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Commercial Applications

Distinguish between an organisation, a firm and a company.

Commercial Orgs Intro

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Answer

S.No.Basis of DistinctionOrganisationFirmCompany
1.MeaningA group of persons jointly undertaking some activity.An individual or group undertaking some business.A group of persons registered as a legal entity.
2.RegistrationMay or may not be registered.May or may not be registered.Always registered (under the Companies Act).
3.Nature of workCan be commercial or non-commercial.Always commercial.Can be commercial or non-commercial.
4.Legal entityMay or may not be a separate legal entity.Generally not a separate legal entity from owners.Has a separate legal entity distinct from its members.
5.ScopeWidest term — covers all institutional arrangements.Narrower than organisation — refers to business units.A specific type of organisation, incorporated by law.
6.Examples(a) Government of India (b) University of Delhi (c) Big Bazaar (d) Board of Cricket Control of India(a) Birla Bros. (b) Aggarwal & Sons (c) Goyal Brothers Prakashan(a) Coca Cola Corporation (b) ICICI Bank (c) LIC of India Ltd. (d) Air India Ltd. (e) Colgate India Ltd.

In summary:

  • Organisation is the widest term — includes business and non-business entities.
  • Firm is narrower — refers to business units owned by one or more persons, may not be a separate legal entity.
  • Company is the most specific — an incorporated body with perpetual existence and a separate legal identity.

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