Question

Shikha is a sole proprietor. Over the past decade, her business has grown from operating a neighbourhood corner shop selling accessories such as artificial jewellery, bags, hair clips, and nail polish to a retail chain with three branches in the city. She looks after the varied functions in all the branches, but now she wants to change her form of business as she also has plans to open branches countrywide. She is also planning to collect the funds by issue of shares. On the basis of the given information about Shikha, answer the following questions (a) Which form of business is suitable for Shikha for the expansion of business? Also mention any two benefits of that form of business. (b) Explain two benefits of remaining a sole proprieto​

Answer 1

Answer:

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Answer 2

a) Ans: As a Sole Proprietor is a business suitable for Shikha for the expansion of business.

A sole proprietorship is a type of enterprise owned and run by one person and in which there is no legal distinction between the owner and the business entity. Because it is Easy to Establish,  Easier to Operate,  Sole Beneficiary of Profits,  Compliance & Taxation,  Privacy in the business  In this type of business, there is Unlimited Liability.

So this type of business is suitable for Shikha.

 

b) Ans: Following are the benefits of remaining a sole Proprieto​r:

a. Privacy.

b. Unlimited Liability.

c. Easier to Operate.

d. Sole Beneficiary of Profits.

e. Easy to Establish.