of registration
is assigned to society. The society will shift into a corporate body from the date specified in the
certificate.
Types of cooperative society
Benefits of cooperative society
• A co-operative society is operated on the policy of democracy. It indicates that every member
has the same rights in conducting the operations in society.
• The surplus received by the cooperative societies is divided in an equal way between
members. Hence all the members of the cooperative society are benefited. Moreover, society
is 10% amount of the surplus can be used for developing the welfare of the people in a
cooperative society.
• Co-operative societies trade in great amounts and quantities straight from the producers or to
the customers. Products are prepared and ranked before they are exchanged. A great amount
of sale and purchase assure reasonable prices and high-grade quality.
• When the aggregate turnover of a CooperativeSocieties in a financial year exceeds Rs.12 lakh
they have to pay GST. They become liable for GST Registration.
• The cooperative society has to pay low tax. So they can easily develop the movements or
campaigns in society. The fact about the co-operative society is that they are non-profit
society. They only work for the welfare of society. Therefore, the government gives various
privileges and concessions in terms of tax. The ITR Filling process is way simpler to the
cooperative society in comparison to others.
• The council and goverment keep viewing the development and promote the growth of
cooperative societies. They spread all support and facilities to them at their best. Goverment
renders loans at low-interest rates, gives subsidies etc.
Limitations of cooperative society
1) Shortage of capital: It suffers from a shortage of capital as it is usually formed
by people with limited means.
2) Inefficient management:- These are managed by elected members who may
not be competent and experienced. Due to lack of managerial knowledge, they
might not be able to run the society effectively.
3) Lack of Secrecy: They have to send their annual reports and accounts to the
registrar of co-operative societies. In this way, the secret of business becomes
public.
4) Excessive government control: It suffers from excessive rules and regulations
imposed by the government.
5) Conflict among members: The members are from different sections of society
with different viewpoints. If any or a few members become rigid, the result is
conflict.
Capital structure
Capital structure means the pattern of capital employed in the firm.
Capital
Capital for the operation and improvement of the cooperative business can
come from three main sources:
[Link] from members themselves
[Link] retained surpluses generated by the cooperative business
c .From outsiders.
A. Directly from members
A. Members help finance the operations and growth of the cooperative
through:
• One-time or annual membership fees
• Member contributions with no individual ownership attached, such as
service fees.
• Member share capital
• Individual member deposits with the cooperative which may be used for
business
• Deferred payment to members for part or all of their produce delivered
to the cooperative
.
B. From cooperative business surpluses
• Funds created through the retention of cooperative business surpluses
that are not directly allocated to members are another important source
of cooperative capital. This is a long term source of funds since most
cooperatives’ rules allow these funds to be distributed only when a
cooperative is liquidated. Unlike loans, or individual member deposits,
the cooperative does not have to pay interest to use these funds. Of
course, retaining such funds by the cooperative also represents a cost to
the individual members who otherwise would have had that portion of
the surplus allocated to them. Members willingly accept this cost when
the benefits it creates for them are clear and worthwhile.

• This source of funds from retained surpluses is often called “institutional

capital” and represents the collectively-owned wealth of the
cooperative.
C. From outsiders
• In addition to institutional capital and member capital, cooperatives often
make use of external sources of funds to run their operations or to finance
investments. These non-member sources of funds may include cooperative or
commercial banks, suppliers, government or donor agencies. External funding
may be provided in different ways:

• As a grant
• As a short-term loan
• As a long-term loan
• As trade credit offered by a supplier.
• Commercial providers of funds, such as banks, generally provide credit or loans
that are legally secured by collateral (pledged assets of the cooperative). They
are motivated by profit and seek to minimise risk. Non-commercial providers,
such as governments or donors, generally provide credit on more generous
terms at below market rates of interest or provide grants. Their motivations
may be social, political or economic - often a mixture of all three.
The gearing ratio
The gearing ratio relates the amount of externally borrowed capital to the
total capital employed by the cooperative (institutional and member
capital plus funds borrowed).

Gearing = funds borrowed ÷ (institutional and member capital plus funds

borrowed) × 100

The higher the gearing ratio, the higher the risk the cooperative runs in
losing their assets in the event of inability to repay a loan.
Source of finance of cooperatives
A cooperative, like any business, requires money, or capital, for start-up,
stability, and growth. Cooperatives can use both debt and equity to meet
their capital needs.

Debt is money that is borrowed and must be paid back to the lender with
additional interest payments. Usually these loans come from banks or other
financial institutions. While lenders may be financing a significant portion of
a cooperative’s capital needs, they do not have ownership rights.

Equity is money that is invested in a business without a guarantee of payback

or financial return. The “at risk” capital entitles the investor to share in
ownership, control, and any business profits or losses. Equity provides
businesses with capital without interest expense or fixed payback
obligations.