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Nature And Purpose Of Business

Question

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For which of the following types of business do you think a sole proprietorship form of organisation would be more suitable, and why?

Solution

Sole proprietorship refers to a form of a business organisation in which an individual is the sole owner of the business. All operations, activities and management of the business are handled by this [business] individual. Thus, it is a favourable form of organisation for small businesses. Among the given alternatives, the sole proprietorship form of organisation is more suitable for the following businesses.

(a) Grocery store
(b) Medical store
(c) Craft centre
(d) Internet cafe

This is why these above stated businesses require a lower capital and lesser managerial skills to handle the day-to-day operations. The sole proprietor has all the rights to make decisions and carry out plans as per his or her own will. Hence, the sole proprietorship form of business is more suitable for the four business types mentioned above.

Some More Questions From Nature and Purpose of Business Chapter

Explain the concept of business.

Define the term 'industry'.

Define 'Commerce'.

Define trade.

Define internal trade.

Define External Trade.

Define risk.

Name the functions of business.

How is business an economic activity?

Explain how industry, trade and commerce are related.

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