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A manufacturer wants to pivot from cotton textiles to sugar manufacturing as a substantial change in business line. The lesson treats this scenario when discussing the "Flexibility of administration" factor. What constraint does it specifically flag for a company?
Answer & Solution
Correct answer: B.
1. The lesson treats flexibility as the eighth factor.
2. It notes that company administration is rigid because activities are conducted at scale.
3. A substantial change in business line is constrained by the objects clause of the MoA.
4. Unless the objects clause already permits the new line, the company cannot legally pursue it without amendment.
5. Proprietorships and partnerships face no such objects-clause constraint.
_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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