Nupur, after completing her MBA, began to help her father Mr. Bhusan in
his business. The business with a limited capital investment, was running
successfully. All the workers were happy. Nupur wanted to use the modern
business techniques in every area of business, namely purchase, sale etc.
in fact, she wanted to implement the methods, which she had studied in her
MBA, in her business. As soon as she started interfering in the business
with her latest techniques, the workers began to protest against her.
Looking at the increasing protest against herself, she became disappointed.
Ultimately, she gave up her business and started working in another
company. In the business such circumstances were created that even her
father could not take any balanced decision. Good workers began to leave
the business. The goodwill of the business in the market went declining. In
no tine, the liabilities of business became many times more than his
assets. On account of the pressure exerted on him by the creditors, Mr.Bhusan cleared the debts of business by disposing his domestic properties
But the situation got worse day by day, Ultimately, the business got closed
i)To which form of business, the above paragraph is concemed?
Explain it
ii)Quoting the relevant lines write about two features of the term
identified in
Answers
Answer:
1) The above business is informal form of business
2)"workers sarted to protest"
and "Goodwill of the business fallen down".
(a) Sole proprietorship
(b) (i) Limited resources
The business had a limited capital investment .
Resources of a sole proprietor limited to his/her personal savings and borrowings from others .
Banks and other lending institutions may hesitate to extend a long-term loan to a sole proprietor .
(ii) Limited managerial ability
Mr. Shiv Sharma was unable to assume the responsibility of all managerial tasks such as purchasing , selling , financing, etc . Good workers started leaving the organisation .
The owner has to assume the responsibility of all managerial tasks such as purchasing , selling , financing etc . Due to limited resources , he may not be able to employ talented employees .
(iii) Unlimited liability .
Sole proprietors have unlimited liability . In the case of business losses , if the business assets are not sufficient to meet all business liabilities , the proprietor may have to sell his personal property to pay off the liabilities .