Small Business And Entrepreneurship - Class 11 Commerce Business Studies - Extra Questions

Why is there more scope for small-scale industries in developing countries like India?

Developing countries face a shortage of finance and there is an abundance of labour. Small businesses prefer production methods that need less capital and more labour. Small-scale enterprises have more opportunities in India since the government provides them with lots of benefits.


What is a startup?

A startup is a business entity registered in India, formed as a private limited company, a partnership, a limited liability company, or a sole proprietorship, that was started less than five years ago and has an annual turnover not exceeding 25 crores in any year since its inception. To be eligible for a startup, the enterprise shall not have been formed by splitting up or reconstructing an existing business entity.


How do patents help in business?

Patents protect "new," "non-obvious," and "useful" techniques, methods, and inventions. If granted, a patent gives you a monopoly on selling, using, making, or importing an invention. However, the requirements for obtaining a patent are extensive.


Write short answers for the following :
What are the functions of National Company Law Tribunal?

National Company Law Tribunal was constituted on 1 June 2016 under the Companies Act 2013 by the government based on the recommendations of the justice Eradi committee. It is a quasi-judicial body that adjudicates issues relating to Indian companies. It has eleven benches, two at New Delhi (one being the principal bench) and one each at Ahmedabad, Allahabad, Bengaluru, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata and Mumbai.
  • It has the power to resolve proceedings:

  1. Initiated before the Company Law Board
  2. Pending before the Board for Industrial and Financial Reconstruction (BIFR), including those pending under the Sick Industrial Companies (Special Provisions) Act, 1985
  3. Pending before the Appellate Authority for Industrial and Financial Reconstruction
  4. Related to claims of oppression and mismanagement of a company, winding up of companies and all other powers prescribed under the Companies Act.
However, the decisions of the NCLT may be appealed to the National Company Law Appellate Tribunal (NCLAT) and the decisions of NCLAT may be appealed to the Supreme Court of India.


Essay Type Questions :
Explain constitution, composition and functions of National Company Law Tribunal.

The NCLT shall consist of a President and such number of Judicial and Technical Members as may be required. As per MCA circular6 dated June 7, 2016 notified that the principal bench of the NCLT is to be located at New Delhi and it would have ten other benches at New Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Chandigarh, Allahabad, Ahmedabad, Hyderabad and Guwahati. The Hon'ble Justice M.M. Kumar, retired judge of the Punjab and Haryana High Court and the current Chairman of the CLB has been appointed as the President of the NCLT and Hon'ble Justice S.J. Mukhopadhaya (Retd.), Supreme Court of India has been appointed as the Chairperson of NCLAT. The existing members and staff of the CLB shall be the members and staff of the NCLT as well.

The NCLT will now deal with the provisions relating to the call for general meeting, oppression and mismanagement, investigation into the company's affairs, class action suits, conversion of a public company to a private company, inspection of books and minutes, compounding of offences etc. Further, the provisions relating to compromise, amalgamation, winding up and capital reduction will continue to be governed by the High Courts. Therefore, the MCA is yet to notify provisions regarding:

  • Compromises, arrangements and amalgamations including reduction of share capital;
  • Revival and rehabilitation of sick companies; and
  • Winding up of companies
Hence, the MCA has planned to transfer the jurisdiction of High Courts in a phased manner in order to provide a smooth transition. Meanwhile, the provisions relating to compromise, mergers, and reduction of share capital and winding up proceedings shall continue to be under the jurisdiction of the High Court and of sick companies shall continue to be under BIFR until further notification.

The appeal from any order of the NCLT would be made with the NCLAT instead of High Court. However, appeals from the NCLAT orders will be heard by the Hon'ble Supreme Court of India.


Essay Type Questions :
Enumerate the various statutory bodies that govern the administration of the Companies Act.

The Ministry of Corporate affairs (MCA), Indian government ministry is primarily concerned with administration of the Companies Act 2013. 


How do Intellectual Property Rights help small business?

Intellectual Property Rights (IPR) systems can be critical in helping new ventures transform their innovation potential and creativity into market value and competitiveness. Innovative entrepreneurs can use intellectual property rights (IPR) to safeguard their inventions. It also gives you a leg up on your competition.


Give the full form and features of NSIC.

National Small Industries Corporation:- National Small Industries Corporation (NSIC) was set up in 1955 to promote and foster the growth of SSI in the country.

Its main focus is:-

  1. To supply indigenous and improved machines under an easy installment payment system.
  2. To procure and supply imported ram material.
  3. To export products of SSI.



How does a trademark work?

A trademark functions similarly to a brand name. It is any word(s) or symbol(s) used to identify and distinguish a product from others in the marketplace. For example, Nike's famous logo that has a swoosh mark is an example of a trademark. A trademark gives you legal protection by ensuring that no one else can use it.


What do you mean by the Startup India scheme?

Startup India is an initiative of the Government of India. The campaign was first announced by the Prime Minister of India, Mr. Narendra Modi, in his speech on 15 August 2015.
Start India is an action plan to develop an eco-system to promote and nurture entrepreneurship across the country. The government is offering various bank financing schemes to promote Startups.


Give full form and features of DIC.

District Industries Centres:- District Industries Centres (DICs) program was started on May 1, 1978, to provide assistance to small-scale industries at the district level. These centers provide promotional services such as identification of suitable schemes, preparation of feasibility reports, arranging for credit, etc. These centers promote entrepreneurial attitudes in rural areas. DIC is the institution at the district level that provides services and support to an entrepreneur for setting up a small-scale business.


What are the problems faced by small-scale industries?

The problem faced by small scale industries are as follows:- 

  1. Poor capacity utilization:- In many small-scale industries, the capacity utilization is not even 50% of the installed capacity. Nearly half of the machinery remains idle. Capital is unnecessarily locked up. Idle machinery also occupies space and needs to be maintained resulting in increased costs.
  2. Incompetent management:- Many small-scale industries are run in an incompetent manner by poorly qualified entrepreneurs without much skill or experience. Not much planning is done in the business matters such as demand, production level, and techniques, financial availability, plant location, prospects, etc. According to an official study, the major reason for SSI sickness is a deficiency in project management i.e. inexperience of promoters in the basic process of production, cash flow, etc.



Answer the following question in $$2$$ or $$3$$ sentences.
State any two characteristics of entrepreneurship.

Characteristics of Entrepreneurship :-

  • Ability to take Risks
This is the first and foremost trait of entrepreneurship. Starting any business involves a considerable amount of risk of failure. Therefore, the courage and capacity to take the said risk are essential for an entrepreneur.

  • Innovation
In a world, where almost everything has been done, innovation is a priceless gift to have. Innovation basically means generating a new idea with which you can start a business and achieve a substantial amount of profits. Innovation can be in the form of a product, i.e., launching a product that no one is selling in the market. It can also be in the form of process, i.e., doing the same work in a more efficient and economical way.



What do you mean by a copyright?

Copyright protection grants the owner the sole right to reproduce the work, modify it (that is, create "derivative works") and distribute, perform and display the work publicly. It is a right conferred upon the creators of literary, artistic, music, sound recording, and cinematographic films. The registration of the content is not mandatory but is essential to exercise exclusive rights in case of an infringement.


What do you mean by small business?

Small-scale businesses exist in every country, but in a developing country like India. They hold a special place because capital is scarce and labor is abundant, and small-scale businesses adopt labor-intensive or capital-saving techniques. According to Industries Development and Regulation Act, 1951 as "Any enterprise which employs not more than 50 persons when using power and 100 when not using power and with capital assets not exceeding 5 lakh" is termed as the small-scale industry.


What is the role of small-scale business in rural India?

Small-scale industries provide the following benefits in rural areas:
  1. Employment: Small-scale industries are labor-intensive so they provide additional employment to men and women. Small business is the most popular occupation in India, next just to agriculture. They also hire cultivators who remain unemployed for a period of the year.
  2. Improves Economic condition- Small-scale industries give greater employment options for those living in rural areas, resulting in improved economic conditions in villages.
  3. Promotion of Artistic and Creative Sense: Small businesses established in rural areas provide opportunities to promote creative excellence and innovation, that has been suppressed in rural areas.
  4. Mobilization of Local Resources: Small-scale industries facilitate mobilization and utilization of local resources which might otherwise remain underutilized. This helps in tapping resources like entrepreneur skills and small savings especially in rural areas.


Match the following :
List I : Industry
List II: Investment Limit

Tiny Enterprises are also known as Micro-Enterprise and the investment limit that is set up by the government is ₹25,00,000 i.e. 25 lakhs in case of manufacturing enterprises.

The ceiling on investment in plant and machinery in the case of Small Scale Enterprise is ₹1,00,00,000  i.e. 1 crore.

The investment limit in plant and machinery in the case of SMF Sector Enterprises is Rs.5,00,00,000 i.e. 5 crores.

The investment limit in the case of Export Oriented Small Scale Enterprise is 10 crores that is set by the government of India. 



Class 11 Commerce Business Studies Extra Questions