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Question:

Analyze the factors influencing the choice of a business organization with examples.

Answer:

  • The choice of a business organization depends on several factors, such as:
    • Nature of Business: A consultancy firm might choose sole proprietorship for flexibility, while a manufacturing unit may opt for a partnership or company to pool resources.
    • Scale of Operations: Small businesses require simpler structures like sole proprietorships, whereas large-scale operations need joint stock companies for substantial capital.
    • Control: Entrepreneurs wanting sole decision-making prefer sole proprietorships, while partnerships and companies distribute control.
    • Liability: Risk-averse individuals favor limited liability options like private companies.
    • Regulatory Requirements: Businesses seeking fewer legal obligations may choose sole proprietorships or partnerships.


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  • Answered by Ekta Mehta
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  • Answered by Ekta Mehta
  • 4 months ago

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