Question

Explain the causes of survival of sole prprietorship business side by side with large scale business

Answer 1

A sole proprietorship is a sole trader, owned by an individual and the business is being run by one man, in this case, there is no legal difference between the business and the owner.

This type of business can survive because it requires small capital to establish,

The sole proprietorship can also leverage on the activities of the large scale business.

It is one man that makes the decision for the business

While large scale business is a business jointly established by a minimum of two or more individuals with the sole aim of making a profit.

It requires a huge or large amount of capital to establish.

It is the board of directors that takes decisions for the company.

Answer 2

Sole Proprietorship is a form of business organisation in which there is only one head that makes all the decisions in the business. In a large scale business, there are multiple heads that conclude in decision making and help in decision making.

Explanation:

The survival of a business completely depends on what type of a business it is. Sole proprietorship is compatible with small scale businesses.

• In a sole proprietorship the owner is the only risk bearer as he is the only person who financially invested into the business. Which will help him in sustaining the business as he/she will know the risks to be faced.
• Survival of a business is depended on many factors, one of the being cost cutting. In a small scale sole proprietorship business, the cost cutting will be efficient as the owner is responsible for all the activities that take place in the business.

A large scale business requires many things to survive in any economical situations.

• Large scale businesses requires a lot of man power which can be daunting and can also lead to inefficiency if the worker's environment is not satisfactory.
• These types of firms survive quite easily as they have large funds and many ways of bringing in capitals. Basically they need a lot of capital. But sometimes, large scale companies sink into debt which leads to closing of the business.

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