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Can you explain the answer of this question below:
This a MCQ (Multiple Choice Question) based practice test of Chapter 2 - Forms of Business Organisations of Business Studies of Class XI (11) for the quick revision/preparation of School Board examinations
Q The structure in which there is separation of ownership and management as per law is called
- A:All business organisations
- B:Company
- C:Partnership
- D:Sole proprietorship
The answer is B.
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Can you explain the answer of this question below:This a MCQ (Multiple...
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.
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Can you explain the answer of this question below:This a MCQ (Multiple...
The answer is B: Company as the owners of the company are shareholders and they appoint management to manage the company. And in company form of business only, we have that much of funds so we can easily appoint specialized persons in management
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Can you explain the answer of this question below:This a MCQ (Multiple...
Explanation:
In a company, the structure ensures the separation of ownership and management as per the law. This means that the owners of the company, known as shareholders, are different from the individuals who manage the day-to-day operations of the company, known as managers. The separation of ownership and management is a distinctive feature of the company structure.
Separation of Ownership and Management:
In a company, the ownership is vested in the shareholders who invest their capital in the company by purchasing shares. They have the right to receive a portion of the company's profits in the form of dividends. However, the shareholders do not participate in the day-to-day management of the company. The management of the company is entrusted to a board of directors, who are elected by the shareholders. The board of directors appoints professional managers to run the company's operations.
Legal Recognition:
The separation of ownership and management in a company is recognized and protected by the law. The Companies Act provides a legal framework for the formation, operation, and management of companies. It defines the rights and responsibilities of shareholders, directors, and managers. It also establishes rules for the governance and decision-making processes of the company.
Limited Liability:
One of the key advantages of the company structure is limited liability. The shareholders are only liable for the debts and obligations of the company to the extent of their investment in the company. Their personal assets are not at risk in case the company faces financial difficulties. This principle of limited liability encourages individuals to invest in companies and promotes entrepreneurship.
Corporate Governance:
The separation of ownership and management in a company also facilitates effective corporate governance. The board of directors, as representatives of the shareholders, oversees the management and ensures that the company is run in the best interests of the shareholders. They are responsible for setting strategic objectives, monitoring performance, and ensuring compliance with legal and ethical standards.
In conclusion, a company is the structure in which there is separation of ownership and management as per the law. This structure provides several advantages, such as limited liability, legal recognition, and effective corporate governance.
In a company, the structure ensures the separation of ownership and management as per the law. This means that the owners of the company, known as shareholders, are different from the individuals who manage the day-to-day operations of the company, known as managers. The separation of ownership and management is a distinctive feature of the company structure.
Separation of Ownership and Management:
In a company, the ownership is vested in the shareholders who invest their capital in the company by purchasing shares. They have the right to receive a portion of the company's profits in the form of dividends. However, the shareholders do not participate in the day-to-day management of the company. The management of the company is entrusted to a board of directors, who are elected by the shareholders. The board of directors appoints professional managers to run the company's operations.
Legal Recognition:
The separation of ownership and management in a company is recognized and protected by the law. The Companies Act provides a legal framework for the formation, operation, and management of companies. It defines the rights and responsibilities of shareholders, directors, and managers. It also establishes rules for the governance and decision-making processes of the company.
Limited Liability:
One of the key advantages of the company structure is limited liability. The shareholders are only liable for the debts and obligations of the company to the extent of their investment in the company. Their personal assets are not at risk in case the company faces financial difficulties. This principle of limited liability encourages individuals to invest in companies and promotes entrepreneurship.
Corporate Governance:
The separation of ownership and management in a company also facilitates effective corporate governance. The board of directors, as representatives of the shareholders, oversees the management and ensures that the company is run in the best interests of the shareholders. They are responsible for setting strategic objectives, monitoring performance, and ensuring compliance with legal and ethical standards.
In conclusion, a company is the structure in which there is separation of ownership and management as per the law. This structure provides several advantages, such as limited liability, legal recognition, and effective corporate governance.
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Can you explain the answer of this question below:This a MCQ (Multiple Choice Question) based practice test of Chapter 2 - Forms of Business Organisations of Business Studies of Class XI (11) for the quick revision/preparation of School Board examinationsQ The structure in which there is separation of ownership and management as per law is calledA:All business organisationsB:CompanyC:PartnershipD:Sole proprietorshipThe answer is B.
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