Which form of business is suitable for following types of business and

1.	Which form of business is suitable for following types of business and why? (a) Beauty Saloon; (b) Garments shop; (c) Garment Factory.
Answer» (a) Beauty Saloon: Sole Proprietor is the right form of business because: It needs limited capital. It is easy to form. Entire profits will belong to the owner. It requires personal attention. (b) Garments Shop: Sole Proprietor is the right form of business because: It needs limited capital. It is easy to form. Entire profits will belong to the owner. (c) Garment Factory: Partnership is more suitable because: It can be easily started and closed without any legal formalities. He is not expected to share his business decisions and secrets with anybody. Direct relationship between efforts and reward provide incentive to the sole trader to work hard. The sole trader can maintain personal contacts with his customers and employees. It provides employment to persons with limited money who are not interested to work under others. It prevents concentration of wealth in a few hands.

Which form of business is suitable for following types of business and why? (a) Beauty Saloon; (b) Garments shop; (c) Garment Factory.

Answer»

(a) Beauty Saloon: Sole Proprietor is the right form of business because:

(b) Garments Shop: Sole Proprietor is the right form of business because:

(c) Garment Factory: Partnership is more suitable because:

It can be easily started and closed without any legal formalities.
He is not expected to share his business decisions and secrets with anybody.
Direct relationship between efforts and reward provide incentive to the sole trader to work hard.
The sole trader can maintain personal contacts with his customers and employees.
It provides employment to persons with limited money who are not interested to work under others. It prevents concentration of wealth in a few hands.