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Among the factors listed for choosing a form of business organisation, "Stability of business" plays a specific role. According to the lesson, which form has the most business stability and why?
Answer & Solution
Correct answer: A.
1. Stability is one of the 16 factors discussed for the choice.
2. Sole proprietorship and partnership are inherently unstable since they end on death, insolvency or insanity.
3. Companies and LLPs enjoy perpetual succession as artificial legal persons.
4. Their existence is independent of any particular member, giving them the highest stability.
_Source: ICSI CS Executive Paper 3 (Setting up of Business Entities and Closure) — Lesson 1: Choice of Business Organisation, pp. 2-11._
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