Aman started a business on his own. he has his fatger helping him with the accounts and his brother help him with looking after customers in the evening. aman paya them monthly salary . identify the form of business entrprise. and explain amy 4 features of it .
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Answers
This form of Enterprise is called as ' Sole Propreitorship'. If it was partnership, his father and brother would have been paid with share of profits from the business. 4 features of sole proprietorship: 1) Limited Capital 2) Unlimited Liability 3) Business liquidates on the death,insolvency or insanity of the sole proprietor 4) Registration of the business is not compulsory.
The form of business enterprise that Aman is doing is known as "Sole Proprietorship". Its 4 features are as follows-
Individual ownership: This business is owned by Aman alone. Neither his brother nor his father is partnered with him. If they have a partnership with Aman, they would have been given a share of the profits.
Required less capital: If a business is a sole proprietorship, then the capital invested for this business enterprise is less compared to other businesses.
No compulsory registration: Since Aman is doing a sole proprietorship business, it is not mandatory to register his business.
Sole responsibility: In this form of business enterprise, the sole proprietor is responsible to handle the liability. Whether profit or loss happened, that will affect him as well as his personal assets.