Class 11 Business Studies Previous Year Paper - 3 | Business Studies (BST) Class 11 - Commerce PDF Download

 Page 1


 
 
 
              
                    
 
Date:                                              Class: XI 
Business Studies  
Time:3hrs                                              M. M: 100 
 
General Instructions: 
 
1. Answer to questions carrying 1 mark may be from one word to one sentence. 
2. Answer to questions carrying 3 marks may be from 50-75 words. 
3. Answer to questions carrying 4 -5 marks may be about 150 words.  
4. Answer to questions carrying 6 marks may be about 200 words. 
5. Attempt all parts of a question together. 
 
 
1 Mr. A is engaged in the business of making and selling idols during the Diwali season. How 
will the working capital requirements of his business change during off season and festive 
season? Give reason for your answer. 
 
1 
2 Lalaji, a local vegetable trader, took first mover advantage to sell his vegetables and 
groceries online. He decided to raise funds from friends and relatives to grow his business 
and launched a company ‘Locallalaji.com’. In the first year, the business did well. The 
industry was flooded with new entrants like Grofers, Bigbasket, etc. Inspite of sincere efforts 
by Lalaji, the business suffered losses. In the third year of operations, the company stopped 
paying salaries and loans. The company was served a legal notice and assets were sold to 
repay the debts. Investors demanded that ‘Lalaji’s’ personal assets should be sold but the 
auctioneer refused to do so.  
Are the investors justified while asking for Lalaji’s personal assets to be sold? Mention the 
merit of company associated with the above situation. 
 
1 
3 What is the position of debenture holders in a company? 
 
1 
4 How many signatories to the Memorandum of Association are required in case of Private 
company and public companies? 
 
1 
5 An Indian company imports goods from Germany and exports them to Nepal. Name the type 
of trade highlighted in the statement. 
 
1 
6 Ramesh, Kiran and Harish entered into a partnership for construction of a housing society in 
Rohini. Name the type of partnership which is referred to in the above line. 
 
1 
7 What are FCCBs? 
 
1 
8 At the time of independence, the private sector was unwilling to invest in key areas. Why? 
 
1 
9 Why was the system of ‘Memorandum of understanding’ introduced for public sector? 
 
1 
10 Name the system which allows both male and female members of the Joint Hindu family 
business to be co – parceners. 
 
 
1 
Page 2


 
 
 
              
                    
 
Date:                                              Class: XI 
Business Studies  
Time:3hrs                                              M. M: 100 
 
General Instructions: 
 
1. Answer to questions carrying 1 mark may be from one word to one sentence. 
2. Answer to questions carrying 3 marks may be from 50-75 words. 
3. Answer to questions carrying 4 -5 marks may be about 150 words.  
4. Answer to questions carrying 6 marks may be about 200 words. 
5. Attempt all parts of a question together. 
 
 
1 Mr. A is engaged in the business of making and selling idols during the Diwali season. How 
will the working capital requirements of his business change during off season and festive 
season? Give reason for your answer. 
 
1 
2 Lalaji, a local vegetable trader, took first mover advantage to sell his vegetables and 
groceries online. He decided to raise funds from friends and relatives to grow his business 
and launched a company ‘Locallalaji.com’. In the first year, the business did well. The 
industry was flooded with new entrants like Grofers, Bigbasket, etc. Inspite of sincere efforts 
by Lalaji, the business suffered losses. In the third year of operations, the company stopped 
paying salaries and loans. The company was served a legal notice and assets were sold to 
repay the debts. Investors demanded that ‘Lalaji’s’ personal assets should be sold but the 
auctioneer refused to do so.  
Are the investors justified while asking for Lalaji’s personal assets to be sold? Mention the 
merit of company associated with the above situation. 
 
1 
3 What is the position of debenture holders in a company? 
 
1 
4 How many signatories to the Memorandum of Association are required in case of Private 
company and public companies? 
 
1 
5 An Indian company imports goods from Germany and exports them to Nepal. Name the type 
of trade highlighted in the statement. 
 
1 
6 Ramesh, Kiran and Harish entered into a partnership for construction of a housing society in 
Rohini. Name the type of partnership which is referred to in the above line. 
 
1 
7 What are FCCBs? 
 
1 
8 At the time of independence, the private sector was unwilling to invest in key areas. Why? 
 
1 
9 Why was the system of ‘Memorandum of understanding’ introduced for public sector? 
 
1 
10 Name the system which allows both male and female members of the Joint Hindu family 
business to be co – parceners. 
 
 
1 
XI A Page 2 of 4 
 
11 National Industries Ltd., a public enterprise set up in Madhya Pradesh was running into 
continuous losses for the past three years. It was declared a sick unit by the government. 
Therefore, the directors decided to close down the unit. But the government wanted to 
restructure it in the favour of employees and workers.  
What policy regarding sick units will be adopted by government in this case? Explain. 
 
3 
12 (i) A company gets registered with illegal objects. But the Registrar issued the 
‘Certificate of Incorporation.’ Was the registration of the company valid?  Give 
reason in support of your answer. 
(ii) Explain the meaning of the term ‘Statement in lieu of Prospectus’. 
 
3 
13 Differentiate between Joint Hindu Family business and Cooperative Society on the basis of 
(a) Formation, (b) Members and (c) Control and Management. 
 
3 
 
14 
 
Cimcotronics Ltd requires finance for “temporary increase in stocks”. Which source of 
finance do you think will be the best for the firm and why? Give two reasons each for your 
answer. 
 
3 
15 
 
A chartered accountancy firm is being successfully run by four persons - Farhan, Radhika, 
Navin and Karishma for the past four years. Due to an unwise decision taken by Navin, the 
partnership firm suffered a loss of Rs. 20,000. All the remaining partners are of the view that 
since the loss has occurred due to an unwise decision taken by Navin, they will not share the 
loss. 
a. Is the opinion of the remaining partners correct in this case? What will their extent of 
liability in the above case? Explain with reference to one of the features of 
Partnership.  
b. The above para also highlights a limitation of partnership form of organization. 
Name and explain it. 
 
3 
16 i. Define the term ‘MOFA’. 
ii. The development of infrastructure is a prerequisite for industrialization in any 
country. So the public sector enterprises took the initiative after independence 
and operated in certain spheres for development of infrastructure. State the three 
areas in which investments were made by them in this regard. 
 
4(1+3) 
17 The members of New Age Products Ltd. attended a general meeting of the company on 18
th
 
February, 2015. But the shareholders were dissatisfied to know that all the decisions were 
taken by the Board of Directors, thereby reducing their influence in terms of controlling or 
running the business.  
a. Name the limitation of the company depicted in the above para. Also quote the lines 
from the above para which highlight this limitation. 
b. Also explain other two limitations of company form of organization. 
c. Also suggest any two values ignored by the company. 
 
4 
18 Define the following: 
i. Memorandum of Association 
ii. Authorised Capital 
iii. Qualification shares 
iv. Return of Allotment 
4 
19 Explain the nature of Business Risks. 
 
4 
Page 3


 
 
 
              
                    
 
Date:                                              Class: XI 
Business Studies  
Time:3hrs                                              M. M: 100 
 
General Instructions: 
 
1. Answer to questions carrying 1 mark may be from one word to one sentence. 
2. Answer to questions carrying 3 marks may be from 50-75 words. 
3. Answer to questions carrying 4 -5 marks may be about 150 words.  
4. Answer to questions carrying 6 marks may be about 200 words. 
5. Attempt all parts of a question together. 
 
 
1 Mr. A is engaged in the business of making and selling idols during the Diwali season. How 
will the working capital requirements of his business change during off season and festive 
season? Give reason for your answer. 
 
1 
2 Lalaji, a local vegetable trader, took first mover advantage to sell his vegetables and 
groceries online. He decided to raise funds from friends and relatives to grow his business 
and launched a company ‘Locallalaji.com’. In the first year, the business did well. The 
industry was flooded with new entrants like Grofers, Bigbasket, etc. Inspite of sincere efforts 
by Lalaji, the business suffered losses. In the third year of operations, the company stopped 
paying salaries and loans. The company was served a legal notice and assets were sold to 
repay the debts. Investors demanded that ‘Lalaji’s’ personal assets should be sold but the 
auctioneer refused to do so.  
Are the investors justified while asking for Lalaji’s personal assets to be sold? Mention the 
merit of company associated with the above situation. 
 
1 
3 What is the position of debenture holders in a company? 
 
1 
4 How many signatories to the Memorandum of Association are required in case of Private 
company and public companies? 
 
1 
5 An Indian company imports goods from Germany and exports them to Nepal. Name the type 
of trade highlighted in the statement. 
 
1 
6 Ramesh, Kiran and Harish entered into a partnership for construction of a housing society in 
Rohini. Name the type of partnership which is referred to in the above line. 
 
1 
7 What are FCCBs? 
 
1 
8 At the time of independence, the private sector was unwilling to invest in key areas. Why? 
 
1 
9 Why was the system of ‘Memorandum of understanding’ introduced for public sector? 
 
1 
10 Name the system which allows both male and female members of the Joint Hindu family 
business to be co – parceners. 
 
 
1 
XI A Page 2 of 4 
 
11 National Industries Ltd., a public enterprise set up in Madhya Pradesh was running into 
continuous losses for the past three years. It was declared a sick unit by the government. 
Therefore, the directors decided to close down the unit. But the government wanted to 
restructure it in the favour of employees and workers.  
What policy regarding sick units will be adopted by government in this case? Explain. 
 
3 
12 (i) A company gets registered with illegal objects. But the Registrar issued the 
‘Certificate of Incorporation.’ Was the registration of the company valid?  Give 
reason in support of your answer. 
(ii) Explain the meaning of the term ‘Statement in lieu of Prospectus’. 
 
3 
13 Differentiate between Joint Hindu Family business and Cooperative Society on the basis of 
(a) Formation, (b) Members and (c) Control and Management. 
 
3 
 
14 
 
Cimcotronics Ltd requires finance for “temporary increase in stocks”. Which source of 
finance do you think will be the best for the firm and why? Give two reasons each for your 
answer. 
 
3 
15 
 
A chartered accountancy firm is being successfully run by four persons - Farhan, Radhika, 
Navin and Karishma for the past four years. Due to an unwise decision taken by Navin, the 
partnership firm suffered a loss of Rs. 20,000. All the remaining partners are of the view that 
since the loss has occurred due to an unwise decision taken by Navin, they will not share the 
loss. 
a. Is the opinion of the remaining partners correct in this case? What will their extent of 
liability in the above case? Explain with reference to one of the features of 
Partnership.  
b. The above para also highlights a limitation of partnership form of organization. 
Name and explain it. 
 
3 
16 i. Define the term ‘MOFA’. 
ii. The development of infrastructure is a prerequisite for industrialization in any 
country. So the public sector enterprises took the initiative after independence 
and operated in certain spheres for development of infrastructure. State the three 
areas in which investments were made by them in this regard. 
 
4(1+3) 
17 The members of New Age Products Ltd. attended a general meeting of the company on 18
th
 
February, 2015. But the shareholders were dissatisfied to know that all the decisions were 
taken by the Board of Directors, thereby reducing their influence in terms of controlling or 
running the business.  
a. Name the limitation of the company depicted in the above para. Also quote the lines 
from the above para which highlight this limitation. 
b. Also explain other two limitations of company form of organization. 
c. Also suggest any two values ignored by the company. 
 
4 
18 Define the following: 
i. Memorandum of Association 
ii. Authorised Capital 
iii. Qualification shares 
iv. Return of Allotment 
4 
19 Explain the nature of Business Risks. 
 
4 
XI A Page 3 of 4 
 
 
20 (i)  "Owner's funds and borrowed funds differ in terms of nature of return". 
How?  
(ii) Distinguish between Public Deposits and Loans from Commercial banks on 
the basis of (a) Suitability ; (b) Security ; and (c) Rate on interest 
 
4 
21 “Ploughing back of profits is an excellent source of funds for a business”. Explain by giving  
reasons for your answer. 
5 
22 Ranjan was living in a small town of Andhra Pradesh and was engaged in his family 
business of making rubber and plastic products. As he was not able to fetch a reasonable 
price for his products, he contacted Subash, who convinced him that he will take his 
products to the city every fortnight and will sell them at a higher price. Ranjan was very 
happy to hear this.  
Although, Subash used to take his products to the city, but he used to charge very high 
commission for this. As a result, Ranjan contacted all the small producers of his town and 
formed a cooperative society. He used to pool the output of all the individual members and 
took it to the city to sell the output at best possible price.  
i. Name the form of cooperative society formed by Ranjan and quote the line from 
the above para which signifies it. Also suggest any one value followed by Ranjan. 
ii. Also name and explain any two other forms of co – operative society. 
 
5 
23 i. Why financial institutions are called ‘Development Banks’? 
ii. What are Inter – Corporate deposits? Explain their types. 
 
5(1+4) 
24 Where national security is concerned, which form of public enterprise is considered most 
suitable? Also give its other two merits and its two demerits. 
5 
25 Farhan, the promoter of ‘New Tech Ltd.’ has offered the public to subscribe to its shares and 
debentures. His company has received a lot of applications, but before going ahead with the 
allotment of shares, the company must receive the amount of minimum subscription.  
i. What amount of minimum subscription should ‘New Tech Ltd.’ receive to go 
ahead with the allotment of shares? Explain by giving an example. 
ii. If the amount of minimum subscription is received by the company, what will be 
the next stage in formation of his company? Explain any two documents required 
for completion of this stage. 
 
5(2+3) 
26 i. A holds 50 preference shares whereas B holds 75 preference shares in Suhasini 
Ltd. A got a share in the surplus profits of the company, whereas B was paid 
arrears of unpaid dividend. Identify the two types of preference shares. 
 
ii. Explain any two merits and two demerits of Preference Shares. 
 
6 
27 A group of 12 persons appointed ‘Prem Ltd.’ as the promoters and ‘Major and Associates’ as 
Chartered Accountants to form their company. Before the company is formed ‘Prem Ltd’ 
enters into a contract with third party for purchase of land on behalf of the company. But 
Prem Ltd. did not disclose the material fact that this land was agricultural land. The company 
was formed after one month. Later on, the company was not allowed to carry on its business 
operations by the government.    
a. Which type of contract is entered into by ‘Prem Ltd’? Explain briefly. 
b. Is the contract legally binding on the company? Give reason. 
c. Explain the legal position of ‘Prem Ltd’. 
d. What can the company do now as it is not allowed to carry on its business 
operations? 
 
6 
Page 4


 
 
 
              
                    
 
Date:                                              Class: XI 
Business Studies  
Time:3hrs                                              M. M: 100 
 
General Instructions: 
 
1. Answer to questions carrying 1 mark may be from one word to one sentence. 
2. Answer to questions carrying 3 marks may be from 50-75 words. 
3. Answer to questions carrying 4 -5 marks may be about 150 words.  
4. Answer to questions carrying 6 marks may be about 200 words. 
5. Attempt all parts of a question together. 
 
 
1 Mr. A is engaged in the business of making and selling idols during the Diwali season. How 
will the working capital requirements of his business change during off season and festive 
season? Give reason for your answer. 
 
1 
2 Lalaji, a local vegetable trader, took first mover advantage to sell his vegetables and 
groceries online. He decided to raise funds from friends and relatives to grow his business 
and launched a company ‘Locallalaji.com’. In the first year, the business did well. The 
industry was flooded with new entrants like Grofers, Bigbasket, etc. Inspite of sincere efforts 
by Lalaji, the business suffered losses. In the third year of operations, the company stopped 
paying salaries and loans. The company was served a legal notice and assets were sold to 
repay the debts. Investors demanded that ‘Lalaji’s’ personal assets should be sold but the 
auctioneer refused to do so.  
Are the investors justified while asking for Lalaji’s personal assets to be sold? Mention the 
merit of company associated with the above situation. 
 
1 
3 What is the position of debenture holders in a company? 
 
1 
4 How many signatories to the Memorandum of Association are required in case of Private 
company and public companies? 
 
1 
5 An Indian company imports goods from Germany and exports them to Nepal. Name the type 
of trade highlighted in the statement. 
 
1 
6 Ramesh, Kiran and Harish entered into a partnership for construction of a housing society in 
Rohini. Name the type of partnership which is referred to in the above line. 
 
1 
7 What are FCCBs? 
 
1 
8 At the time of independence, the private sector was unwilling to invest in key areas. Why? 
 
1 
9 Why was the system of ‘Memorandum of understanding’ introduced for public sector? 
 
1 
10 Name the system which allows both male and female members of the Joint Hindu family 
business to be co – parceners. 
 
 
1 
XI A Page 2 of 4 
 
11 National Industries Ltd., a public enterprise set up in Madhya Pradesh was running into 
continuous losses for the past three years. It was declared a sick unit by the government. 
Therefore, the directors decided to close down the unit. But the government wanted to 
restructure it in the favour of employees and workers.  
What policy regarding sick units will be adopted by government in this case? Explain. 
 
3 
12 (i) A company gets registered with illegal objects. But the Registrar issued the 
‘Certificate of Incorporation.’ Was the registration of the company valid?  Give 
reason in support of your answer. 
(ii) Explain the meaning of the term ‘Statement in lieu of Prospectus’. 
 
3 
13 Differentiate between Joint Hindu Family business and Cooperative Society on the basis of 
(a) Formation, (b) Members and (c) Control and Management. 
 
3 
 
14 
 
Cimcotronics Ltd requires finance for “temporary increase in stocks”. Which source of 
finance do you think will be the best for the firm and why? Give two reasons each for your 
answer. 
 
3 
15 
 
A chartered accountancy firm is being successfully run by four persons - Farhan, Radhika, 
Navin and Karishma for the past four years. Due to an unwise decision taken by Navin, the 
partnership firm suffered a loss of Rs. 20,000. All the remaining partners are of the view that 
since the loss has occurred due to an unwise decision taken by Navin, they will not share the 
loss. 
a. Is the opinion of the remaining partners correct in this case? What will their extent of 
liability in the above case? Explain with reference to one of the features of 
Partnership.  
b. The above para also highlights a limitation of partnership form of organization. 
Name and explain it. 
 
3 
16 i. Define the term ‘MOFA’. 
ii. The development of infrastructure is a prerequisite for industrialization in any 
country. So the public sector enterprises took the initiative after independence 
and operated in certain spheres for development of infrastructure. State the three 
areas in which investments were made by them in this regard. 
 
4(1+3) 
17 The members of New Age Products Ltd. attended a general meeting of the company on 18
th
 
February, 2015. But the shareholders were dissatisfied to know that all the decisions were 
taken by the Board of Directors, thereby reducing their influence in terms of controlling or 
running the business.  
a. Name the limitation of the company depicted in the above para. Also quote the lines 
from the above para which highlight this limitation. 
b. Also explain other two limitations of company form of organization. 
c. Also suggest any two values ignored by the company. 
 
4 
18 Define the following: 
i. Memorandum of Association 
ii. Authorised Capital 
iii. Qualification shares 
iv. Return of Allotment 
4 
19 Explain the nature of Business Risks. 
 
4 
XI A Page 3 of 4 
 
 
20 (i)  "Owner's funds and borrowed funds differ in terms of nature of return". 
How?  
(ii) Distinguish between Public Deposits and Loans from Commercial banks on 
the basis of (a) Suitability ; (b) Security ; and (c) Rate on interest 
 
4 
21 “Ploughing back of profits is an excellent source of funds for a business”. Explain by giving  
reasons for your answer. 
5 
22 Ranjan was living in a small town of Andhra Pradesh and was engaged in his family 
business of making rubber and plastic products. As he was not able to fetch a reasonable 
price for his products, he contacted Subash, who convinced him that he will take his 
products to the city every fortnight and will sell them at a higher price. Ranjan was very 
happy to hear this.  
Although, Subash used to take his products to the city, but he used to charge very high 
commission for this. As a result, Ranjan contacted all the small producers of his town and 
formed a cooperative society. He used to pool the output of all the individual members and 
took it to the city to sell the output at best possible price.  
i. Name the form of cooperative society formed by Ranjan and quote the line from 
the above para which signifies it. Also suggest any one value followed by Ranjan. 
ii. Also name and explain any two other forms of co – operative society. 
 
5 
23 i. Why financial institutions are called ‘Development Banks’? 
ii. What are Inter – Corporate deposits? Explain their types. 
 
5(1+4) 
24 Where national security is concerned, which form of public enterprise is considered most 
suitable? Also give its other two merits and its two demerits. 
5 
25 Farhan, the promoter of ‘New Tech Ltd.’ has offered the public to subscribe to its shares and 
debentures. His company has received a lot of applications, but before going ahead with the 
allotment of shares, the company must receive the amount of minimum subscription.  
i. What amount of minimum subscription should ‘New Tech Ltd.’ receive to go 
ahead with the allotment of shares? Explain by giving an example. 
ii. If the amount of minimum subscription is received by the company, what will be 
the next stage in formation of his company? Explain any two documents required 
for completion of this stage. 
 
5(2+3) 
26 i. A holds 50 preference shares whereas B holds 75 preference shares in Suhasini 
Ltd. A got a share in the surplus profits of the company, whereas B was paid 
arrears of unpaid dividend. Identify the two types of preference shares. 
 
ii. Explain any two merits and two demerits of Preference Shares. 
 
6 
27 A group of 12 persons appointed ‘Prem Ltd.’ as the promoters and ‘Major and Associates’ as 
Chartered Accountants to form their company. Before the company is formed ‘Prem Ltd’ 
enters into a contract with third party for purchase of land on behalf of the company. But 
Prem Ltd. did not disclose the material fact that this land was agricultural land. The company 
was formed after one month. Later on, the company was not allowed to carry on its business 
operations by the government.    
a. Which type of contract is entered into by ‘Prem Ltd’? Explain briefly. 
b. Is the contract legally binding on the company? Give reason. 
c. Explain the legal position of ‘Prem Ltd’. 
d. What can the company do now as it is not allowed to carry on its business 
operations? 
 
6 
XI A Page 4 of 4 
 
28 Define the term ‘Commerce’. Why is it considered as the backbone of industry & other 
business activities? Explain. 
 
6 
29 KayCee Limited is a company manufacturing cosmetics in Delhi. It decides to expand its 
business to other parts of the country and even abroad by entering into a joint venture. The 
new business can pool in financial and human resources and will be able to face market 
challenges and take advantage of new opportunities. It will also allow both businesses to 
come up with something new and creative for the same market. It may also benefit one of 
the parties from other’s goodwill. 
a. Identify the three benefits of joint venture referred to in the above para. Also quote 
the lines from the above para which depicts these three benefits. 
b. In what ways can KayCee Limited form a joint venture? 
 
6(3+3) 
30 Dev, a sole proprietor, runs a successful Coach business in Bengaluru. Private commuters, 
tourists and business clients are among his customers. Dev has also operated a daily bus 
service between Bengaluru and Mysore for some years, which has proved to be the most 
popular service provided by his business to commuters.However, he is considering the 
option of entering into partnership with his friend Natasha.  
i. Define the form of business, which Dev is currently undertaking. 
ii. Explain any three merits of the form of business in which Dev is planning to 
enter with his friend, Natasha. 
iii. What should Dev do to avoid the unlimited liability of the business without 
inviting any partner? 
6 
 
 
 
 
 
 
 
Page 5


 
 
 
              
                    
 
Date:                                              Class: XI 
Business Studies  
Time:3hrs                                              M. M: 100 
 
General Instructions: 
 
1. Answer to questions carrying 1 mark may be from one word to one sentence. 
2. Answer to questions carrying 3 marks may be from 50-75 words. 
3. Answer to questions carrying 4 -5 marks may be about 150 words.  
4. Answer to questions carrying 6 marks may be about 200 words. 
5. Attempt all parts of a question together. 
 
 
1 Mr. A is engaged in the business of making and selling idols during the Diwali season. How 
will the working capital requirements of his business change during off season and festive 
season? Give reason for your answer. 
 
1 
2 Lalaji, a local vegetable trader, took first mover advantage to sell his vegetables and 
groceries online. He decided to raise funds from friends and relatives to grow his business 
and launched a company ‘Locallalaji.com’. In the first year, the business did well. The 
industry was flooded with new entrants like Grofers, Bigbasket, etc. Inspite of sincere efforts 
by Lalaji, the business suffered losses. In the third year of operations, the company stopped 
paying salaries and loans. The company was served a legal notice and assets were sold to 
repay the debts. Investors demanded that ‘Lalaji’s’ personal assets should be sold but the 
auctioneer refused to do so.  
Are the investors justified while asking for Lalaji’s personal assets to be sold? Mention the 
merit of company associated with the above situation. 
 
1 
3 What is the position of debenture holders in a company? 
 
1 
4 How many signatories to the Memorandum of Association are required in case of Private 
company and public companies? 
 
1 
5 An Indian company imports goods from Germany and exports them to Nepal. Name the type 
of trade highlighted in the statement. 
 
1 
6 Ramesh, Kiran and Harish entered into a partnership for construction of a housing society in 
Rohini. Name the type of partnership which is referred to in the above line. 
 
1 
7 What are FCCBs? 
 
1 
8 At the time of independence, the private sector was unwilling to invest in key areas. Why? 
 
1 
9 Why was the system of ‘Memorandum of understanding’ introduced for public sector? 
 
1 
10 Name the system which allows both male and female members of the Joint Hindu family 
business to be co – parceners. 
 
 
1 
XI A Page 2 of 4 
 
11 National Industries Ltd., a public enterprise set up in Madhya Pradesh was running into 
continuous losses for the past three years. It was declared a sick unit by the government. 
Therefore, the directors decided to close down the unit. But the government wanted to 
restructure it in the favour of employees and workers.  
What policy regarding sick units will be adopted by government in this case? Explain. 
 
3 
12 (i) A company gets registered with illegal objects. But the Registrar issued the 
‘Certificate of Incorporation.’ Was the registration of the company valid?  Give 
reason in support of your answer. 
(ii) Explain the meaning of the term ‘Statement in lieu of Prospectus’. 
 
3 
13 Differentiate between Joint Hindu Family business and Cooperative Society on the basis of 
(a) Formation, (b) Members and (c) Control and Management. 
 
3 
 
14 
 
Cimcotronics Ltd requires finance for “temporary increase in stocks”. Which source of 
finance do you think will be the best for the firm and why? Give two reasons each for your 
answer. 
 
3 
15 
 
A chartered accountancy firm is being successfully run by four persons - Farhan, Radhika, 
Navin and Karishma for the past four years. Due to an unwise decision taken by Navin, the 
partnership firm suffered a loss of Rs. 20,000. All the remaining partners are of the view that 
since the loss has occurred due to an unwise decision taken by Navin, they will not share the 
loss. 
a. Is the opinion of the remaining partners correct in this case? What will their extent of 
liability in the above case? Explain with reference to one of the features of 
Partnership.  
b. The above para also highlights a limitation of partnership form of organization. 
Name and explain it. 
 
3 
16 i. Define the term ‘MOFA’. 
ii. The development of infrastructure is a prerequisite for industrialization in any 
country. So the public sector enterprises took the initiative after independence 
and operated in certain spheres for development of infrastructure. State the three 
areas in which investments were made by them in this regard. 
 
4(1+3) 
17 The members of New Age Products Ltd. attended a general meeting of the company on 18
th
 
February, 2015. But the shareholders were dissatisfied to know that all the decisions were 
taken by the Board of Directors, thereby reducing their influence in terms of controlling or 
running the business.  
a. Name the limitation of the company depicted in the above para. Also quote the lines 
from the above para which highlight this limitation. 
b. Also explain other two limitations of company form of organization. 
c. Also suggest any two values ignored by the company. 
 
4 
18 Define the following: 
i. Memorandum of Association 
ii. Authorised Capital 
iii. Qualification shares 
iv. Return of Allotment 
4 
19 Explain the nature of Business Risks. 
 
4 
XI A Page 3 of 4 
 
 
20 (i)  "Owner's funds and borrowed funds differ in terms of nature of return". 
How?  
(ii) Distinguish between Public Deposits and Loans from Commercial banks on 
the basis of (a) Suitability ; (b) Security ; and (c) Rate on interest 
 
4 
21 “Ploughing back of profits is an excellent source of funds for a business”. Explain by giving  
reasons for your answer. 
5 
22 Ranjan was living in a small town of Andhra Pradesh and was engaged in his family 
business of making rubber and plastic products. As he was not able to fetch a reasonable 
price for his products, he contacted Subash, who convinced him that he will take his 
products to the city every fortnight and will sell them at a higher price. Ranjan was very 
happy to hear this.  
Although, Subash used to take his products to the city, but he used to charge very high 
commission for this. As a result, Ranjan contacted all the small producers of his town and 
formed a cooperative society. He used to pool the output of all the individual members and 
took it to the city to sell the output at best possible price.  
i. Name the form of cooperative society formed by Ranjan and quote the line from 
the above para which signifies it. Also suggest any one value followed by Ranjan. 
ii. Also name and explain any two other forms of co – operative society. 
 
5 
23 i. Why financial institutions are called ‘Development Banks’? 
ii. What are Inter – Corporate deposits? Explain their types. 
 
5(1+4) 
24 Where national security is concerned, which form of public enterprise is considered most 
suitable? Also give its other two merits and its two demerits. 
5 
25 Farhan, the promoter of ‘New Tech Ltd.’ has offered the public to subscribe to its shares and 
debentures. His company has received a lot of applications, but before going ahead with the 
allotment of shares, the company must receive the amount of minimum subscription.  
i. What amount of minimum subscription should ‘New Tech Ltd.’ receive to go 
ahead with the allotment of shares? Explain by giving an example. 
ii. If the amount of minimum subscription is received by the company, what will be 
the next stage in formation of his company? Explain any two documents required 
for completion of this stage. 
 
5(2+3) 
26 i. A holds 50 preference shares whereas B holds 75 preference shares in Suhasini 
Ltd. A got a share in the surplus profits of the company, whereas B was paid 
arrears of unpaid dividend. Identify the two types of preference shares. 
 
ii. Explain any two merits and two demerits of Preference Shares. 
 
6 
27 A group of 12 persons appointed ‘Prem Ltd.’ as the promoters and ‘Major and Associates’ as 
Chartered Accountants to form their company. Before the company is formed ‘Prem Ltd’ 
enters into a contract with third party for purchase of land on behalf of the company. But 
Prem Ltd. did not disclose the material fact that this land was agricultural land. The company 
was formed after one month. Later on, the company was not allowed to carry on its business 
operations by the government.    
a. Which type of contract is entered into by ‘Prem Ltd’? Explain briefly. 
b. Is the contract legally binding on the company? Give reason. 
c. Explain the legal position of ‘Prem Ltd’. 
d. What can the company do now as it is not allowed to carry on its business 
operations? 
 
6 
XI A Page 4 of 4 
 
28 Define the term ‘Commerce’. Why is it considered as the backbone of industry & other 
business activities? Explain. 
 
6 
29 KayCee Limited is a company manufacturing cosmetics in Delhi. It decides to expand its 
business to other parts of the country and even abroad by entering into a joint venture. The 
new business can pool in financial and human resources and will be able to face market 
challenges and take advantage of new opportunities. It will also allow both businesses to 
come up with something new and creative for the same market. It may also benefit one of 
the parties from other’s goodwill. 
a. Identify the three benefits of joint venture referred to in the above para. Also quote 
the lines from the above para which depicts these three benefits. 
b. In what ways can KayCee Limited form a joint venture? 
 
6(3+3) 
30 Dev, a sole proprietor, runs a successful Coach business in Bengaluru. Private commuters, 
tourists and business clients are among his customers. Dev has also operated a daily bus 
service between Bengaluru and Mysore for some years, which has proved to be the most 
popular service provided by his business to commuters.However, he is considering the 
option of entering into partnership with his friend Natasha.  
i. Define the form of business, which Dev is currently undertaking. 
ii. Explain any three merits of the form of business in which Dev is planning to 
enter with his friend, Natasha. 
iii. What should Dev do to avoid the unlimited liability of the business without 
inviting any partner? 
6 
 
 
 
 
 
 
 
  
Date of Exam:                          Class: XI 
Time:3 hrs                                             M. M:100 
 
Subject: Business Studies 
 
1 Mr. A is engaged in the business of making and selling idols during the Diwali season. How 
will the working capital requirements of his business change during off season and festive 
season? Give reason for your answer.  
Ans. More wc required for building inventories during festive season than in off season.  
1 
2 Lalaji, a local vegetable trader, took first mover advantage to sell his vegetables and 
groceries online. He decided to raise funds from friends and relatives to grow his business 
and launched a company ‘Locallalaji.com’. In the first year, the business did well. The 
industry was flooded with new entrants like Grofers, Bigbasket, etc. Inspite of sincere efforts 
by Lalaji, the business suffered losses. In the third year of operations, the company stopped 
paying salaries and loans. The company was served a legal notice and assets were sold to 
repay the debts. Investors demanded that ‘Lalaji’s’ personal assets should be sold but the 
auctioneer refused to do so.  
Are the investors justified while asking for Lalaji’s personal assets to be sold? Mention the 
merit of company associated with the above situation. 
Ans. No, not justified due to limited liability.   (0.5 +0.5) 
1 
3 What is the position of debenture holders in a company? 
Ans. They are the creditors of the company.  
1 
4 How many signatories to the Memorandum of Association are required in case of Private 
company and public companies? 
Ans. Min 2 in pvt co & min 7 in public co 
1 
5 An Indian company imports goods from Germany and exports them to Nepal. Name the type 
of trade highlighted in the statement. 
Ans. Entrepot 
1 
6 Ramesh, Kiran and Harish entered into a partnership for construction of a housing society in 
Rohini. Name the type of partnership which is referred to in the above line. 
Ans. Particular partnership 
1 
7 What are FCCBs? 
Ans. Foreign Currency Convertible Bonds- These are converted into equity or depository 
receipts after a specified period of time at a predetermined price or exchange rate. (0.5 for 
full form & 0.5 for def) 
1 
8 At the time of independence, the private sector was unwilling to invest in key areas. Why? 
Ans. due to heavy investment and long gestation periods.  
1 
9 Why was the system of ‘Memorandum of understanding’ introduced for public sector? 
Ans. to make them accountable for specified results. 
1 
10 Name the system which allows both male and female members of the Joint Hindu family 
business to be co – parceners. 
Ans. Dayabhaga 
1 
11 National Industries Ltd., a public enterprise set up in Madhya Pradesh was running into 
continuous losses for the past three years. It was declared a sick unit by the government. 
Therefore, the directors decided to close down the unit. But the government wanted to 
restructure it in the favour of employees and workers.  
What policy regarding sick units will be adopted by government in this case? Explain. 
Ans. i. All public sector units to be referred to BIFR (board for industrial & financial 
reconstruction) to decide whether a sick unit should be restructured or closed down.       (1) 
3