zigya tab
Profits do not have to be shared. This statement refers to
  • Partnership
  • Sole Proprietorship
  • Joint Hindu Family Business
  • Company


Sole Proprietorship

The maximum number of partners allowed in banking business are
  • Twenty
  • Ten
  • No Limit
  • Two



The Karta in Joint Hindu Family Business has
  • Limited liability
  • Unlimited liability
  • No liability for debts
  • Joint liability


Unlimited liability

The structure in which there is separation of ownership and management is called
  • Sole proprietorship
  • Partnership
  • Company
  • All business organisations



For which of the following types of business do you think a partnership form of organisation would be more suitable and why?
(a) Grocery store,
(b) Medical clinic,
(c) Legal consultancy,
(d) Craft centre,
(e) Internet cafe
(f) Chartered accountancy firm

(a) Grocery store: For grocery store, a sole proprietorship firm is the best because:
Here, the sole proprietor has complete freedom in making business decisions.
This kind of business can be started at any time and any where with minimum legal formalities.

(b) Medical clinic: For a medical clinic, a sole proprietorship firm is best because:
There is personal satisfaction involved in running medical clinic.
This involves rendering specialised service which is possible only in sole proprietorship.

(c) Legal consultancy: In order to run legal consultancy firm, a partnership firm will be useful because:
The partners share amongst themselves the responsibility of decision making. This work involves providing technical expertise which is possible in association with other persons.

(d) Craft centre: To start a craft centre, a partnership firm is the best because: It requires greater amount of money. It involves more risk as compared to sole proprietorship.

(e) Internet cafe: In order to start internet cafe, a partnership firm is the best. It requires technical expertise as well as heavy investment. Greater capital investment is possible since partnership is an association of more than one person who can pool in investments. Varied skills - Since partnership is an association of some persons, managerial expertise is available.

(f) Chartered accountancy firm:
This firm requires technical ability and easy access to clients. Hence, for this, partnership form of business ownership is the best.