If You have confidence on own

strength then you become

entrepreneur,

But other have confidence on your

strength then you become CEO.
 Chapter
• Introduction to Entrepreneurship:
• Concept and Definitions
• Typology, Role, Importance and its contribution in Economic Development
• Entrepreneurial Competencies, myths and mind-set of entrepreneurship
• Factor Affecting Entrepreneurial Growth
• Entrepreneurial Training Methods, Process of Entrepreneurial Development
• Forms of business organizations
• Sole Proprietorship,
• Partnership,
• HUF,
• Private limited,
• Public limited,
• LLP, Franchise
 Concept
Enterprise Entrepreneur
• is an already formed business • is a person who establishes and
organization that propose some manages the enterprise. He/she is
goods or services, etc. often the founder and owner of
the business.

Entrepreneurship
• is the process of establishing new
business enterprise along with the
capacity to identify the
opportunities and threats and to
undertake all the risks to gain
profits in results.
 THE CONCEPT OF ENTREPRENEUR
• According to New Encyclopedia Britannica

“An entrepreneur is an individual who bear the risk of operating business in face of
uncertainty about future condition”

• According to Peter Drucker

“An entrepreneur is one who always searches for change, respond to it and exploit it as an
opportunity. Innovation is a specific tools of an entrepreneur by which they can exploit
change as an opportunity for different business and service”
DEFINITION
An individual who bears the risk of operating a business in the face of uncertainty about the Encyclopedia Britannica
future conditions.

He is the one who innovates, and introduces something new in the economy. Joseph A. Schumpeter

He shifts economic resources out of an area of lower and into an area of higher productivity J. B. Say (French
and greater yield. economist)

He searches for change, responds to it and exploits opportunities. Innovation is the specific Peter F. Drucker
tool of an entrepreneur.

He is the one who is endowed with more than average capacities in the task of organising and Francis A. Walker
coordinating the various factors of production. He is a pioneer and captain of industry.

He is a critical factor in economic development and an integral part of economic William Diamond
transformation.

He is a person who is able to look at the environment, identify opportunities to improve the Robert E. Nelson
environment, marshall resources, and implement action to maximise those opportunities.
Types of Entrepreneur
 (a) Based on Functional Characteristics
Innovative entrepreneur:
• Entrepreneurs introduce new goods or new methods of production or discover new markets or reorganise
their enterprises.
Imitative (Copied) or adoptive entrepreneur:
• Entrepreneurs do not innovate themselves, but imitate techniques and technology innovated by others.
• Suitable for underdeveloped economies as adoption saves costs of trial and error.
Fabian entrepreneur:
• Entrepreneurs display great caution and skepticism (doubt) in experimenting with any change in their
enterprise. They change only when there is an imminent threat to the very existence of their enterprise.
Drone entrepreneur:
• Entrepreneurs are characterised by a die-hard conservatism and may even be prepared to suffer the loss of
business.
 (b) Based on the Developmental Angle
Prime mover: This entrepreneur sets in motion a powerful sequence of
development, expansion, and diversification of business.
Manager: Such an entrepreneur does not initiate expansion and is content just
staying in business.
Minor innovator: This entrepreneur contributes to economic progress by finding
better use for existing resources.
Satellite: This entrepreneur assumes a supplier's role and slowly moves towards a
productive enterprise.
Local trading: Such an enterpreneur limits his enterprise to the local market.
 (c) Based on Types of Entrepreneurial Business
Manufacturing: An entrepreneur who runs such a business actually produces the products
that can be sold using resources and supplies. For example, apparel and other textile
products, chemical and related products, electronics and other electrical equipment,
fabricated metal products, industrial machinery and equipment, printing and publishing,
rubber and miscellaneous plastic products, stone, clay etc.

Wholesaling: An entrepreneur with such a business sells products to the middle man.

Retailing: An entrepreneur with such a business sells products directly to the people who
use or consume them.

Service: An entrepreneur in this business sells services rather than products.

 (d) Based on the Nine Personality Types of Entrepreneurs
• Begin identifying dominant personality theme and understand how operate in business.

1. The Improver:

• If you operate your business predominately in the improver mode,

• It focused on using company as a means to improve the world.

• Overarching motto is: morally correct companies will be rewarded working on a noble cause.
Improvers have an unwavering ability to run their business with high integrity and ethics.

• Personality alert: be aware of tendency to be a perfectionist and over-critical of employees and

customers.

• Entrepreneur example: Anita Roddick, founder of the body shop.

2. The Advisor:
• This business personality type will provide an extremely high level of assistance
and advice to customers.
• The advisor's motto is: the customer is right and we must do everything to please
them. Companies built by advisors become customer focused.
• Personality Alert: Advisors can become totally focused on the needs of their
business and customers that they may ignore their own needs and ultimately burn
out.
• Entrepreneur example: John W. Nordstrom, Founder Nordstrom.
 • The Superstar:
• the business is centered on the charisma and high energy of the Superstar CEO. This personality often will cause
you to build your business around your own personal brand.

• Personality Alert: Superstarts Can be too competitive and workaholics.

• Entrepreneur example: Donald Trump, CEO of Trump Hotels & Casino Resorts.

• The Artist:
• This business personality is the reserved but a highly creative type. Often found in businesses demanding
creativity such as web design and ad agencies. As an artist type you'll tend to build your business around the
unique talents and creativities that you have.

• Personality Alert: You may be overly sensitive to your customer's responses even if the feedback is
constructive. Let go the negative self-image.

• Entrepreneur example: Scott Adams, Creator of Dilbert.

 The Visionary:
• A business built by a Visionary will often be based on the future vision and thoughts of the founder. You will
have a high degree of curiosity to understand the world around you and will set-up plan to avoid the landmines.

• Personality Alert: Visionaries can be too focused on the dream with little focus on reality. Action must precede
vision.

• Entrepreneurial example: Bill Gates, Founder of Microsoft Inc.

The Analyst:
• If you run a business as an Analyst, your company focus is on fixing problems in a systematic way. Often the
basis for science, engineering or computer firms, Analyst companies excel at problem solving.

• Personality Alert: Be aware of analysis paralysis. Work on trusting others.

• Entrepreneurial example: Intel Founder, Gordon Moore.

 • The Fireball:
• A business owned and operated by a Fireball is full of life, energy and optimism. Your company is life energizing
and makes customers feel the company has a get it done attitude in a fun playful manner.

• Personality Alert: You may over commit your teams and act impulsively. Balance your impulsiveness with
business planning.

• Entrepreneurial example: Malcolm Forbes, Publisher of Forbes Magazine.

• The Hero:
• You have an incredible will and ability to lead the world and your business through any challenge. You are the
essence of entrepreneurship and can assemble great companies.

• Personality Alert: Over promising and using forceful tactics to get your way will not work long term. To be
successful, trust your leadership skills to help others find their way.

• Entrepreneurial example: Jack Welch, CEO of GE.

 • The Healer:
• If you are a Healer, you provide nurturing and harmony to your business. You
have an uncanny ability to survive and persist with an inner calm.

• Personality Alert: Because of your caring, healing attitude toward your

business, you may avoid outside realities and use wishful thinking. Use
scenario planning to prepare for turmoil.

• Entrepreneurial example: Ben Cohen, Co-Founder Of Ben & Jerry's Ice Cream.
(e) Based on schools of Thought on Entrepreneurship
Why Should You Become an

Entrepreneur?
• You will be your own boss and boss to other people and make decisions that are crucial to the
business’ success or failure.

• You will have the chance to put your ideas into practice.

• You will make money for yourself rather than for someone else.

• You may participate in every aspect of running a business and learn and gain experience in a variety
of disciplines.

• You will have the chance to work directly with your customers.

• You will have the personal satisfaction of creating and running a successful business.

• You will be able to work in a field or area that you really enjoy.

• You will have the chance to build retirement value (for example, by selling the business when you
retire).
Importance of Entrepreneur
 IMPORTANCE
• To increasing national income through job creation,

• Entrepreneurship has always served as a bridge between innovation and the

marketplace.

• Altered our pattern of living,

• Many services have been introduced to alter or create new service

industries such as commercial banking, medical treatment, logistics,
information systems, and insurance.
1. Contribution to GNP and per capita income:

• Entrepreneurship contributes to economic stability by introducing new products

• services in the market and encouraging effective resource mobilization.

• This helps in increasing the gross national product as well as per capita income of the people in the country.

• Economic stability leads to increased institutional investment for productive activities and is a sign of economic
growth.

2. Employment generation:

• Entrepreneurs are not only self-employed but also provide employment to others.

• For example, when the information technology boom occurred in India, it led to several successful
entrepreneurial ventures. This provided employment to many and also led to the launch of a number of
engineering colleges, development of real-estate and hospitality ventures, and infrastructural facilities.
• 3. Balanced regional development:
• The development of enterprises in less-developed regions promotes balanced regional development in the
country.
• Entrepreneurship stimulates the distribution of wealth and income to more and more individuals (such as
stakeholders) and geographical areas, thus benefiting larger sections of society.

• 4. Promotion of export and trade:

• Entrepreneurship promotes the country’s export trade and earns foreign exchange.
• This earning can help combat the country’s import dues requirements. International trade brings economic
strength and techno-economic reliance.

• 5. Improvement in the standard of living:

• Entrepreneurs bring a wide variety of products and services into the market.
• This increases competition in the market and makes it possible for people to avail of a better quality of products
and services at lower and more competitive prices, resulting in an improvement of the country’s overall standard
of living.
• 6. Increased innovation:

• With the liberalization of the Indian economy, the increased competition in the
domestic and international market has encouraged entrepreneurs to be more
creative.

• 7. Overall development of the economy:

• Entrepreneurs create new technologies, products, processes, and services that

become the next wave of new industries, and these in turn drive the economy.
Entrepreneurs are change agents in society. They create wealth and value, and
generate employment in society. This naturally leads to social and economic growth.
 Chapter
• Introduction to Entrepreneurship:
• Concept and Definitions
• Typology, Role, Importance and its contribution in Economic Development
• Entrepreneurial Competencies, myths and mind-set of entrepreneurship
• Factor Affecting Entrepreneurial Growth
• Entrepreneurial Training Methods, Process of Entrepreneurial Development
• Forms of business organizations
• Sole Proprietorship,
• Partnership,
• HUF,
• Private limited,
• Public limited,
• LLP, Franchise
Characteristics of a Successful

Entrepreneur
 1. Creativity
• Creativity is “the ability to bring something new into existence”.

• This definition emphasises the “ability”, not the “activity,” of bringing

something new into existence.

• A person may therefore conceive of something new and envision how it will
be useful, but not necessarily take the necessary action to make it a reality.

• Innovation is the process of doing new things, but creativity is a prerequisite

(requirement) to innovation.
 2. Innovation
• Innovation is the specific instrument of entrepreneurship.

• It is the act that endows resources with a new capacity to create wealth.

• Innovation, indeed, creates a resource.

• Successful entrepreneurs, whatever their individual motivation—be it

money, power, curiosity, or the desire for fame and recognition—try to

create value and to make a contribution.

A High School Student Invented A Bath-Substituting Lotion That Could
Save Millions Of People

Ludwick Marishane (South Africa) invented the word's first water-less bath ..
 3. Dynamism:
• The enterprise may open up new vistas, better product mix, or charismatic product image
stimulating steady growth.

• A dynamic entrepreneur is always pragmatic (Practical / Ralistic).

• Given the potentialities of the enterprises, he sets attainable goals, which are to be accomplished
within specific timeframes.

• An entrepreneur tends to approach problems to solve them rather than running away from them.

• Being the decision maker, he cannot wish away problems.

• They have to be analysed systematically and solved in the interest of the enterprise.

• He must believe in, create, and practice “win-win” situations.

 After 10 years as a software
professional, Sriram Aravamudan
found his calling in beautifying
Bengaluru’s balconies with My Sunny
Balcony.

•Rahul Narvekar
Harvard Business School, Founder
Scale Ventures Fund , Founder
India Network , Ex-CEO : NDTV
Ethnic ,Fashion & You
 4. Leadership:
• This spirit keeps him paces forward in any field.

• The quality of his leadership is clear from personal relationships, mode of

handling a problem, generating resources and taking others in to ones own

stride.
 Ratan Tata Adi Godrej Azim Premji Mukesh Ambani Lakshmi Mittal

Gautam Adani Anand Mahindra Adar Poonawalla Roshni Nadar Byju Raveendran
 5. Teambuilding:
• A team is a group of individuals with a common purpose, that is focused and
aligned to achieve a specific task or set of outcomes.
• The teambuilding skill consists of the following steps.
• Step 1 Wanting to feel better
• Step 2 Identifying the problem and needs of the enterprise
• Step 3 Creating a vision
• Step 4 Setting goals for the group
• Step 5 Reviewing progress
 6. Achievement motivation:
• Entrepreneurs can be classified into three categories.

• 1. Some are only dreamers and though they indulge in nice dreams, they are not capable of
translating their dreams into action. The growth of such entrepreneurs is soon stunted.

• [Link] entrepreneurs belong to the category of doubters.

• a negative attitude, never expand their activities, never take any risk, and never go out of their way
to achieve anything, doubt their own capacity to do anything new., Never innovative and they
follow the line of least resistance.

• [Link] third category of entrepreneurs are the doers. They always accept any challenge and take a
calculated risk to do something worthwhile. It is necessary to contact such highly successful
entrepreneurs and ask them what motivated them to become successful in their life.
• These entrepreneurs believed in “Slow and steady wins the race”.
• To learn anything and everything directly or indirectly related to their business.
• They were professional in their thinking and approach. T
• hey were never content (satisfied) after achieving initial success.
• They did not fall prey to complacency, hypocrisy, sycophancy, idiosyncrasy, and
obsolescence.
• They obtained interpersonal support.
• They were taskmasters and did not neglect even the smallest tasks assigned by them to
their subordinates.
• They also took a considerable interest in their personal life and were always cheerful.
 7. Problem solving:
• An entrepreneur should be able to solve problems and not avoid them.
• A formal problem-solving model helps entrepreneurs solve problems on a
logical manner.
• The model consists of six steps.
• Define the problem
• Gather information
• Identify various solutions
• Evaluate alternatives and select the best option
• Take action
• Evaluate the action taken
• Brainstorming is a creative group problem-solving technique that involves
generating a large number of fresh ideas.
• Ideas are not analysed or criticised at a brainstorming session.
A mechanical engineer professor Satish Kumar aims to solve
environment's biggest problem. He has converted 50 tonnes of
non-biodegradable plastic into petrol. He is supplying this petrol to
small and medium enterprises for Rs. 40 per liter which is almost half
the price of the actual commercial petrol.

Mr. Daroath was named to the Forbes ‘30 Under 30’ list of
social entrepreneurs in Asia. Prior to his role as Executive
Director, Daroath led WaterSHED’s market-building activities
in the nascent water, sanitation and hygiene market in rural
Cambodia. He has been a driving force behind many of the
organization’s leading initiatives, including supply chain
development and partnerships with micro-finance.
• [Link]
Seema Dholi launched this Gurgaon-based company in 2011 after the birth
of her baby. “When I was pregnant with my first child, I was very particular
about the food I ate. There was not even a single organic food supplier and
hardly anyone knew what organic meant. That was the trigger for me,” she
says. Today, the company has its presence in 262 cities across the country.

• 7C Home Cleaning Services

Superior Cleaning Solutions With an outstanding reputation for quality,
integrity and service, we can clean anything you throw at us!

• Vinisha Enterprise Professional Housekeeping and Home Cleaning Services

House Cleaning and Professional Housekeeping Services. Open 24 hours
 8. Goal orientation:
• Goal setting is the achievement of targets and objectives for successful
performance of an entrepreneur, both long run and short run.

The goal-setting process requires three steps

• Definition of goal

• Specific goals

• Feedback about goal achieved

 • Aspects of goal setting • Types of Goals
• Clarity of goals Clear and simple • Target oriented
objectives will bring expected • Achievement oriented
results.
• Specific (primary)
• Reformulation of goals
• Overall (broad based)
• Restating goals
• Secondary
• Plan of action
• Long range/short range
• Defining standards of performance
and measurement criteria • Personal/social
• Recognising risks and obstacles
• Goal reaffirmation
• Goal attainment
 9. Risk taking and decision-making ability:
• Are willing to bear risk, but never gamble with results.

• This is evidenced by market studies, exploring alternative lines of production or a

new product mix, or a new combination of inputs, and so on.

• A good entrepreneur should avoid excessively high as well as low risk situations.

• Risk bearing is an indication of an extreme sensitivity to cost consciousness and a

passion for profit.

• The focus should always be on the market. The entrepreneur should believe in
competition.
Bangalore-based Ramesh Prabhu is not your typical social entrepreneur,
for he still regards his venture as a responsibility rather than a business.
However, his company, Three Wheels United (TWU), is posting a
revenue of Rs 9-10 lakh and has helped 250 auto drivers till date.
Prabhu's patience paid off and Corporation Bank decided to lend money
to autowallahs, with TWU as a guarantor. The model proposed by TWU
was simple. Drivers would have to organise themselves in groups of
4-10, with each driver being introduced by one other member. The
company would get them a loan at 11% for a five year tenure, and they
would have to repay Rs 200 per day to the NGO partners. This is the
amount they paid for renting the auto. Of this, Rs 15 was kept by TWU
for operational expenses, and another Rs 20 was kept in a recurring
deposit to build a maintenance fund. The remainder was used to service
the loan. As Prabhu points out, at Rs 200 per day, the loan would be
repaid in just 37 months.
 A Fire Engineering graduate from National Institute of Fire Engineering with
multiple certifications and a strong experience in Customer Service industry.
Sandeep Gajakas is the man behind The Shoe Laundry, he dared to dream
in 2003 to give India it's first Shoe Laundry service.

Founder (Mr. Prashant Kulkarni)

The master mind behind creation of chatarpatar is Mr. Prashant Kulkarni. A
young entrepreneur who always believes in the power of ideas, and also
know how ideas can be implemented successfully.
 10. Commitment:
• One of the subtle qualities of an entrepreneur is his willpower.

• Strong determination with sound thinking fortifies will power.

• It is determination that provides the entrepreneur energy to work for 15–18

hours a day, 7 days a week and 52 weeks in a year till the unit reaches a
natural stage of take off.
Founded in 1996 by VSS Mani, the company is headquartered in Mumbai, India. In addition to its
headquarters, Justdial has offices in Ahmedabad, Bangalore, Chandigarh, Chennai, Coimbatore, New Delhi,
Hyderabad, Jaipur, Kolkata, and Pune.
Organization type: Company
Founders: V.S.S. Mani
Geographic scope: India
 Warren Buffett
N. R. Narayana Murthy Azim Premji

Mark Zuckerberg Bill Gates Ratan

Tata
Mukesh Ambani Lakshmi Mittal Amancio Ortega

Nirav Modi Naresh Goyal

Vijay Mallya
PROBLEMS FACED BY

ENTREPRENEUR
 Which Problem Face By
• Pepsi Blue
• Sahara
• Kingfisher Airlines
• Jet Airways
• Docomo/ Telenor/ Reliance Communications
• Nano
• Maruti 800
• Rotomac companies set to be shut now
• Problems faced by entrepreneurs are:
a. Internal problems
b. External problems and
c. Specific management problems.

• To build capacity for entrepreneurship following measures can be taken:

• Availability of credit, imported raw materials, skilled labour, Technology and

Equipment, Infrastructural facilities, Advisory Services and access to market.
1. Internal Problems of

Entrepreneurs
 1. Internal Problems of Entrepreneurs
A. Planning
• Technical feasibility Economic viability Lack of strategies

• Inadequate High cost of inputs

Lack of vision
technical Break-even point too high
Inadequate connections
know-how
Uneconomic size of project
Lack of motivation
• Locational
Choice of idea
disadvantage Underestimation of financial
requirements
• Outdated Feeble structure

production Faulty planning

Unduly large investment in
fixed assets
process
Poor project implementation
Overestimation of demand
 1. Internal Problems of Entrepreneurs
• B. Implementation
• Cost over-runs resulting from delays in getting licences, sanctions, and so on, and inadequate
mobilisation of finance.
C. Internal Problems of Entrepreneurs - Production
A. Production management B. Labour management

• Inappropriate product mix • Excising high wage structure

• Poor quality control • Inefficient handling of labour
• Poor capacity utilisation problems
• High cost of production • Excessive manpower
• Poor inventory maintenance and • Poor labour productivity
replacement • Poor labour relations
• Lack of timely and adequate • Lack of trained skilled labour or
modernisation and so on technically competent personnel
• High wastage
• Poor production
C. Internal Problems of Entrepreneurs - Production
C. Marketing management D. Financial management
• Poor resource management and financial
• Dependence on a single customer or a limited
planning
number of customers/single or a limited
number of products • Faulty costing
• Poor sales realisation • Dividend policy
• Defective pricing policy • General financial indiscipline and
• Booking of large orders at fixed prices in an application of funds for unauthorised
inflationary market purposes
• Weak market organisation • Deficiency of funds
• Lack of market feedback and market research • Over trading
• Unscrupulous sale purchase practices • Unfavourable gearing or keeping adverse
debt equity ratio
• Inadequate working capital
• Absence of cost consciousness
• Lack of effective collection machinery
C. Internal Problems of Entrepreneurs - Production
E. Administrative management
• Over centralisation

• Lack of professionalism

• Lack of feedback to management (Management Information System)

• Lack of timely diversification

• Excessive expenditure on R and D

2. External Problems of

Entrepreneurs
 Infrastructural Financial
• Location • Capital Industrial and financial
regulations
• Power • Working capital Government policy
• Water • Long-term funds Administrative hurdles
• Post Office and so on • Recovery Rampant corruption

• Communication • Marketing Lack of direction

• Taxation Competitive and volatile

• Non-availability or irregular environment
supply of critical raw materials • Raw material
or other inputs
• Transport bottlenecks
3. Specific Management

Problems
• Management deficiency

• Finance

• Manufacturing and technical problems

• Product planning

• Selection of equipment, plant and machinery

• Human resource development

• Technical know-how

• Preparation of project report

Myths
 Myths Reality
(a) Entrepreneurs Entrepreneurs cannot be taught Entrepreneurship has models, processes and
are born, not or learned, they are innate traits case studies that allow the topic to be
made with which a person must be studied and the traits acquired by training
born. and development.
(b) Entrepreneurs are academically Business education, was aimed primarily at
Entrepreneurs and socially ineffective is born of the study of corporate activity. The
are academic and some business owners having entrepreneur is considered a hero socially,
social misfits started successful enterprises economically and academically. The
after dropping out of school or entrepreneur is now viewed as a
quitting a job. professional.

(c) Entrepreneurs Based on case studies and on The venture itself, and the entrepreneur have
fit an ideal profile research findings among interactive effects, which result in many
achievement-oriented people. different types of profiles. Provide more
accurate insights into the various profiles of
successful entrepreneurs.
(d) All you need A large number of business Failure due to managerial incompetence, lack
is money to be failures occur because of lack of of financial understanding, poor investments,
an entrepreneur adequate financing. poor planning, and so on.
 Myths Reality
(e) All you need is luck “the right place at the right time” What appears to be luck is really a
to be an entrepreneur is always an advantage, but “luck combination of preparation,
happens when preparation meets determination, desire, knowledge, and
opportunity” is an equally innovativeness.
appropriate adage.
(f) A great idea is the it is not backed by adequate finance,
only ingredient in a demand for the product and, most
recipe for success importantly, good management.

(g) My best friend will you may agree on most issues but
be a great business misunderstandings can erupt over
partner insignificant aspects like who should be in
the office first, who's in charge of
supervising the office staff and so on.
(h) Having no boss is If you thought your boss was way too
great fun demanding, watch out for your vendors,
bankers, investors, suppliers and
customers.
 Myths Reality

i. I can make to make quite a few sacrifices.

lots of to miss the security
money

(j) I'll Put it down to plain optimism, the number of people who fail are legion (Mass),
definitely egoism or a survival strategy, and it can happen to you as well.
become but most business owners or
successful even those starting off on their
own refuse to accept the
possibility of failure.

(k) Life will Working for yourself is definitely more strenuous

be much than working for others, at least when starting off.
simpler if I Example : Dinesh Gupta. He set up Green Investors’
work for Grievances Services two years ago to take care of
myself individuals’ stock-related problems, and has a
punishing schedule even now. His typical day starts
at 5 a.m. and ends at 7 p.m.
Things To Follow:
• Access to funding sources like venture capital and loans is vital for aspiring
entrepreneurs. A stable economy fuels business growth, whereas volatility poses
challenges.

• Understanding market trends and seizing opportunities within India’s dynamic

market is crucial.

• Access to land, skilled labour, technology, and favourable regulatory policies

influence business ease.

• International trade and inflation rates impact costs and access to capital. Leveraging
India’s support ecosystem, including incubators and mentorship programs, is
invaluable in the initial business phases.
 Social Factors Affecting Entrepreneurship
• Cultural values around risk-taking and innovation shape attitudes towards entrepreneurship, impacting
individuals’ willingness to embrace it.

• Social equality equal opportunities across diverse backgrounds, fosters an environment supportive of
entrepreneurship.

• India’s robust support networks provide emotional and practical aid to budding entrepreneurs, alongside
access to role models and mentors.

• The educational system emphasises innovation and nurturing entrepreneurial skills.

• Collaborative ecosystems foster business growth and innovation, aided by positive media portrayals of
successful entrepreneurs.

• Governmental initiatives, including grants and subsidies, bolster entrepreneurship and economic
growth.
Environmental Factors Affecting
Entrepreneurship
• Technological advancements create opportunities demanding adaptability.

• Reliable physical infrastructure cuts operational costs.

• Environmental sustainability offers markets for eco-friendly solutions.

Entrepreneurs face risks from natural disasters and climate change,
requiring adaptable strategies. Globalisation intensifies competition,
demanding global awareness.

• Political stability fosters investment confidence.

• A fair legal framework encourages fair competition.

• Accessible technology aids market research and management.

 Personal Factors Affecting Entrepreneurship
• Embracing calculated risks is essential.

• Creativity and innovation foster market differentiation.

• Strong decision-making skills to navigate complexities.

• Effective leadership motivates teams.

• Time management and organization handle multiple tasks.

• Strong communication skills secure funding and collaborations. Emotional

intelligence builds resilience.
 Legal Factors Affecting Entrepreneurship
• Initiating a business involves complying with registration norms, obtaining licenses, and adhering to tax
regulations.

• Safeguarding innovations through intellectual property rights (patents, trademarks, copyrights) is crucial for
competitive edge preservation.

• Understanding contract law and effective dispute resolution aids in risk management.

• Environmental regulations demand responsible practices for sustainability.

• Engaging in international trade necessitates grappling with complex customs laws and international
agreements.

• Remaining informed about regulatory bodies’ oversight and maintaining open communication is imperative.
Psychological Factors Affecting Entrepreneurship
• Self-belief, proactive behaviour, and a desire to achieve goals drive
perseverance.

• Resilience, ambiguity tolerance, and stress management skills foster

adaptability in uncertain environments.

• Emotional intelligence shapes relationships and team leadership.

• Optimism and positive thinking sustain motivation amid challenges.

 External Factors Affecting Entrepreneurship
• Economic Climate: Inflation, interest rates, and market size

• Political and Legal Landscape: Government policies, stability, and legal regulations

• Social and Cultural Trends: Societal attitudes, demographics, and cultural shifts

• Technological Shifts: Rapid tech advancements continuously reshape industries.

• Environmental Concerns: Growing sustainability demands shape consumer behaviour, presenting

opportunities for eco-friendly products/services.

• Global Competition: Globalization intensifies competition.

• Resource Accessibility: Skilled labour, technology, and infrastructure availability directly impact
business operations.

• Support Networks: Engaging with entrepreneurial ecosystems provides guidance and collaboration.
 Internal Factors Affecting Entrepreneurship
• Entrepreneurial Traits: Personal attributes like motivation, risk-taking, and
decision-making influence
• Education and Skills: to make informed decisions and understand market
dynamics, fostering strategic planning.
• Financial Resources: Access to funds directly impacts sustainability and expansion.
• Networking: Building robust relationships provides valuable support and avenues
for collaboration and growth.
• Values and Mission: Clear guiding principles form the foundation
• Time Management: Effective organizational skills are crucial for handling multiple
responsibilities
• Communication Skills: Strong interpersonal abilities aid in relationship-building,
effective leadership, and successful negotiations.
• Adaptability: Embracing change and fostering a culture of continuous learning
Pull & Push factors for Entrepreneurial Motivation.

Pull Factors Push Factors

• Religious Values
• A lot of bounties in business
• Follow the teachings of the religion
• Duty to lead a prosperous life
• Frustration
• Limited job mobility
• VSS and “retrenchment”
• Psychological • Dissatisfaction
• Doesn’t like to be controlled
• Necessity
• Want freedom
• No jobs
• Riches and Power • Need to support family
• Lack educational qualifications
• Rich and famous
• Sophisticated life-style

• Service to the Society

• Corporate social responsibility
• Philanthropic activities

• Entrepreneurial Culture
 Chapter
• Introduction to Entrepreneurship:
• Concept and Definitions
• Typology, Role, Importance and its contribution in Economic Development
• Entrepreneurial Competencies, myths and mind-set of entrepreneurship
• Factor Affecting Entrepreneurial Growth
• Entrepreneurial Training Methods, Process of Entrepreneurial Development
• Forms of business organizations
• Sole Proprietorship,
• Partnership,
• HUF,
• Private limited,
• Public limited,
• LLP, Franchise
 Entrepreneurial Training Methods
• Lecture Method
• The lecture method of training is one of the oldest and most widely-used training methods.
A lecture may be defined as an informative discourse delivered to an audience. It clearly
implies a one-way communication to a number of people by someone who is
knowledgeable in his subject. The method is used to deliver the majority of content in
training programmes. In entrepreneurship training programmes, this method is widely used
in combination with other methods like those involving seminars, conferences, panel
discussions, workshops, buzz groups, the syndicate method, the case method, role play, the
simulation method, and the laboratory method. Modern technology provides a wide range
of aids to the speaker with the help of which the lecture method could be made more
interesting, absorbing, and meaningful.
 Entrepreneurial Training Methods- Participative Methods

• Conference:
• This method may effectively be used where the objective is to develop a perspective
and insight into the subject conferred on, and where it is important to collect ideas
from many before embarking on a project. The usual procedure adopted for
conducting conferences is to prepare the agenda notes and working paper and invite
experts to contribute papers for the conference. The plenary session, which is held in
the beginning to spell out the objectives, purposes, the scope, and specific topics for
discussion in the conference, provides a general forum for the participants and also
helps in sharpening the focus of discussions. The chairman is the key figure in the
conference.
 Entrepreneurial Training Methods- Participative Methods

• Seminar:
• A seminar is a formal presentation by a small group of people on a particular topic of
common interest. In a seminar, participants present their views on a specific topic,
followed by discussion and conversation. A seminar enables exchange of thoughts
and ideas and the findings of the discussion are recorded for future action.
 Entrepreneurial Training Methods- Participative Methods

• Panel discussion:
• A panel discussion is designed to provide an opportunity to participants to hear the
viewpoints of different people who are knowledgeable on a specific topic. A panel
usually comprises 4–5 panel members. The discussion is led by a moderator. The role
of the moderator is very important for opening the discussion, leading the discussion,
closing the discussion, and concluding the discussion. The moderator should inform
the panel members of the objective of the panel discussion and the time allotted for
the panel discussion.
 Entrepreneurial Training Methods- Participative Methods

• Workshop:
• A workshop is product-centred and focuses on the specificity of the task to be
accomplished. It is a method of designing training activities around identified work
problems in order to find solutions to them. The objective is to obtain contributions
from all affected individuals and optimize the resources available to solve the
problems and to plan future action. The workshop differs from other group methods
only in that it is set up to tackle specific operational problems. The participants play a
key role in making the workshop a success. The workshop ends with a definite plan of
action for the solution of a particular problem or task.
 Entrepreneurial Training Methods- Participative Methods

• Buzz group:
• Buzz groups are sub-divisions of a large group. The focus of this method is to provide
an opportunity to everyone to express an opinion on the topic. The interaction is
confined to a limited number of participants ranging from five to ten. The
deliberation takes place in a small group on a given topic, which is presented by the
leader of the sub-group.
 Entrepreneurial Training Methods- Participative Methods
• Syndicate method:
• This method is suitable for learning at a higher level. This method is widely used in
teaching–learning situations, especially in top-level management training. This
method requires a competent trainer and should have a core group of co-trainers
equally competent in handling different assignments given to them. The participants
should be divided into small groups consisting of eight to ten participants. This small
group is known as a “syndicate.” Generally, each syndicate is given a brief and
carefully prepared background paper by the instructor. The syndicate discusses the
issues involved in the subject area assigned to it and prepares a paper. The leader of
each syndicate presents his report separately, followed by questions raised by each
syndicate on the recommendation of other syndicates. The trainer acts mainly as a
resource person in providing necessary information and facilitating their thinking on a
particular topic. The participants learn from their own participation and from the
experiences the trainers and other members bring to syndicate discussions.
 Entrepreneurial Training Methods- Participative Methods

• Case method:
• The case method has long been accepted as an important method for training
entrepreneurs. It facilitates active participation and participative learning. If properly
administered, it has the advantage of improving the knowledge, attitude, and skills of
the trainees. The effectiveness of the case method depends upon the preparation of
the case and the leading of the case in a classroom situation by the trainer. The
trainer is expected to perform the role of facilitator.
 Entrepreneurial Training Methods- Participative Methods

• Role play:
• Trainees are made to enact a particular role so as to give a real feel of the roles given
to them. This enables participants to understand the behaviour of others as well as
their own feelings and emotions. The trainer must brief the trainees on the theme or
situation and what is expected of them. This is a common and very effective
technique for bringing into the classroom real-life situations concerning
entrepreneurship. Sometimes the script is given to the team, while at other times the
trainees prepare their own script around a given situation.
 Entrepreneurial Training Methods- Participative Methods

• Simulation method:
• Simulation methods try to replicate various activities in “real life” in the form of a
game. In the simulation method, a “near real-life situation” is created providing an
opportunity to trainees to experience. The trainees experience the impact of their
behaviour on the situation. The simulation technique is carried out to generate
response and reactions based on the real feelings of the participants, which are
subsequently analysed by the trainer. Simulation games can result in very effective
learning but trainers who administer them need considerable competency and good
preparation.
 Entrepreneurial Training Methods- Participative Methods

• Laboratory method:
• The laboratory method of training is process-oriented learning wherein the
participants learn by sharing their experiences, particularly those generated in the
group. The method is also termed as sensitivity training, T-group, D-group, L-group,
etc. The basic assumption in this method is that the efficiency and productivity of the
group depends more often on the manner in which people work together than on
their technological skill. The laboratory method offers a climate conducive to open
discussion and learning, and encourages trusting behaviour. A major goal of such a
method is to contribute towards personal growth through increased selfawareness
and inter-personal competence.
 THE PROCESS OF
ENTREPRENEURIAL
DEVELOPMENT
 Stimulatory phase:
• The stimulatory phase involves implementing stimulatory activities for creating
interest and awareness in potential entrepreneurs. These activities prepare the
foundation for the emergence of entrepreneurship in society. This phase involves
various activities such as planned publicity for entrepreneurial opportunities,
providing entrepreneurial education, counselling and motivational training to new
entrepreneurs, identification of potential entrepreneurs through scientific
techniques, providing guidance in selection of product/service and preparing
project reports, creating entrepreneurial forums, and recognizing and rewarding
existing entrepreneurs.
 Support phase:
• The support phase involves implementation of support activities that help in
new venture creation. Support activities nurture and promote
entrepreneurship. This phase involves various activities such as registration
of enterprises; development of the product prototype; arrangement of
finance, land, shed, power, and common facility centre;
offering management consultancy services and marketing support; guidance
for selecting plant and machinery; and getting approvals and licenses.
 Sustenance phase:
• The sustenance phase involves the implementation of sustaining activities

that help in the continuous and efficient functioning of enterprises within a

society. This phase involves various activities such as modernization,

diversification, expansion, getting additional finance, and research and

development support to help an enterprise survive, develop, and grow after

it is set up.
 Chapter
• Introduction to Entrepreneurship:
• Concept and Definitions
• Typology, Role, Importance and its contribution in Economic Development
• Entrepreneurial Competencies, myths and mind-set of entrepreneurship
• Factor Affecting Entrepreneurial Growth
• Entrepreneurial Training Methods, Process of Entrepreneurial Development
• Forms of business organizations
• Sole Proprietorship,
• Partnership,
• HUF,
• Private limited,
• Public limited,
• LLP, Franchise
Types of Business Organization
 Meaning of an Organization

“Organization is a group of people working together to create a

surplus / profit, satisfaction of needs, and achievement of goals
viz. organizational as well as individual.”
 Types of Organization
• Proprietorship

• Partnership

• Cooperative / Society / Trusts

• Company : a)Private Ltd. b)Public Ltd.

• Non Profit Organisation

• Hindu Undivided Family (HUF)

• Formation of Company
 1. Sole Proprietorship
• J.L. Hanson: “A type of business unit where one person is solely responsible

for providing the capital and bearing the risk of the enterprise, and for the

management of the business.”An individual start a business on his own,

without any registration.

• Can we say that “Sole Proprietorship refers to a business

enterprise exclusively owned, managed and controlled by a

single person”
MRS Bector Food
 FEATURE
and closure
S
Easy formation
Lack of
business
continuity

Unlimited
liability Absolute
control

Sole risk bearer No

and profit separate
recipient entity
 Sense of
MERITS Quick
decision
accomplishment making

Confidentiality
of information
Ease of
formation
and closure
Direct
incentive
 LIMITATION
Unlimited
S Limited life
liability of a business
concern

Limited Limited
Resources managerial
skills
OPTIONS FOR A SOLE
PROPRIETOR
 Partnership
According to The
Indian
Partnership Act,
1932,
“Partnership is the
relation between 2
persons who have
agreed to share the
profit of the
business carried on
by all or any one of
them acing for all.”
Neeraj Choksi (left in the
photo) and Jignesh Desai (right
in the photo)
 FEATURE
Joint decision
making
S Maximum
members in
other
business-20

Equal Risk
bearing Maximum
members in
banking-10
Continuity
is ensured
Minimum
Mutual members
Agency required-2
 Balanced
decision
MERITS
making Ease of
formation
and closure
More funds

Sharing of
Secrecy
risks
 LIMITATION
S
Lack of public
Unlimited
liability
confidentiality Possibility
of conflicts

Limited
Resources

Lack of
continuity
TYPES OF
PARTNERS
Active partner
Participates in
Contributes capital management of
firm

Shares profits and

Unlimited liability
losses

Takes part in
carrying out
business on others
behalf
 Sleeping or dormant partner

Does not
Contributes capital Participate in Shares profits and Unlimited liability
management of losses
firm
Nominal partner
Does not
Allows the use of Participate in
his name by a firm management of
firm

Does not Share

Unlimited liability
profits and losses

Does not
Contribute capital
Secret partner
Participates in
Contributes management of
capital firm

Shares profits and Unlimited liability

losses

His association is
not known to the
general public
Partner by estoppel
Gives impression Does not
that he is a partner Participate in
of firm through his management of
behaviour firm

Does not Share Unlimited liability

profits and losses

Does not
Contribute capital
Partner by holding out
Allows himself to Does not
be represented as a Participate in
partner but is not a management of
partner firm

Does not Share Unlimited liability

profits and losses

Does not
Contribute capital
Status of a Minor
Cannot become a Can be admitted to
partner in any firm as benefits of a
is incompetent to partnership firm with
enter into a valid the mutual consent of
contract with others. all other partners.

Liability is limited to Not eligible to take

the extent of capital part in active
contributed by him. management

When he attains
majority, he decides
whether he would like
to become a partner in
the firm.
EXISTING
PARTNERSHIPS
Partnership deed
The written
agreement which
specifies the terms
and conditions
that govern the
partnership is
called a
partnership deed.
 Duties and Investment
obligations made by
of the each
Preparation
partners and partner
Name auditing of
of the accounts
firm Duration
of
business

Contents of a Nature
and
location of
business

partnership Interest on
capital and
drawings

deed Terms
governing
Procedure admission,
for Salaries and
Methods Distribution withdrawal
retirement
dissolution and expulsion
of firm
of solving of profits of the
disputes and losses partners of a partner
 3. Cooperative / Society / Trusts

• Term cooperation is derived from the Latin word ‘co-operari’, where the word ‘Co’ means
‘with’ and ‘operari’ mean ‘to work’.

• It is a voluntary association of persons who work together to promote their economic

interest.

• A corporation or an association that conducts business for the benefit of the general public
without a profit motive.

• The most basic difference is that nonprofit corporations cannot operate for profit. That is,
they cannot distribute corporate income to shareholders.
• Amul considered one of the largest co-operatives of India today
• Adarsh Co-operative Bank
• Indian Coffee House
• Indian Farmers Fertiliser Cooperative Limited
• KRIBHCO
• Vasudhara Dairy
• Shri Mahila Griha Udyog Lijjat Papad
 Characteristics
• Voluntary Association

• Open Membership

• Service Motive

• Distribution of Surplus

• Number of Members

• Registration of the Society: registered under The Cooperative Societies Act 1912

• Capital
 The application for forming a society must
have the following information:
(a) Name and address of the society.
(b) Aims and objectives of the society.
(c) Names and addresses of members of the society.
(d) Share capital and its division.
(e) Mode of admitting new members.
(f) A copy of the bye laws of the society.
The required documents are filed with the Registrar of Societies. The Registrar
scrutinizes the documents, if these are as per requirements then the society’s
name is entered in the register. A certificate of registration is also issued to the
society. The society will become a corporate body from the date mentioned in the
certificate.
 Definition
• A cooperative is defined as an
autonomous association of persons
united voluntarily to meet their
common economic, social, and
cultural needs and aspirations
through a jointly-owned and
democratically-controlled
enterprise.
• A cooperative society may also be
defined as a business owned and
controlled equally by the people
who use its services or who work at
it.
 Formation of a Co-operative Society
• A Co-operative Society can be formed as per the provisions of the
Cooperative Societies Act, 1912.
• At least ten persons having the capacity to enter into a contract with
common economic objectives, like farming, weaving, consuming, etc. can
form a Co-operative Society.
• A joint application along with the bye-laws of the society containing the
details about the society and its members, has to be submitted to the
Registrar of Co-operative Societies of the concerned state.
• After scrutiny of the application and the bye–laws, the registrar issues a
Certificate of Registration.
 Types of Co-operative Societies

1. Consumers’ Co-operative Society: to protect the interest of general

consumers by making consumer goods available at a reasonable price.
2. Producers’ Co-operative Society: to protect the interest of small
producers by making available items of their need for production like
raw materials, tools and equipments, machinery, etc. Bayanika,
Haryana Handloom, is example of producers’ co-operative society.
3. Co-operative Marketing Society: These societies are formed by small
producers and manufacturers who find it difficult to sell their products
individually.
 Types of Co-operative Societies
4. Co-operative Credit Society: to provide financial support to the
members. The society accepts deposits from members and grants
them loans at reasonable rate of interest in times of need.
Examples: Village Co-operative Society, Urban Cooperative Banks
5. Co-operative Farming Society: These societies are formed by small
farmers to work jointly and thereby enjoy the benefits of large-scale
farming. Examples: Ex: Pani-panchayats
6. Housing Co-operative Society: to provide residential houses to
members they purchase land, and construct houses or flats and allot
the same to members. Some societies also provide loans at low rate of
interest to members to construct their own houses.
Examples: The Employees’ Housing Societies , Metropolitan Housing
Co-operative Society
 Characteristics of Co-operative Society

I. Open membership: A minimum of ten members are required to form a

co-operative society. The Co–operative societies Act does not specify the
maximum number of members for any co-operative society.
ii. Voluntary Association: Members join as well as leave the co-operative
society voluntarily, that is by choice.
iii. State control: To protect the interest of members, co-operative societies are
placed under state control through registration.
iv Sources of Finance: In a co-operative society capital is contributed by all the
members. However, it can easily raise loans and secure grants from
government after its registration.
v. Democratic Management: The society is managed by a group known as
“Board of Directors”. The members of the board of directors are the elected
representatives of the society.
 Characteristics
vi. Service motive: Co-operatives are not formed to maximize profit like
other forms of business organization.
vii. Separate Legal Entity: A Co-operative Society is registered under the
Co-operative Societies Act. After registration a society becomes a separate
legal entity, with limited liability of its members.
viii. Distribution of Surplus: Every co-operative society in addition to
providing services to its members, also generates some profit while
conducting business.
ix. Self-help through mutual cooperation: Co-operative Societies thrive on
the principle of mutual help. They are the organizations of financially
weaker sections of society.
 Advantages
Top
• Easy to Form
• Economic Operation
Disadvantages
• Limited Liability
• Open Membership • Limited Capital
• Tax Concession • Inefficient Management
• Democratic Management • Absence of Motive
• Conflicts among Member
• Rigid Govt. Rules and Regulations
 4. Company / Joint Stock Company
• A Joint Stock Company or simply a company is a voluntary association of persons
generally formed for undertaking some big business activity

• It is established by law and can be dissolved by law only.

• According to the Act, a company means ‘a company formed and registered

under this Act or an existing company’.

• According to Company’s Act 1956, A form of business organization recognized by

law a separate legal entity having all as an individual.
 Characteristics

• Artificial Person

• Formation

• Separate Legal Entity

• Perpetual (Continuous) Existence

• Limited Liability of Members

• Transferability of Shares

• Membership
 Advantages
Disadvantages
• Large Resources • Lengthy & Expensive Procedure for formation
• Limited Liability • More Government Regulation
• Free Transfer of Share • Lack of personal interest
• Continuity of Existence • Delay in decision making and action
• Benefits of Large-scale Operation • Conflict of interest
• Liquidity • Oligarchic Management – Small group of person
• Professional Management serve their personal interest.
• Public Confidence • Speculation by Directors
• Tax Benefits
 Types of Company
Company on the basis of Company on the basis of Company on the basis of Multinational Companies
Incorporations Liabilities Control
Chartered Company – Company Limited by Shares Government Company Branches
Granted by King and Queen

Statutory Company – Special Company Limited by Non – Government Company Subsidiary

Act of Parliament or State Guarantee
Legislature Not having share capital
Having share capital

Registered or Incorporated Unlimited Company Foreign Company Joint Venture

Company
Private Company
Public Company
Domestic Company Franchise Holder
Holding Company Turn Key Project
Subsidiary Company
Differences….
Non Profit Organisation
 Nonprofit Organization
• Definition: An organization in which no owner, stockholder or trustee
shares in profits and losses, and which exists not to earn revenue but
to promote a mission that enhances the public welfare. These
organizations are often eligible for tax-exempt status and some, but
not all, can receive tax deductible contributions.
• Nonprofit refers to groups whose purposes are to benefit the public. A
nonprofit is exempt from income tax under Sections 501(c)(3) or 501(c)(4) of
the federal Internal Revenue Code. There are actually 20 categores of
tax-exampt organizations under Section 501 of the tax code. All of these are
considered "nonprofit" organizations.
 Purposes :
• Charities are classified as 501(c)(3) tax-exempt organizations. These include
organizations whose
• Charitable
• Religious
• Educational
• Scientific
• Literary
• Testing For Public Safety
• Fostering National Or International Amateur Athletic Competition
• Preventing Cruelty to children or animals.
• Furthermore, "charitable purposes" are defined as activities beneficial to the
public interest and serving an open class of people, not a limited number of
identified people.
 Social Enterprises
• A Social Enterprise has been defined by the UK government as:

‘a business or service with primarily social objectives whose surpluses are

principally reinvested for that purpose in the community, rather than being
driven by the need to maximise profit for shareholders and owners.’
Social enterprises Non profit
Can have for profit, non profit or a hybrid of the two Strictly non profit model
models

Driven by social and financial goals Driven only by social goals

Rely primarily on their earned income making it-self Rely primarily on individuals donors, charitable
sustainable contributions
Recruit employees like other business Mostly depend on paid or unpaid volunteers

Markets itself using commercial and social Markets the social cause to publicist and advertise
advantage itself
Income makes it sustainable Increasing the risk of non sustainability

Ex :Grameen bank , Aravind eye care Akshara foundation, help age

Hindu Undivided Family
 Introduction
❖ It is a specific form of business organisation found only in India.
❖ HUF is a separate and distinct tax entity that i.e. the income of a HUF can be
assessed in the hands of HUF only and not in the hands of any of its
members.
❖ Hindu Undivided Family do business under the control of the head of the
family is known as ‘karta. The members of the family is known as
‘co-parceners’ of Hindu undivided estate.
HUF is a ancient form of commerce, business works around a tradition
routed in hierarchy. The male(and now even female)members of biological
family run a business together and hand it down from generation to
generation.
 Joint Hindu Family Business : An Introduction
1. Form of business organization which is owned and run by members of
hindu undivided family .
2. By taking birth in a hindu family and falling under three successive
generations one can be called member of HUF.
3. KARTA is the eldest member of the family who controls all sorts of
activities regarding family business.
4. The interest in inheritance is called coparcenary interest. Hence, the
members of the HUF are called coparceners.
 Features:
❖ FORMATION: Joint Hindu family cannot be formed or created by any
contract or agreement because this organisation came into existence
because by the operation of Hindu succession act 1956.
❖ MEMBERSHIP: it requires minimum of 2 people {at least one male
member}
KARTA: Is the elder male member of the family, who controls and manages
the business.
CO-PARCENERS: Other family members who by birth acquires an interest in
the joint property of the family, whether inherited or acquires by the family.
There is no limit for membership because membership is by birth.
 FEATURES:
❖ LIABILITY: The liability of the KARTA is unlimited because
he is the only deciding authority, Whereas the liability of
CO-PARCENERS is limited upto their share in the capital of the
family.
❖ SHARING OF PROFIT AND LOSSES: According to
Hindu Succession Act,1956,all the members of Hindu Undivided
Family have equal rights to share the profits as well as losses of the
business.
❖ CONTROL: the control of the family lies with the karta. He
takes all the decision and authorizes to manage the business.
 Features:
❖ CONTINUITY AND STABILITY: This organization enjoys long
and stable life as it is not affected by death, insolvency, insanity of any of its
member. In other words if KARTA dies and became incapable of managing
the business then the succeeding CO-PARCENERS will act as KARTA.
❖ MINOR MEMBERS: the inclusion of an individual into the
business occurs due to birth in a Hindu undivided family.
❖ BUSINESS SECRECY: There is a great deal of business secrecy in
the organization.
The business secrets are known to the CO-PARCENERS in general and KARTA
in particular.
It is not obligatory for them to publish their accounts, which results in great
deal of privacy and secrecy
 Pros and cons:
❖ PROS: Ease of formation. ❖ CONS: Confined to Joint Hindu
Continuity of operations. Families.
Effective control Relatively limited capital.
Increased loyalty and cooperation Limited managerial talents.
Family co-operation and trust Unlimited Liability of the KARTA.
Quick and prompt decisions by karta
Tax benefits
Continuity and stability
Credit worthiness more than sole
propritership.
Cannot sue or be sued
 Gujarati Entrepreneur and
Contribution to India and World
Economy
• Mukesh Ambani

Mukesh Ambani, chairman of Reliance Industries, controls one of the

world's biggest oil refining complex at Jamnagar in the western Indian
state of Gujarat, with capacity to process 1.24 million bpd of crude. As
per the Hurun India Rich List for 2014, Mukesh Ambani's wealth has
risen 37 per cent to Rs 1.65 lakh crore this year. RIL posted a 13.7 per
cent jump in its April-June quarter net profit to almost $1 billion, the
highest quarterly profit by a private firm, on the back of higher refining
margins, better petrochem earnings and surge in US shale gas business.
Mukesh was born on April 19, 1957 to Dhirubhai Ambani and Kokilaben
Ambani. He is not only admired among the head honchos of India Inc
for leadership, he has also received high praise from Prime Minister
Narendra Modi, for putting the state on global map.
• Dilip Shanghvi

•
Dilip Shanghvi is the founder of Sun Pharmaceutical
and is credited to build Sun into one of the most
profitable generic drugs companies in the world. Sun
has become the country's most valuable drug company
and has plans to take its NYSE-listed subsidiary Taro
Pharmaceutical Industries, in which it has nearly a two
thirds stake. Dilip is now ready to steer Sun into its next
growth phase
• Gautam Adani

Gautam Adani is a self-made billionaire and chairman of power-focused Adani Group,

which owns Mundra Port. He is the first billionaire from the city of Ahmedabad.
According to a latest Hurun Report, a sharp 152 per cent jump in his wealth saw
Adani Group chairman Gautam Adani break into the list of 10 richest Indians even as
Mukesh Ambani retained the pole position. Adani blazed into the top league riding
on the runaway share prices of his companies in recent past, pegging his wealth at Rs
44,000 crore, the report said. His success in the business world is a glaring example of
the fact that the vision to build a successful enterprise does not require an MBA from
a blue-chip B-School. Gautam S. After completing high school at the Seth C.N.
Vidyalaya in Ahmedabad, he enrolled for [Link] at the Gujarat University but
dropped out during the second year and relocated to Mumbai at the age of 18,
starting his career as a diamond sorter with Mahendra Brothers. Two years later he
started his own company for trading in diamonds, and in the early 1980s moved back
to Ahmedabad to manage a plastics unit for his elder brother. Soon he started
importing PVC, under his own company, Adani Exports, and during the
post-liberalization period, it became one of the largest players in the sector. At
present Adani Group have interests in edible oil, coal trading/mining, power, oil and
gas exploration, export-import of pulses and fruits. Mr. Adani lives in Ahmedabad
• Sudhir Mehta
•

Sudhir Uttamlal Mehta serves as the Chairman of Torrent Group,

of which Torrent Pharmaceuticals Limited is the flagship
company. He has been instrumental in steering the growth of
Torrent Pharmaceuticals through strategic alliances with
international giants from UK, Germany, France and USA. He also
serves as a director of The Surat Electricity Company Ltd.,
Torrent Pvt Ltd. and Torrel Cosmetics Pvt Ltd. He is a Science
graduate from Gujarat University. Earlier, Sudhir Mehta and his
brother Samir Mehta came into limelight by buying a 1,112.4 sq
yards bungalow on Dharam Marg in Chanakyapuri, near the
American embassy, for Rs 111 crore. The Ahmedabad-based
drug-to-power group bought the bungalow for Rs 10 lakh per
yard.
• Samir Mehta
•
Samir Mehta is the vice chairman of Torrent Group. Born in 1963,
Samir Mehta began his career alongside his brother to contribute to
the development of Torrent Pharmaceuticals. He took over the
management of the pharma business of the group, which was
concentrating on psychotropic drugs manufactured in their own
plant at Vatva with focus on exports. Apart from overseeing the
operations, he is contributing in the areas of HR, finance and general
management. He was also behind setting-up of a state-of-the-art
research and development center and a second manufacturing plant
at Baddi, Himachal Pradesh. He is holding positions on board of
Torrent Power Generation Ltd., Torrent Pharmaceuticals Ltd., Torrent
Power SEC Ltd, Torrent Power AEC Ltd., and Torrent Private Ltd.
• Pankaj Patel
•

Pankaj Ramanbhai Patel is the chairman and managing

director of Cadila Healthcare. He comes from Ahmedabad
and is the son of a pharmacy professor. With over 30 years of
experience in the pharma industry, he is one of the most
successful pharma entrepreneurs in the country. Zydus
Cadilla is a well known brand now and enjoys good reputation
in the pharma industry. Zydus enjoys presence in segments
like cardiovasculars and gastrointestinals. It has 17 brands
that feature amongst the top 300 pharmaceutical brands in
India. In 2006, the group was featured in the Forbes list of
'Best Under a Billion' company from amongst 200 companies
in Asia.
• Romesh Wadhwani
•
Romesh T. Wadhwani is the founder and chairman of Symphony Technology
Group, a private equity firm investing in software and software services
companies. He is a Silicon Valley serial entrepreneur, having created and sold
three companies in 30 years. In 2000, Wadhwani's e-commerce start-up Aspect
Development Inc was acquired by i2 Technologies, another Indian-owned
company, in a historic and one of the largest deals in the US software industry
that year. His Wadhwani Centre for Entrepreneurial Development at the Indian
School of Business focuses on on broad-based policy research. Romesh currently
serves on the boards of directors of STG companies SymphonyIRI Group,
Symphony Services, Lawson, MSC Software and Shopzilla. Romesh says
strengthening Indian entrepreneurship in the technology domain will accelerate
the economic development in the country while contributing positively to the
global business scenario.
• Uday Kotak

• Uday Kotak is the vice-chairman and managing

director of Kotak Mahindra Bank. He owns a 50 per
cent stake in Kotak Mahindra Bank, which he founded
and runs. He is among India's first billionaire banker
who started out with a small finance firm in 1985 and
then made it a full-fledged bank after acquiring
banking license in 2003. The bank has over 320
branches and 2.7 million customers. Uday Kotak was
born in Mumbai, India and belongs to traditional
Gujarati cotton trader's family.