Every business entity adopts some form of business organisation to carry out business activities as success and growth of business depends a great deal on the choice of the form of business organisation. Apart from corporates, there are other forms of business entities namely Co-operatives, Joint Venture, Small Scale Industries and Trusts. All these forms have their own specialised areas of operating and organising business activities. These are also subjected to taxation in a manner similar to corporates under the Income Tax Act,1961 or other Indian laws as prescribed to be suitable for the purpose of taxation. But there are certain variations in tax provisions relating to each of them due to differences in the form of their organisation. Besides, small scale industries are provided some deductions and exemptions in order to promote their growth and development. Also, trusts that have been set up for various charitable and religious purposes are also subjected to some exemptions under the Income Tax Act.
A 'trust' is an obligation annexed to the ownership of property and arising out of a confidence reposed in and accepted by the owner, or declare and accepted by him, for the benefit of another, or of another and the owner.
'Joint Venture'(JV) is defined as a contractual agreement formed between two or more parties, with each party contributing their equity share, in order to undertake an economic activity which is subjected to joint control.
A 'Co-operative organisation' is a society which has as its objectives the promotion of the interests of its members in accordance with the principles of cooperation. It is a voluntary association of ten or more members residing or working in the same locality, who join together on the basis of equality for the fulfillment of their economic or business interest. The basic feature which differentiates the co-operatives from other forms of business ownership is that its primary motive is service to the members rather than making profits.
'Small Scale Industries' are the units in which investment in fixed assets in plant and machinery whether held on ownership terms on lease or on hire purchase does not exceed Rs. 1crore or Rs. 10 million, subject to the condition that the unit is not owned, controlled or subsidiary of any other industrial undertaking.