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CBSE Questions for Class 11 Commerce Business Studies Forms Of Business Organisation Quiz 4 - MCQExams.com
CBSE
Class 11 Commerce Business Studies
Forms Of Business Organisation
Quiz 4
The third stage in the formation of a Joint Stock Company is ____________.
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incorporation
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capital raising
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promotion
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investment
Explanation
The third stage in the formation of Joint stock company is Capital subscription or raising. At this step, a company is allowed to raise their funds from general public by issuing shares and debentures. But before that it has to issue a prospectus for the public to subscribe to the capital of company.
Fill in the blanks:
The constitution of a joint stock company is called _______.
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memorandum of association
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articles of association
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table A
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None of these
Explanation
Memorandum of Association is the constitution of Joint stock company. It directs or instructs joint stock company. The joint stock company runs in accordance with the memorandum of association. Activities of the joint stock company are directed by the Memorandum of Association. Memorandum of association is regarded as a blueprint as it is needed for the incorporation of the joint stock company. Memorandum of Association is submitted to Company Registrar Office. Basic information and provision of the company are clearly mentioned in the memorandum of association. It defines scopes, objectives, functions of the joint stock company.
Select the correct option given below :
The management of a joint stock company is vested in the ____________.
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Director
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Board of directors
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Manager
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All of above
Explanation
Option B is the correct answer.
The management of a joint stock company is vested in the Board of Directors.
Write a word, term or a phrase which can substitute each of the following statements:
A report to be submitted to the Registrar according to Section 165.
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Annual report
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Statutory report
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Trade report
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None of these
Explanation
According to section 165 of the companies act 1965 the company has to file statutory report to registrar.
Write a word or a term or a phrase which can substitute each of the following statements:
A form of organisation where there is a separation of ownership from management ______________.
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Joint Stock Company
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Co-operative Society
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Public Company
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Private Company
Explanation
Option A is the correct answer.
A form of organisation where there is a separation of ownership from management is Joint Stock Company.
The term company is defined in section _______ of the Companies Act, $$2013$$.
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$$2$$
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$$3(1)(i)$$
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$$3(2)$$
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$$4$$
Explanation
As per section 2 of the Companies Act, 2013 a company is a company as created under the Companies Act, 2013 or any other previous companies act.
Indian Partnership Act defines business in...........
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Inclusive manner
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Exclusive manner
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Exhaustive manner
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illustrative manner
Explanation
Option A is the correct answer.
Which of these rights are available to a partner under the Partnership Act ________.
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Overtime and conveyance charges for attending firms business
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To open bank A/c in his name on behalf of the firm
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Right to share profits
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Right to transfer his share outside the firm without consent of other partner
Explanation
Option C is the correct answer.
A person not being a partner but represents himself to be a partner is called...........
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Sub partner
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Partner by estoppels
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Sleeping partner
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Dormant partner
Explanation
Option B is the correct answer.
In India Companies are governed by ________.
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Indian partnership act, $$1932$$
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Companies act, $$1956$$ as amended from time to time
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Societies registration act
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all of the above
Explanation
In India companies are governed by the companies act, 1956 amended from time to time. The provisions of the act will apply to:
i) Any body corporate registered under the act.
ii) Insurance company except the ones registered under the insurance act 1938.
iii) Banking company except the ones registered under the Banking company act. 1949.
iv) Company supplying electricity and is not registered in the electricity generation act 1948.
Which of these statements is true in respect of a Joint Hindu Family business?
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Joint Hindu Family firm cannot have more than $$10$$ members
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Joint Hindu Family has a perpetual existence
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Liability of Manager is limited
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Consent of all the members is necessary to admit a new member
Explanation
The firm enjoys continuity of operations as its
existence is
not subject to the death or insolvency of a co-parcener or even of the Karta himself. Thus, it
has a perpetual
life like the public limited company.
Which of these rights are available to a transferee under the Partnership Act.
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To inspect books of account
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To interfere in firms day to day business
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To transfer immovable property of the firm
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To receive share of assets to which the transferor entitled at the time of dissolution of the firm
Explanation
Option D is the correct answer.
In order to not to bind the firm for all the acts done by a partner within the implied authority which has been restricted by mutual agreement between the partners, the firm need to establish that........
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The plaintiff knew such restrictions
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Did not know that the partner is the partner of the firm
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Either A or B
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Both
Explanation
Option C is the correct answer.
What is the real test of existence of a partnership
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Mutual agency relationship
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Sharing of profit and loss
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Existance of business
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All the three
Explanation
Option A is the correct answer.
In HUF the main person is called ____________.
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Karta
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Coparcener
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Partner
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Managing partner
Explanation
In HUF the main person is called as karta. He is typically the eldest person or head of the family who heads the HUF and manages its day to day operations. He also takes care of day to day expenses along with protecting the joint family properties. He is sui generis and acts on behalf of other members. Hence the correct answer is A.
Application for dissolution of a firm on the ground of permanent incapacity of a partner can be made by...
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Any partner
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Any partner other than who is permanently incapable
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Partner who is permanently incapacitated
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Senior-most partner only
Explanation
Option B is the correct answer.
Which of the following is not the property of a partnership firm
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Goodwill of the firm
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Ancestral property of a partner
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Property purchased by or for the firm
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All rights, liabilities originally brought into the stock of the firm
Explanation
Option B is the correct answer.
Which of these rights are affected in case of an unregistered firm
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Non-contractual rights
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Right of third party against the firm
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Rights of the partner to sue for dissolution of the firm
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All the three
Explanation
Option A is the correct answer.
Registrar of firms under section $$57$$ of the Partnership Act is appointed by ________.
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RBI
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State Government
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Trade associations
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Local bodies
Explanation
Option B is the correct answer.
A partner has an implied authority to bind the firm if he__
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Buys goods on behalf of the firm in which the firm deals
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Sells such goods
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Borrow money on credit of the firm
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All the three
Explanation
Option D is the correct answer.
_________ is one who becomes partner by an agreement and is actively engaged in the business of the firm.
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Active partner
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Dormant partner
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Nominal partner
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Outgoing partner
Explanation
Option A is the correct answer.
A minor person can......
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Stand as surety
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Be admitted as partner for profits only
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Execute a contract
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Do nothing
Explanation
Option B is the correct answer.
What is one of the hardships of a sole proprietorship?
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Capital is limited to owners savings and bank loans
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It has to complete too many registration formalities
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As they are government owned there is no profit motive
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More tax is charged on them
Explanation
A business which is owned and managed by a single person is called as sole proprietorship. As the owner is a single person he/she has limited capital with him/her to invest in the business. Hence, it is one of the hardships of a sole proprietorship. The limited capital might be due to very low internal sources of finance and/or banks or other external sources of finance will also be unavailable.
A, B, C, and D are partners A retires, B dies, the status of partnership ______.
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remains unchanged
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comes to an end
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reconstituted
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all of the above
Explanation
False.
If A retires and B dies, the status of partnership will be reconstituted as 2 partners C and D remain and then can form a new partnership agreement after giving A and B their respective shares and revaluating the assets and liabilities on the basis of previous of previous agreement.
An Indian citizen cannot make ___________ form of organization in America.
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HUF
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Partnership
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Company
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Society
Explanation
A Hindu Undivided Family is regulated by the Hindu succession act. It consists of karta the head of the family and co-parceners, the members of the family. It does not need any regulation or legal formalities to set up. In America, in order to set up business many legal formalities are necessary. Hence, an Indian citizen cannot make form of organisation in America.
Which of the following can have minor as members?
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HUF
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Proprietorship
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Private limited Company
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All of the above
Explanation
Hindu undivided family is a business carried out by hindus which involves karta, the head of the family and co-parceners who are the members of the family. It can have minor as a member because no registration under any Act is required for setting up HUF.
Looking at the below mentioned options one of the advantages of a partnership form of business organization is that _______.
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all partners always have limited liability
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all the decisions are taken by one partner
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the business survives on the death of the partners
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the business has access to more capital than a sole trader
Explanation
A business which is carried out by two or more persons together is called as partnership firm. The features of this firm are:
Equal sharing of profit between all partners.
Decision making is done by all the partners together.
Their liability is unlimited, joint and several.
They have large capital as compared to sole trading concern.
What is one of the best advantages of proprietorship?
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Shares can be sold to raise capital
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Profits are to be shared
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The owner has independence
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Limited liability is enjoyed
Explanation
A business which is owned and managed by a single person is called as sole proprietorship. The advantages of this are:
No sharing of profit.
The owner is independent.
Owner only makes decisions.etc.
Limited liability partnership possesses not more than 2 of the following character.
Limited liability
Raise funds from public
No separation of management from owners
No Restriction on number of partners.
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2 and 4
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1 and 2
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1 and 3
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1 and 4
Explanation
Limited liability company is a partnership in which some or all partners have limited liability. There is no restriction on number of partners to enter in this firm. Hence, it possess 2 characteristics:
Limited liability.
Raise funds from public.
Invariably is the disadvantage of co-operative society ________.
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business secrecy
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low prices
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limited liability
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open membership
Explanation
Co-operative societies have to send their annual reports and accounts to the Registrar of cooperative
societies.
In this way, the secrets of business
become
public and hence there is lack of secrecy.
As per section 58 of the Partnership Act, a statement on various matters for registration of the firm is required to be signed by.........
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All the partners or duly authorized agent
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Sr. partner
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Managing partner of the firm
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Secretary of the firm
Explanation
Option A is the correct answer.
Among the following, which statement about co-operative business organizations is true?
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All co-operatives are only for public sector
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Profits are shared equally amongst members
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They are owned by government
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Workers have no say in decision-making
Explanation
A co-operative organisation is an association of persons united voluntarily to meet a common economic, social and cultural needs and aspirations through a jointly owned enterprise. All the members of a co-operative business organisations share profits equally.
Karta of HUF is the ________ of his family.
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creditor
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representative
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employee
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none of the above
Explanation
A Hindu Undivided Family is regulated by the Hindu succession Act. It consists of karta the head of the family and co-parceners, the members of the family. Hence, Karta of HUF is of his family representative.
Limited liability is enjoyed by ________.
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a general partnership
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a corporation
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a sole proprietorship
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none of the above
Explanation
A corporation is a group of people or company authorized to act as a legal entity which is recognized by Law. It has a limited liability distinct from its members. The owner and the company are two different persons.
If the remaining partner wants to continue the business, after the retirement of a partner, a new partnership agreement is ______.
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necessary
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not necessary
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optional
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none of above
Explanation
Retirement, admission, death of partner leads to reconstitution of the firm where old partnership agreement comes to an end and new partnership agreement is formed.
Mr. Varun wanted to start a bakery shop with limited money. What kind of business organization you would suggest him?
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Sole proprietorship
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HUF
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Partnership
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Corporation
Explanation
A sole proprietorship is a business which is owned and managed by a single person. It consists of limited capital as there is only one person. Hence, it is a sole proprietorship form of business organization.
Co-operative society has ________.
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separate legal entity
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government support
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service motive
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all of the above
Explanation
Co-operative society is an association of members who voluntarily come together to meet the economic, social and political objectives of the company. The features of co-operative society are:
Separate legal entity.
Government support.
Service motive.
Mr. Varun is a rich man with ample amount of working capital. He wants to go for a business of chain of 5 star hotels. What kind of business organization you will suggest him?
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Company
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Partnership
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Sole proprietorship
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Trust
Who all can be Coparceners in HUF?
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Daughters of family
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Sons of family
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Both a and b
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None of the above
Explanation
False.
Only male members can be the coparcener in the Joint Hindu Family Business .But according to the Hindu Succession Act,1956 a woman after the death of her husband and in the absence of a male successor can become the coparcener of the family business.
A partner can transfer his share to an outsider ________.
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without the consent of other partners but with the consent of Registrar of companies.
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with the consent of other partners and the consent of registrar of companies
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with the consent of other partners
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none of the above
Explanation
According to the provisions of the Indian Partnership Act, 1932, all the partners are obliged to follow certain rules and regulations and one such rule is that a partner is not allowed to transfer his share to an outsider without the consent of other partners.
A florist opened a shop in the year 2000 but due to certain losses he did wind it up in a single day after 9 years of operation i.e. inWhat kind of organization it is _________.
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Sole proprietorship
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Company
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Limited liability partnership
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None of the above
Explanation
In the given case, shop was opened by a single person and was wound by himself only. That means the shop was owned, controlled and managed by the single person and the loss was also borne by him. In sole proprietorship, the business is owned and managed by single person. Hence, it is sole proprietorship type of organization.
The most suitable definition of a sole trader form of business organization is _______.
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the business who manufacture only one product
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the business is owned by one person
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the firm has a single buyer
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there is a single seller is the industry
Explanation
A sole trading concern is a business which is owned and managed by a single person. He is the only risk taker in the business and the profit is enjoyed by himself only. Hence, the most suitable definition of a sole trader form of business organization is the business is owned by one person.
In relation to business organisation structure, which one of the following is easy to form and wind up?
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A company
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A sole proprietorship
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Statutory corporation
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Public enterprises
Explanation
A sole proprietorship business requires only one person, less capital to set up. It requires very less legal formalities to establish the business as compare to a company, statutory corporation. public enterprises. Hence, sole proprietorship is easy to form and wind up.
A co-operative society can promise maximum ____ amount of interest on the money contributed by it's members.
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9%
0%
6%
0%
5%
0%
unlimited rate of interest
_____________ is a feature of partnership form of business.
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Separate legal entity, from the firm
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Limited scope for raising finance
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The liability of a partner is limited to his contribution to capital
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Registration of partnership is compulsory
Explanation
Partnership form of business main features are:
Ease of formation is its most important feature because it is not required to go through elaborate legal formalities.
No agreement is to be made and registration of the firm is also not essential. However, the owner may be required to obtain a license specific to the line of business from the local administration.
The firm has no legal existence separate from its owner.
The capital required by the organisation is supplied wholly by the owner himself and he depends largely on his own savings and profits of his business.
Owner alone enjoys the benefits or profits of the business and he alone bears the losses.
The liability of the proprietor is unlimited i.e. it extends beyond the capital invested in the firm.
Owner has a complete control over all the aspects of his business and it is he who takes all the decisions though he may engage the services of a few others to carry out the day-to-day activities.
The formation and operation of a sole proprietorship form of business organisation requires almost no legal formalities.
The legal claimants can pursue the personal property of the proprietor and not simply the assets used in the business.
Which one of the following does not have perpetual succession?
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Company
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Statutory Corporation
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Sole Proprietorship
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Co-operative Society
Explanation
Perpetual succession means continuous without any stoppage. In case of a sole proprietorship there is only one person and the business comes to and end if the owner dies because he is the only owner. Hence, sole proprietorship does not have perpetual succession.
If the objective for the business organization is self help as well as mutual help. It is _____________ type of organisation.
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Partnership
0%
Sole proprietorship
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Co-operative society
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Company
Explanation
A cooperative form of business is a different form of business enterprise. In this form, the main motive is not earning profit but the main motive of the cooperative organization is mutual help. It works with the principle of each for all and all of each. A cooperative society or organization is a voluntary association of persons who join together for mutual help. A minimum of 10 persons is required to form a cooperative society. The registration of a cooperative society is compulsory and the capital of a cooperative organization is contributed by the members-only in the form of share capital. The cooperative organization can raise loans also from the banks.
The choice of an appropriate form of business organisation largely depends upon:
I. Ease of formation
II. Continuity and stability
III. Liability aspects
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I and II
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II and III
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I and III
0%
I, II and III
Explanation
Whenever a business organisation is formed it always focuses on the following points :
Ease of formation.
Continuity and stability.
Liability aspects.
If these points are found in the business organization a busness can be efficiently managed.
AMUL is a __________.
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company
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co-operative society
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co-operation
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none of the above
Explanation
Option B is the correct answer.
Amul is a dairy cooperative society.
Why co-operative marketing society is formed?
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To protect the interest of general consumers
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To sell the product of small farmers and producers
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To protect the interest of small producers
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To provide financial support to the members
Explanation
The cooperative marketing society is made up of small producers who find it difficult to sell their products at profit. The output of all the small producers is brought together and sold at the best price. Such a society helps to improve the bargaining power and competitive position of its members. It performs various marketing functions such as transportation, warehousing, packaging, grading, etc. The profit and the sale proceeds are distributed among the members according to their respective shares in the common sales pool. The main objective of marketing cooperative society are:-
To ensure a stable and favorable market for the output of its members.
To ensure the best possible price for the output.
To provide facilitate transportation, warehousing, packaging, etc., which individual cannot be afforded the members.
To assure honest trading practices in weighing, measuring, and accounting.
To get rid of the middlemen and have direct dealing with the customers.
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