Understanding Sole Proprietorship

The video tutorial provides a comprehensive overview of sole proprietorship, a business model where one individual is responsible for all aspects of the business. It covers the definition, features, merits, and demerits of sole proprietorship, highlighting its simplicity, direct control, and flexibility. However, it also points out challenges like limited resources and continuity issues. The video concludes with the suitability of this model for small-scale operations and provides examples like Wal-Mart.

What is a sole proprietorship?

• A business owned by multiple partners

• A business owned and managed by one person

• A non-profit organization

• A corporation with shareholders

Which of the following is a feature of a sole proprietorship?

• Limited liability

• Shared profits

• Complex legal formalities

• Single ownership

Why is a sole proprietorship easy to form?

• It requires multiple approvals

• It has no legal formalities

• It involves complex legal procedures

• It requires a large amount of capital

What motivates a sole proprietor to work hard?

• Shared profits with partners

• Employee bonuses

• Direct motivation from owning all profits

• Government incentives

Which of the following is a demerit of a sole proprietorship?

• Suitable for large-scale operations

• Unlimited resources

• Lack of continuity

• Limited liability

How does unlimited liability affect a sole proprietor?

• The business can never go bankrupt

• The owner is not responsible for business debts

• The owner's personal assets can be used to pay business debts

• The business is protected from personal debts

Why might a sole proprietorship not be suitable for large-scale operations?

• It has unlimited managerial expertise

• It has extensive legal support

• It has limited resources and managerial ability

• It can easily hire experts in all areas

In what type of market is a sole proprietorship most suitable?

• Global markets

• Limited or localized markets

• High-risk industries

• Large-scale manufacturing

Which of the following is an example of a famous sole proprietorship?

• Microsoft

• Amazon

• Wal-Mart

• Google

What type of goods and services are ideal for a sole proprietorship?

• Heavy machinery

• Mass-produced electronics

• Goods requiring manual skill like handicrafts

• Pharmaceuticals