Q.1) Merits of sole trading concern.

Ans:A sole trader is one type of business organization. Or I would say a sole
trader is among the many types of organization that exist in a business
environment. If you are a sole trader, it means that you own the business, and any
profits from the business belongs to you. It's important to know that there are
other types of business organizations like partnership or limited companies. A
partnership is where you and another partner owns the business. ( it may not
necessarily be 50% each, it depends on the agreement of each partner ). Limited
companies on the other hand, are companies that can offer shares to raise capital.
Although this is complicated, you need to understand that while sole trader can
earn all the profits, it will face difficulties in raising funds for expansion,
that's the reason limited companies are formed, they can raise funds from the
public.

Q.2) Distinguish between micro economics and macro economics?

Ans: Microeconomics deals with the relationship between financial and goods
matters on a personal level, which can extend to the accounting systems of
separate firms or banks. There is no relationship with anything more than in one
sector of the macroecomonic system (see below), and within this sector it is only
the relationship between its various parts such as labour and wages, or capital
investment and dividends that can be covered by this subject. It becomes
interesting when for example the legal aspects of how to divide inheritances
between distant members of families is examined in detail.
Macroeconomics deals with the "big-picture" of the whole system. This involves the
functional way that various parts of the system are connected, by their being
represented as various sectors within the community. These sectors include at
least the following: landlords, government, house-holders, producers, capitalists
and banks (and other finance institutions). To achieve this capacity to cover the
complete activities within a country, macroeconomics must incorporate a model of
the system and within the model it must contain the various sectors (or functional
entities) by which the nation works as a compound community, various activities
within the system being autonomously controlled. The problems that characterise
this are equilibrium and stability (also instability as at present) of the
existing system and also of its growth and how this is both limited and encouraged
by different forces working between the entities.

Q.3)What are the partnership firm?

Ans: The requirements for production, usually represented as capital, labour, and
land. Capital covers all man-made aids to future production; fixed capital stays
put, and includes the physical plant, buildings, tools and machinery, while
circulating capital includes raw materials and components.

Labour includes all human resources. It may be unskilled, semi-skilled, or

skilled, and local labour markets vary in the size and nature of the pool of
labour. Cheap, unskilled and semi-skilled labour may be an important locational
factor for multinational corporations while skilled labour is significant in high
technology industries. Industries may be capital- or labour-intensive. Management
skills can be a vital factor of labour or can be seen as a separate factor of
production under the heading of entrepreneurship.

Land includes natural resources, as in mining, and is an increasingly important

factor as modern factories extend on one level and require space for storage and
parking.

Q.4)What are the difference between Partnership and Sole-Trade Business?

Ans:The difference between Partnership and Sole-Trade Business.

The Distinguish between Partnership and Sole-Trade Business are:

Membership: Partnership is owned by two or more persons known as partners.

Agreement: To constitute a partnership, an agreement is required in the form of a

partnership deed. The agreement among partners may be express or implied.

Registration: A partnership concern needs registration to get certain advantages

of registration. Though registration is not compulsory but non-registration bars
it from taking legal remedies.

Management: All partners have equal rights and all of them can participate in the
management. They can bin the business by their acts.

Risk: The business risk is shared by all the partners in proportion of their
shares.

Capital: All the partners contribute towards capital of the firm. The partners
pool their resources to run the business efficiently. However, there is no bar on
a person becoming a partner without bringing any capital.

Secrecy: The secrets of the business are in the knowledge of all the partners; so
there is a fear of leaking them out.

Sole-Trade:

Membership: Sole-trade business is owned and controlled by only one person. If a

second person joins then it becomes a partnership.

Agreement: A sole trader does not require any formality to start the concern.
There is no need of agreement in this business.

Registration: No registration of a sole trade business is required except under

ships and Establishment Act.

Management: This business is controlled by one person only. His order is a law
and he is the final authority in the concern.

Risk: The whole risk is shared by the sole-trader.

Capital: Only the resources of one person are used in the business. He may suffer
from shortage of capital because the resources of one person will generally be
limited.

Secrecy: There is a complete secrecy in the business because the owner does not
share the secrets with anybody else.