Commercial Applications
Which of the following options regarding Proprietorship is wrong?
- Basis of formation : No agreement
- Number of members : No maximum limit
- Management : By the Sole Proprietor
- Application of Law : The Contract Act
Answer
Number of members : No maximum limit
Reason — In a sole proprietorship, the number of members is only one. There is no question of a maximum limit because the business is owned and managed by a single individual. The other options are correct — no agreement is required, management is by the sole proprietor, and it is governed by the Contract Act.
Related Questions
Statement I: The secrets of business are known to the Karta only.
Statement II: The Karta is the head of the family.
- Both I and II are correct
- Only II is correct
- Only I is correct
- Both I and II are wrong
Statement I: The existence of a joint Hindu family business is not threatened by the death or incapacity of any member or the Karta.
Statement II: The Joint Hindu family comes to an end only after the total breakdown of the Joint family.
- Both I and II are wrong
- Both I and II are correct
- Only I is correct
- Only II is correct
Which of the following options regarding Joint Hindu Family Business is wrong?
- Basis of formation : By Birth
- Division of profit : Unequal share
- Management : Only by Karta
- Application of law : Hindu Succession Act
Statement I: The capital of joint Hindu family business is limited to the ancestral property.
Statement II: The Karta of joint Hindu family business may not be competent to manage the business.
- Both I and II are correct
- Both I and II are wrong
- Only I is correct
- Only II is correct