BUSINESS STUDIES CLASS 11 NOTES

            A sole trader may want to expand his business at some point of time. At that time he may face the problem of  shortage of capital and managerial skills.  Two alternatives are available to him for solving this problem.  1. To Employ a paid assistant  2. To admit one or more partners     Employment of Paid Assistant    When the sole trader employs a paid assistant, he has the following advantages and disadvantages: Advantages a) Division of work: An assistant can be appointed whose expertise can be used for the benefit of the business. The sole trader can delegate some of his work to the assistant and can devote his time and attention to crucial matters of business. b) No share in profits: The assistant is paid a fixed salary. The assistant is not given a share in profits. c) Complete control: The assistant has no right to interfere in decision making. So, the sole trader retains full control over the business. d) Secrecy: The sole trader is not expected to share the secr

       Sole Proprietorship is a popular form of business organization and it is the most suitable form of organization for small businesses. It is one of the oldest, simplest, and common form of business organization. Sole proprietorship form of business is established, financed, owned, and managed by a single person who is known as, Sole Trader or Sole Proprietor . The sole trader bears all the risks and he alone is responsible for all the profit and losses of his business. He may borrow funds and employ people to help him but the ultimate authority and responsibility lie in his hands. Therefore, Sole trader business is a one-man show. Definition of Sole Proprietorship by L.H. Haney        The individual proprietorship is the form of business organization at the head of which stands an individual as one who is responsible, who directs its operations and who alone runs the risk of failure. Definition by B.O. Wheeler       The sole proprietorship is that form of business ownership whic

The choice of the best suitable form of organization is a very crucial decision. So, the choice should be made with great thought and consultations. Each form of business organization has its own advantages and disadvantages, and these should be considered before choosing the form of organization. The following are the various factors that should be considered while making the selection of the form of organization: 1. Nature of business: The nature of business has an important role in the choice of the form of business organization. Businesses providing direct services, like small retailers, salons, tailors, restaurants, and professional services depend on their success upon personal attention to customers and the personal knowledge or skill of the owner and are, therefore, organized as proprietary concerns. Business activities which required pooling of skills and funds, like wholesale trade, accounting firms, tax consultants, stockbroker, are better organized as partnerships. 2. Size

       A business organization is an organization that is engaged in some industrial or commercial activity. It represents an institutional arrangement for carrying on any kind of business activity. It may be owned or controlled by a single individual or by a group of individuals who have entered into a formal or informal agreement to jointly conduct the business.        Every business has its own identity separate ownership. It can be distinguished from other undertakings based on its ownership, management, and control.  Meaning of Business Organisation         A business undertaking may be defined as an organization operating under separate ownership, management, and control and carry on any business activity with independent risk-bearing. Characteristics of a Business Organisation 1. Separate Identity  - Every business undertaking has a distinct name and separate existence. Its assets and liabilities are independent of the other undertakings. Its accounts are separate from those of