Explain the causes for the popularity of company form of business organisation.

The company form of business organisation has become very popular all over the world for several reasons. The main causes for the popularity of this form are:

1. Industrial Revolution and Factory System — The Industrial Revolution created the modern factory system involving production on a very large scale. Mass production required huge capital investment and expert professional management; it also involved heavy risks.

2. Huge Capital Requirements — Modern business requires massive amounts of capital. A joint stock company can raise huge capital by issuing shares and debentures to the public. This capital-raising ability is unmatched by any other form of business.

3. Limited Liability — The principle of limited liability is a major attraction for investors. The financial risk is restricted to the value of shares held, and personal property is protected.

4. Perpetual Existence — The continuity of existence is essential for long-term business planning and execution. A company is not affected by the death or insolvency of its members.

5. Transferability of Shares — Free transferability of shares makes investment in a company highly liquid. Investors can easily convert their shares into cash through the stock exchange.

6. Economies of Scale — Large capital and professional management enable companies to undertake large-scale operations and achieve economies in production, marketing, purchasing, and finance. These economies reduce costs and increase competitiveness.

7. Democratic Management — A company is managed by directors elected by shareholders. The Companies Act provides several safeguards against mismanagement and oppression.

8. Encouragement to Savings and Investment — The company form mobilises small savings of millions of people into productive investment. It thus promotes capital formation in the economy.

9. Efficient Management — A company can employ highly qualified experts in different areas of business management.

10. Globalisation and Multinational Operations — The company form allows businesses to expand globally.

Due to all these reasons, the company form of organisation has become the most popular form for large-scale business enterprises across the world.