Tag: formation, characteristics, merits & demerits and objectives of sole proprietorship

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Multiple choice elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

Which of following is advantages (A) and which is disadvantage (D) of sole proprietorship form of business?
(i) Maintenance of business secrets
(ii) Limited capital
(iii) Quick decision and prompt action
(iv) Lack of continuity
Select the correct answer from the options given below.

  1. i - A

    ii - A

    iii - A

    iv - A

  2. i - D

    ii - D

    iii - D

    iv - D

  3. i - A

    ii - D

    iii - A

    iv - D

  4. i - D

    ii - A

    iii - D

    iv - A
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Sole proprietorship, also known as the sole trader, individual entrepreneurship or proprietorship, is a type of enterprise that is owned and run by one person.'

Advantages: ease of start-up and closure, pride of ownership, retention of all profits, Secrecy, Quick decision making.
Disadvantages: unlimited liability, lack of continuity, Limited capital, limited management skills, and difficulty in hiring employees.

Multiple choice elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

Which of the following statement is/are TRUE and which is/are FALSE?
I. Sole proprietorship business includes only shopkeepers.
II. In sole proprietorship business the proprietor has full control over each and every activity of the business. 
III. The sole proprietor is always in a position to maintain good personal contact with the customers and employees.
IV. In a HUF business all co-parceners have equal share in the profits of the business. 
Select the correct answer from the options given below:

  1. I - False

    II - False

    III - True

    IV - True

  2. I - False

    II - True

    III - True

    IV - False

  3. I - True

    II - False

    III - True

    IV - True

  4. I - False

    II - True

    III - False

    IV - True
Reveal answer Fill a bubble to check yourself
C Correct answer
Multiple choice elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

The sole proprietorship form of business discourages self employment.

  1. True

  2. False

  3. Partly true

  4. Partly false
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Sole proprietorship actually encourages self-employment by providing an accessible and simple way for individuals to start their own business.

Multiple choice elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

Thus the partners of __________ firm get the benefit of lower assessment.

  1. registered partnership

  2. unregistered partnership

  3. HUF

  4. sole proprietorship
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Registered partnerships provide legal recognition and specific tax benefits under various jurisdictions, whereas unregistered firms lack these formal advantages. This is a standard concept in business law and taxation.

Multiple choice elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

Sole proprietorship form of business organisation is suitable ________.

  1. where the market for the product is small

  2. where customers are given personal attentions

  3. where the nature of business is simple

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Sole proprietorships are ideal for small-scale operations where the owner can maintain direct control, provide personalized service, and manage simple business processes. Since all these conditions are typical for this business form, all options are correct.

Multiple choice elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

Statutory body is a body that is created under an Act, enacted by ________.

  1. association of people

  2. association of ministers

  3. both (a) and (b)

  4. judiciary
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A statutory body is established by an Act of Parliament or a state legislature. Since these bodies are created through legislative action, the term 'association of ministers' refers to the government cabinet that introduces such legislation.

Multiple choice elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

Which property will be the property of a Firm?

  1. The movable and immovable property of the firm

  2. Property brought in by a partner and is vested in the firm.

  3. Property brought in by a partner and is being used in partnership firm.

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

According to the Indian Partnership Act, property belonging to the firm includes all property and rights or interests in property originally brought into the stock of the firm, or acquired, by purchase or otherwise, for the firm.

Multiple choice elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

Mr. Varun wanted to start a bakery shop with limited money. What kind of business organization you would suggest him_______________.

  1. sole proprietoryship

  2. HUF

  3. Partnerhship

  4. corporation
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A sole proprietorship is the most suitable form for an individual starting a small business with limited capital, as it is easy to form, requires minimal legal formalities, and allows the owner to retain all profits.

Multiple choice elements of business sole trade meaning, features and merits of sole proprietorship sole proprietorship - meaning & features formation, characteristics, merits & demerits and objectives of sole proprietorship

A florist opened a shop in the year $2000$ but due to certain looses he did wind it up in a single day after $9$ years of operations i.e. in $2009$. What kind of organization it is________________.

  1. sole proprietorship

  2. company

  3. limited liability partnership

  4. none of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A sole proprietorship is owned and managed by one individual. It is characterized by ease of formation and dissolution, making it the most likely structure for a small shop that can be closed down by the owner at will.