06. Mr. Prince Gupta along with his friend Ashish have been
running a grocery store for over 10 years. They had con
tibuld capital in equal amount and so their profit loss
sharing ratio was also the same . They had a good reputation
in the locality. They want to expand his store. That's why
they applied for a loan of so lakh from SBI . But it was a
disappointing experience because their ban application was
on the grounds that they were hat able to produce adequate
collateral. You have to answer the fallowing: -
(1) What form of business is highlighted in the about paragraph?
ii) what limitation is highligted in such a form of business due to
which the loan application was
was rejected?
Answers
Well, it is a sole proprietorship. Also, it is the most common type of business structure found in India. In fact, all the businesses that you see around you, your local grocer, the chemist, the doctor are all probably sole proprietors. So, let us look at some features of a sole proprietorship.
Sole Proprietorship in simple words is a one-man business organisation. Furthermore, a sole proprietor is a natural person(not a legal person/entity) who fully owns and manages this type of entity. In fact, the business and the man are the same, it does not have a separate legal entity.
In addition, a sole proprietorship usually does not have to be incorporated or registered. Thus, it is the simplest form of business structure and the ideal choice to run a small business or medium scale business. Let us look at some important features of a proprietorship.
Answer:
1) partnership
ii) There was a disappointing experience. limitation is limited resources is highlighted in form of business.