Lesson 5 Flashcards
1
Q
Characteristics of Sole trader
A
Single ownership One man control No legal entity No legal formalities No profit sharing Unlimited liability Small size
2
Q
Objectives of sole tarder business
A
To create self employment Independent living Utilize funds Feeder to large industries Equal distribution of wealth and income To serve customer
3
Q
Merits of sole trader business
A
Easy formation Quick decisions Independent control Motivation to work Easy dissolution No legal formalities Government regulations Social utility Economy Flexibility of operations Personal touch Secrecy of affairs
4
Q
Demerits of sole tarder business
A
Limited scope for expansion
Uncertain of life
Limited managerial skills
Limited capital resources
5
Q
Suitability of sole tarder business
A
When the market is small Fashions changes frequently Personal attention is needed Small amount of capital is enough but personal skills are important Risk Involved is negligible
6
Q
Paid assistant advantages
A
Division of work No share in profit Complete control Easy to dismiss Secrecy
7
Q
Paid assistant disadvantage
A
Lack of motivation
Competition
Problem of capital
Lack of responsibility
8
Q
Advantage of partner
A
Availability of capital Division of work Motivation Reduced risk Economy of costs
9
Q
Disadvantages of partner
A
Division of profit Loss of freedom Lack of Secrecy Difficulty in removing a partner Source of disputes
10
Q
Causes for survival of sole trader
A
Human inertia Personal motivation Nature of market Desire for independence Need for personal attention Nature of manufacturing process Ancillary system Retainer system State assistantance and patronage Cover for monopoly
