Neco 2021 Commerce Question 7

Practice essay / theory question 7 from the 2021 Neco Commerce examination. This question covers Business Organizations .

Neco 2021 Commerce Essay / Theory

Topic: Business Organizations

Question 7 NECO • 2021 • COMMERCE • essay

A group of three friends intends to start a small manufacturing enterprise that will produce biodegradable packaging materials. They anticipate an initial capital requirement of ₦25,000,000 and expect the business to grow rapidly, possibly attracting external investors within five years. The partners are concerned about personal liability, continuity of the business, and the ability to raise additional finance in the future.

Question Parts

( a )

Define the following forms of business organisation and state one key characteristic of each: (i) Sole proprietorship, (ii) Partnership, (iii) Private limited company.

( b )

Discuss two advantages and two disadvantages of each of the three forms of business organisation identified in part (a) with particular reference to the concerns of the entrepreneurs (liability, continuity and finance).

( c )

Based on the above analysis, recommend the most suitable form of business organisation for the friends. Justify your recommendation with reference to liability, continuity and future financing needs.

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About This Question

This is Neco 2021 Commerce Question 7. It is one of the essay questions from the 2021 Neco Commerce examination.

The question covers Business Organizations .

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