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Forms of Business Organisation

Q. What is the meaning of Partnership? 

Ans.  According to section 4 of the Company's act 1932," Partnership is a relation between two or more persons who have agreed to share the profits of a business carried on by all or any one of them acting for all."

 Q. What are the limitations of Partnership?

Ans.  Limitations of Partnership: -

1. Less capital as compared to a company

2. Unlimited liability

3. Conflict between partners

4. Slow decision making

5. Non- public confidence

6. Uncertain life of the firm               

Q. Describe the Suitability of Partnership

Ans.  Partnership firm is suitable under the following conditions:

1. The business is run on a small or medium scale

2. Personal touch with the customers or clients is essential

3. It is convenient for the professionals to form partnership

4. It facilitates partnership between those having capital and those having technical qualifications.

 Q. List out the merits of a Company.

Ans.  Merits of a company -

1. Huge Financial Resources

2. Better Management

3. Transferability of shares

4. Limited Liability

5. Democratic Functioning

6. Continuity and Stability

7. Diffused Risk

8. Avenues for Investment

9. Economies of large Scale Operation

10. Public Confidence

 Q. What are the merits of Partnership?

Ans.  Merits of partnership:

1. Easy to form a partnership firm

2. Facility of large financial resources

3. Better management of operations

4. Sound decisions

5. Sharing of risks

6. Flexibility in operations

7. Greater motivation because of unlimited liability

8. Maintenance of secrecy

9. Easy to dissolve the firm


 Q. Give some points regarding public company.

Ans.  A public company is a company which:

1. Is a private company which is a subsidiary of a public company

2. Has a minimum of 7 members with no upper limit as maximum number of members

3. Does not put any restriction on the transfer of its shares

4. Invites the general public to subscribe, to its shares and debentures

5. Invites public deposits from the general public

6. Has a minimum paid – up capital of five lack rupees or such higher amount as may be prescribed by the Government

 Q. Define Dayabhaga System.

Ans.  This system of Hindu Succession is prevailing in Bengal, Assam and Orissa only According to this system, in case of death of a co-parcener, who has no male issue; his widow will become a co-parcener. In other words, under this system both male as well as female members of a family can become Co-parceners.

 Q. How many types  of co-operatives are there ?

Ans.  Types of co-operatives: -

1. Consumers’ cooperative societies

2. Credit Cooperative societies

3. Producers cooperative societies

4. Marketing cooperative societies

5. Farmers cooperative societies

6. Housing cooperative societies

 Q. Describe the meaning of Joint Hindu Family Business.

Ans.  A Joint Hindu Family Business may be defined as a form of business organization in which all the male members of a Hindu Undivided Family Carry on business under the management and control of the head of the family called "Karta”. The members of the family are known as 'Co-parceners'. And Karta has unlimited liability.

 Q. State the different kinds of partners.   

Ans.  Types of partners: -

1. Active or working Partner

2. Inactive, Sleeping Partner

3. Nominal Partner

4. Minor Partner

5. Incoming Partner

6. Outgoing Partner

7. Lanceted Partner

8. Partner in Profits only

9. Secret Partner

 Q. What is the meaning of co-operative society?

Ans. A Co-operative Society is established by group ten or more persons who voluntary come together for mutual benefit. It is based on the principles of collective effort, mutual self-help, equality and freedom.

 Q. What do you understand by Co-operative Society? 

Ans.  A co-operative society is a voluntary association formed by people on the basis of equality to protect their interest on a democratic basis with collectively owned funds.
All the members actively participate in the activities.

 Q. Define Sole Proprietorship.       

Ans.  Sole proprietorship is a form of business organization in which the proprietor brings his own capital, manages and controls the business himself and bears solely the risks and profits of the business. So in this we do not include the involvement of another person.

 Q. What are the advantages of Joint Hindu Family business?

Ans.  Following are the important advantages of Joint Hindu Family business:

1.Easy Formation: A joint Hindu family Businesscomes into existence byoperation of Hindu law. There are no legal formalities or contracts required to bring it into existence.

2.Economy: The liability of "Karta" i.e. the head of the family is unlimited, so he is careful, judicious and economical in business expenditure.

3.Secrecy: The secrets of business are known to Karta only.

4.Continuity of Operations: The joint Hindu family business enjoys continuous existence even after the original karta is no more. It is stable and comes to an end only after the total breakdown of the joint family

                5.Direct contact with customers: It has direct contact with customers.The companycan provide personal attention to the requirements of its customers resulting in growth of the business.
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