Entrepreneurship Development

Vinulal V V

Module 2
Entrepreneurship development programs in India

David C. McClelland (1961) at Harvard University made an interesting investigation-

cum-experiment. He found that the need for achievement that motivates people to
work hard. According to him, money- making was incidental. It was only a measure
of achievement, not its motivation.

He conducted a five-year experimental study in Kakinada, i.e. one of the prosperous

districts of Andhra Pradesh in India in collaboration with Small Industries Extension
and Training Institute (SIET), Hyderabad. This experiment is popularly known as
‘Kakinada Experiment’. Under this experiment, young persons were selected and
put through a three-month training programme and motivated to see fresh goals.

One of the significant conclusions of the experiment was that the traditional beliefs
did not seem to inhibit an entrepreneur and that the suitable training can provide
the necessary motivation to the entrepreneurs. The achievement motivation had a
positive impact on the performance of entrepreneurs.

‘Kakinada Experiment’ is considered as the seed for the Entrepreneurship

Development Programmes (EDPs) in India. The fact remains that it was the
‘Kakinada Experiment’ that made people appreciate the need for and importance of
the entrepreneurial training, now popularly known as ‘EDPs’, to induce motivation
and competence among the young prospective entrepreneurs.

Based on this, it was the Gujarat Industrial Investment Corporation (GIIC) which, for
the first time, started a three-month training programmes on entrepreneurship
development. Impressed by the results of GIIC’s this training programme, the
Government of India embarked, in 1971, on a massive programme on
entrepreneurship development. Since then, there is no looking back in this front. By
now, there are some 686 All-India and State level institutions engaged in conducting
EDPs in hundreds imparting training to the candidates in thousands.

Till now, 12 State Governments have established state-level Centre for

Entrepreneurship Development (CED) or Institute of Entrepreneurship Development
(IED) to develop entrepreneurship by conducting EDPs. Today, the EDP in India has
proliferated to such a magnitude that it has emerged as a national movement. It is
worth mentioning that India operates the oldest and largest programmes for
entrepreneurship development in any developing country.

The impact of India’s EDP movement is borne by the fact that the Indian model of
entrepreneurship development is being adopted by some of the developing
countries of Asia and Africa. Programmes similar to India’s EDPs are conducted in
other countries also, for example, ‘Junior Achievement Programme’ based on the
principle of ‘catch them young’ in USA and ‘Young Enterprises’ in the U. K.

Entrepreneurial Development Program

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Entrepreneurial Development Program means a program conducted to help a

person in strengthening his entrepreneurial motive and in acquiring skill and
capabilities required for promoting and running an enterprise efficiently. A program
which is conducted with a motive to promote potential entrepreneurs,
understanding of motives, motivational pattern, their impact on behavior and
entrepreneurial value is termed as an entrepreneurial development program.

There are a number of programs which give information to the prospective

entrepreneurs regarding a new business idea, how to set up a new venture, how to
prepare a project report, sources of finance etc. These programs should not be
confused with EDP; these are all a part of the EDP.

EDP is primarily concerned with developing, motivating entrepreneurial talent and

understanding the impact of motivation on behavior.

A well designed EDP envisages three tiered approach:

1) Developing achievement motivation and sharpening entrepreneurial traits
and behavior.
2) Guidance on industrial opportunities, incentives, facilities and rules and
regulations.
3) Developing managerial and operational capabilities.

Phase of Entrepreneurship development programs

I. The Initial Phase or Pre-Training Phase.

This phase consists of necessary preparation for implementing the training
programme. During this phase the following activities are carried out:
1. Creation of the infrastructural facilities for the programme.
2. Preparation of a suitable syllabus for the training.
3. Arrangement of guest facilities for the trainees.
4. Inauguration of the training programme.
5. Formulation of the techniques for the selection of the trainees.
6. Formation of a selection committee.
7. Advertising propaganda of the training programme.
8. Preparation of the application form for the trainees.
9. Review of the training facilities.

II. The Training Phase or Development Phase

Real training is conducted during this phase. Efforts are made to enhance the
entrepreneurial capabilities of the participants. The aim of this phase includes the
creation of the willingness and motivation in the minds of the trainees to set up
business enterprises of their own. Changes favourable to impart entrepreneurial
traits among the trainees are brought about during this phase.
According to N.P. Singh, the trainees, during this phase should ascertain that the
following changes have been brought about in their behaviour:
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1. His aptitude coincides with his project idea.

2. He has the real motivation to undertake an entrepreneurial venture and that
he is willing to face the risk involved in the venture.
3. There shall be no inverse changes in his outlook and skills.
4. He shall safeguard his entrepreneurial behaviour.
5. He has already obtained from the training the necessary technical know-how
and human resources required by an average trained entrepreneur.
6. He has become well-versed in taking prompt and creative decisions.
III. The Post Training Phase or Follow up Phase
This is a phase in which the trainers confirm that the objectives of training confirm
that the objectives of the training programme have favorably been realized. In
addition to this, the trainees are given necessary financial assistance and
infrastructural facilities during this phase. The trainees are subjected to constant
watch in order to ascertain that they have already acquired necessary managerial
skills and that they are able to protect their enterprises in their infancy from all
possible draw backs and short comings.

Content of training programme

Once the selection procedure for entrepreneurs is over, the selected persons have
to be equipped with managerial and technical skills to start their enterprises. In
such entrepreneurship development programs, there are participants with a variety
of backgrounds and qualities. Therefore, a package of training inputs is provided
during the program which is usually of six weeks duration. It consists of the
following six inputs.

1. General Introduction to Entrepreneurship: The participants are exposed

to a general knowledge of entrepreneurship such as factors affecting small-
scale industries, the role of entrepreneurs in economic development,
entrepreneurial behavior and the facilities available for establishing small-
scale enterprises.
2. Achievement Motivation Training (AMT): The purpose of the AMT is to
develop the attitude towards risk-taking, initiative and other such behavioral
or psychological traits. A motivation development program creates self-
awareness and self-confidence among the participants and enables them to
think positively and realistically. Without achievement motivation training, an
EDP becomes an ordinary executive development program. Motivation
training initiates to strive for excellence, to take calculated risk, to use
feedback for improvement, sense of efficiency etc.
3. Support System and Procedures: The participants have to be exposed to
agencies like the local banks and other financial institutions, industrial service
corporations and other institutions dealing with the supply of raw-materials,
equipment etc. The programs on support system needs to include the
procedures for approaching them, applying and obtaining assistance from
them and availing of the services provided by them. A linkage between the
training institute and support system agencies can be established with the
participation of these agencies in sponsoring and financing EDPs.
4. Market Survey and Plant Visit: In order to familiarize the participants with
real life situations in small business, plant visits are also arranged. Such visits
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help the participants to know more about an entrepreneur‘s behavior,

personality, thoughts and aspirations. Moreover, the participants should be
given opportunity to conduct market surveys for their respective projects.
This would help to expose the participant to the market avenues available
and could be followed by sessions on methods of dealing in the markets.
5. Managerial Skill: Since a small entrepreneur cannot employ management
experts to manage his enterprise, he needs to be imparted basic and
essential managerial skills in the functional areas like finance, production and
marketing knowledge of managerial skills enables an entrepreneur to run his
enterprise smoothly and successfully.
6. Project Preparation and Feasibility Study: A good period of time needs
to be devoted to the actual preparation of projects. The active involvement in
this task would provide them necessary understanding and also ensure their
personal commitment. During the course of EDP, various guidance sessions
are helpful in enabling the trainees to identify appropriate business
opportunities. Information and counseling on various business opportunities
is provided though the team experts and by spot survey. Necessary
experience is provided in market survey, project preparation, sources of
finance etc. Undue emphasis on any dimension should be avoided as it may
lead to distortion in both the process and content of the program

Choosing the form of Ownership

The task to convert an innovative idea into a commercial entity calls for certain
fundamental decisions. These include selection of the suitable form of ownership for
the proposed venture. For a business involving comparatively little investment and,
to be run on a tiny scale, sole proprietorship or partnership should be the
appropriate choice. In a proprietary concern, under normal conditions, the owner-
operator does not have to put in extraordinary efforts for funds. In partnership,
generally the partners themselves collectively bring together own resource and
thereby facilitate availability of required capital. Additionally, borrowed capital may
be available from external sources, though more often the cost of borrowing funds
could be prohibitive. Where though more often capital requirement is neither too
little nor too much and, in such a case an enterprise must essentially be on a small
to moderate scale, it becomes necessary to make more people interested in the
proposed project, that is to say invite others to invest.

In proprietorship or partnership, investors cannot avoid the burden of unlimited

liability; but such a problem does not arise in a limited liability set-up. The benefit of
limited liability, apart from other advantages, is that it makes investment in
company form of business more inviting to investors. Put simply, many people will
be willing to make equity (ownership) investment in a limited liability company. In
possession of the requisite resources Viz., men, money, materials, machinery as
also technical managerial skills limited liability form of business holds immense
scope to grow. Again, as competed with a public limited company, a private limited
company is allowed a number of exemptions as regards regulatory measures.
Further, in a private limited company the investors being few and closely connected
by common interest stand the chance of controlling the management. Therefore,
with regard to small business entrepreneurship and from the standpoint of both
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entrepreneurs and equity investors, ownership in the form of private limited

company is the best adaptable.

Nevertheless, in determining the right form of ownership, other than the size of
business and capital requirement, the issues that require through consideration are
quite few and varied. Notable among these are:

• Nature of business;
• Minimum output to achieve economies of production;
• Minimum turnover to make business commercially visible;
• Specialized and skilled personnel needed;
• Capital requirement
• Return on investment
• Extent of loan finance likely from external sources;
• Liability of equity (ownership) investors.
• Number of individuals interested in equity (ownership) investment;
• Facility of formation and registration, and related expenses;
• Tax burden and concessions;
• Grants and subsidies from government;
• Control over management.
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Forms of Business Organization

One of the first decisions that you will have to make as a business owner is how the
business should be structured. All businesses must adopt some legal configuration
that defines the rights and liabilities of participants in the business’s ownership,
control, personal liability, life span, and financial structure.

Sole Proprietorship
The vast majority of small businesses start out as sole proprietorships. These firms
are owned by one person, usually the individual who has day-to-day responsibility
for running the business. Sole proprietorships own all the assets of the business
and the profits generated by it. They also assume complete responsibility for any of
its liabilities or debts. In the eyes of the law and the public, you are one in the same
with the business.

Advantages of a Sole Proprietorship

• Easiest and least expensive form of ownership to organize.

• Sole proprietors are in complete control, and within the parameters of the
law, may make decisions as they see fit.
• Profits from the business flow-through directly to the owner’s personal tax
return.
• The business is easy to dissolve, if desired.

Disadvantages of a Sole Proprietorship

• Sole proprietors have unlimited liability and are legally responsible for all
debts against the business. Their business and personal assets are at risk.
• May be at a disadvantage in raising funds and are often limited to using
funds from personal savings or consumer loans.
• May have a hard time attracting high-caliber employees, or those that are
motivated by the opportunity to own a part of the business.
• Some employee benefits such as owner’s medical insurance premiums are
not directly deductible from business income (only partially as an adjustment
to income).

Partnerships
In a Partnership, two or more people share ownership of a single business. Like
proprietorships, the law does not distinguish between the business and its owners.
The Partners should have a legal agreement that sets forth how decisions will be
made, profits will be shared, disputes will be resolved, how future partners will be
admitted to the partnership, how partners can be bought out, or what steps will be
taken to dissolve the partnership when needed; Yes, its hard to think about a
“break-up” when the business is just getting started, but many partnerships split up
at crisis times and unless there is a defined process, there will be even greater
problems. They also must decide up front how much time and capital each will
contribute, etc.

Advantages of a Partnership
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• Partnerships are relatively easy to establish; however, time should be

invested in developing the partnership agreement.
• With more than one owner, the ability to raise funds may be increased.
• The profits from the business flow directly through to the partners’ personal
tax return.
• Prospective employees may be attracted to the business if given the
incentive to become a partner.
• The business usually will benefit from partners who have complementary
skills.

Disadvantages of a Partnership

• Partners are jointly and individually liable for the actions of the other
partners.
• Profits must be shared with others.
• Since decisions are shared, disagreements can occur.
• Some employee benefits are not deductible from business income on tax
returns.
• The partnership may have a limited life; it may end upon the withdrawal or
death of a partner.

Types of Partnerships that should be considered:

1. General Partnership
Partners divide responsibility for management and liability, as well as the shares of
profit or loss according to their internal agreement. Equal shares are assumed
unless there is a written agreement that states differently.

2. Limited Partnership and Partnership with limited liability

“Limited” means that most of the partners have limited liability (to the extent of
their investment) as well as limited input regarding management decision, which
generally encourages investors for short term projects, or for investing in capital
assets. This form of ownership is not often used for operating retail or service
businesses. Forming a limited partnership is more complex and formal than that of
a general partnership.

3. Joint Venture
Acts like a general partnership, but is clearly for a limited period of time or a single
project. If the partners in a joint venture repeat the activity, they will be recognized
as an ongoing partnership and will have to file as such, and distribute accumulated
partnership assets upon dissolution of the entity.

General or ordinary partnership refers to an arrangement, which makes all the

partners jointly and severally responsible for all the debts and liabilities of a
business. Simply, defined, all partners will have to bear the risks of unlimited
liabilities. In limited partnership;
• There must be one or more general partners where liabilities for all debts and
obligations of the firm shall remain unlimited and
• There must also be one or more limited (also known as special) partners who
will be liable for an amount to the extent of one’s capital contribution.
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Partnership-at-will refers to a business formed for an indefinite period, i.e., without

any specific agreement about the continuance of partnership. Partnership-at-will
can be dissolved at any time as and when a notice to that effect is served by a
partner. Particular partnership, also known as joint venture, is formed for a very
specific venture or period and it comes to an end as soon as the specific. Purpose or
period is over.

Types in Partners

In partnership, every partner is entitled to take equal part in the management of

business. In reality, this rarely happens, instead they assume different roles that are
mutually determines and categorically stated I the contractual agreement. And this
is done in terms of one’s expertise, experience and keenness in a practical matter.
Commonest and the most widely favoured types of partners are discussed
hereunder.

Active or General Partners

Active or general partners are those who actively participate in the management of
a business. This is how they are also known in the trading community and to the
general public. Secret partners, active or general, can take active part in the
management, but they do so secretly, that is without the knowledge of the people
not belonging to the same business.

Sleeping or Dormant

Sleeping or dormant partners are those who do not take part in the management
and their identities are not known to general public. Even if their identities are
known to others, sleeping or dormant partners are also at items called silent
partners. Working partners do not invest any capital but they hold key positions
and, in most cases, they are admitted in recognition of their business acumen,
knowledge and capability in any particular field. Quasi or Ostensible partners are
those who have already retired from active participation but whose investment in
the same business is still retained as loan capital and against which they get some
return. Holding out partners denote those persons who without being real partners
hold out, that is to say they represent themselves, to general public as if partners
and conceal their true identities. As a consequence, such persons will be liable for
any partnership debts arising out of their actions payable to outsiders.

Corporations
A Corporation, chartered by the state in which it is headquartered, is considered by
law to be a unique entity, separate and apart from those who own it. A Corporation
can be taxed; it can be sued; it can enter into contractual agreements. The owners
of a corporation are its shareholders. The shareholders elect a board of directors to
oversee the major policies and decisions. The corporation has a life of its own and
does not dissolve when ownership changes.

Advantages of a Corporation
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• Shareholders have limited liability for the corporation’s debts or judgments

against the corporation.
• Generally, shareholders can only be held accountable for their investment in
stock of the company. (Note however, that officers can be held personally
liable for their actions, such as the failure to withhold and pay employment
taxes.
• Corporations can raise additional funds through the sale of stock.
• A Corporation may deduct the cost of benefits it provides to officers and
employees.
• Can elect S Corporation status if certain requirements are met. This election
enables company to be taxed similar to a partnership.

Disadvantages of a Corporation

• The process of incorporation requires more time and money than other forms
of organization.
• Corporations are monitored by federal, state and some local agencies, and as
a result may have more paperwork to comply with regulations.
• Incorporating may result in higher overall taxes. Dividends paid to
shareholders are not deductible from business income; thus this income can
be taxed twice.

Other Types of Ownership (Additional material)

Family Business

The expression ‘Family Business” denotes a particular type of commercial

enterprise that is owned, directly managed and financed by single individuals
usually the family heads. The owner, also known as proprietor, accepts all risks and
responsibilities and operates his/her business, often with the assistance of some
other members of the family. The success and survival of a venture of this kind
depend entirely of its owner-operator’s capability and intelligence in practical
business matters.

Family business firms may be broadly classified into three groups according to their
function, namely:
(i) Manufacturing or production units;
(ii) Trading units;
(iii) Service units.

Cottage or tiny manufacturing units are mostly home-based and these are generally
owned and managed by traditional artisans, craftsmen or specially trained
individuals. These are engaged in making, among numerous other things, useful
and valuable articles like furniture, handicrafts, pottery, brassware, gold and silver
ornaments, dairy and farm products, fruit juice, jam and jelly, pickles, agarbattis
and so on. Many are involved in service related and / or trading activities supplying
household and personal requirements of local consumers. Notable among these are
pharmacists and pathologists, booksellers and stationers, wholesalers, grocers,
retailers, confectioners, restaurateurs, tailors, photographers, electricians,
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electronic goods repairers, interior designers and job printers etc. again, there are
small firms that either manufacture minor components for large industries or
provide industry-related service.

A great majority of family businesses are a sort of proprietorship ventures and these
are run on a tiny or small scale. These, in reality, do not have much scope for
growth or expansion mainly due to the very nature of business. Other causes
include: dearth or finance, space, skilled manpower, specialized technical
education, managerial skills and, above all, absence of ambition to proper on the
part of most owners. However, due to old age or death or owner-operators, many
family businesses are often closed sown or sold to other.

Hindu Joint Family Business

This form of business is found only among the Hindu joint families in India. Under
Dayabhaga system of inheritance, which prevalent in West Bengal, Assam and
Orissa, following the death of the father, the members of his family inherit his
business along with other property. It is only after the death of the father that his
inheritors will acquire legal title to the ownership of his business. Under the
Mitakshara system, which operates in other Indian states, a Hindu family’s any of
the three successive generations in the male line can simultaneously inherit the
ancestral property and business from the day he is born. The joint family property is
known as coparcenary property and the joint owners are coparceners. This
inheritance right is enforceable by the principle of survivorship, which is as long as
one is alive. Other basic features of this system are; business is managed by
“Karta”, head of the family, rest of the family members are not entitled to take part
in the management of the business; business in not dissolve by the death of any
member; the liability of “Karta” is unlimited, but that of every other member is
limited to the extent of the value of one’s interest.

Advantages

• Male family members are assured of some income from business;

• Opportunity for all to gain business experience;
• Business not to be dissolved due to death or insolvency of any member;
• Continuity of business;
• Membership of business without any formality or payment of fees;
• Limited liability for all except “Karta”.
• Minor members cannot be adjudged as insolvents.
• Registration not compulsory.

Limitations

• Only “Karta” is privileged to head the management of business.

• Unless a member severs connection with family business, he cannot question
the authority and decision of”Karta”.
• One severing connection with business cannot ask for accounts of past profits
and losses.
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• A joint Hindu family business or a business set up by a father and his son only
cannot be treated as partnership.
• A partnership venture must be managed by all partners or by anyone among
them acting for all.

Cooperative

A cooperative society is a voluntary association of ten or more individuals, who

come together for the benefit of their common economic interests. A cooperative is
a joint enterprise where all the members contribute capital and labour and also
manage its affairs with an understanding to primarily distribute among themselves
equally the profits earned or benefits derived out of that venture.
At least ten individuals are required to form a cooperative society, there being no
restriction on the upper limit of the members. Like in West Bengal, cooperative
societies are formed, registered and governed in terms of the provisions of the
cooperative societies act and rules as enacted in other states.
Service Cooperative are in with a view to rendering varied service facilities to own
members at no-profit-no-loss basis. The facilities include, such services as may be
necessary for sustenance or support, for instance, housing accommodation, health
care, hospitalization, transportation, cold storage, repair and maintenance and so
on.

Joint Stock Company

A joint stock company, popularly called limited company, is an association of many

individuals, who contribute to a common capital to conduct a business for gain. The
common capital is divided into equal parts, each of a certain fixed uniform value,
known as shares and the individuals so contributing are members commonly known
as shareholders. The shares can be sold and transferred freely and the liability of a
shareholder is limited to the extent of total fixed face value of one’s shareholding.
Section 3, of the Indian companies’ act 1956, however, denotes a company as “a
company formed and registered under this Act, and that “an existing company
means a company formed and registered under any of the previous company laws”.
In India, all matters concerning formation, registration and operation of joint stock
companies are governed under the Indian companies’ act 1956.

Important Features

• A joint stock company has a separate and independent legal entity as if an

artificial person.
• Its existence continues indefinitely so much so that is not to be dissolved due
to the retirement, death or insolvency or any member.
• Any of its shareholders can freely sell and transfer own shares without the
consent of others.
• Its management is controlled by a board of Directors elected by and from
among shareholders.
• Its shareholders have no right to participate in the general conduct and
management of business and affairs of the company.
• It has rights to acquire and transfer property in its own name.
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• It can sue others and be sued by others in its own name.

• It can admit equity as well as preference shareholders. Preference
shareholders will have preferential rights to profits and also to refund to
capital, in the event of its dissolution, but will not have any voting right. The
right of equality shareholders to profits and refund of capital will come next
to that of preference shareholders, but they will have the voting rights.
• It can take up any risky venture, because its liability is limited to the
aggregate face value of its total number of shares.
• Its shareholders are not responsible for the acts of the company.

Nature of Limited Liability

On the basis of the nature of limited, companies are classified into two groups with
less resemblances:

a) those having liability limited by guarantee

b) the rest having liability limited by shares.

Furthermore, a company having its liability limited by shares can operate as a

private limited company of a public limited company. Brief details of these types are
being discussed hereunder.
Company limited by guarantee: The liability of a company of his type will be limited
to the aggregate amount guaranteed to be paid by its members. Its members do
not contribute any money as capital, but undertake to meet the company’s debts
and liabilities, in case it is would up, to such predetermined amounts payable,
usually equally, by each of them as declared in the company’s Memorandum of
Association. Organizations registered under this category are not required to use
the words “Private Limited” or “Limited” with their names.

As provided under section 25 of the companies Act 1956, non-commercial

organizations engaged in promoting trade, sports, scientific, artistic and cultural
activities are generally registered as companies limited by guarantee. These include
chambers of commerce, traders’ associations, manufacturers’ associations,
exporters’ associations, clubs, research centre and so on. A company limited by
guarantee, also known as a grantee company, cannot engage any itself in any
activity on a business basis for profit. However, in ese there is any excess of income
over expenditure, the same cannot be distributed among the guarantor-members
but will have to be utilized for advancement of the organization’s objectives.

Private limited company: a company having its liability limited by shares can be
formed as a private limited company and this means that:

• It cannot openly invite the general public to subscribe to its shares;

• The number of its shareholders must not be either less than two or more than fifty;
• The rights of its shareholders to transfer shares are restricted; company’s name. A unit to
operate essentially for profit cannot be registered as a guarantee company.
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Public limited company: an enterprise having its liability limited by shares can also
be set up as a public limited company and for which the essential conditions
include:

• It will have at least seven and a maximum of any number of shareholders

• Members of the general public may be invited to subscribe to its shares,
debentures and bonds;
• Shareholders will have the right to sell and transfer freely their shares to
anyone; and
• The word “Limited” must be used after the name of the company.

Various exemptions and limitations on the private limited and public limited
companies have been cited in Table.
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Exemptions and Restrictions

S.N Private limited Public limited

Regarding
o company company
Minimum 7 and
Minimum 2 and
I Number of shareholders maximum any
maximum 50
number
Invitation to general public for
2 Not permissible Permissible
subscription to shares
Financial assistance to help an
3 intending investor purchase Not permissible Permissible
company’s own shares
4 Transferability of shares Restricted Not restricted
Minimum number of directors to
5 Two Three
be appointed
Permissible
Permissible only
without prior
with prior approval
approval of
6 Increase in number of directors of department of
department of
company affairs,
company affairs,
Govt. of India.
Govt. of India.
Approval by
Director’s age, appointment, department of
Approval not
7 reappointment, remuneration and company affairs,
necessary
amenities. Govt. of India
necessary.
Particulars need
Particulars must be
Director’s eligibility and consent not be filed with
filed with registrar
8 about purchase of stipulated registrar of
of companies, Govt.
minimum number of shares. companies, Govt.
of India.
of India.
After obtaining
certificate for
commencement of
After obtaining
business, which is
certificate
9 Commencement of business granted only after
of incorporation
stipulated minimum
(registration)
number of shares
have been
subscribed.
Statutory report and statutory
10 Not legally binding Both legally binding
meeting
Must not exceed
11% of net profit; in
case of inadequate
Managerial remuneration
11 No restriction profit, to be decided
by department of
company affairs,
G.O.I.
12 Quorum Generally two Generally five
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members, unless
members, unless
otherwise
otherwise stipulated
stipulated in the
in the Articles.
articles
Filing of profit and loss account
13 Not essential Essential
with registrar of companies