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Which of the following forms of business enterprises suffer from lack of public confidence because they are not required to publish its accounts legally?
- a)Partnership
- b)Cooperative Society
- c)Company
- d)None of the options
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
Which of the following forms of business enterprises suffer from lack ...
Lack of Public Confidence in Partnership
Partnership is a form of business enterprise where two or more individuals come together to carry out a business venture. It is a popular form of business due to its simplicity and ease of formation. However, one major disadvantage of partnership is that it suffers from a lack of public confidence because it is not required to publish its accounts legally.
Reasons for Lack of Public Confidence
1. No Legal Requirement to Publish Accounts: Unlike companies, partnerships are not legally required to publish their accounts. This lack of transparency can create suspicion among the public, who may question the financial health of the partnership.
2. Unlimited Liability: Partnerships have unlimited liability, which means that the partners are personally liable for the debts and obligations of the partnership. This can create a lack of confidence among the public, who may fear that the partners will not be able to meet their financial obligations.
3. Lack of Separation of Ownership and Management: In a partnership, the partners are both owners and managers. This lack of separation can create a lack of confidence among the public, who may fear that the partners will prioritize their own interests over the interests of the business.
Conclusion
In conclusion, partnership suffers from a lack of public confidence because it is not required to publish its accounts legally. This lack of transparency, combined with unlimited liability and a lack of separation of ownership and management, can create suspicion among the public about the financial health and stability of the partnership.
Partnership is a form of business enterprise where two or more individuals come together to carry out a business venture. It is a popular form of business due to its simplicity and ease of formation. However, one major disadvantage of partnership is that it suffers from a lack of public confidence because it is not required to publish its accounts legally.
Reasons for Lack of Public Confidence
1. No Legal Requirement to Publish Accounts: Unlike companies, partnerships are not legally required to publish their accounts. This lack of transparency can create suspicion among the public, who may question the financial health of the partnership.
2. Unlimited Liability: Partnerships have unlimited liability, which means that the partners are personally liable for the debts and obligations of the partnership. This can create a lack of confidence among the public, who may fear that the partners will not be able to meet their financial obligations.
3. Lack of Separation of Ownership and Management: In a partnership, the partners are both owners and managers. This lack of separation can create a lack of confidence among the public, who may fear that the partners will prioritize their own interests over the interests of the business.
Conclusion
In conclusion, partnership suffers from a lack of public confidence because it is not required to publish its accounts legally. This lack of transparency, combined with unlimited liability and a lack of separation of ownership and management, can create suspicion among the public about the financial health and stability of the partnership.
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Community Answer
Which of the following forms of business enterprises suffer from lack ...
Partnership firm act 1932 tells to that shows your financial activities to the public through balance-sheet. Then if the accounts is not published the partnership firm decreas or loss it's good will
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Which of the following forms of business enterprises suffer from lack of public confidence because they are not required to publish its accounts legally?a)Partnershipb)Cooperative Societyc)Companyd)None of the optionsCorrect answer is option 'A'. Can you explain this answer?
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