Advantages Of Multinational Company

Main advantages of merits of multinational company can be highlighted as follows:

1. Foreign Direct Investment

Multinational companies bring foreign currency in the form of foreign direct investment to the host country. So, it helps to maintain the adequate stock of foreign currency to the developing countries.

2. Employment Opportunity

Multinational companies create large employment opportunities in the host countries. It helps to minimize the unemployment rate of the country.

3. Arrival Of New Technology

Multinational companies bring new skill, latest technology and modern machinery from the home country to the host country in order to operate the business. It helps industrial development of the country.
advantages multinational company
4. Resource Utilization

Multinational companies utilize unused local resources ( like water, land, forest, mines etc.) by using their skills and technology.


5. Increase Government Revenue

These companies pay more tax than local companies. So, multinational companies help to increase government revenue.

   
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6. Improve Balance Of Payment

Multinational companies help the host countries by promoting exports and decreasing imports. So, it helps to improve balance of payment of the country.

7. Overall Development

MNCs bring capital and technology from home countries, create employment opportunities, improve balance of payment of the host country. So, these companies are very helpful in overall development of the country.

Disadvantages Of Cooperative Organization

Some of the notable drawbacks or disadvantages of cooperative organization are highlighted below:

1. Lack Of Privacy

In cooperative organization, all business activities are performed openly. Members of the society can easily get information about the business affairs. So, it lacks secrecy and privacy.

2. Limited Resources

Generally, cooperatives are established and operated by lower and middle income group people. The cannot invest adequate capital to undertake large scale business.

3. Possibility Of Disputes And Conflict

Because of open membership, people of different background (religion and ethnic group) and status may be the member of cooperatives. So, there is a possibility of disputes and conflict among the members of cooperative organization.
disadvantages of cooperative organizations
4. Slow Decision Making Process

All the members are involved in the decision making process of cooperatives. Decisions are taken after long discussion and consultation with the members. So, decision making process takes a long time.

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5. No Prompt Action

Because of slow decision making process, prompt action is not possible in this type of business organization.

6. No Credit Facility

In cooperatives, all the transactions are performed on cash basis. So, there is no credit facility to the members.

Advantages Of Cooperative Organization

Main advantages or benefits of cooperative organization can be studied as follows:

1. Easy To Establish

Cooperatives can be easily established when compared to joint stock company. It requires ten members, simple registration process and few legal formalities to form cooperative organization.

2. Limited liability

Members are not personally liable for the debt and loss of the organization. Their liability is limited to the extent of their share contributed. So, members' personal property will not be used to pay the debt of the cooperative society.

3. Open Membership

Cooperatives are voluntary organizations where any person can become a member or leave the organization without any barrier. There is no discrimination among the members of the society.

4. Democratic

Cooperatives are operated in democratic management style. All the members have voting right and there is no restriction to express opinions and to give suggestions. 


5. Perpetual Life

Cooperative organizations are long-lasting and stable form of organization like a joint stock company. Single or few members cannot dissolve the organization as per their wish. Bankruptcy, death or insolvency of any member does not affect the continuity of the business.
advantages cooperative organization
6. Government Assistant

Cooperatives are fully supported by the government of the country. Government provides financial support and protection to this type of organization.

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7. Tax Benefit

Cooperative societies enjoy tax benefit because of tax concession and exemptions provided by the government.

8. Social Welfare

Cooperative societies are established with the aim to provide quality goods at low price to the members at low price. So, there is very low profit margin in this type of business. The profit of the society is used for social welfare.

9. Elimination Of Intermediaries 

Middlemen or business intermediaries are totally eliminated because products are supplied directly from producers to final customers.

Disadvantages Of Joint Stock Company

Main disadvantages or demerits of joint stock company can be expressed as follows:

1. Difficult To Form

It is a complicated process to form and operate joint stock company. Lots of legal formalities, high set-up costs and much time is needed to establish this type of business.

2. Lack of Quick Decision

In joint stick company salaried manager cannot make any decision. Important decisions are taken after the approval of board of directors. Therefore, decision making process is lengthy and prompt action is not possible. 

3. No Secrecy

In joint stock company, it is not possible to maintain business secrecy and privacy like sole proprietorship and partnership firms.All the financial data and information become public through financial statements and all the matters are discussed in annual general meeting with the shareholders and other parties.

Ownership and management are different in joint stock company. All the organizational activities are performed by salaried managers. A company do not provide extra incentive for their work which may lack motivation and personal interest for the growth of the business.

5. High Tax

Joint stock company suffers from higher tax rate than sole trading concern and partnership firm. It has to pay more tax than other types of business.

Advantages Of Joint Stock Company

Merits or advantages of joint stock company can be studied as follows:

1. Limited Liability

In joint stock company shareholders' liability is limited to the amount of share they invest in the business. So,  their personal property will not be used to pay the debt and other liabilities of the business in case of loss.

2. Perpetual Existence

Joint stock company is stable and long lasting form of business (as compared to sole proprietorship and partnership firm). The death, lunacy, or insolvency of the shareholder does not affect the existence of the company.

3. Easy Transfer of Share

A shareholder of joint stock company can easily sell or transfer the right of share to any one without any restriction. 
advantages joint stock company
4. Large Capital

It can raise large amount of capital by issuing equity share and by taking long-term loan from banks and other financial institutions. So, the company does not suffer from the limitations of inadequate capital.


5. Scope Of Expansion

Because of huge capital resources and better management, large scale production is possible. So there is a scope of future growth and expansion.

6. Efficient Management

Joint stock company is run by experienced, skilled and talented professionals. It helps to increase the efficiency of management.

     
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7. Economic Development

A joint stock company collects and mobilizes scattered savings, promotes industrialization, and creates employment opportunities in the society. So, it plays significant role in the economic development of the country.

8. Flexibility

A company has the ability to cope with both internal and external business environment. Changes or modification in working pattern can be made as per the situation. So, joint stock company is a flexible type of business organization. 

Disadvantages Of Partnership Firm

Main drawbacks or disadvantages of partnership firm can be highlighted as follows:

1. Uncertain Future

The future of partnership firm is always uncertain. It may be shut down in case of lunacy or death of a partner.So, there is instability in this form of business.

2. Unlimited Liability

All the partners are liable for the losses of business. They have to sell their personal property in order to pay debts and other liabilities of the business.
disadvantages partnership firm
3. Disagreement

There is a chance of disagreement between partners in partnership business. Misunderstanding and mistrust may create dispute among the partners.

4. No Prompt Decision And Action

In partnership firm, there should be interaction, consultation and approval of all partners to make a decision. It delays decision making process. Prompt action is not possible because of delayed decision.

     
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5. Limited Capital

Partnership firms have more capital than sole proprietorship business but they have very limited amount of capital while comparing to joint stock companies and multinational companies.

6. No Public Faith

Partnership firm lacks legal status because no legal procedures are followed to start the business. It will be hard for the public to believe such business. So, it lacks public faith.