Forms of Business Organisations Test

Result

Forms of Business Organisations Test - 25

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Weekly Quiz Competition

Question 1
1 / -0

The maximum amount with which a company gets registered is called __________.

A
authorized share capital

B
issued share capital

C
subscribed share capital

D
paid up share capital

Solution

The Authorised share capital is the maximum amount of the capital for which shares can be issued by the Company to shareholders, the capital clause is mentioned in the Memorandum of Association of the Company. The Authorised capital can be increased at any time in the future by taking necessary steps as required by law or the Companies Act, 2013.
Thus the correct answer is A.
Question 2
1 / -0

Which form of business organisation has a separate legal entity?

A
Hindu Undivided Family (HUF)

B
Co-operative society

C
Partnership firm

D
Sole proprietorship

Solution

After registration a co-operative enterprise becomes a body corporate independent of its members i.e. a separate legal entity. Registration of a co-operative enterprise is compulsory. A co-operative society may be registered with the Registrar of Co-operatives Societies.
Question 3
1 / -0

In case of HUF what are liabilities of coparcener and Karta?

A
Both have unlimited liability

B
Coparcener's liability is limited while Karta's liability is unlimited

C
Karta's liability is limited while Coparcener's liability is unlimited

D
Both have limited liability

Solution

Joint Hindu family business is regulated by the Hindu succession act. According to it the business is owned and managed by the karta, the head of the family and the members of the family are its co parceners. Hence, the head of the family business is called as karta. The liability of coparcener is limited whereas the liability of karta is unlimited.
Question 4
1 / -0

Which of the following people cannot be called partners?

A
Minors

B
Insolvents

C
Co-owners without the agreement to carry on the business

D
All of the above

Solution

Indian Partnership Act provides that though a minor cannot be a partner in a firm, with the consent of all the partners for the time, he may be admitted to the benefits of the partnership by an agreement executed through his guardian with the other partners.
Insolvency means a person who is not able to pay their debts. So he cannot be a partner of a partnership firm. No member can be a partner without an agreement between co-owners.
Hence, option (D) is the correct answer.
Question 5
1 / -0

A partnership form of business organization will be more advantageous in operation as it has _______.

A
access to large amount of initial capital

B
limited liability

C
both a and b

D
none of the above

Solution

In a partnership firm of business organization there is an increased ability to raise funds as there is more than one owner and each member can contribute a sufficient amount of capital which is not possible in a sole trading business as it is difficult to raise funds quickly and sufficiently.
Question 6
1 / -0

Which statement is true?

A
Karta has unlimited liability In HUF

B
Partner has unlimited liability in partnership

C
Both HUF and partnership have unlimited liability

D
a and b

Solution

Every partner in a partnership has unlimited liability for all of the partnership’s debts and losses. The partners are personally responsible for debts of the business, even if they had nothing to do with creating them. Each partner is responsible not only for liabilities also for the liabilities originated from a contract signed by any one of the partners.
Thus the correct answer is B.
Question 7
1 / -0

Which of the following is not a form of organisation?

A
Partnership

B
Company

C
Partners

D
Sole Proprietorship

Solution

Partners are the members who come together to form partnership. They are not the form of organisation, They are just the members of the organisation.
Question 8
1 / -0

Partners are ____________ of the firm.

A
owners

B
employers

C
agents

D
none of the above

Solution

Partner is a representative of a partnership business. As a representative of a partnership firm, the partners should conduct business based on the the powers given to them. Partners are agents who may act on behalf of the firm.
Question 9
1 / -0

A sub-partner is a person __________.

A
who is sharing the profits of some partner

B
who does not invest and shares the profits

C
who invests but does not work

D
a partner who only gives his name for partnership

Solution

When a partner enters into a contract with a third party to share his profit, the third party is called a sub partner. " The right to receive profits and bear losses becomes the asset of the sub partnership. A sub partnership which is in the receipt of the share of profit of a partner is the main partnership, has to be deemed to be a partner in the main partnership for the limited purpose of section 10(2-A) of the Income Tax act ".
Question 10
1 / -0

XYZ partnership firm is a partnership firm between A and B. C posed that he is a partner in XYZ and earned profits form the market. C will be regarded as ______.

A
holding out partner

B
dormant partner

C
nominal partner

D
none of the above

Solution

C will be regarded as a partner in profit. A partner in profit is a partner who shares in the profit only without being liable for the losses. He contributes capital to the firm but does not take part in the management of the business. He is liable to third parties like other partners. Such a partner is generally inactive but associated with his money and goodwill.
Hence, option D is correct.

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Re-Attempt Weekly Quiz Competition

Forms of Business Organisations Test - 25

Result

Forms of Business Organisations Test - 25

Score

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Rank

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SHARING IS CARING

Question 1

authorized share capital

issued share capital

subscribed share capital

paid up share capital

Solution

Question 2

Hindu Undivided Family (HUF)

Co-operative society

Partnership firm

Sole proprietorship

Solution

Question 3

Both have unlimited liability

Coparcener's liability is limited while Karta's liability is unlimited

Karta's liability is limited while Coparcener's liability is unlimited

Both have limited liability

Solution

Question 4

Minors

Insolvents

Co-owners without the agreement to carry on the business

All of the above

Solution

Question 5

access to large amount of initial capital

limited liability

both a and b

none of the above

Solution

Question 6

Karta has unlimited liability In HUF

Partner has unlimited liability in partnership

Both HUF and partnership have unlimited liability

a and b

Solution

Question 7

Partnership

Company

Partners

Sole Proprietorship

Solution

Question 8

owners

employers

agents

none of the above

Solution

Question 9

who is sharing the profits of some partner

who does not invest and shares the profits

who invests but does not work

a partner who only gives his name for partnership

Solution

Question 10

holding out partner

dormant partner

nominal partner

none of the above

Solution

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