Fundamentals Of Business Activities - Class 9 Elements Of Business - Extra Questions

1. Sachin's transaction cannot be termed as a business transaction as it is not a continuous process. The feature of business  which supports the statement is 'continuity'

The main difference between economic and non-economic activities is the end result of that activity. If the end result is earning money then it is economic activity and Wend result is psychological satisfaction then it is non-economic activity: 
(a) Economic activity 
(b) Non-economic 
(c) Economic 
(d) Non-economic. 

The economic activity which involves specialised knowledge is known as a profession. Profession includes those activities, which require special knowledge and skill to be applied by individuals in their occupation. Such activities are generally subject to guidelines or codes of conduct laid down by professional bodies. Those engaged in professions are known as professionals. For example, doctors are engaged in the medical profession and are subject to the regulations of the Medical Council of India, the concerned professional body. Similarly, lawyers are engaged in the legal profession, governed by the Bar Council of India and Chartered Accountants belong to the accounting profession and are subject to the regulations of the Institute of Chartered Accountants of India. 

1. Selection of line of business: The first thing to be decided by any entrepreneur of a new business is the nature and type of business to be undertaken. He will obviously like to enter that branch of industry and commerce, which has the possibility of greater amount of profits. The decision will be influenced by the customer requirements in the market and also the kind of technical knowledge and interest the entrepreneur has for producing a particular product. 
   
2. Physical facilities: Availability of physical facilities including machines and equipment, building and supportive services is a very important factor to be considered at the start of the business. The decision relating to this factor will depend on the nature and size of business, availability of funds and the process of production. 
   

Commerce is considered as the backbone of industry because it performs the following functions :

1. Helps in eliminating the hindrances of persons.
   
2. Helps in eliminating the hindrances of place.
   
3. Helps in eliminating the hindrances of time.
   
4. Helps in eliminating the hindrances of finance.
   
5. Helps in eliminating the hindrances of risk.
   
6. Helps in eliminating the hindrances of information.
   

Yes, I agree with this statement that profit is not an objective but a requirement of business. A business must earn profit because of the following reasons: 
(i) Survival 
(ii) Growth 
(iii) Symbol of efficiency 
(iv) Reward for risk bearing 
(v) Improves goodwill.

Yes, I agree with this statement. Like eating is essential for survival of any human being, same way profit is essential and a must for survival of any business. But a person cannot survive for a long time and cannot lead a healthy life only by eating. A person has to perform other activities also such as social activities, religious activities and patriotic activities. 

(a) Working as CA is an Economic activity.
(b) Teaching students without charging them is a Non-Economic activity. 
(c) Values followed by Bhuvan are: (i) Sympathy (ii) Compassion 

(i) Amer is a professional. Akbar is engaged in business. Anthony is an employee.

(a) Medical Council of India 

(a) False- Main elements of business are Trade and Auxiliaries to Trade

(a) Business 

By donating the clothes to orphan children in her locality, Ravine engaged in a Non-Economic activity. Whereas, other clothes which were sold in the exhibition is a business activity and hence can be termed as an Economic activity.

Mrs Higgins is engaged in a business activity since she is involved in supplying chocolate to a local bakery regularly. An activity which involves producing and supplying goods and services for profit is a business activity and nancy is not doing business because she is not doing that everyday for her living or to make a profit out of that.Continuity is a very important characteristic of business.

(a) No, the transaction between Indu and her friend cannot be termed as business.
(b) Business activity needs to be on a "Regular Basis". The transaction 'a' does not have continuity an hence cannot be termed as a business. 
(c) Yes, as it is done on Regular Basis, the sale of dresses on her shop can be called as business.

No, business does not involve only sale and exchange of goods and services for profit. The sale, purchase or exchange must be on regular basis. Business should have a continuity in the process. If a person sells his old computer at profit, it does not constitute business. 

(a) No. The transaction between Rakesh and Nishant cannot be termed as a business transaction since it is not done on a regular basis.

(i) Value of citizenship

The values which are violated are:

Business enterprise is any endeavor where the primary motive is profit and not mere employment for oneself and others. It is the activity of providing goods and services involving industrial, financial and commercial aspects.

1. No. Sachin's business transaction does not happen on a 'regular basis' which is an important feature of business.

Answer
Commission. Term usually given to agencies charged with the regulation of business activities ... The several units that make up any administrative organization. Line agencies chapter

A) Common seal is the official stamp used by joint stock company.
B) E- business is short form of electronic business. It is a business conducted through internet. 
C) Principle of unity of command is one of the principle of management  given by Henry Fayol. It states that one employee should be responsible to one supervisor only.
D) Cold storage is used for various perishable goods like storage of milk, vegetables etc. 
E) Controlling ensures that an organization’s resources are being used effectively & efficiently for the achievement of predetermined goals. It is considered primary function of management. 

Bangalore is known as the Information Technology hub of India. Bangalore city is also known as the Silicon Valley of India. It is also referred to as the IT (Information Technology) capital of India. It plays a crucial role in the export of Information Technology. The headquarters of Indian technological organizations are located in this city.

Business activities are classified into two categories:-

1. Industry:- Industry refers to an activity that converts raw material into a useful product. Industry includes activities related to production and processing as well as activities related to the rearing and reproduction of animals or other living species.
2. Commerce:- Commerce refers to all those activities which help directly or indirectly in the distribution of goods to the ultimate consumer. There will be no use in producing goods unless and until these goods reach the ultimate consumer. Goods are produced in one place and consumers are scattered at different places. The consumers are not aware of what kind of goods are produced by the manufacturer. Goods are produced in a large quantity and demanded by consumers in a small quantity. All these problems i.e. the hindrances of place, hindrances of knowledge, hindrances of storage, etc are solved by commerce.

The transfer of interest is not possible in the following cases:

Human capital refers to the production factors, coming from human beings, we use to create goods and services. Our knowledge, skills, habits, and social and personality attributes all form part of the human capital that contributes to the creation of goods and services. Our creativity also contributes. Factors of production are the four inputs required for the production of goods and services.

In other words, it is the collection of all our resources. It comprises all our knowledge, abilities, talents, skills, intelligence, training, judgment, and experience. It also includes our wisdom, individually, and collectively.

Business activities can be classified as:
1. Industry;
2. Commerce
Industry: It involves activities that are concerned with processing raw materials to shape them into final products. The role of an industry is to provide value to the raw material so that it can be consumed by the end-users (consumers). Industries are classified as primary, secondary, and tertiary based on the function they perform.
Commerce: It is mainly concerned with trading and related activities. It includes the exchange of goods and services. Commerce deals with two types of activities: trade and auxiliaries to trade. When goods are bought and sold, it is referred to as trade and auxiliaries to trade involved activities that include banking, transportation, advertising, communication. Commerce provides the necessary link that needs to exist between producers and consumers.

Radhika is trying to achieve the social objectives of the business. Social objectives are those objectives that are desired to be achieved for the benefit of society. They include:

Following are the characteristics of business-
1. An economic activity:- Business is considered as an economic activity as it is undertaken with the objective of earning money.
2. Production of goods and services: Business includes all the activities concerned with the production and supply of goods and services.
3. Sale or exchange of goods and services: There should be a sale or exchange of goods or services between the seller and the buyer.
4. Profit earning: The main purpose of business is to earn profit. A business cannot survive without making profit. So, businessmen try to maximize profit by increasing the sales or reducing cost.
5. Uncertainty of return: Every business invests money with the objective of earning profit but the amount of profit earned may vary. Also, there is always a possibility of losses.
6. Element of risk: All business activities carry some elements of risk because the future is uncertain and business has no control over several factors like strikes, fire, theft, change in consumer taste, etc.

The social objectives of the business are :
1. Quality goods and services at a fair price: The first social objective of business is to provide a good quality product at reasonable prices and in proper quantity.
 2. Avoidance of Anti-social and unfair trade practices: Anti-social practices includes hoarding, black-marketing, and adulteration. Making false claims in advertisements to mislead people is an example of unfair trade practice. Businesses should not indulge in such practices.
3. Generation of employment: Recently, unemployment has become one of the huge problems of society. Businesses should provide employment to more and more people living in the country.
4. Community service: Businesses should contribute something to the society where it is established and operated. Library, dispensaries, educational institutions, etc. are certain contributions that a business can make and help in the development of the community.

Those activities whose objective is to earn money and to create wealth are known as economic activities. The main aim is to earn maximum attainable profit. For examples - people working in factories, cooking food in a restaurant, a teacher teaching in a school, etc.

All human beings, where they are, are required to perform some of the other activities to satisfy their needs. They pursue different occupations to earn a livelihood and to get some psychological satisfaction. Activities that human beings undertake are known as human activities. Some of these activities are undertaken to earn money but others are performed to derive personal satisfaction. On examination of human activities, one can find that some of these activities produce direct economic benefits, for example:- working in an office, running a shop, etc, while others do not produce direct economic benefits, for example:- cooking, playing, going to school, etc. There are two types of human activities:-

1. Economic Activities:- Activities that are undertaken by people with the object of earning money are known as economic activities. For example:- Production of goods in a factory, distribution of goods by a wholesaler or retailer.
2. Non-economic Activities:- The activities which are undertaken by an individual with a motive of getting psychological satisfaction are known as non-economic activities. Examples are:- going to the temple, charity, etc.

Activities can be economic or non-economic based on intention. This statement is true. Economic activities are done with an intention of earning monetary value. Non-economic activities are performed with an intention to help people and contributing to the society.
For example:

1. A tutor teaching in a coaching for Rs.50,000 per month and same tutor teaches to slum children for personal satisfaction.
2. A doctor treating patients in clinic and same doctor treats poor families for free.

1. Promoting capital formation: Capital formation is a fundamental requirement for economic development. Private savings are very low in the underdeveloped countries in view of the low income of the people. Therefore, there is a need for generation of savings by the government Developing countries have to depend primarily on government to mobilize domestic resources during the early stages of economic development. The government has a major role to play in promoting capital formation.
2. Development of Economic Infrastructure: Provision of economic infrastructure is mostly the responsibility of the government. Key economic services, called infrastructure, like railways, road transport, communication network, roads, bridges, irrigation works, gas, electricity, etc. are very essential for economic development. The absence of infrastructure can retard economic development.
3. Politics of the welfare state: The government is also required to undertake the responsibility of the welfare state. The welfare state is a society in which the government protects the individuals against various contingencies so as to guarantee people a minimum standard of living. The government provides various types of assistance to the people as part of the policies of a welfare state, such as pensions, accident insurance, health insurance etc.
4. Population policy: Population is growing rapidly in most of the underdeveloped countries. The government can evolve an appropriate population policy to control population growth. All the development efforts will be futile if the growth in number is not checked. To increase the per capital income and to improve the standard of living of the people the rate of population growth must be checked. The state can evolve an appropriate population policy by giving priority to family planning programme.

• An appointed or elected member of the board of directors of a company who, with other directors, has the responsibility for determining and implementing the company's policy.
• powers of directors :

An occupation in which people regularly engage in activities relating to the purchase, production, and sale of goods and services with a view to earning profit is known as business.

One of the main purposes of business is to earn income by way of profit. No business can survive for long without profit. That is why, businessmen make all possible efforts to maximize profits, by increasing the volume of sales or reducing costs.

Profession refers to the activities which require special knowledge and skill to be applied by an individual in his work to earn a living. These activities are subject to guidelines or codes of conduct laid down by professional bodies. The people who are engaged in professions are known as professionals. 

The term business comes from the word 'busy' and means doing things on a regular basis. Business refers to those economic activities which are connected with the production, purchase, sale or distribution of goods or services with the main objective of earning profit.
Example:- Fishing, Mining, Farming, Manufacturing, Wholesales etc.

It is a businessman bears the risks and run business with the main motive of earning profit. Profit is the type of incentive or reward given to business man for bearing the risk. Private gain is the main incentive of the business by providing goods and services as it is the means of livelihood for the businessman to survive in the market and then expand or grow by analyzing market condition and change in business environment.

Employment refers to an activity in which an individual works regularly for another person and gets remunerated in return. Employees are those who are employed by others. Employers are people who hire others to work for them on a regular basis. Salary or wages refers to the remuneration paid by an employer to an employee.

Business refers to those economic activities that involves the purchase, production and sale of goods and services with a motive of earning profit by satisfying human needs in society. Examples are:- Wholesalers sell goods to the retailers and retailers sell goods to the customers.

The term marketing standing is concerned with the position of an enterprise. The percentage of total sales for a product in a particular market that a business accounts for is the market standing for that company.

Profession includes those activities, which require special knowledge and skill to be applied by individuals in their occupation. Such activities are generally subject to guidelines or code of conduct laid down by professional bodies. Those engaged in the profession are known as professionals. Examples are: teaching, law, etc.

Consolidation means business combination of two or more entities. This can occur in various forms:
1. Merger of two or more entities into a new entity.
2. Merger of one or more entities into an existing entity.
3. Acquisition of one or more entities by an existing entity.
Consolidation can also be understood in terms of merging financial statements of one or more entities into another.

Liquidation is a process, wherein, all the assets of the business are sold and liabilities are settled. It is the process of bringing the operations of a business to end, i.e. the business ceases to exist. It is an event that usually, not necessarily, occurs when a entity is insolvent, meaning it cannot pay its obligations when they are due.

According to Lewis H. Honey:- "Business is a human activity directed towards producing or acquiring wealth through buying and selling goods."

According to Peterson and Plowman:- "Business is an activity in which different persons exchange something of value, whether goods and services for mutual gain or profit."

The fundamental for differentiating economic and non-economic activities is the final result. If end result is money income then it is economic activity, if end result is psychological satisfaction then it is non-economic activity.

Economics: It is the study of how the society uses its scarce resources to produce goods and services demanded by the people. It the basically the study of the behavior of the economy. It is a study or a theory of certain principles and rules.

Economy: It is a country/nation where the economic principles are at play.                                                                                             An economy is from where we try to derive the economic principles.        It is a place or phenomena.

    

• Economic activities:
  

Economic activity: 1.       Activities which are related to the production and consumption of goods in return for money 2.       The main motive is to earn money 3.       It is added to the national income. 4.       Example: A shopkeeper sells goods and gets money for it. An employee works in an office and gets paid.

Non-economic activity: 1.       The activities which are done out of one’s own will and not to earn money. 2.       The motive can be social or psychological. Out of love, satisfaction, happiness. 3.       It is not added to the national income. 4.       Example: Anyone who works at an NGO out of one’s own will without getting paid.

Economy is the large set of inter-related production and consumption activities that aid in determining how scarce resources are allocated. This is also known as an economic system.

Every human being keeps himself occupied in some activity to satisfy human wants; such activities are known as human activities. These activities are broadly classified as economic and non-economic activities. While economic activities are those conducted with an aim of earning money or acquiring wealth, non-economic activities are performed free of cost, with service motive.

No, drinking tea from a tea stall in the market in a economic activity because it involves exchange of goods for some monetary worth which is regarded as an economic activity.  

Economic activity: 1.       Activities which are related to the production and consumption of goods in return for money. 2.       The main motive is to earn money. 3.       It is added to the national income. 4.       Example: A shopkeeper sells goods and gets money for it. An employee works in an office and gets paid.

Non-economic activity: 1.       The activities which are done out of one’s own will and not to earn money. 2.       The motive can be social or psychological. Out of love, satisfaction, happiness. 3.       It is not added to the national income. 4.       Example: Anyone who works at an NGO out of one’s own will without getting paid.

Economic activity are the ones which are related to the production and consumption of goods and services in return for money. The main aim of these activities is:

1.    To produce those goods and services which the consumer require.

2.    To earn money (cash) in return for these goods or services provided.

Example: An employee works in an office and gets salary. 

The Net attendance ratio is the percentage which shows the number of children between the age of 6-10 who attend school as compared to the total children of that age. It is also known as the Enrollment ratio. 

Economic activities:
(i) It involves raw material, methods of production-buying and selling, saving, spending, etc.
(ii) It covers a lot of activities including shopping, travelling, opening of a bank account, growing vegetables and fruits, etc. For example, a doctor working at his clinic.
Non-economic activities:
(i) It includes those activities which are undertaken for personal satisfaction. This means that these activities are not related to wealth. It won't make you richer or poorer.
(ii) It includes hobbies that are done for one's personal interest.
(iii) For example, a child helping an old man to cross the road.

The correct matches of the pairs are :

1. the company secretary acts as an advisor to  board of directors and implements the decision taken by the board of directors.
2. A secretary occupies nucleus (central) position, around which the whole office machinery rotates. 
3. He occupies a key position in the administrative set up of the organization.
4.  He is a link between the top management and middle and lower management. 
5. A secretary is a custodian of secret, confidential and important information of his organization.
   
6. One of the most important duties of the secretary is to comply with all the legal requirements on behalf of his organization.   
   
7. communicate with the stakeholders of the company(stakeholder: shareholders, workers, government etc who have direct interest in working of the organization.
8. custodian of maintaining books of accounts required as per companies act
9.  

In ancient times , a secretary was appointed by the king , emperor or a person holding an important position in the society to look after their routine work . However , the work of a secretary was limited to writing letters , doing confidential work and providing advice as and when required. In the modern times , due to expansion of business , the secretary is required to perform a number of functions and duties . The secretary is required to :

‘Secretary’, means an officer who is generally entrusted with the responsibilities of writing and exchanging letters, maintain documents and performing confidential activities on behalf of someone or any organization. A secretary is an important person in a business organization: It is said that a secretary is an indispensable person for office organization. Because he looks after the administrative work and executes the decisions taken by the management. A secretary occupies nucleus (central) position, around which the whole office machinery rotates. He occupies the key position in the administrative set up of the organization. He is a link between the top management and middle and lower management. A secretary is a custodian of secret, confidential and important information of his organization. Since he is closely connected with a top management, he participates in the decision making, policy framing, planning etc. A secretary is responsible for compliance with Legal requirements on behalf of his organization. Maintenance of statutory books and records, the filing of returns (legal papers) and statements to concern authorities, doing or completion of work within the stipulated time limit laid down by the law, all these are the responsibilities of a secretary.

Personal secretary also known as personal assistance is a position in a firm or business of a person who provides administrative and management help to an individual . The main motive of a personal secretary is to reduce the burden of the employer . A personal secretary manages all the daily tasks of the employer which includes preparing of schedules , meetings , communication , letter writing , taking notes etc . A personal secretary should possess the knowledge of management and accounting to take in hold of the administration efficiently. Apart from all this a personal secretary should possess the qualities of multi-taking , good communication skills , fluent language etc .

The secretary of the government department is the administrative head of a ministry or department whose creation lies completely on the Union council of Ministers where the secretary is the principal adviser to the ministry in charge on all policy matters related to the economic activities of the country. 

A Company Secretary means “a person who is a member of the Institute of Company Secretaries of India”. 

According to Section 2(45) of the Companies Act, 1956, “Secretary means any individual possessing the prescribed qualifications, appointed to perform the duties which may be performed by a secretary under this Act and any other ministerial or administrative duties”

The company secretary is responsible for regulating and efficiently managing the financial, legal and statutory requirements. Along with that he has to comply with the corporate governance that includes the welfare of all the stakeholders of the company viz shareholders, employees, customers, suppliers, financiers, government and the society.

Personal secretary often acts as managers first point of contact with people from both outside and inside of the organization. Tasks are likely to include:

A Company Secretary should also possess the following special qualifications:

1. Knowledge of Company Law:

The Secre­tary must know the detailed provisions of the Com­panies Act and its implications. He must have a knowledge of the rules of meetings.

2. Knowledge of Mercantile Law:

The Secretary must have a sound knowledge of Labour Laws, Factories Act, ESI Act, Mercantile Laws and Patent, Copyright and Trade Mark Laws.

3. Knowledge of Economics:

In order to han­dle economic problems of the company, the Secre­tary should have a sound knowledge of Econom­ics—theoretical and practical—general money mar­ket, capital market and financial institutions.

4. General Knowledge:

The Secretary must have a sound general knowledge. He must have thorough acquaintance with social, political and economic conditions of the country.

5. The Secretary must be smart, unbiased, and must have high IQ, presence of mind and amiable personality.

One or more of the following qualifications shall have to be possessed by the Secretary:

(i) Qualifications specified in clause (a) above;

(ii) A degree in law granted by any univer­sity.

(iii) Membership of the Institute of Chartered Accountants of India.

(iv) Membership of the Institute of Cost and Works Accountants of India.

(v) A post-graduate degree or diploma in Management granted by any university or the Indian Institute of Management.

(vi) A post-graduate degree is Commerce granted by any university.

(vii) A diploma in Company Law granted by any Indian Law Institute.

A secretary is a person who is employed to do office work and administrative work such as letter typing , arranging meeting , making schedules etc .  A secretary is good at handling day to day administration of a person , team , a secretary is the eyes and ears of the company privy to unique and powerful insight about the company culture , performance future directions . 

A personal secretary is the one who does office work and administrative work . It is a job title of describing a person who assists a specific person with their daily business tasks.

A personal secretary also known as personal assistance, is a job title describing a person who assists a specific person with their daily business or personal tasks. A personal secretary helps with time and daily management, scheduling of meetings , correspondence and note taking. The role of a personal assistance can be varied such as answering phone calls , taking notes , scheduling meetings , emailing , texts etc. They assist with a variety of life management tasks including running errands , arranging travel .their task may include devising and maintaining office systems including data management and filing , organizing meetings and ensuring the manager is well prepared for the meeting . Hence personal secretary is a person who does office work and administrative work in an organisation .

he following duties of the Company Sec­retary:

1. Signing of Annual Returns,

2. Registration of Allotment Returns,

3. Issuing Share Certificates,

4. Convening Annual General Meeting,

5. Maintaining Share Registers,

6. Maintaining Register of Directors.

7.  To ensure that proper stamps are affixed on the company’s documents.

8. Arrange for registration of the company, if necessary, and sub­mit the tax returns.

A Managing Director as defined by the companies act means a director who by virtue of agreement with the company or of a resolution passed by a the company is entrusted with substantial powers of management which would not be otherwise be exercisable by him and includes a director occupying the position of a managing director. A managing director must be an individual and can be appointed for a maximum term of five years at a time.

The main functions of the secretary of a coop­erative society are:

1. To act as the mouthpiece of the Managing Committee and to carry out the decisions of the Managing Committee.

2. To carry out the routine activities of the office including correspondence, maintenance of registers and accounts, receipts of payment of cash and preparation of statements and returns for sub­mission to the Registrar of Cooperative Societies.

3. To convene all the meetings of the society and to help the Chairman in conducting the meet­ings and to write the Minutes of the meetings.

4. To advise the Managing Committee in legal and other matters regarding the activities of the society.

5. To control and supervise the staff of the so­ciety.

6. To prepare the budget estimate for the next year and place it before the Managing Committee and before the Annual General Meeting.

7. To prepare annual accounts for placing be­fore the Auditors.

8. To receive all money on behalf of the soci­ety and issue receipts thereof and to deposit money to the society’s bank.

9. To institute, defend and conduct all legal proceedings in law courts and other places on be­half of the society.

10. To look after the appointment of staff and staff matters.

11. To prepare Income and Expenditure Ac­count and Balance Sheet and Annual Reports and Statements.

12. To all shareholders, issue share certificates, arrange for transfer of shares and maintain share register.

13. To arrange election of office-bearers, Sec­retary and members of the Managing Committee.

14. To represent the society in the govt., court and the public.

15. To maintain the bank accounts of the soci­ety.

As in the case of general meetings, it is the primary responsibility of the Secretary to ensure that Board meetings are duly convened and constituted, and that the provisions of the Companies Act, Articles of Association of the Company and Standing Orders arc complied within the conduct of the meetings. 

According to the Companies Act , a Company Secretary means a person who is a member of the Institute of Companies Secretary India. A company secretary is an important organ of a company who performs various ministerial and administrative duties. It is mandatory for every company having a paid up share capital of 5 crore or more to appoint full time company secretary .

The correct matches of the groups are:

Basis of comparison	Member	Shareholders
Meaning	A person whose name  is written in the register of a company is the  registered member of the company.	The person who owns the shares of a company is called as sharholders
Defined in	Section 2 (27)	Not defined.
Share warrent	The holder of a share warrent is not a  member	The holder of a share warrent is a shareholder.
Company	Every company must have a minimum  number of members.	The company limited by shares can have shareholders.
Memorandum	The person who signs the memorandum of associaton with the company becomes a member.	After signing the memorandum a person can be a shareholder only when the shares are allotedto him.

Basis	Directors	Managing directors
Description	Is the most basic form of an executive officer and is responsible for a specific department	Is the highest level of executive officer and is responsible for the smooth functioning of the corporation.
Heirarcy	Lowest or second lowest executive officer	The highest level of executive officer
Reports to	The vice president or CEO or MD	Reports to the chairman or the board of directors
Roles and  Responsibilities	overseeing their specific department such as finance , marketing or manufacturing. maintains the role of a specified decision maker within the department	maintaining the overall performance of the company and in particular the departments within. Producing and planning strategic operating plans and objectives for long-term future

Under Section 40, Companies Act 1956, "Registrar" means a Registrar, or an Additional, a Joint, a Deputy or an Assistant Registrar, having the duty of registering companies under this Act  The Registrar of Companies (ROC) as defined under Sub-Section 75 of Section 2 of the Companies Act, 2013, is an appointment of the Ministry of Corporate Affairs which is responsible for the regulation of Indian enterprises in Industrial and Services Sector. 

The Companies Act, 1956 was enacted with a view to consolidate and amend the earlier laws relating to companies and certain other associations. The Act came into force on 1st April, 1956. 

An auditor is a person who makes an independent report to a company's shareholders to show whether the company has prepared its financial statements according to company law an other financial reporting rules . The report must also state whether a company's accounts give a true and fair view of its financial affairs at the end of the year. The rights of an auditor includes the following:

According to the Company's Act , a Company Secretary as defined in the company secretary Act, 1980  is appointed by a company to perform the functions of a company secretary under this act . A company secretary means an individual who is a member of the institute of companies secretaries of India and is appointed to perform the functions of a company secretary under the companies act . A company secretary is an important organ of a company  who performs various ministerial and administrative duties . It is mandatory for every company having paid up capital of 5 crore or more to appoint a full tim company secretary . 

Section 2(24), Companies Act 2013 states  “Company Secretary” or “Secretary” means a company secretary as defined in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 who is appointed by a company to perform the functions of a company secretary under this Act. 

1. Act within powers

You must act in accordance with the company’s constitution, and only exercise your powers for the purposes for which they were given.

The company’s constitution includes its articles of association and resolutions and agreements of a constitutional nature (e.g. shareholder or joint venture agreements).

2. Promote the success of the company

You must act in the way you consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole.

Success will generally mean a long-term increase in value but fundamentally it is up to each director to decide, in good faith, whether it is appropriate for the company to take a particular course of action.

When considering what is most likely to promote the success of the company, the legislation states that a director must have regard to:

• the likely consequences of any decision in the long term
• the interests of the company’s employees
• the need to foster the company’s business relationships with suppliers, customers and others
• the impact of the company’s operations on the community and the environment
• the desirability of the company maintaining a reputation for high standards of business conduct
• the need to act fairly as between members of the company.

This list is not exhaustive but is designed to highlight areas of particular importance to responsible business behaviour. Other relevant factors should also be properly considered.

3. Exercise independent judgment

You must exercise independent judgment and make your own decisions.

This does not prevent you from acting in accordance with the company’s constitution or an agreement which the company has entered into.

4. Exercise reasonable care, skill and diligence

You must exercise the same care, skill and diligence that would be exercised by a reasonably diligent person with:

• the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as you in relation to the company
• the general knowledge, skill and experience that you actually possess.

The expected standard is measured against both objective and subjective yardsticks. A director’s actual understanding and abilities may not be enough if more could reasonably be expected of someone in his or her position.

5. Avoid conflicts of interest (a conflict situation)

You must avoid a situation in which you have, or could have, an interest that conflicts, or may conflict, with the interests of the company. This applies in particular to the exploitation of any property, information or opportunity, regardless of whether the company could take advantage of it.

This duty is not infringed if:

• the situation you are in cannot reasonably be regarded as likely to give rise to a conflict of interest. On a proper analysis of the circumstances, consider whether there will actually be a conflict or potential for conflict with the interests of the company
• the situation has been pre-authorised. Authorisation may be given in the articles of association, by specific shareholder resolution or, in certain circumstances, by the other directors who do not share the same conflict.

There is no convenient set of rules to determine which situations will or will not give rise (or potentially give rise) to a conflict of interest. The following are examples of arrangements which may potentially give rise to a conflict situation:

• Multiple directorships – you are also on the board of a major shareholder, the pension scheme trustee company, a competitor or a customer or supplier of the company.
• Personal interests – you are a major shareholder, a competitor, a customer or supplier of the company or you own property adjacent to the company’s property which could be affected by the company’s activities.
• Advisory positions – you have another hat as an advisor (e.g. accountant or consultant) to the company or to a competitor of the company.
• Other profits – you make personal use of the company’s information or opportunities, want to take up an opportunity declined by the company or are in any situation where you can make a profit as a result of your directorship.
• Connected persons – if any of the above situations apply to a person connected with you, e.g. spouse, partner, parent, child or other close family member.

If you think you may be in a potential conflict situation you should:

Seek approval – potentially a conflict situation can be approved by the other members of the board. If the board does not have the power to authorise conflicts or is otherwise unable to approve the conflict situation it could refer the matter to the shareholders for approval.

Check the articles of association – the company’s articles might contain provisions relating to conflicts of interest, including:

• pre-authorised common conflict situations – these might list a limited set of circumstances allowing you to put yourself in a situation which could otherwise give rise to a potential conflict of interest without obtaining specific approval. Typical examples include cross-directorships of group companies or positions relating to the company pension scheme.
• conduct provisions – these might set out how you are expected to conduct yourself in relation to an authorised conflict and might also confirm that you will not be in breach of other duties to the company if you act accordingly. These typically deal with:
  • protecting the confidential information of the company and the third party
  • inclusion or exclusion from board meetings and receipt of board papers
  • any benefit received as a result of the authorised conflict.

Regulate your behaviour – even if a potential conflict situation has been authorised or is permitted by the articles of association you should still act appropriately, remembering your obligation to promote the success of the company. You must take care to act in accordance with the articles of association and any terms and conditions attached to the authorisation.

6. Not accept benefits from third parties

You must not accept a benefit from a third party given because you are a director or because you do (or do not do) anything as a director.

This duty is not infringed if your acceptance cannot reasonably be regarded as likely to give rise to a conflict of interest.

7. Declare interests in proposed or existing transactions or arrangements with the company

If you are in any way, directly or indirectly, interested in a transaction or arrangement with the company, you must declare the nature and extent of that interest to the other directors. In the case of a proposed transaction you must do this before it is entered into. In the case of an existing transaction you must do this as soon as reasonably practicable. This duty is not infringed if:

• your interest in the transaction cannot reasonably be regarded as likely to give rise to a conflict of interest
• an interest has not been declared because you are unaware that you have the interest or the other directors are already (or ought reasonably to be) aware of it.

(a) False. An economic activity is done for some profit motive. 

Real Time Gross Settlement (RTGS) is an electronic form of funds transfer where the transmission takes place on a real time basis. In India, transfer of funds withRTGS is done for high value transactions, the minimum amount being Rs 2 lakh.The beneficiary account receives the funds transferred, on a real time basis.

Business requires legal formalities for running. A professional is when someone is an expert in a field and is a member of a professional body. Employment happens in a company where a person is employed for doing a specific job. A business involves buying and selling of goods and service. 

Commerce includes two types of activities:

The characteristics of business are :-

An economic activity is such an activity which is responsible for earning a livelihood. Example: Business

Business is an economic activity which results in earning profit. The activities include purchase and production of goods and services for the satisfying the needs of the customers.

The Role of Profit in an Economy. Profit is the surplus revenue after a firm has paid all its costs. Profit can be seen as the monetary reward to shareholders and owners of a business. In a capitalist economy, profit plays an important role in creating incentives for business and entrepreneurs.

Business activities can be broadly classified as:

The difference between economic and non-economic activities can be drawn clearly on the following grounds:

• An activity related to buying and selling of goods and services for economic gain is known as economic activity. An activity performed with empathy or moral values without any regard to monetary gain is known as non-economic activity.
  
• Economic activities are performed for creating livelihood such as doing business. On the other hand, non-economic activities are performed for social welfare or psychological reasons.
• Economic activities are measured in monetary terms, whereas non-economic activities are not measured in non-monetary terms.
• Economic activities give more importance to money. As against this, non-economic activities have an idealistic approach wherein more importance is given to human values instead of money.
• Economic activities are very important for the economy as they add value to the country’s gross domestic product (GDP) as well as improve Balance Of Payments through International trade. As opposed to non-economic activities, which have no influence over country’s national income but gives importance to the well-being of the human kind.

Primary industry include all those activities, which are connected with the extraction and production of natural resources and reproduction and development of living organisms, plants etc. Fishing comes under genetic industries which is a further sub division of primary industry.

 Social Objectives:

Social objective are those objectives of business, which are desired to be achieved for the benefit of the society. Since business operates in a society by utilizing its scarce resources, the society expects something in return for its welfare. No activity of the business should be aimed at giving any kind of trouble to the society. If business activities lead to socially harmful effects, there is bound to be public reaction against the business sooner or later. Social objectives of business include production and supply of quality goods and services, adoption of fair trade practices and contribution to the general welfare of society and provision of welfare amenities.

(i) Production and Supply of Quality Goods and Services: Since the business utilizes the various resources of the society, the society expects to get quality goods and services from the business he objective of business should be to produce better quality goods and supply them at the right time and at a right price It is not desirable on the part of the businessman to supply adulterated or inferior goods which cause injuries to the customers. They should charge the price according to the quality of  goods and services provided to the society. Again, the customers also expect timely supply of all their requirements. So it is important for every business to supply those goods and services on a regular basis.

(ii) Adoption of Fair Trade Practices: In every society, activities such as hoarding, black- marketing and over-charging are considered undesirable. Besides, misleading advertisements often give a false impression about the quality of products. Such advertisements deceive the customers and the businessmen use them for the sake of making large profits. This is an unfair trade practice. The business unit must not create artificial scarcity of essential goods or raise prices for the sake of earning more profits. All these activities earn a bad name and sometimes make the businessmen liable for penalty and even imprisonment under the law. Therefore, the objective of business should be to adopt fair trade practices for the welfare of the consumers as well as the society.

(iii) Contribution to the General Welfare of the Society: Business units should work for the general welfare and upliftment of the society. This is possible through running of schools and colleges better education opening of vocational training centres to train the people to earn their livelihood, establishing hospitals for medical facilities and providing recreational facilities for the general public like parks, sports complexes etc.

Business refers to those economic activities, which are connected with the production or purchase and sale of goods or supply of services with the main object of earning profit.

Economic activities may be divided into three major categories i.e. (i) Business (ii) Profession (iii) Employment

Employment refers to the occupation in which people work for others and get remunerated in return. Those who are employed by others are known as employees. Example, workers who work for a company are called employees of that company.

A business activity is when goods and services are produced for the purpose of buying and selling in the market. In the given scenario, Piyush cooks for the consumption of his family but Rishab cooks food and sells it others in restaurant. This follows the criteria of a business activity.