Select the proper option from the options given below and rewrite the completed sentences.
A sole proprietorship is the ________ form of organization.
(a) private sector
(b) public sector
(c) none of
ANSWER:
Correct option- a
A sole proprietorship is the private sector form of organisation.
Explanation:
A sole proprietorship is completely owned and managed by an individual. This kind of business is not regulated by any government and is controlled and managed by the proprietor himself. Hence, it is regarded as a private sector organisation.
A sole proprietorship has ________ owner/owners.
(a) one
(b) two
(c) unlimited.
ANSWER:
Correct option- a
A sole proprietorship has one owner.
Explanation:
Sole means one and proprietor means owner. Therefore, a sole proprietorship is the one which is controlled and managed by only one or single owner.
A proprietor has ________ liability.
(a) unlimited
(b) limited
(c) restricted.
ANSWER:
Correct option- a
A proprietorship has unlimited liability.
Explanation:
Under unlimited liability, if the owner fails to pay the debts of the business, then his/her personal property can be utilised to pay the debt. This implies that there is no difference between the property of the owner and the business. The term “unlimited liability” pertains specifically to a sole proprietorship, as the proprietor is solely liable for the debts incurred by the business.
A sole trading concern ensures ________ business secrecy.
(a) minimum
(b) maximum
(c) limited.
ANSWER:
Correct option- b
A sole trading concern ensures maximum business secrecy.
Explanation:
The proprietor is the sole owner of the business; therefore, all decisions are taken by the proprietor himself. All business-related information remains with the owner. Further, it is the prerogative of the proprietor to share business information with others. Thus, a sole proprietorship guarantees maximum secrecy.
Business organization which is controlled by Hindu succession Act is known as ________
(a) Joint stock company
(b) partnership firm
(c) Joint Hindu family firm
ANSWER:
Correct option- c
Business organisation which is controlled by Hindu Succession Act is known as joint Hindu family firm.
Explanation:
A joint Hindu family business is governed by the Hindu Succession Act. Enacted in 1956, it specifies the rights and liabilities of coparceners. This law has further extended the line of coparcenary to the daughters in a joint Hindu family.
The members of Hindu Undivided family business are called ________
(a) Karta
(b) partners
(c) coparceners
ANSWER:
Correct option- c
The members of Hindu Undivided family business are called coparceners.
Explanation:
Coparceners refer to the members or the common ownership of the ancestral property. In other words, the members of a Hindu undivided family business enjoy common ownership in the ancestral property; therefore, they are called coparceners.
Limited managerial skill is the ________ of Joint Hindu family business.
(a) feature
(b) limitation
(c) advantage
ANSWER:
Correct option- b
Limited managerial skills is the limitation of Joint Hindu family business.
Explanation:
The head of the family, also known as Karta, manages and controls the family business whereas; other members cannot interfere in the decisions of business. Thus, as a joint Hindu family business is managed and controlled by only one person, it results in limited ideas and management.
The Karta in Joint Hindu family Business has ________ Liability.
(a) Unlimited
(b) limited
(c) joint
ANSWER:
Correct option- a
The Karta in Joint Hindu family business has unlimited liability.
Explanation:
The Karta’s property can be used to pay the liabilities of the business if the business assets are not sufficient to pay off the debts, thus, he has unlimited liability. The liabilities of coparceners are limited.
The Head of Joint Hindu family Business is called as ________.
(a) Proprietor
(b) Karta
(c) Director
ANSWER:
Correct option - b
The head of a joint Hindu family business is called Karta.
Explanation:
The Karta is the eldest male member of a joint Hindu family who controls and manages the joint Hindu family business. He takes all the decisions relating to the family business and has unlimited liability.
The maximum number of partners for a firm carrying on banking business is ________
(a) Ten
(b) Twenty
(c) Seven
ANSWER:
Correct option- a
The maximum number of partners for a firm carrying on banking business is ten.
Explanation:
The maximum number of partners in a banking business is 10. For other businesses, the maximum number of partners is 20.
Indian partnership Act was passed in the year ________.
(a) 1932
(b) 1923
(c) 1942
ANSWER:
Correct option- a
Indian Partnership Act was passed in the year 1932.
Explanation:
Indian Partnership Act was passed in the year 1932. According to this Act, “partnership is the relation between two or more persons who have agreed to share the profits of a business carried on by all or any of them acting for all”.
Registration of partnership firm is ________ in Maharashtra.
(a) Compulsory
(b) no compulsory
(c) optional.
ANSWER:
Correct option- a
Registration of partnership firm is compulsory in Maharashtra.
Explanation: Registration of a partnership firm was made compulsory in Maharashtra with effect from 1 April 1985. It is not compulsory in other states.
In partnership firm the liability of partners is ________.
(a) limited
(b) unlimited
(c) none of the above.
ANSWER:
Correct option- b
In partnership firm the liability of partners is unlimited.
Explanation:
Unlimited liability imply that, if a business’s assets are not sufficient to pay the business liabilities, then personal assets of the partners can be used to pay off the debts. Thus, in partnership firm the liability of partners is said to be unlimited.
In a partnership firm every partner is the principal as well as the ________.
(a) agent
(b) karta
(c) partner
ANSWER:
Correct option- a
In a partnership firm every partner is the principal as well as the agent.
Explanation:
In a partnership firm, every partner is the principal as well as the agent. It means that any partner can enter into a contract with other firms by himself (as the principal), without discussing it with other partners (acting as an agent on behalf of others).
At least ________ persons are required to form a partnership firm.
(a) two
(b) one
(c) three
ANSWER:
Correct option - a
At least two persons are required to form a partnership firm.
Explanation:
A partnership is not meant for one person. It involves an agreement between two or more persons. Under partnership, two or more person comes into contact which each other and agrees to share profit or loss equally or in some decided ratio.
The maximum number of members in a private limited company are ________
(a) 50
(b) 40
(c) 20
ANSWER:
The maximum number of members in a private limited company are 50.
Explanation:
As per the Companies Act 1956, the number of members in a private limited company is minimum 2 and maximum 50. On the other hand, in public limited companies, minimum 7 members are required and there is no limit for the maximum number of members.
The liability of the shareholders in the public limited joint stock company is ________.
(a) limited
(b) unlimited
(c) collectively
ANSWER:
Correct option- a
The liability of the shareholders in the public limited joint stock company is limited.
Explanation:
The liability of shareholders is limited to the amount of their investment in the shares. Because of the company’s legal status, the company’s liabilities are its own; thus, personal property of shareholders cannot be used to pay the liabilities.
The elected representatives of shareholders are called ________.
(a) Directors
(b) Members
(c) Owners
ANSWER:
Correct option- a
The elected representatives of shareholders are called directors.
Explanation:
Directors are the representatives of shareholders in a company. This is because the number of shareholders is large and they may belong to different places across the country. Therefore, they cannot take part in meetings. Thus, directors are elected or chosen to attend meetings on their behalf.
A joint stock company is an Artificial person created by ________.
(a) law
(b) public
(c) directors
ANSWER:
Correct option- a
A joint stock company is an artificial person created by law.
Explanation:
A joint stock company is an artificial person created by the law. It cannot be seen physically but it has a name, it uses the common seal in place of its signature and it can enter into contracts.
Registration of a Joint stock company is ________.
(a) compulsory
(b) not necessary
(c) optional
ANSWER:
Correct option- a
Registration of a joint stock company is compulsory.
Explanation:
According to the Indian Companies Act 1956, every Indian company has to be registered with the Registrar of Companies.
The minimum number of persons required for the registration of a private company is ________.
(a) 5
(b) 2
(c) 7
ANSWER:
Correct option- b
The minimum numbers of persons required for the registration of a private company is two.
Explanation:
A private company is formed with minimum two persons. Thus, it can be registered when there are at least two members. On the other hand, a public limited company is formed with minimum 7 members.
The minimum number of Directors in a public company are ________.
(a) two
(b) three
(c) five.
ANSWER:
Correct option- b
The minimum number of directors in a public company are three.
Explanation:
A public company needs to have at least three directors. On the other hand, a private company must have at least two directors.
The minimum amount of paid up capital for public company is ________.
(a) Five lakhs
(b) one lakh
(c) ten lakhs
ANSWER:
Correct option- a
The minimum amount of paid up capital for public company is five lakhs.
Explanation:
According to Section 3(I)(4) of the Companies Act 1956, the minimum amount of paid-up capital for a public company is five lakhs. Whereas, it is 1 lakh in case of private company.
The minimum of members allowed in a co-operative society is ________.
(a) 20
(b) 10
(c) 7
ANSWER:
Correct option- b
The minimum of members allowed in a co-operative society is 10.
Explanation:
A co-operative society can be formed with a minimum of 10 members. There is no maximum limit on the number of members in a co-operative society.
In a co-operative society the principle followed is ________.
(a) one share one vote
(b) one man one vote
(c) on vote.
ANSWER:
Correct option- b
In a co-operative society the principle followed is one man one vote.
Explanation:
“One man, one vote” means that equal voting rights are given to all members of a co-operative society. Hence, there exists a democratic style of management in a co-operative society.
The co-operative societies Act was passed in the year ________.
(a) 1932
(b) 1912
(c) 1956
ANSWER:
Correct option - b
The Co-operative Societies Act was passed in the year 1912.
Explanation:
The Co-operative Societies Act was passed in 1912. All co-operative societies are required to get themselves registered under this Act or under the State Co-operative Act.
The Maharashtra State co-operative societies Act came in force in ________.
(a) 1956
(b) 1960
(c) 1932
ANSWER:
Correct option- b
The Maharashtra State co-operative societies Act came in force in 1960.
Explanation:
In 1960, the Maharashtra State Co-operative Societies Act was passed. All co-operative societies in Maharashtra are required to register themselves under the Maharashtra State Co-operative Societies Act.
While selecting the place of business _______ is important.
(a) locality
(b) region
(c) capital
ANSWER:
Correct option- a
While selecting the place of business locality is important.
Explanation:
Availability of raw material, labor, modes of transportation and other facilities are important for any business. Thus, while selecting the place of business, it is important to consider the locality and ensure that all these components are easily available.
From the point of continuity ________ business organizations is the most suitable.
(a) company
(b) partnership
(c) sole proprietorship
ANSWER:
Correct option- a
From the point of continuity company business organisation is the most suitable.
Explanation:
A joint stock company enjoys a continuous and stable life. This feature is known as perpetual succession, which means that the company remains unaffected by the death, retirement, insolvency or insanity of its members. Thus, from the point of continuity, a company form of business organisation is the most suitable.
Match the correct pairs.
Group “A”
Group “B”
a)
Private company
1)
Compulsory
b)
Public company
2)
Minimum 7 members
c)
Common Seal
3)
Maximum 50 members
d)
Registration of a company
4)
61% share capital
e)
Government company
5)
51% share capital
6)
Symbol of a company
7)
Optional
8)
Simple formation
9)
Easy dissolution
10)
Hindu succession Act 1956.
Group “A”
|
Group “B”
| ||
a)
|
Private company
|
1)
|
Compulsory
|
b)
|
Public company
|
2)
|
Minimum 7 members
|
c)
|
Common Seal
|
3)
|
Maximum 50 members
|
d)
|
Registration of a company
|
4)
|
61% share capital
|
e)
|
Government company
|
5)
|
51% share capital
|
6)
|
Symbol of a company
| ||
7)
|
Optional
| ||
8)
|
Simple formation
| ||
9)
|
Easy dissolution
| ||
10)
|
Hindu succession Act 1956.
|
Answer:
Group “A”
Group “B”
a)
Private company
3)
Maximum 50 members
b)
Public company
2)
Minimum 7 members
c)
Common Seal
6)
Symbol of a company
d)
Registration of a company
1)
Compulsory
e)
Government company
5)
51% share capital
Group “A”
|
Group “B”
| ||
a)
|
Private company
|
3)
|
Maximum 50 members
|
b)
|
Public company
|
2)
|
Minimum 7 members
|
c)
|
Common Seal
|
6)
|
Symbol of a company
|
d)
|
Registration of a company
|
1)
|
Compulsory
|
e)
|
Government company
|
5)
|
51% share capital
|
Explanation:
a. A private company can have minimum 2 members and a maximum of 50 members. Hence, as per the definition of a private company, any company with less than two members will be regarded as a sole proprietorship firm. On the other hand, if the number of members exceeds 50, it will be regarded as a public company.
b. A public company can have a minimum of seven members, but there is no limit on the maximum number of members.
c. A company is an artificial person; therefore, it cannot sign its documents. However, to validate the documents, the directors of the company use a common seal on behalf of the company. Hence, the common seal is regarded as the symbol of the company.
d. According to the Indian Companies Act 1956, every company has to be registered with the Registrar of Companies.
e. In a government company, minimum 51% of the share capital is owned by the government and the rest 49% can be owned by the private players of the market. Therefore, the decision-making power rests with the government.
Match the correct pairs.
Group “A”
Group “B”
a)
Sole proprietorship
1)
No legal status
b)
Joint stock company
2)
Partner
c)
Partnership Act
3)
1956
d)
Co-operative society
4)
1960
e)
Joint Hindu family firms
5)
One member one vote
6)
Karta
7)
Maximum business secrecy
8)
Common seal
9)
1932
10)
member
Group “A”
|
Group “B”
| ||
a)
|
Sole proprietorship
|
1)
|
No legal status
|
b)
|
Joint stock company
|
2)
|
Partner
|
c)
|
Partnership Act
|
3)
|
1956
|
d)
|
Co-operative society
|
4)
|
1960
|
e)
|
Joint Hindu family firms
|
5)
|
One member one vote
|
6)
|
Karta
| ||
7)
|
Maximum business secrecy
| ||
8)
|
Common seal
| ||
9)
|
1932
| ||
10)
|
member
|
Answer:
Group “A”
Group “B”
a)
Sole proprietorship
7)
Maximum business secrecy
b)
Joint stock company
8)
Common seal
c)
Partnership Act
9)
1932
d)
Co-operative society
5)
One member, one vote
e)
Joint Hindu family firms
6)
Karta
Group “A”
|
Group “B”
| ||
a)
|
Sole proprietorship
|
7)
|
Maximum business secrecy
|
b)
|
Joint stock company
|
8)
|
Common seal
|
c)
|
Partnership Act
|
9)
|
1932
|
d)
|
Co-operative society
|
5)
|
One member, one vote
|
e)
|
Joint Hindu family firms
|
6)
|
Karta
|
