Understanding Sole Proprietorships

The video tutorial covers the forms of business organization, focusing on sole proprietorship. It explains the features, merits, and demerits of sole proprietorship using examples like Rama's kitchen and eBay. The tutorial highlights the ease of formation, unlimited liability, and the sole risk bearer nature of sole proprietorship. It also discusses the limited resources and managerial ability associated with this form of business.

Which of the following is NOT a form of business organization mentioned in the video?

• Joint stock company

• Cooperative society

• Limited liability partnership

• Sole proprietorship

What is the primary characteristic of a sole proprietorship?

• Owned and managed by a single individual

• Operates as a non-profit organization

• Managed by a board of directors

• Requires extensive legal formalities

According to J.L. Hansen, what is a sole trader responsible for?

• Setting up a board of directors

• Providing capital and bearing risk

• Hiring employees

• Expanding internationally

What is a key feature of sole proprietorship regarding liability?

• Shared liability

• Unlimited liability

• No liability

• Limited liability

Which feature of sole proprietorship allows for quick decision making?

• Sole control

• Complex hierarchy

• Shared control

• External management

What is a major demerit of sole proprietorship in terms of resources?

• Abundant resources

• Limited resources

• Government funding

• Unlimited resources

How does a sole proprietorship maintain confidentiality of information?

• By publishing annual reports

• By not requiring public disclosure of accounts

• By sharing information with competitors

• By hiring a public relations firm

What happens to a sole proprietorship if the owner becomes incapacitated?

• The business is taken over by the government

• The business continues under new management

• The business is sold to the highest bidder

• The business is closed

Which of the following is a merit of sole proprietorship?

• Limited control

• Shared profits

• High level of confidentiality

• Complex decision-making process

What is an example of a business that started as a sole proprietorship?

• Amazon

• eBay

• Google

• Microsoft