Question

Q7. Ms Shivangi is running a ladies store. As she has no business partners in the shop, she appointed two more ladies to assist
her in trading activities at a salary of Rs. 8,000 per month.
(5)
(a) Which form of business organisation is reflected in the above para?
(b) Explain any two merits and two demerits of this form of business organisation.​

Answer 1

Answer:

(a) They are active partners

(b)

An active partner helps run the business to enhance his or her returns and is therefore considered a material participant. This person typically shares more risk and return versus a limited or silent partner. Many firms are built around having active partners fill key management roles.