Define Firm And Various Kinds Of Firms

MEANING OF THE FIRM

A firm refers to the business or production unit which is form to carry on economic activity. Another definition “Economic institution that transforms factor of production into consumer goods”

There are various kinds of firms:

1. Individual Entrepreneur firm 
2. Partnership firm 
3. Joint Stock Company
  Define Firm And Various Kinds Of Firms
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MEASURES TO CORRECT DISEQUILIBRIUM IN THE BALANCE OF PAYMENTS

Individual Entrepreneur Firm

In such type of firm an individual or the owner imitates the business with the help of his personal or borrowed capital. He is the organizer of his business as well as the owner. He bears the entire risk of the business and is free to take all the business decision. 

Partnership Firm

Another business organization came into being called “Partnership Firm”. Two or three or more people in this business and share the profits and losses ratios of the firm according to the agreement.


Joint Stock Company
Joint Stock Company is the most modern and most important form of business organization. Whenever a huge amount of capital is required to invest this can be contributed by a group of people, Joint Stock Company is the most suitable form of business. In such type of business, the people purchase the share of the company and acquire the rights of ownership in the firm to the extent of the share which they posses.

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