
Long questions with answers for this topic
Form of business organisation means the legal and organisational structure under which a business is owned, managed and operated.
Capital requirement is a factor affecting the choice of form of business organisation.
Limited liability means the owners’ liability is restricted to the amount of their investment/guarantee and their personal assets are generally not used to pay business debts.
Sole proprietorship is a form of business organisation.
Perpetual succession means the business continues to exist even if members/owners change due to death, insolvency or transfer.
LLP (Limited Liability Partnership) is a business form having separate legal entity with limited liability of partners and flexible internal management through an LLP agreement.
The choice of form depends on factors like capital requirement (high capital favours company/LLP), risk and liability (high risk favours limited liability forms), and control/management (full control favours proprietorship; shared control in partnership). Other factors include continuity, legal formalities and cost, secrecy, tax considerations, and growth/expansion needs.
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