Question

The sole proprietor concern sinks with the proprietor . Justify

Answer 1

(a) The following are two of the benefits of sole proprietorship.

i. A sole proprietor is the single recipient of all the profits of the business.

ii. A sole proprietor takes all business decisions independently and enjoys complete control over the business.

(b) The following are two benefits of converting to a joint stock company.

i. In a joint stock company capital can be easily expanded by issuing fresh, new shares.

ii. The liability of the owners is limited to the amount of capital invested by them.

(c) If she plans to go nationwide then converting to a joint stock company would be more appropriate as it will lead to large scale business operations.

(d) Some of the legal formalities to be completed for operating a joint stock company are as follows.

i. Promotion of the company

ii. Submitting documents such as Memorandum of Association, Articles of Association, statutory declaration and agreement

iii. Getting the certificate of incorporation

iv. Getting the certificate of commencement of business

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