case studies of ch 2 forms of business organization
Answers
Answer:
1. Single ownership: It is wholly owned by one individual.
2. Control: Sole proprietor has full power of decision making.
3. No separate legal entity: Legally there is no difference between business& businessmen.
4. Unlimited liability: The liability of owner is unlimited. In case the assets of business are not sufficient to meet its debts, the personal property of owner can be used for paying debts
5. No legal formalities: Not required to start, manage and dissolve such business organization.
6. Sole risk bearer and profit recipient: He bears the complete risk and there is no body to share profit/loss with him.
Merits
1. Easy to start and close: It can be easily started and closed without any legal formalities.
2. Quick decision making: As sole trader is not required to consult or inform anybody about his decisions.
3. Sense of accomplishment: There is a sense of personal satisfaction.
4. Unlimited liability: The liability of owner is unlimited. In case the assets of business are not sufficient to meet its debts, the personal property of owner can be used for paying debts
5. No legal formalities: are required to start, manage and dissolve such business organization.
6. Sole risk bearer and profit recipient: He bears the complete risk and there is no body to share profit/loss with him.