Worksheet: Forms of Business Organisation | Business Studies (BST) Class 11 - Commerce PDF Download

MCQ Questions

Q1: _____ defines the rules regarding internal management of a company.
(a) Articles of association
(b) Partnership deed
(c) Memorandum of association
(d) Certificate of incorporation
Ans: (a)

Q2: _____ clause contains the name of the company with which the company will be known, which has already been approved by the registrar of companies.
(a) Name
(b) Registered office
(c) Objects
(d) Liability
Ans: (a)

Q3: Application for approval of name of a company is to be made to
(a) SEBI
(b) Registrar of companies
(c) GOI
(d) State government in which company is registered
Ans: (b)

Q4: Name the type of partner who is not really a partner but is liable to third parties for the repayment of the firm’s debts.
(a) Sleeping
(b) Active
(c) Nominal
(d) Secret
Ans: (c)

Q5: Name the process by which the shares of a company are allowed to be traded on a stock exchange.
(a) Trading on shares
(b) Listing of shares
(c) Mutualisation of shares
(d) None of the above
Ans: (b)

Q6: After doing her M.Com. from ‘Himachal Pradesh University of Shimla’, Aparna went back to her village in Kinnaur district of Himachal Pradesh. She wanted to contribute for the development of women of her village, so she formed an organisation, the membership of which was open for all the women villagers on a voluntary basis by paying ₹ 500 only which will be treated as their capital.
Aparna knew that the land of her village was suitable for the farming of medicinal plants. So she motivated the members of her organisation for growing medicinal plants in their fields under the guidance and help of the local agricultural department.
It was also decided that the organisation will purchase the produce of each member and sell the same to drug manufacturing companies at a very good price which was not possible for the members individually. The main objective of the organisation is to render services to its members rather than to earn profit.
A computer training center for young boys and girls of the village was started under the guidance of Aparna from the surplus of the profits.
On the basis of the given information, identify the kind of organisation that was formed by her.
(a) Cooperative society
(b) Company
(c) HUF
(d) Partnership
Ans: (a)

Q7: The person or group of persons who perform the work of promotion and form a company is/are known as promoter(s).
(a) True
(b) False
(c) Can’t say
(d) Partially true
Ans: (a)

Q8: Match the following.

Codes      A     B    C      D
(a) (i)   (iii)  (ii)   (iv)
(b) (iii)  (ii)  (i)    (iv)
(c)  (i)   (ii)  (iii)   (iv)
(d) (ii)  (iii)  (iv)   (i)
Ans: (d)

Q9: A company cannot come into existence without
(a) electing directors
(b) getting certificate of incorporation
(c) issuing a prospectus
(d) All of the above
Ans: (b)

Q10: ‘Return of allotment’, signed by a director or secretary is filed with the registrar companies within how many days of allotment of shares?
(a) 15 days
(b) 8 days
(c) 10 days
(d) 30 days
Ans: (d)

Q11: In a cooperative society, which of the following principle is followed?
(a) One share one vote
(b) One man one vote
(c) No vote
(d) Multiple votes
Ans: (b)

Q12: A partner by ____ 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.
(a) active partner
(b) sleeping or dormant partner
(c) secret partner
(d) partner by holding out
Ans: (d)

Q13: _____ clause specifies the maximum capital which the company will be authorised to raise through the issue of shares.
(a) Name
(b) Capital
(c) Objects
(d) Liability
Ans: (b)

Q14: A type of business organisation where a person is individually responsible for capital, bearing risk and control of management is called ____ .
(a) Joint stock company
(b) Cooperative society
(c) Sole proprietorship
(d) Partnership
Ans: (c)

Q15: The ____ is a conclusive evidence of the regularity of the incorporation of a company.
(a) articles of association
(b) partnership deed
(c) memorandum of association
(d) certificate of incorporation
Ans: (d)

Q16: Members may come and members may go, but the company continues to exist. Identity the feature of company highlighted here.
(a) Perpetual succession
(b) Formation
(c) Separate legal entity
(d) Artificial person
Ans: (a)

Q17: Match the following forms the business organisation with their suitable example.

Codes      A    B   C    D
(a) (i)  (ii) (iii) (iv)
(b) (ii) (iv) (iii) (i)
(c) (iv) (iii) (ii) (i)
(d) (ii) (iii) (iv) (i)
Ans: B

Q18: It can continue as long as the partners want and is terminated when any partner gives a notice of withdrawal from partnership to the firm.
(a) Partnership at will
(b) Particular partnership
(c) General partnership
(d) Limited partnership
Ans: (a)

Q19: Samarth Sharma was born in Delhi and is a fashion designer. He runs his hi-fashion garments business from the posh Greater Kailash market of Delhi. After running the business for eight years, Samarth feels that he should get his business registered in a way that he can save himself from the threat of unlimited liability.
But at the same time, he doesn’t want anyone else to be a part of decision-making or to interfere in his business. On the basis of the given information, state the form of business organisation to be formed by Samarth.
(a) Partnership
(b) Public company
(c) Private company
(d) One person company
Ans: (d)

Q20: A public company publishes and files its annual accounts and reports, as it helps company to maintain secrecy.
(a) True
(b) False
(c) Can’t say
(d) Partially false
Ans: (b)

Assertion-Reasoning MCQs

Q1: Assertion (A) Personal assets of the partners may be used to pay-off business debts in case of insufficiency of business assets.
Reason (R) Partners of a firm have unlimited liability.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
Ans: (a)

Q2: Assertion (A) Board of directors exercise direct control over the business.
Reason (R) Board of directors are the owners of the company.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
Ans: (c)

Q3: Assertion (A) The managing committee elected by members of the cooperative society is generally not professionally equipped to handle the management functions effectively.
Reason (R) Cooperative society is unable to employ experts because of their inability to pay them high salaries.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
Ans: (a)

Q4: Assertion (A) Timely decisions of sole proprietor help him/her to take advantage of market opportunities as and when they arise.
Reason (R) Sole proprietorship can be easily started or dissolved at any time with minimum legal formalities.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
Ans: (b)

Q5: Assertion (A) Credit cooperative societies are established for providing easy credit on reasonable terms to the members.
Reason (R) Credit cooperative societies provide loans to members out of the amounts collected as capital and deposits from the members and charge low rates of interest.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
Ans: (a)

Case Based MCQs

Some of the people of Dwarkapuri unitedly established a cooperative society. Its objective was to purchase the goods of daily consumption directly from the producers and sell to the members. By doing so, now they are getting goods of a high quality at a reasonable rate. In the proximity of Dwarkapuri, there is an industrial area in which there are several small producers. They are struggling against the problem of procuring the raw material at a reasonable rate and selling the produced goods at a reasonable rate. 
Some prudent producers consulted all of them and established a cooperative society. This society resolved the problems of the producers related to buying and selling.
Similarly, in Nand Nagri too, there are several such people which produce several goods in small-small quantities. Some big buyers buy their goods at cheap rates and sell them at high rates in the market. They earn huge profits. Small producers also made a society in order to get rid of their clutches and heaved a sigh of relief.
In Nand Nagri itself, there live a large number of people whose financial position is poor. Usually, they borrow money from the rich at a high rate of interest. They also formed a society which fully succeeded inmaking themget rid of the clutches of the rich.
Q1: Which form of business organisation is discussed in the above case?
(a) Joint stock company
(b) Cooperative organisation
(c) Partnership
(d) Sole proprietorship
Ans: (b)

Q2: Identify the cooperative society established by the people of Dwarkapuri.
(a) Cooperative Credit Society
(b) Marketing Cooperative Society
(c) Producers’ Cooperative Society
(d) Consumers’ Cooperative Society
Ans: (d)

Q3: Tell the name of the cooperative society established by the producers of the industrial area located in the proximity of Dwarkapuri.
(a) Cooperative Credit Society
(b) Marketing Cooperative Society
(c) Producers’ Cooperative Society
(d) Consumers’ Cooperative Society
Ans: (c)

Q4: Name the cooperative society formed by the producers of Nand Nagri in order to solve their problem.
(a) Cooperative Credit Society
(b) Marketing Cooperative Society
(c) Producers’ Cooperative Society
(d) Consumers’ Cooperative Society
Ans: (b)

Q5: Identify the society formed by the financially poor people of Nand Nagri.
(a) Cooperative Credit Society
(b) Marketing Cooperative Society
(c) Producers’ Cooperative Society
(d) Consumers’ Cooperative Society
Ans: (a)

Unlike a partnership or a proprietorship firm, this form of business organisation is separate from its owners.
It is a separate legal entity and no single member is liable for such an organisation’s activities.
Such a firm will not depend on any owner or shareholder to decide its future course of action.
Irrespective of members come and go; shares are bought and sold, dividends are earned and distributed; such a form of business organisation goes on. It is  managed democratically, by the representatives chosen from the shareholders.
Q6: Identify the form of business organisation highlighted in the above case.
(a) Partnership
(b) Cooperative organisation
(c) Joint stock company
(d) Sole proprietorship
Ans: (c)

Q7: “This form of business organisation is separate from its owners”, which characteristics of above mentioned business is highlighted in the lines?
(a) Perpetual succession
(b) Separate legal entity
(c) Artificial person
(d) Profit sharing
Ans: (b)

Q8: “Irrespective of members come and go; shares are bought and sold, dividends re earned and distributed; such a form of business organisation goes on”, which characteristics of above mentioned business is highlighted in the lines?
(a) Perpetual succession
(b) Separate legal entity
(c) Artificial person
(d) Profit sharing
Ans: (a)

Q9: “It is managed democratically, by the representatives chosen from the shareholders”. ……………. are chosen by the shareholders.
(a) promoters
(b) underwriters
(c) board of directors
(d) managers
Ans: (c)

Q10: Such business organisation is created by ____ .
(a) owners
(b) shareholders
(c) board of directors
(d) law
Ans: (d)

The whole family of Rama Narayan is busy in a special kind of business. They are running a business organisation which is found only in India. Except Rama Narayan, the liability of all the other members is limited. Rama has a friend whose name is Mr Maya.
He is also running a special kind of business. He has established a company in which he is the only shareholder. In other words, he himself has invested the whole capital. He has nominated his wife in the company.
Mr Maya has two sons, Krishna and Shayam. Krishna has completed his studies of M.B.A. and Shayam, his engineering studies. Krishna has been selected for the post of finance manager in a company.
A special characteristic of his company is that there is a ban on the transfer of its shares. On the other hand, Shayam, too has been selected for the post of production manager in another company.
At the time of his interview, Shayam made a special observation that out of the total number of seven of his interviewers, five of them were directors of the company.
Q11: Identify the business organisation being run by Rama Narayan.
(a) Partnership
(b) One person company
(c) Joint hindu family business
(d) Private company
Ans: (c)

Q12: Identify the company being run by Mr Maya.
(a) Partnership
(b) One person company
(c) Joint hindu family business
(d) Private company
Ans: (b)

Q13: Identify Mr Krishna’s company, in which he is selected for the post of finance manager.
(a) Public company
(b) One person company
(c) Private company
(d) None of the above
Ans: (c)

Q14: To which class does Mr Shayam’s company belong?
(a) Public company
(b) One person company
(c) Private company
(d) None of the above
Ans: (a)

Q15: What term is used for Rama Narayan in his business?
(a) Owner
(b) Member
(c) Karta
(d) Partner
Ans: (c)

Miss Jyoti, Rishi and Vijay are running a firm in partnership. The main objective of their firm is to make a high quality wheat available to the public at a cheap rate.
A special characteristic of this firm is that the liability of all the partners is unlimited. The second special characteristic of the firm is that Miss Jyoti has a capital investment in the company.
She gets the share in profit and loss as well as remains active in management. But the outsiders are not aware of her being a partner. Mr Rishi spends more time than the other partners in business.
This is the very reason that he gets ₹ 1 lakh extra on account of his salary per month. Vijay introduced capital in the business but does not take part in the management of the company. The business of the firm is growing fast. With the increase in size of the business, the number of partners is also increasing. By now, its number has reached 20.
Q16: Identify the type of partnership highlighted in the given case.
(a) General partnership
(b) Limited partnership
(c) Partnership at will
(d) Particular partnership
Ans: (a)

Q17: Which of the following types of partners is Miss Jyoti?
(a) Active partner
(b) Sleeping partner
(c) Secret partner
(d) Nominal partner
Ans: (c)

Q18: Identify the agreement on the basis of which Rishi gets his salary.
(a) Partnership deed
(b) Memorandum of association
(c) Both (a) and (b)
(d) None of the above
Ans: (a)

Q19: Which of the following type of partner is Vijay?
(a) Active
(b) Sleeping
(c) Secret
(d) Estoppel
Ans: (b)

Q20: Which of the following types of partners is Mr. Rishi?
(a) Active partner
(b) Sleeping partner
(c) Secret partner
(d) Nominal partner
Ans: (a)

Madhu, Himanshu and Ashu after completing B.E. in civil engineering have jointly taken a project of constructing three government. school buildings in a village near Agra, within the time period of 6 months. As per the written agreement between them, only Madhu and Ashu will contribute the capital, take all managerial decisions and Himanshu will contribute capital only but will not be actively involved in management.
Q21: Himanshu will contribute capital only but will not be actively involved in management. What type of partner Himanshu is?
(a) Active
(b) Dormant
(c) Nominal
(d) Secret
Ans: (b)

Q22: Specify the kind of partnership mentioned above.
(a) Limited partnership
(b) Particular partnership
(c) Partnership at will
(d) General partnership
Ans: (b)

Q23: Identify the document which defines the terms and conditions of such partnership.
(a) MoU
(b) MoA
(c) Partnership deed
(d) Partnership registration
Ans: (c)

Q24: If the partners are not able to complete the project effectively and efficiently, then who will be held liable for the losses for non-completion of the project?
(a) Madhu
(b) Himanshu
(c) Both Madhu and Mayank
(d) All three of them
Ans: (d)

Q25: What type of partner Madhu and Ashu are?
(a) Active
(b) Dormant
(c) Nominal
(d) Secret
Ans: (a)