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Manish is a student pursuing final year B.Tech. from IIT Kharagpur. His father Mr. Sambal Singh who owned a small general store in Jaipur had a heart attack and became completely paralysed. There was no other source of income for the family, so, Manish left his studies and decided to take charge of his father’s general store. While checking the books of accounts, he found that his father had taken a loan of ₹ 2 lakhs from Bank of Baroda to be repaid this year only, but the business is running into losses due to his father’s illness. Hence, his mother advised him to close the business and to look for a job outside. On the basis of the given case, answer the following questions:
Q. Which of the following shows a merit and a demerit of the type of business organisation mentioned in the above case?
Most Upvoted Answer
Manish is a student pursuing final year B.Tech. from IIT Kharagpur. Hi...
Merit of Sole Proprietorship
- Complete Control: As the sole proprietor of the general store, Manish has full authority to make decisions regarding the business. This enables him to implement changes quickly without the need for consensus from partners or shareholders.
- Simplicity in Establishment: Setting up a sole proprietorship is relatively easy and involves less bureaucratic red tape than other business forms, allowing for immediate operation.
Demerit of Sole Proprietorship
- Unlimited Liability: A significant downside is that Manish is personally liable for all debts incurred by the business. This means that if the business cannot repay the ₹ 2 lakh loan, creditors can pursue Manish's personal assets, exacerbating the family's financial difficulties.
- Limited Resources: The business may face challenges in raising capital, especially during tough times. With his father’s illness leading to losses, Manish may struggle to find additional funds to keep the business afloat or repay debts.
Conclusion
In conclusion, while the sole proprietorship model offers Manish autonomy and ease of management, it also places him at financial risk due to unlimited liability and limited access to resources. Given the current scenario, Manish must weigh these pros and cons carefully as he decides whether to continue the business or pursue alternative employment opportunities.
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Manish is a student pursuing final year B.Tech. from IIT Kharagpur. His father Mr. Sambal Singh who owned a small general store in Jaipur had a heart attack and became completely paralysed. There was no other source of income for the family, so, Manish left his studies and decided to take charge of his father’s general store. While checking the books of accounts, he found that his father had taken a loan of ₹ 2 lakhs from Bank of Baroda to be repaid this year only, but the business is running into losses due to his father’s illness. Hence, his mother advised him to close the business and to look for a job outside. On the basis of the given case, answer the following questions:Q. Which of the following shows a merit and a demerit of the type of business organisation mentioned in the above case?
Question Description
Manish is a student pursuing final year B.Tech. from IIT Kharagpur. His father Mr. Sambal Singh who owned a small general store in Jaipur had a heart attack and became completely paralysed. There was no other source of income for the family, so, Manish left his studies and decided to take charge of his father’s general store. While checking the books of accounts, he found that his father had taken a loan of ₹ 2 lakhs from Bank of Baroda to be repaid this year only, but the business is running into losses due to his father’s illness. Hence, his mother advised him to close the business and to look for a job outside. On the basis of the given case, answer the following questions:Q. Which of the following shows a merit and a demerit of the type of business organisation mentioned in the above case? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Manish is a student pursuing final year B.Tech. from IIT Kharagpur. His father Mr. Sambal Singh who owned a small general store in Jaipur had a heart attack and became completely paralysed. There was no other source of income for the family, so, Manish left his studies and decided to take charge of his father’s general store. While checking the books of accounts, he found that his father had taken a loan of ₹ 2 lakhs from Bank of Baroda to be repaid this year only, but the business is running into losses due to his father’s illness. Hence, his mother advised him to close the business and to look for a job outside. On the basis of the given case, answer the following questions:Q. Which of the following shows a merit and a demerit of the type of business organisation mentioned in the above case? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Manish is a student pursuing final year B.Tech. from IIT Kharagpur. His father Mr. Sambal Singh who owned a small general store in Jaipur had a heart attack and became completely paralysed. There was no other source of income for the family, so, Manish left his studies and decided to take charge of his father’s general store. While checking the books of accounts, he found that his father had taken a loan of ₹ 2 lakhs from Bank of Baroda to be repaid this year only, but the business is running into losses due to his father’s illness. Hence, his mother advised him to close the business and to look for a job outside. On the basis of the given case, answer the following questions:Q. Which of the following shows a merit and a demerit of the type of business organisation mentioned in the above case?.
Solutions for Manish is a student pursuing final year B.Tech. from IIT Kharagpur. His father Mr. Sambal Singh who owned a small general store in Jaipur had a heart attack and became completely paralysed. There was no other source of income for the family, so, Manish left his studies and decided to take charge of his father’s general store. While checking the books of accounts, he found that his father had taken a loan of ₹ 2 lakhs from Bank of Baroda to be repaid this year only, but the business is running into losses due to his father’s illness. Hence, his mother advised him to close the business and to look for a job outside. On the basis of the given case, answer the following questions:Q. Which of the following shows a merit and a demerit of the type of business organisation mentioned in the above case? in English & in Hindi are available as part of our courses for UPSC. Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.
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