We are here with you hands in hands to facilitate your learning & don't appreciate the idea of copying or replicating solutions. Read More>>


Looking For Something at vustudents.ning.com? Click Here to Search

Objective:

  • To familiar the students with different types of businesses.

Learning Outcome:

 ·         After attempting this GDB, students can analyze the different types of business and their attractiveness.

Scenario:

Literally, the word “business” means the state of being busy. Generally, the term business includes all human activities concerned with earning money. There are many types of businesses like sole proprietorship, partnership, Joint Stock Companies, cooperative societies and combination. Sole proprietorship is the simplest form of business under which there is no legal entity to run it but on the other hand owner has to face lack of capital and his liability is also unlimited. It simply refers to a person who owns the business and is personally responsible for its debts. Partnership is another form of business, backed up by legal formalities. In partnership, partners share their resources and experiences. In this type of business all the partners manage the business equally and profits are shared according to their investments.

Point of Discussion:

People from all over the world moving from sole proprietorship to partnerships due to the numerous benefits they get. You are required to tell why the focus is shifting from sole proprietorship to partnership?  Explain your answer with the help of at least five solid reasons.

Marking scheme: (each point carries 1 marks). You may add examples to enrich your discussion.

BEST OF LUCK

+ Click Here To Join also Our facebook study Group.

..How to Join Subject Study Groups & Get Helping Material?..


See Your Saved Posts Timeline

Views: 1989

.

+ http://bit.ly/vucodes (Link for Assignments, GDBs & Online Quizzes Solution)

+ http://bit.ly/papersvu (Link for Past Papers, Solved MCQs, Short Notes & More)

Replies to This Discussion

From the above‐mentioned advantages and disadvantages of both sole proprietorship and partnership, we can deduce that despite the above disadvantages, partnership is an important form of business organization. This is because its formation is very easy and due to unlimited liabilities, partners take great interest in business, because in case of loss they are personally responsible.

I think a partnership is more a frame of mind than anything else. Certainly there are specific attributes to a legal partnership but two or more people can be partners in a joint stock company. The arrangements of LLCs, S-corps, C-corps etc are largely for tax purposes rather than how a business is run. But I'll leave the attributes of various legal formations for the legal and tax experts to comment upon.

However, don't let the inexperienced turn you off a partnership. Partnerships are a highly successful means of doing business. Indeed, most successful businesses today began as partnerships - Microsoft, HP, Apple, Google, Facebook, Cisco and so on, plus many companies from the past, as you can tell from their names - Sears (& Roebuck), Proctor and Gamble, Johnson and Johnson, Abercrombie & Fitch, etc.

  1. More Capital.            Capital could be the biggest reason that two or more people joining hands to start a bigger business which require huge capital which is not possible for a single owner to manage the finance. 
  2. Skilled Workers.        As there is sufficient capital so a firm is in a better position to hire the services of qualified and skilled workers.
  3. Sense of Responsibility.        As there is unlimited liability in case of partnership, so every partner performs his duty honestly.
  4. Satisfaction of Partners.       In this type of business organization each partner is satisfied with the business because he can take part in the management of the business.
  5. Social Benefit.            Two or more partners with their resources can build a strong business. This factor is very helpful in solving social problems like unemployment.
  1. Expansion of Business.         In this type of business organization, it is very easy to expand business volume by admitting new partners and can borrow money easily.
  2. Flexibility.      It is flexible business and partners can change their business policies with the mutual consultation at any time.
  3. Public Factor.            Public shows more confidence in partnership as compared to sole proprietorship. If a firm is registered, people feel no risk in creating relations with such business.
  4. Prime Credit Standing.         The liabilities of partners are unlimited, so the banks and other financial institutions provide them credit easily.
  5. Distribution of Work.           There is distribution of work among the partners according to their ability and experience. This increases the efficiency of a firm.
  1. Combined Abilities.   Every partner possesses different ability, which helps in running the business effectively, when combined together.
  2. Absence of Fraud.     In partnership each partner can look after the business activities. He can check the accounts. So, there is no risk of fraud.
  3. Expansion Problem.  Partnership business may not be expanded due to limited number of partners, limited capital and unlimited liability.
  4. Frozen Investment.   It is easy to invest money in partnership but very difficult to withdraw it. 

RSS

© 2019   Created by + M.Tariq Malik.   Powered by

Promote Us  |  Report an Issue  |  Privacy Policy  |  Terms of Service