Question

Final Test Paper Class BUSI 2093 Set D QI D.(20 Marks) Which form of Business organisation (sole proprietorship, partnership, corporate) might best suit the following? Give short reasons a. A consulting firm with several senior consultants and support stuff b. A house painting company owned and operated by a college student who hires some friends for occasional help C. A per goods company with sales of $100 million and 2000 employees

Answer 1

Forms of business organization in the following case can be

a) Partnership firm

b) Sole proprietorship

c) Corporate

Reasons:

a) A consulting firm with several senior consultants and support staff can be a partnership firm.Each senior consultants can be a partner of the firm.A consulting firm consists of one or more experts who provides professional feedback to an individual or organization for a fee.Only limited number of members is required and it has an element of mutual agency among the partners.

b). A house painting company owned and operated by a college student who hires some friends for occasional help can be formed as a sole proprietorship. This is because the ownership and control of the enterprise rests within a single person. The college student is responsible for all the debts.He /She seeks the help of friends and the friends  do not have any control on the enterprise.

c) A per goods company with sales of $100 million and 2000 employees can be formed as a corporate. Since it is a firm with large number of employees and high turnover, the corporate form is the suitable form.There should be a professional management team for the functioning.It can have a divisional, functional, SBU or matrix structure. A corporate has different departments like human resource department, production,research and development, and so on.