1)Discuss whether the sole proprietorship involves a lengthy and expensive procedure for its formation?
2)Explain whether the liability of a sole proprietor is limited to the extent of of his shares?
3)In which form of organisation is a trade agreement made by one owner binding on the others?Give reasons to support your answers
4)Outline the procedure for registration of partnership
5)Explain the principle of 'one man one vote' with reference to cooperative societies?
Eishan,
Good attempt by Chhavi!!
1. Sole Proprietorship does not involve a lengthy and expensive procedure for its formation. Infact, the formation of sole proprietorship is very easy as no legal formalities are required for setting up the business.
2. No, the liability of the sole proprietor is not limited to the extent of his shares. The sole proprietor has unlimited liability and the personal assets of the proprietor can be used for debt repayments if there is any shortage of funds.
3. In partnership there exists a feature of mutual agency, which states that the partnership may be carried on by all the partners or by any one of them on behalf of all. All the partners have equal right to participate in the activities of the business. There exists a principal and agent relationship among the partners of a firm. As an agent, a partner may bind the other partners by his/her acts and as a principal, a partner is himself/herself bound by the acts done by the other partners. This is known as mutual agency and is a very important feature of partnership firm without which it cannot be considered as partnership. Therefore, in partnership there is a trade agreement made by one owner binding on others.
4. The following are the steps that a partnership firm (for example, ‘Nag Ltd.’) must follow in order to get itself
registered with the Registrar of Firms.
Step 1: Submitting an application containing all the important details, and duly signed by the partners of Nag
Ltd., to the Registrar of Firms. The application should contain the following information.
i. Name of the firm
ii. Location of the firm
iii. Names of places where the firm carries out its business
iv. Dates of joining of all the partners
v. Name and address of each partner
vi. Duration of partnership
Step 2: Depositing the application and the fees prescribed with the Registrar of Firms.
After Nag Ltd. completes the two steps mentioned above, the Registrar of Firms examines the documents, enters
the name of the firm in the Register of Firms and issues a certificate of registration to Nag Ltd.
5. When individuals voluntarily join together to protect and promote their common interests, they form a cooperative society. A cooperative society is managed by an elected body known as the managing committee. The elections in cooperative societies are based on the principle of ‘one man, one vote’. This principle guarantees equal voting rights to the members of a society, thereby preventing any discrimination in the body.
Good attempt by Chhavi!!
1. Sole Proprietorship does not involve a lengthy and expensive procedure for its formation. Infact, the formation of sole proprietorship is very easy as no legal formalities are required for setting up the business.
2. No, the liability of the sole proprietor is not limited to the extent of his shares. The sole proprietor has unlimited liability and the personal assets of the proprietor can be used for debt repayments if there is any shortage of funds.
3. In partnership there exists a feature of mutual agency, which states that the partnership may be carried on by all the partners or by any one of them on behalf of all. All the partners have equal right to participate in the activities of the business. There exists a principal and agent relationship among the partners of a firm. As an agent, a partner may bind the other partners by his/her acts and as a principal, a partner is himself/herself bound by the acts done by the other partners. This is known as mutual agency and is a very important feature of partnership firm without which it cannot be considered as partnership. Therefore, in partnership there is a trade agreement made by one owner binding on others.
4. The following are the steps that a partnership firm (for example, ‘Nag Ltd.’) must follow in order to get itself
registered with the Registrar of Firms.
Step 1: Submitting an application containing all the important details, and duly signed by the partners of Nag
Ltd., to the Registrar of Firms. The application should contain the following information.
i. Name of the firm
ii. Location of the firm
iii. Names of places where the firm carries out its business
iv. Dates of joining of all the partners
v. Name and address of each partner
vi. Duration of partnership
Step 2: Depositing the application and the fees prescribed with the Registrar of Firms.
After Nag Ltd. completes the two steps mentioned above, the Registrar of Firms examines the documents, enters
the name of the firm in the Register of Firms and issues a certificate of registration to Nag Ltd.
5. When individuals voluntarily join together to protect and promote their common interests, they form a cooperative society. A cooperative society is managed by an elected body known as the managing committee. The elections in cooperative societies are based on the principle of ‘one man, one vote’. This principle guarantees equal voting rights to the members of a society, thereby preventing any discrimination in the body.