(a) Explain any three merits of Joint Stock Company.
(b) Describe any four features of Sole Proprietorship Business.
(c) Explain the procedure of Registration of Partnership Business.
Answers
Answer:
(a)(1) Huge Financial Resources
(2) Limited Liability
(3) Perpetual Existence
(b)In the sole proprietorship business, the sole owner has unlimited liability. In this case, the owner is himself liable to pay all the liabilities. ... Hence, he is personally liable for all the debt which can be recovered by his personal estate when funds are insufficient.
(c)*Application to the Registrar of Firms in the prescribed form (Form A). ...
*The duly signed copy of the Partnership Deed (which contains all the terms and conditions) must be filled with the registrar.
*Deposit/pay the necessary fees and stamp duties.
Explanation:
(a)(1) Huge Financial Resources : A company can collect large sum of money from large number of shareholders. There is no limit on the number of shareholders in a public company. Since its capital is divided into shares of small value even a person of small means can contribute to its capital by simply purchasing its shares. It facilities the mobilization of savings of millions for the productive purposes. In addition, a company can borrow from banks to a large extent and also issue debentures to public.
(2) Limited Liability : The liability of shareholders in a company is limited to the face value of the shares they have purchased. The limited liability encourages many people to invest in shares of joint stock companies. If the funds of a company are insufficient to satisfy the claims of the creditors, no members can be called to pay anything more than the value of shares held by them.
(3) Perpetual Existence : Due to its separate legal existence, it has perpetual existence. The life of company is not dependent die or become insolvent. The members of a company may go on a company. The stability of business is of great importance to the society as well as to the nation.
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