Forms of Business Organisation
Q. What is the meaning of
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
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
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
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
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
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
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
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
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
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
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
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
3.Secrecy: The secrets of business are known to Karta
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.