Forms Of Business Organisation - Class 11 Commerce Business Studies - Extra Questions

Fill in the blanks with appropriate words in the following sentences:
The first co-operative society in the world was started by ________ in _______ (country).

A cooperative society is an autonomous group of persons or group of associations who united voluntarily to meet their common economic and social needs, goals, and aspirations through a jointly-owned and democratically-controlled enterprise. The first cooperative society in the world was started by Rochdale pioneers in England where around 28 men (weavers and skilled workers) jointly decide to open a democratically governed enterprise.


The formation of co-operative societies is regulated as per The Indian Co-operative Act of _________.

A cooperative society or organization is a voluntary association of persons who join together for mutual help. A minimum of 10 people 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. "Co-operative organization is a society which has its objectives for the promotion of the economic interest of its member in accordance with cooperative principles." - The Indian Cooperative Societies Act, 1912.


What does voluntary association mean in a cooperative society?

The cooperative society is a voluntary association of persons. Anyone with a common interest can join the cooperative society.The member can leave the society whenever they desire so by giving a notice. There is no restriction on entry or exit of members. They can join or leave the cooperative organization of their own will or wish. All members are welcome to join, regardless of their caste, creed, or religion.


What does "Joint Hindu family business" mean?

The business carried out by the members of a Hindu undivided family is known as Joint Hindu Family Business. This kind of business is not governed by Industrial or Company Act but it is governed by the Hindu Succession Act, exists under Hindu law.
There are two conditions for the existence of a Joint Hindu Family Business. These are:-
  1. Minimum two male members must be there in the family.
  2. Existence of some ancestral property.


According to International Labour Organisation, define the term "cooperative organisation".

According to International labour Organisation (ILO) " A cooperative organisation is an association of persons usually of limited means, who have voluntarily joined together to achieve a common economic end, through the formation of democratically controlled business organisation, making equitable contribution to the capital required and accepting a fair share of risks and benefits of the undertakings."


According to H.C. Calvert, define the term "Cooperative organisation".

According to H.C. Calvert "Cooperative is a form of organisation wherein persons voluntarily associate together as human beings on the basis of equality for the promotion of the economic interest of themselves".


The Head of the Hindu undivided family business is known as __________.

The Head of the Hindu undivided family business is known as karta. He is the eldest member of the family while other members are coparceners.


How are partnership firms started? Explain briefly.

Partnership firms are the firms which are carried on by two or more people who mutually come to an agreement either verbal or written to carry out a business by contributing appropriate capital and share profits in a prescribed ratio. A partnership firm can be started by the mutual agreement of two or more people as the firm does not require any incorporation cost. 


Fill in the blanks with appropriate words in the following sentences:
The co-operative societies come into existence after receiving ________ from _______.

A cooperative society is an autonomous group of persons or group of association who united voluntarily to meet their common economic and social needs, goals and aspirations through a jointly-owned and democratically-controlled enterprise.  
The society started coming into existence after receiving the rights under the cooperative society  act, 1912 from the government.


Answer the following questions:
What are the advantages of registering a partnership firm?

Benefits of Partnership Firm Registration:

  1. Ability to file case against Third Parties:

The partners of the registered Partnership Firm can bring third parties to the court for resolution of disputes arouse during the course of Business or any other matter relating to the Partnership Firm.

An unregistered Partnership firm loses the right file the case against third party for resolution of their disputes until and unless the procedure of Deed Registration has been completed. 

However, the third party always own the right to file the suit against a Partnership Firm irrespective of its registration status.

  1. Power to file suit against co-partners:

As none knows when the dispute between the Partners arises, whether for the sharing of profits or any other matter regarding operations of the Partnership Firm. The resolution of any dispute is best resolved by the Court of Law.

The Partners of an unregistered Partnership Firm cannot enforce any clauses of Partnership Deed. To enforce the said clauses, the registration for Partnership Firm shall be required by following the procedure prescribed for the same.

  1. Ability to claim Set-off:

The registration of Partnership Firm enables the partners with power to claim set-off. When any third party files a suit against the Partnership Firm, the Partnership Firm can claim the set-off, if any against the claim of third Party. The said power to claim set-off is not available when the Partnership Firm is not yet registered under the Indian Partnership Act, 1932.



Fill in the blanks with appropriate words in the following sentences:
The First co-operative society was started in Karnataka at _________.

A cooperative society is an autonomous group of persons or group of association who united voluntarily to meet their common economic and social needs, goals and aspirations through a jointly-owned and democratically-controlled enterprise.
The first cooperative society formed in India was the Agriculture Credit Cooperative Society, of Kanaginahal village of Gadag District in Karnataka in 1905 under First Cooperative law of India.


Fill in the blanks with appropriate words in the following sentences:
The maximum number of members in co-operative societies is _________.

A cooperative society is an autonomous group of persons or group of associations who united voluntarily to meet their common economic and social needs, goals and aspirations through a jointly-owned and democratically-controlled enterprise. The maximum number of members in a cooperative society are not specified under the cooperative society act, 1912 for any cooperative society.


Answer the following questions:
Mention the different types of co-operative societies.

A cooperative society is an autonomous group of persons or group of association who united voluntarily to meet their common economic and social needs, goals and aspirations through a jointly-owned and democratically-controlled enterprise. The different types of cooperative society are: 
 Consumers cooperative society
  • Producers cooperative society: 
    (a) Industrial service cooperative society 
    (b) Manufacturing cooperative society. 

    Marketing Cooperative society 
    Cooperative Farming Society
    Housing Cooperative society 
    Credit Cooperative society.



List out the merits and demerits of co-operative societies.

A cooperative society is an autonomous group of persons or group of association who united voluntarily to meet their common economic and social needs, goals and aspirations through a jointly-owned and democratically-controlled enterprise. 
Merits of a cooperative society are :-
1. Democratically controlled 
2. Voluntary participation 
3. Backed by social goals 
4. Have government support. 
Demerits of a cooperative society are :-
1. Less capital 
2. Less managerial efficiency
3. Lacks coordination.


Distinguish : 
Secretary of a Co-operative Society and Secretary of Non-profit Association. 

Secretary of a co-operative society :
1. Appointment : He is appointed by the managing committee of a cooperative society.
2. Qualifications : He possess a diploma/degree like GDC & A
3. Duities : His rights and duities are laid down in a co-operative society act
4. Status : He has a legal status
5. Position : He is an employee of the industry.

Secretary of non profit association :
1. Appointment : He is appointed by managing committee of a association.
2. Qualifications : There is no prescribed qualifications for the firm
3 Duities : His rights and duities are governed by managing committee of association
4 Status : He has no legal status 
5 Position : He is a member of managing committee.


Write short answers for the following:
State the characteristics or features of Joint Hindu Family Business.

Joint Hindu Family Business is a form of business organization wherein the business is owned by the members of a Hindu Undivided Family The business is controlled by the head of the family who is the eldest member and is called Karta. 
The features of Joint Hindu Family Business are :

1. Formation: For a joint Hindu family business, there should be at least two members in the family and ancestral property to be inherited by them.

2. Liability: The liability of all members except the Karta is limited to their share of the co-parcenery property of the business.

3. Control: The control of the family business lies with the Karta. He takes all the decisions and is authorized to manage the business. His decisions are binding on the other members.

4. Continuity: The business continues even after the death of the Karta as the next eldest member takes up the position of Karta, leaving the business stable


Write short notes on the following : 
Secretary of a Co-operative society. 

The main role and responsibilities of a housing society’s secretary are:

  • To organize meetings and record its minutes
  • To make sure that all important documents, papers, books of the society are kept safely in the society office
  • To act on behalf of the society when required
  • To issue share certificates and notices to members within the required time
  • To deal with matters of resignation from society members
  • To make entry in the nomination register regarding nominations and revocations
  • To keep a check at the society’s property
  • To issue notices in case of any repairs to be done in the flats
  • To prepare and issue bills for society’s maintenance charges
  • To look into the society accounts and finalise it in timely manner
  • To keep a record of the society’s current activities and prepare a yearly report for the Annual General Meeting
  • To issue notice to members in cases where there are breaches of the society bye-laws
  • To bring to the notice of the committee regarding cases of defaults in payments of the maintenance and other charges
  • To invite and manage applications from society members for various purposes
  • To conduct a timely inspection of the society’s property
  • To perform other duties as required by the Board or prescribed by laws.


Write short answers for the following:
What is Joint Hindu family business? State it's main characteristics.

Hindu undivided family business or Joint Hindu family business is the business concerns ( small, medium, or large scale) which are run by the members of a joint family. Usually, the head of the family is also the head of the concern run by the family. The business carried out by the members of the Hindu undivided family is known as Joint Hindu Family Business. This kind of business is not governed by the Industrial or Company Act but it is governed by the Hindu Succession Act, which exists under Hindu Law.
The features of a Joint Hindu family business are as follows:- 
  1. Formation:- For the formation of a Joint Hindu Family Business, there should be at least two members in the family and ancestral property to be inherited by them. Business does not require any agreement as membership is by birth. It is governed by the Hindu Succession Act 1956.
  2. Liability:- The liability of Karta is unlimited whereas the liability of all other members of Joint Hindu Family Business is limited up to their share in the business. The Karta liability is unlimited so his personal assets can also be used for paying back the debts of the business.
  3. Control:- The Joint Hindu family business is managed and controlled by the senior-most member of the family who is called Karta. Only the Karta has legal rights to enter into contract with outsiders. He only takes all the decision of business. Other members have no right to take decisions in the management of Joint Hindu Family Business.


Write shorts answer to the following questions:
Discuss briefly the functions performed by a secretary of a co-operative society. 

  • To organize meetings and record its minutes
  • To make sure that all important documents, papers, books of the society are kept safely in the society office
  • To act on behalf of the society when required
  • To issue share certificates and notices to members within the required time
  • To deal with matters of resignation from society members
  • To make an entry in the nomination register regarding nominations and revocations
  • To keep a check at the society’s property
  • To issue notices in case of any repairs to be done in the flats
  • To prepare and issue bills for society’s maintenance charges
  • To look into the society accounts and finalize it in a timely manner.


Distinguish between the following.
Joint Hindu family firm and Joint stock company.

Joint Hindu family firm: It is governed by the Hindu Succession Act, 2005. A HUF is an organization which is carried on by the members of a family. It is controlled by the head of the family known as the karta and the other family members are known as the co-parceners. The karta has the unlimited liability. A person becomes the member of HUF by birth. Even a minor is its member.
Joint Stock Company: It is governed by the Companies Act,2013. It is an artificial person having a separate legal entity and a common seal. It has perpetual succession and the liability of the shareholders is limited to the amount of capital contributed in form of shares by them. It is of two types, viz. Private Co. and Public Co.


Write short notes on the following.
Features of a co-operative society.

The features of the co-operative society are:
1. Voluntary membership: A person is free to join and leave the society as per his will. There is no compulsion to remain a member.
2. Legal status: The compulsory registration of a co-operative society under the Co-operative societies Act 1912, makes it a separate legal entity.
3. Limited liability: The members of the society have the liability limited to the extent of the capital contribution made by them.
4. Control: The control vests in the hands of the managing committee elected by the members.
5. Service motive: It is established with a purpose to serve the members by eliminating the middlemen.


Match the following:
AB
Head of the familyCoparceners
Karta Karta
Limited liabilityKarta
Unlimited liabilityImplied authority
Members of Hindu
undivided family
Members of Hindu
undivided family

Head of the family- Karta 
Karta- Implied authority 
Limited liability- Members of Hindu Undivided family 
Unlimited liability- Karta 
Members of Hindu Undivided family- Coparceners


Fill in the blanks:
(a) The membership of a joint Hindu family business is acquired by _______.
(b) The liability of the Karta in a joint Hindu family business is _______.
(c) A member of the joint Hindu family business _______ demand division / of property.
(d) All the members of a joint Hindu family business_________ part in its management.
(e) A member of the joint Hindu family business________ call for account of past profits while leaving the business.

(a) Family members.
(b) Unlimited.
(c) cannot
(d) are 
(e) can 


Define 'joint Hindu family firm'. Explain the features of a joint Hindu family firm.

Joint Hindu family firm is an organization which is carried on by the members of a joint hindu family. It is governed by the Hindu Succession Act, 2005. It is controlled by the head of the family known as the karta and the other family members are known as the co-parceners. The karta has unlimited liability. A person becomes a member of HUF by birth. Even a minor is its member. Also a female member can also become its Karta.
Features:
1. Formation: For a HUF there should be atleast two members in the family and ancestral property inherited by them. The membership is by birth.
2. Liability: The liability of the karta is unlimited but the liability of the co-parceners is limited to their share in the ancestral property.
3. Control: The control lies in the hands of the karta. He is the sole decision maker.
4. Continuity: It continues even after the death of the karta as after his death the eldest member of the family becomes the new karta.
5. Minor members: A person becomes the member by birth. Thus, a minor is also a member.


State whether the following statements are True or False:
(a) A joint Hindu family business is the result of a contract between the members of the family.
(b) Every member of a joint Hindu family business is an agent of the firm.
(c) There is no limit on the number of members in a joint Hindu family business.
(d) Female members of a family do not have a share in the joint Hindu family business according  to darabhaga 
(e) A joint Hindu family business is not dissolved on the death of a member.

(a) True.
(b) True.
(c) True.
(d) False. female members of a family have equal share in the joint hindu family business as sons. 
(e) True. 


Write a word or a term or phrase which can substitute of the following.
A speculator who expects the price of a particular share to rise in the future.

Bull


Distinguish between the following:
Co-operative society and Joint Hindu family firm.

A Joint Hindu Family business is a family concern with operates under the provision of the Hindu Law and Hindu succession Act 1956.It is governed by the Hindu Succession Act, 1956. In Joint Hindu Family business, authority of controlling the business lies in the hands of the 'Karta'.
A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.


State with reason, whether the following statement is True or False:
Maximisation of profit is the object of a co-operative society.

Co-operative society is open to all, who have a common object of providing service without expecting returns on it. A cooperative society is registered under Cooperative Societies Act, it is a separate legal entity where the liability of its member is limited. It can run the business under its name.


Select the proper option from the options given below and rewrite the sentence:
The Karta in a Joint Hindu family business has________ liability.

Answer - unlimited liability
The joint Hindu family business is controlled by the head of the family who is the eldest member and is called Karta.
The karta has unlimited liability while the liability of all other members is limited to their share of co-parcenery property of the business.


Define Co-operative Society. Explain merits and demerits of Co-operative Society.

A cooperative society is a voluntary association of persons of moderate means, who unite together to protect and promote their common economic interests. 

Features: 

  • Voluntary association: Everyone having a common interest is free to join a cooperative society and can also leave the society after giving proper notice. 
  • Legal status: Its registration is compulsory and it gives it a separate identity. 
  • Limited liability: The liability of the member is limited to the extent of their capital contribution in the society. 
  • Democratic control: Management and control lies with the managing committee elected by the members by giving vote. Every member has one vote irrespective of the number of shares held by him. 
  • Service motive: The main aim is to serve its members and not to maximize the profit. 
  • State control: They have to abide by the rules and regulations framed by government for them. 
  • Distribution of surplus: The profit is distributed on the basis of volume of business transacted by a member and not on the basis of capital contribution of members.

Merits-
  • Ease of formation: It can be started with minimum of 10 members. Registration is also easy as it requires very few legal formalities. 
  • Limited liability: The liability of members is limited to the extent of their capital contribution. 
  • Stable existence: Due to registration it is a separate legal entity and is not affected by death, lunacy or insolvency of any of its members. 
  • Economy in operations: There is economy in operation due to elimination of middle man and voluntary services provided by its members. 
  • Government support: Government provides support by giving loans at lower interest rates, subsidies and by charging less taxes. 
  • Social utility: It promotes personal liberty, social justice and mutual cooperation. They help to prevent concentration of economic power in a few hands.


Demerits- 

  • Shortage of capital: It suffers from shortage of capital as it is usually formed by people with limited means. 
  • Inefficient management: Cooperative society is managed by elected members who may not be competent and experienced. Moreover it can’t afford to employ expert and experienced people at high salaries. 
  • Lack of motivation: Members are not inclined to put their best efforts as there is no direct link between efforts and reward. 
  • Lack of secrecy: Its affairs are openly discussed in its meeting which makes it difficult to maintain secrecy. 
  • Excessive government control: It suffers from excessive rules and regulations of the government. It has to get its accounts audited by the auditor and has to submit a copy of its accounts to registrar. 
  • Conflict among members: The members are from different sections of society with different view points. Sometimes when some members become rigid, the result is conflict.


Write short note on the following:
Features of Joint Hindu Family Business.

1. Formation: For a HUF there should be atleast two members in the family and ancestral property inherited by them. The membership is by birth.
2. Liability: The liability of the karta is unlimited but the liability of the co-parceners is limited to their share in the ancestral property.
3. Control: The control lies in the hands of the karta. He is the sole decision maker.
4. Continuity: It continues even after the death of the karta as after his death the eldest member of the family becomes the new karta.
5. Minor members: A person becomes the member by birth. Thus, a minor is also a member.


Name the Head of Joint Hindu Family Business.

Karta :-
Karta means manager of joint family and joint family properties. He is the person who takes care of day to day expenses of the family looks after the family and protects the joint family properties. It is a presumption that ordinarily senior most male member is the Karta and Karta is always a member in the family no outsider or stranger can become a Karta. 

The senior most male member so long as he is alive may be, aged, infirm or ailing continues as Karta. By his death Kartaship will pass on to next senior most male member. In the presence of senior most male member a junior cannot act as Karta but if all coparcener agree, a junior also can become a Karta. Karta owes his position by consent or agreement of all coparceners.


 Long Answer Type Questions :
Explain the meaning and features of Joint Hindu Family Business.

Meaning of Joint Hindu Family Business:

The Joint Hindu Family Business is a distinct form of organisation peculiar to India. Joint Hindu Family Firm is created by the operation of law. It does not have any separate and distinct legal entity from that of its members.

The business of Joint Hindu Family is controlled under the Hindu Law instead of Partnership Act. The membership in this form of business organisation can be acquired only by birth or by marriage to a male person who is already a member of Joint Hindu Family.

“When two or more families agree to live and work together, throw their resources and labour with joint stock and share profits and the losses together, then this family is known as composite family.”

 

There are two schools of Hindu Law-one is Dayabhaga which is prevalent in Bengal and Assam and the other is Mitakshara prevalent in the rest of the-country. According to Mitakshara law, there is a son’s right by birth in the property of joint family. It means, when a son is born in family, he acquires an interest in the property jointly held by the family.

The business of the Joint Hindu Family is controlled and managed by one person who is called ‘Karta’ or ‘Manager’. The Karta or manager works in consultation with other members of the family but ultimately he has a final say. The liability of Karta is unlimited while the liability of other members is limited to their shares in the business.

Characteristics of a Joint Hindu Family Business:

The main characteristics of Joint Hindu Family Business are given below:

1. Governed by Hindu Law:

The business of the Joint Hindu Family is controlled and managed under the Hindu law.

There are two schools of Hindu law:

(i) Dayabhaga, and

(ii) Mitakshara.

2. Management:

All the affairs of a Joint Hindu Family are controlled and managed by one person who is known as ‘Karta’ or ‘Manager’. The Karta is the senior most male member of the family. He works in consultation with other members of the family but ultimately he has a final say.

The members of the family have full faith and confidence in Karta. Only Karta is entitled to deal with outsiders. But other members can deal with outsiders only with the permission of Karta.

3. Membership by Birth:

The membership of the family can be acquired only by birth. As soon as a male child is born in family, he becomes a member. Membership requires no consent or agreement.

4. Liability:

Except the Karta, the liability of all other members is limited to their shares in the business. The Karta is not only liable to the extent of his share in the business but his separate property is equally attachable and amount of debt can be recovered from his separate property.

5. Permanent Existence:

The death, lunacy or insolvency of any member of the family does not affect the existence of the business of Joint Hindu Family. The family goes on doing its business.

6. Implied Authority of Karta:

In a joint family firm, only Karta has the implied authority to contract debts and pledge the credit and property of the firm for the ordinary purpose of the businesses of the firm.

7. Minor also a Partner:

In a partnership, minor cannot become co-partner though he may be admitted to the benefit of partnership. In a Joint Hindu Family firm minor is a partner.

8. Dissolution:

The Joint Hindu Family Business can be dissolved only at the will of all the members of the family. Any single member has no right to get the business dissolved.



Explain the merits of the Joint Hindu Family business.

Merits of the Joint Hindu Family business are as follows:-
1. Effective control: The Karta can promptly take decisions as he has absolute decision-making power.
2. Continued business Existence:- The death or lunacy of Karta will not affect the business as the next eldest member will then take that position.
3. Limited liability:- The liability of all members except Karta is limited.
4. Secrecy:- Complete secrecy regarding the business decisions can be maintained by Karta.


Define 'co-operative society'. Explain the features of a co-operative society.

A cooperative organisation is an association of persons, usually of limited means, who have voluntarily joined together to achieve a common economic goal. 
The following are the characteristic features of a cooperative organisation:
1.  Voluntary Association: A cooperative society is a voluntary association of persons and not of capital. Any person can join a cooperative society of his free will and can leave it at any time. 
2. Spirit of Cooperation: The spirit of cooperation works under the motto, ‘each for all and all for each.’ This means that every member of a cooperative organisation shall work in the general interest of the organisation as a whole and not for his self-interest.
3.  Democratic Management:  Economic equality is fully ensured by a general rule—one man one vote.Whether one contributes 50 rupees or 100 rupees as share capital, all enjoy equal rights and equal duties. A person having only one share can even become the president of cooperative society.
4.  Capital: Capital of a cooperative society is raised from members through share capital.Since it is a part of govt. policy to encourage cooperatives, a cooperative society can increase its capital by taking loans from the State and Central Cooperative Banks.
5.  Fixed Return on Capital: In a consumers’ cooperative store, return on capital is fixed and it is usually not more than 12 p.c. per annum. 


In which form of business organization, a minor can also be a member?

Joint Hindu family business recognises every individual as a member who is born in the hindu undivided family. Hence, minors are also included in the members of the a joint hindu family business.


Explain the features of the Joint Hindu Family Business?

Features of Joint Hindu Family business are as follows:-
1. Formation:- There should be at least two members in the family and some ancestral property to be inherited by them to start this type of business.
2. Membership:- Membership automatically starts by birth in the family.
3. Control:- Here, business is managed wholly by the Karta. The other members can suggest and assist him.
4. Liability:- Liability of the Karta is unlimited but of all other members is limited to the extent of their share in the assets.
5. Permanent existence:- The existence is permanent like the existence of the company. There is no effect of the death, insolvency of any member of the business.
6. Minor members: A minor can also become a full-fledged member of the family business.
7. Registration: There is no need for any registration.


Explain the limitations of Joint Hindu Family Business.

The limitations of Joint Hindu Family business are:-
1. Limited capital: There is a limitation on capital as it is confined to the ancestral property.
2. Limited managerial skill: In this, all the decisions have to be taken by Karta but he might not well-versed with all the aspects of business. Therefore, sometimes the decisions taken are not favorable to the business.
3. Unlimited liability: In this, the liability of the Karta is unlimited. So, he might hesitate in taking new and risky business decisions.
4. Unbalanced decision: As Karta is overburdened with work he may take unbalance decisions.


What is different kinds of cooperative societies?

There are six types of co-operative societies:-
  1. Consumer's co-operative society:- The society consists of consumers who join together to eliminate the middlemen. The consumer cooperative societies purchase goods directly from manufacturers and sell them to the member at a reasonable price. 
  2. Producer's co-operative society:- The society consists of small producers who individually find it difficult to procure the inputs, get the machinery and latest technology.
  3. Marketing co-operative society:- The cooperative marketing society consists 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. 
  4. Farmer's co-operative society:- These consist of small farmers who join together to avail the benefits of large-scale merchandised farming. Such societies are particularly important in the case of countries such as India, where agriculture suffers from excessive subdivision and fragmentation of land.
  5. Credit co-operative society:- It consists of people with limited resources who find it difficult to arrange credit and loans. These societies provide financial assistance to its members and promote habits of savings among the members.
  6. Co-operative housing society:- These societies are formed to provide residential accommodation to their members. These societies purchase a big plot of land, construct flats on that and sell these flats to their members on installment and easy payment terms.


What is the role of Karta in a Joint Hindu family business? Give any four points.

The role of karta in a Joint Hindu family business is:
1) The control of the family business lies with the Karta. His decisions are binding on the all other members.
2) Karta has unlimited power and even though he acts on behalf of other members, he is not a partner or agent.
3) Karta is not bound to pay the income of the joint family in any fixed proportion to other members. This means that the Karta need not divide the income generated from the joint family property equally among the family members. He can discriminate one member from another and is not bound to treat everyone impartially. The only responsibility is that he has to pay everyone something so that they can avail themselves of the basic necessities such as food, clothing, shelter, education, etc.
4) The liability of karta is unlimited whereas the liability of all other members of joint Hindu family business is limited up to their share in the business.


Explain the limitations of a sole proprietorship.

The limitations of a sole proprietorship are as follows:-
1. Limited financial resources:- In sole proprietorship firm, finance is supplied by the proprietor himself from his wealth or from borrowings. Usually, there is a limit to the credit raising capacity of a single person.
2. Limited managerial ability:- The survival and continuity of sole proprietorship firm depends upon one person only. If the proprietor dies or becomes insolvent then the business may come to an end.
3. Unlimited liability:- The sole proprietor is personally liable for all the debts. In case of heavy losses, the proprietor will not only lose all his business assets but he may have to sell his personal property to pay back his debts.
4. Limited Managerial Skill:- In sole proprietorship firm, all the activities are performed by a single individual. A single individual might not be well-versed with all the aspects of business.


Explain the merits of a co-operative society.

The merits of a co-operative society are as follows:
1) Ease of formation: Any ten adults having a common objective can establish a cooperative society by getting it registered with the registrar. 
2) Stable existence: Due to its registration, the society is a separate legal entity and is not affected by the death, lunacy, or insolvency of any of its members.
3) Limited liability:- The liability of members is limited to the extent of their capital contribution.
4) Supply of goods at a cheaper rate:- These societies benefit their members by supplying them goods at cheaper rates than the market.
5) Government support: Government provides support by extending loans at lower interest rates, subsidies and by charging fewer taxes.


Explain the limitations of a Co-operative society.

Following are the limitations of a co-operative society:
1) Shortage of capital: It suffers from a shortage of capital as it is usually formed by people with limited means.
2) Inefficient management:- These are managed by elected members who may not be competent and experienced. Due to lack of managerial knowledge, they might not be able to run the society effectively.
3) Lack of Secrecy: They have to send their annual reports and accounts to the registrar of co-operative societies. In this way, the secret of business becomes public.
4) Excessive government control: It suffers from excessive rules and regulations imposed by the government.
5) Conflict among members: The members are from different sections of society with different viewpoints. If any or a few members become rigid, the result is conflict.


Define Partnership Deed.

The document containing the terms and conditions of the partnership agreement is known as Partnership Deed. It is a stamped paper on which the terms and conditions for the regulation of the partnership are written. It also contains the names, details, rights and duties of the all the partners.


Explain the features of a co-operative society.

The features of a Co-operative society are as follows-
1) Voluntary Membership:- Everyone having a common interest can voluntarily join a cooperative society.
2) Legal status:- Its registration is compulsory and that gives it a separate legal identity.
3) The limited liability:-The liability of the members is limited to the extent of their capital contribution to society.
4) Control:- Management and control lie with the managing committee elected by the members by voting.
5) Service motive: The main aim is to serve its member and not to maximize the profit.


Define co-operative society?

A cooperative society or organization is a voluntary association of persons who join together for mutual help. In this form, the main motive is not earning profit but mutual benefit of all the members. It works with the principle of each for all and all for each. A minimum of 10 persons are required to form a cooperative society. The registration of a co-operative society is compulsory and the capital of cooperative organisation is contributed by the members only in the form of share capital.


Class 11 Commerce Business Studies Extra Questions