Question

A company form of organisation is popular because its members have limited liability.Explain why the company form of organisation is in a position to undertake huge and risked projects?

Answer 1

Answer:

There and many factors responsible for why the company form of organisation is in a position to undertake huge and rescued projects. Like:

1. The biggest advantage of a company form of business is that it can collect large amount of capital by generating shares in public. Because the value of some shares is very small so people with small savings can also buy these shares. Apart, company also issues debentures and other securities.
2. The shares of a company can be easily purchased and then sold in the market. If owner of shares requires cash then he can easily sell the shares and can get cash.
3. The company form of business enjoy stability. As we know that business is to be treated as separate body, in case of of company form of organisation love can only and the company by legal procedure of winding up.
4. The owner of company can easily hire professionals to perform managerial activities for the organisation. This helps in improving the efficiency and working of the company.
5. There is limited liability for the people working in in joint stock company due to the extent of their share capital contribution. Because of limited liability reason people are attracted towards the company to invest their money in it.

$\bold \red{Celestial} \bold{Centrix}$

Answer 2

Answer:

A company form of organisation is popular because its members have limited liability.Explain why the company form of organisation is in a position to undertake huge and risked projects?