[HOTS] - Entrepreneurial Planning, Entrepreneurship, Class 12 | Additional Study Material for Commerce PDF Download

Q1. Which form of organization is considered to be the simplest form of organization ? (1 mark)
Ans. Sole proprietorship firm.

Q2. Which form of business gives all the rights even to the minor member ? (1 mark)
Ans. Joint Hindu Family Business.

Q3. Which feature of partnership binds all the partners to the agreement signed by one partner ? (1 mark)
Ans. Mutual Agency.

Q4. In case of heavy loss, creditors can claim the recovery of their dues from the personal assets of sole proprietor. Which feature of sole proprietor is highlighted here ? (1 mark)
Ans. Unlimited liability.

Q5. In which business organization there is separation of ownership and management ? (1 mark)
Ans. Company form of business.

Q6. Which form of business is the most complex form of business ? (1 mark)
Ans. Joint stock company form of business.

Q7. Teachers of a school formed a society to buy land and construct flats for its members. Identify this form of business. (1 mark)
Ans. Co-operative society.

Q8. The business assets of an organization amount to Rs. 50,000 but the debts that remain unpaid are Rs. 80,000. What course of action can the creditors take if :
(i) The organization is a sole proprietorship firm.
(ii) The organization is a partnership firm with Anthony and Akbar as partners. Which of the two partners can the creditors approach for repayment of debt ? Explain giving reasons. (2 marks)
Ans.
(i) They can claim over the personal property of sole properietor as his liability is unlimited.
(ii) Creditors can approach both Anthony and Akbar and they are liable to pay back in their profit sharing ratio but in case one of the partners becomes insolvent then creditor can claim from only one partner also.

Q9. A person has decided to start a small leather belt manufacturing unit. He is not aware of the various formalities involved in the process of setting up the unit. Explain to him the procedure. (TBQ) (4 marks)

Ans. The procedure for setting up the unit is as follows :
(i) Business Name : Since the manufacturing unit is being started by a single person, he is under no obligation to select a trade name for the business. However, he is free to do so if he desires.
(ii) VAT/CST registration : If tangible goods are being sold within the state than VAT applies, if it is inter-state then CST applies.
(iii) Payment of Taxes : He has to ensure that his business meets the state and federal requirements. The sole trader bears the taxes of the business.
(iv) Others : PAN, bank account number in the name of sole propeirtorship business, shop and establishment license, Employee Provident Fund Registration as and where applicable, have to be complied with.

Q10. Which form of business is suitable for following types of businesses and why ?
(i) Beauty Parlor
(ii) Shopping malls
(iii) Hotels
(iv) Medium size trading concerns
(4 marks)
Ans.
(i) Sole proprietorship as it requires personal touch.
(ii) Public company as huge capital outlay is needed.
(iii) Private company as it requires more capital and managerial skills.
(iv) Partnership as it requires involvement of more persons.

Value Based Question:
Q. Aman an entrepreneur is operating his business without PAN and TAN. What would you suggest in this regard.
Ans. TAN or Tax Deduction and Collection Account Number is required to be obtained by all persons who are responsible for deducting or collecting tax.
PAN or Permanent Account Number is issued by the Income Tax Department.
These two are legally compulsory activities that are to be taken by an entrepreneur. In case this is not followed the following may happen :
(i) Legal action against the entrepreneur for not following the legal format.
(ii) Fine to the entrepreneur.
(iii) Delay in production in future due to non-fulfillment of the documents.
(iv) Wastage of time and money in future.