Test: Forms Of Business Organisations - 1 - Commerce MCQ

The management and control of the affairs of the company is undertaken by the Board of Directors, which appoints the top management officials to the business. The managers are accountable to shareholders who are the owners of the company.

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.

One man one vote principle is followed by cooperative society. Cooperative society is established for social welfare. So it does not follow such rules that are based on wealth.As our country's construction says one man one vote is followed by cooperative society.

The Shareholders Meeting of a joint stock company (JSC) has the authority to appoint and dismiss members of the Board of Directors. Appointment of a Board Member must be conducted through cumulative voting. Under cumulative voting principle, whenever a JSC elects new Board Members, each shareholder will have a number of votes equal to the number of new Board Members to be elected times the number of voting shares held by such shareholder and such shareholder may cash all or some of his/her votes for any candidate.

Correct Answer :- c

Explanation : As per the Companies Act, 2013 the maximum number of members in a partnership firm is 100. The minimum number of partners should be atleast 2. The maximum number of members for a firm carrying banking business is 10.

Answer:
Sole Proprietorship:
- In a sole proprietorship, the business is owned and operated by a single individual.
- The individual has complete control over the business and its profits.
- Since there are no partners or shareholders, the profits do not have to be shared with anyone else.
- The sole proprietor has the right to keep all the profits generated by the business.
Other Business Structures:
- In a partnership, the profits are typically shared among the partners according to the terms of their partnership agreement.
- In a company, the profits may be distributed to the shareholders in the form of dividends, depending on the company's financial performance and the decisions made by the board of directors.
- In a joint Hindu family business, the profits are often shared among the members of the family as per the customs and traditions.
Conclusion:
- The statement "Profits do not have to be shared" refers to the business structure of sole proprietorship, where the individual owner retains all the profits generated by the business.

Shares are units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends. The two main types of shares are common shares and preferred shares. Physical paper stock certificates have been replaced with electronic recording of stock shares, just as mutual fund shares are recorded electronically.

In Hindu joint family, the senior most male ascendant is the head of the family and is called The Karta. Karta represents the family and acts on its behalf. He is responsible to maintain all member can sue him for the maintenance and can also recover the arrears of the maintenance.

Co-operative housing societies are established to help people with limited income to construct houses at reasonable costs and giving the option of paying in installments.

A secret partner is one whose association with the firm is unknown to the general public. He is like the rest of the partners in all other aspects.