Briefly explain the obligation of business towards owners and investors.

Explanation

Owners:

Business is accountable towards owners as well as managing business profitably, ensuring fair and regular return on capital employed, consolidating financial position of business, guaranteeing capital appreciation so as to enable the owners to withstand any business contingencies.



Shareholders or Owners : -

Shareholders who are the owners of business should be provided with correct information about company to enable them to give them true and fair position of the company to enable them to decide about further investments.


Company should provide a fair return on the investment made by shareholders. If shareholders do not get proper dividend then they will hesitate to invest additional funds in the concern. Shareholders should be kept fully informed about the working of the company for healthy growth of the business. The Companies Act 1956 also requires company to give full disclosure in the published statements.


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