Exploring Business Organization Options: Partnership and Joint Stock Companies

The video discusses Mr. Daniel's challenges as a sole proprietor, including limited capital and risk aversion. It explores two business structures: partnership firms, which offer shared capital and decision-making but involve joint liability, and joint stock companies, which provide limited liability and greater capital access through shares. The video concludes with a summary and an invitation to future sessions.

What is one of the main challenges Mr. Daniel faces as a sole proprietor?

• Difficulty in hiring employees

• Need for second opinions on decisions

• Limited access to technology

• Lack of business knowledge

What is a key benefit of forming a partnership firm?

• Shared decision-making and capital

• Unlimited liability for all partners

• Complete control over decisions

• No need for a partnership deed

In a partnership firm, what is a potential risk for partners?

• Limited liability for debts

• Being sued individually for firm liabilities

• No need to share profits

• Lack of specialization among partners

How can joint stock companies raise more capital?

• By reducing operational costs

• By increasing product prices

• By borrowing from a single lender

• By issuing shares on a stock exchange

What is a major advantage of joint stock companies over other business forms?

• No need for legal formalities

• Complete secrecy of business operations

• Perpetual succession and legal identity

• Unlimited liability for shareholders

Why might lenders prefer to give loans to joint stock companies?

• They are considered more secure and stable

• They do not disclose financial details

• They have a single owner

• They have fewer legal requirements

What is a trade-off for Mr. Daniel if he chooses a joint stock company?

• Increased personal liability

• Limited decision-making power

• Loss of business secrecy

• Reduced access to capital