Unit-2 Forms of Business Organisation

Q1.The liability of all the co-parceners except the...........is limited to their share in the business, and
consequently their risk is well-defined and precise.
(a) Karta (b) Partners
(c) Members (d) Shareholders

Q2................ is a type of business unit where a person is solely responsible for providing the capital.
(a) Sole proprietorship (b) Joint Hindu family business
(c) Partnership (d) Cooperative societies

Q3. Partnership is the relation which subsists between persons who have agreed to combine their
property, labour or skill in some business and to share the profits there from between them.
(a) True
(b) False
(c) Partly True
(d) None of these

Q4. The relation between persons who have agreed to share the profit of the business carried on by
all or any one of them acting for all.
(a) Sole proprietorship
(b) Joint Hindu family business
(c) Partnership
(d) Cooperative societies

Q5.A ...........partner is one whose association with the firm is unknown to the general public.
(a) Secret
(b) Active
(c) Sleeping
(d) Nominal

Q6. 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

Q7. It is optional for a partnership firm to get registered.

(a) True
(b) False
(c) Partly True
(d) None of these

Q8.A............ which has its objectives for the promotion of economic interests of its members in
accordance with cooperative principles.
(a) Sole proprietorship (b) Joint Hindu family business
(c) Partnership (d) Cooperative societies

Q9. The cooperative society is compulsorily required to be registered under the Cooperative
Societies Act.........
(a) 1912 (b) 1956
(c) 1932 (d) 1965
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Q10. The principle of ‘one man one vote’ governs the cooperative society.
(a) True (b) False
(c) Partly True (d) None of these

Q11. The liability of members of a cooperative society is ......... to the extent of their capital
contribution.
(a)Born (b) Shared
(c) Unlimited (d) Limited

Q12. The society aims to fight against the big capitalists and enhance the bargaining power of the
small producers.
(a) Consumer’s cooperative societies (b) Producer’s cooperative societies
(c) Marketing cooperative societies (d) Farmer’s cooperative societies

Q13. The aim is to gain the benefits of large scale farming and increase the productivity.
(a) Consumer’s cooperative societies (b) Producer’s cooperative societies
(c) Marketing cooperative societies (d) Farmer’s cooperative societies

Q14. The society aims to eliminate middlemen and improve competitive position of its members by
securing a favourable market for the products.
(a) Consumer’s cooperative societies (b) Producer’s cooperative societies
(c) Marketing cooperative societies (d) Farmer’s cooperative societies

Q15. The members comprise of consumers desirous of obtaining good quality products at reasonable
prices.
(a) Consumer’s cooperative societies (b) Producer’s cooperative societies
(c) Marketing cooperative societies (d) Farmer’s cooperative societies

Q16. The aim of such societies is to protect the members from the exploitation of lenders who charge
high rates of interest on loans
(a) Consumer’s cooperative societies (b) Producer’s cooperative societies
(c) Credit cooperative societies (d) Farmer’s cooperative societies

Q17. The members of these societies consist of people who are desirous of procuring residential
accommodation at lower costs.
(a) Consumer’s cooperative societies (b) Producer’s cooperative societies
(c) Marketing cooperative societies (d) Cooperative housing societies

Q18. The company form of organisation is governed by The Companies Act, ......
(a) 1912 (b) 2013
(c) 1932 (d) 1965

Q19. A company is a creation of law and exists independent of its members.

(a) Formation (b) Separate legal entity
(c) Perpetual succession (d) Artificial person

Q20. Contracts signed after incorporation but before commencement of business are Provisional
Contracts.
(a) True (b) False
(c) Partly True (d) None of these

Q21. The law does not recognise the business and owners to be one and the same.
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(a) Perpetual succession,
(b) Formation
(c) Separate legal entity
(d) Artificial person

Q22. Members may come and members may go, but the company continues to exist. Identify the
feature
(a) Perpetual succession,
(b) Formation
(c) Separate legal entity
(d) Artificial person

Q23. The shareholders do not have the right to be involved in the day-to-day running of the business.
(a) Risk bearing (b) Common seal
(c) Liability (d) Control

Q24. The members can be asked to contribute to the loss only to the extent of the unpaid amount of
share held by them.
(a) Risk bearing (b) Common seal
(c) Liability (d) Control

Q25. The Board of Directors enters into an agreement with others by indicating the company’s
approval through a ……….
(a) Risk bearing (b) Common seal
(c) Liability (d) Control

Q26. The risk of loss thus gets spread over a large number of shareholders.
(a) Risk bearing (b) Common seal
(c) Liability (d) Control

Q27. These partners take actual part in carrying out business of the firm on behalf of other partners.
(a) Active partner (b) Sleeping or dormant partner
(c) Secret partner (d) Nominal partner

Q28. Partners who do not take part in the day to day activities of the business are called
……………... partners.
(a) Active partner
(b) Sleeping or dormant partner
(c) Secret partner
(d) Nominal partner

Q29. A ……… partner is one whose association with the firm is unknown to the general public.
(a) Active partner (b) Sleeping or dormant partner
(c) Secret partner (d) Nominal partner

Q30. A ………… is one who allows the use of his/her name by a firm, but does not contribute to its
capital.
(a) Active partner
(b) Sleeping or dormant partner
(c) Secret partner
(d) Nominal partner

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Q31. A person is considered a partner ……… if, through his/her own initiative, conduct or
behaviour, he/she gives an impression to others that he/she is a partner of the firm.
(a) Active partner
(b) Sleeping or dormant partner
(c) Secret partner
(d) Partner by estoppel

Q32. 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

Q33. .......................is the most important document as it defines the objectives of the company.
(a) Articles of Association (b) Partnership deed
(c) Memorandum of Association (d) Incorporation certificate

Q34. ……… 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 Clause (b) Registered Office Clause
(c) Objects Clause (d) Liability Clause

Q35. …………clause contains the name of the state, in which the registered office of the company is
proposed to be situated
(a) Name Clause (b) Registered Office Clause
(c) Objects Clause (d) Liability Clause

Q36. ………. clause defines the purpose for which the company is formed.
(a) Name Clause (b) Registered Office Clause
(c) Objects Clause (d) Liability Clause

Q37. …………..clause limits the liability of the members to the amount unpaid on the shares owned
by them.
(a) Name Clause (b) Registered Office Clause
(c) Objects Clause (d) Liability Clause

Q38.…………clause specifies the maximum capital which the company will be authorised to raise
through the issue of shares.
(a) Name Clause
(b) Capital Clause
(c) Objects Clause
(d) Liability Clause

Q39. ………..defines the rules regarding internal management of a company.

(a) Articles of Association
(b) Partnership deed
(c) Memorandum of Association
(d) Certificate of Incorporation

Q40. The ……………… is a conclusive evidence of the regularity of the incorporation of a

company.
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(a) Articles of Association (b) Partnership deed
(c) Memorandum of Association (d) Certificate of Incorporation

Q41. SEBI stands for

(a) Securities and Exchange Board of India (b) Shares and Exchange Board of India
(c) Securities and Export Board of India (d) Services Exchange Board of India

Answers:

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Q1 (a)
Q2 (a)
Q3 (a)
Q4 (c)
Q5 (a)
Q6 (a)
Q7 (a)
Q8 (d)
Q9 (a)
Q10 (a)
Q11 (d)
Q12 (b)
Q13 (d)
Q14 (c)
Q15 (a)
Q16 (c)
Q17 (d)
Q18 (b)
Q19 (b)
Q20 (a)
Q21 (c)
Q22 (a)
Q23 (d)
Q24 (c)
Q25 (b)
Q26 (a)
Q27 (a)
Q28 (b)
Q29 (c)
Q30 (d)

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Q31 (d)
Q32 (d)
Q33 (c)
Q34 (a)
Q35 (b)
Q36 (c)
Q37 (d)
Q38 (b)
Q39 (a)
Q40 (d)
Q41(a)