Why mcqs of class 11 Business Studies lesson 2 Forms of Business Organisation is important ?
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MCQ’S TEST
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CLASS 11 BUSINESS STUDIES LESSON 2 FORMS OF BUSINESS ORGANISATION OBJECTIVE QUESTIONS MCQ’S TEST
1. The structure in which there is a separation of ownership and management as per law is called ________.
partnership
all business organisations
sole proprietorship
Company
Answer - D
Explanation - Company is the form of business organisation in which there is a separation of ownership and management. Company has a separate legal entity from its members.
2. The Karta in Joint Hindu family business has ________.
Limited liability
Unlimited liability
Joint liability
No liability for debts
Answer - B
Explanation - This means the self-acquired property of Karta may be attached to pay business debts.
3. In a cooperative society the principle followed is ________.
one share one vote
one man one vote
no vote
multiple votes
Answer - B
Explanation - Cooperatives are run in a democratic manner, the affairs are managed by the elected managing committee through One-Man-One-Vote.
4. The board of directors of a joint-stock company is elected by:
employees
general public
shareholders
government bodies
Answer - C
Explanation - The board of directors of a joint-stock company is elected by shareholders because shareholders are the real owner of the joint-stock company but they cannot be present in all meetings so they elect a board of directors as their representatives.
5. The maximum number of partners allowed in the partnership business are:
Twenty
Fifty
Two
No limit
Answer - B
Explanation - Rule 10 of the Companies (Miscellaneous) Rule, 2014 at present the maximum number of members can be 50.
6. Profits do not have to be shared. This statement refers to:
Joint Hindu family business
Company
Sole proprietorship
Partnership
Answer - C
Explanation - Since Sole proprietor is the sole owner who is responsible for all the business affairs. If the business is successful, he receives all the business profits as a direct reward for his risk-bearing.
7. The capital of a company is divided into a number of parts each one of which is called ________.
Dividend
Interest
Share
Profit
Answer - C
Explanation - Shares are the smallest part of share capital which can be transferred freely from one shareholder to another person (except in a private company).
8. The head of the Joint Hindu Family Business is popularly known as ________.
Karta
Proprietor
Director
Manager
Answer - A
Explanation - The Joint Hindu Family business is managed and controlled by the eldest male member of a family known as Karta.
9. Provision of residential accommodation to the members at reasonable rates is the objective of:
Consumers cooperative
Housing cooperative
Credit cooperative
Producers cooperative
Answer - B
Explanation - Housing cooperative societies help people with limited income to construct houses at reasonable costs.
10. A partner whose association with the firm is unknown to the general public is called ________.
Active partner
Secret partner
Nominal partner
Sleeping partner
Answer - B
Explanation - A secret partner is one whose association with the firm is unknown to the general public.
11. The life of sole proprietorship business is ________.
very short life
stable
long life
Unstable
Answer - D
Explanation - In the eyes of the law, the owner and the business are considered one and the same. So, a sole proprietorship does not enjoy continuity of life. Illness, death, or insolvency of the proprietor affects the business and can lead to its closure.
12. Hindu Succession Act was passed in ________.
1956
1932
1952
1960
Answer - A
Explanation - Joint Hindu Family Business is governed by the provisions of the Hindu Law (the Hindu Succession Act, 1956).
13. What is the limit of members in case of a Private Company?
200
10
50
2
Answer - A
Explanation - According to Sec (3) of Companies Act, 2013 the maximum limit of members in Private Limited Company is 200 members.
14. In case of ________ Registration is compulsory.
Company
Sole Proprietorship
Partnership
None of these
Answer - A
Explanation - A Company must be registered under the Companies Act, 1956.
15. At least 10 adults, no maximum limit in case of ________.
Company
Joint Hindu Family
Cooperative Society
Partnership
Answer - C
Explanation - A minimum of 10 adult persons(18 years and above) are required to form a cooperative society.
16. ________ company does not invite the public to subscribe to its share capital.
Public Company
Both Private and Public Company
Private Company
None of these
Answer - C
Explanation - By its Articles of Association, Private Company prohibits any invitation to the general public to subscribe for its shares.
17. ________ company needs to have only two directors.
None of these
Public
Private
Sole Proprietorship
Answer - C
Explanation - A private company can work with just two directors as compared to three directors under a public company.
18. Which of the following is not a feature of Joint Stock Company?
Formation
Separate legal entity
Artificial person
Lack of business continuity
Answer - D
Explanation - Except for lack of business continuity, all the three are features of a joint-stock company.
19. A person who is not a partner in a firm but knowingly allows himself to be represented as a partner in a firm is called ________.
sleeping partner
partner by holding out
active partner
nominal partner
Answer - B
Explanation - A partner by ‘holding out’ is a person who though is not a partner in a firm but knowingly allows himself/herself to be represented as a partner in a firm.
20. A person who allows the use of his name by a firm, but does not contribute to its capital is called ________.
Nominal Partner
Dormant partner
Active partner
None of these
Answer - A
Explanation - A nominal partner is one who allows the use of his/her name by a firm, but does not contribute to its capital.
21. A person who contributes capital, takes part in the management, shares profits/losses, and has unlimited liability towards the creditors but unknown to the general public is called ________.
secret partner
active partner
None of these
nominal partner
Answer - A
Explanation - A secret partner is associated with the business but outsiders have no knowledge about his status in the business. He carries business activities on behalf of other partners and is bound by activities of other partners as well.
22. A person who contributes capital but does not take part in the day to day activities of the business is called ________.
active partner
nominal partner
secret partner
sleeping partner
Answer - D
Explanation - A sleeping partner may not contribute to business decision making but is bound by acts of all other partners. He has unlimited liability in the business.
23. Partnership at will can continue ________.
till the date of retirement
none of these
till the registration ends
as long as partners want
Answer - D
Explanation - The partnership will continue at the will of all the partners. The business continues till all the partners mutually agree to do so.
24. In ________ type of partnership, the liability of at least one partner is unlimited.
limited
general
partnership at will
None of these
Answer - A
Explanation - In Limited Partnership, the liability of at least one partner is unlimited. All other partners may have limited liability.
25. The partnership deed generally includes the following:
Name of firm
Location of business
Nature of business
All of these
Answer - D
Explanation - A Partnership Deed/Agreement is a written or oral document which states the financial and non-financial terms and conditions related to the functioning of the partnership business.
26. Partnership comes to an end in case of ________.
retirement of a partner
death of a partner
insolvency
all of these
Answer - D
Explanation - Partnership gets automatically dissolved on the death, retirement, insanity or insolvency of any of its partners. However, if the remaining partners desire to continue, then they may do so on the basis of a new agreement.
27. ________ is not legally required to publish its accounts and submit its reports.
Listed company
Public company
Government company
Partnership
Answer - D
Explanation - Partnership business is not bound by any law. It is not required to submit or publish their financial results. Also, all the important decisions and major business activities are carried by partners only. Hence, the partnership business is able to maintain the confidentiality of information relating to its operations.
28. The cooperative society is compulsorily required to be registered under the Cooperative Societies Act ________.
1912
1956
1952
1932
Answer - A
Explanation - The Indian Cooperatives Act 1912 defines Cooperative Societies "As a society which has its objectives for the promotion of economic interest of its members in accordance with cooperative principles."
29. ________ is not a separate entity in the eyes of law.
Government company
Sole Proprietorship
Limited company
Public company
Answer - B
Explanation - A sole proprietorship has no legal existence, i.e. in the eyes of the law, no distinction is made between the firm and the proprietor. As a result, the owner is held responsible for all the activities of the business.
30. As per the ________ partnership business can be carried on by all the partners or any one of the partners can act for all.
compulsory registration of partnership
unlimited liability
mutual agency
limited liability
Answer - C
Explanation - Mutual agency relationship means each partner is the owner as well as the agent of the firm and agent to other partners.