Forms of Business Organisations Test

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Forms of Business Organisations Test - 45

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Weekly Quiz Competition

Question 1
1 / -0

Characteristics of a company.

A
Artificial legal person

B
Incorporated body

C
Capital divisible into shares

D
All of above

Solution

Artificial persons such as companies, firms, institutions etc.
Legally, a company has got a personality of its own. Like human beings it can buy, own or sell its property. It can sue others for the enforcement of its rights and likewise be sued by others.
A company comes into existence the day it is incorporated/registered. In other words, a company cannot come into being unless it is incorporated and recognised by law. This feature distinguishes a company from partnership which is also a voluntary association of persons but in whose case registration is optional.
The capital of the company is divided into shares which is owned by the shareholders if the company.
Question 2
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Where the partnership is at will, the firm may be dissolved by __________ giving notice in writing to all the other partners of his intention to dissolve the firm.

A
Any partner

B
Two partners

C
Three partners

D
Four partners

Solution

The partnership is started at the will of the partners where the firm stands dissolved whenever the partners want it to as there is no fixed period or provision regarding the business duration and determination of the firm. Such a type of partnership is known as a partnership at will. Any partner can dissolve the firm by giving a prior notice regarding the dissolution mentioning a legitimate reason behind the dissolution.
Hence, option (A) is the correct answer.
Question 3
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A minor can be admitted to the benefits of partnership, which means _______.

A
He can have a share in the loss only

B
He can have a share in the profit only

C
He cannot have any share in profit or loss

D
He can have a share in the profits only if other partner by majority agrees to give it

Solution

According to the Partnership Act, 1932 a minor can be admitted as a partner in a partnership firm with the consent of all the partners in the agreement where the minor will share only the profits or gains of the firm and he will have no share in the firms' loss.
Question 4
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Registration of partnership is _________.

A
Compulsory

B
Not compulsory

C
Compulsory if its turnover exceeds specified amount

D
Compulsory if it is liable to tax audit under the Income Tax Law

Solution

A partnership basically refers to the contract between two or more people who have agreed to carry on certain business in order to achieve common goals.
Under Partnership Act, 1932 registration of partners and the partnership firm is not compulsory however it is advised to get the firm registered for many legal requirements.
Hence, option (B) is the correct answer.
Question 5
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A partnership is deemed to be a partnership at will when.
$$1$$. No fixed period has been agreed upon for the duration of partnership.
$$2$$. There is no provision made as to the determination of partnership in any other way.
Select the correct answer from the options given.

A
$$1$$ only

B
$$2$$ only

C
Both $$1$$ & $$2$$

D
Neither $$1$$ nor $$2$$

Solution

A partnership basically refers to the contract between two or more people who have agreed to carry on certain business in order to achieve common goals. The partnership can be started at the will of the partners where the firm stands dissolved whenever the partners want it to as there is no fixed period or provision regarding the business duration and determination of the firm. Such a type of partnership is known as partnership at will.
Question 6
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Characteristics of a company.

A
Transferability of shares

B
Perpetual existence

C
Limited liability

D
All of above

Solution

Transferability of Shares:
Shares in a company are freely transferable, subject to certain conditions, such that no share-holder is permanently or necessarily wedded to a company. When a member transfers his shares to another person, the transferee steps into the shoes of the transferor and acquires all the rights of the transferor in respect of those shares.
Perpetual Succession:
A company does not cease to exist unless it is specifically wound up or the task for which it was formed has been completed. Membership of a company may keep on changing from time to time but that does not affect life of the company. Insolvency or Death of member does not affect the existence of the company.
Limited Liability:
The liability of the members of the company is limited to contribution to the assets of the company upto the face value of shares held by him. A member is liable to pay only the uncalled money due on shares held by him. If the assets of the firm are not sufficient to pay the liabilities of the firm, the creditors can force the partners to make good the deficit from their personal assets.
Question 7
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Which of the following is a voluntary association of persons who work together to promote their economic interest?

A
Sole proprietorship

B
Company

C
Co-partnership

D
Co-operative

Solution

A Co-operative Society is an artificial voluntary association of people who work together to promote their economic interests and in order to achieve common goals.
These societies are incorporated with some social motives and they often have a separate legal body and a common seal.
Hence, option (D) is the correct answer.

Question 8

1 / -0

Match the following:

List I	List II
P. Consumers co-operative societies	$$1.$$ Formed by small producers and manufacturers who find it difficult to sell their products individually.
Q. Producers co-operative societies	$$2.$$ Formed to provide financial support to the members.
R. Co-operative marketing societies	$$3.$$ Formed to protect the interest of small producers by making available items of their need for production like raw materials, tools and equipments, machinery, etc.
S. Co-operative credit societies	$$4.$$ Formed by small farmers to work jointly and thereby enjoy the benefits of large-scale farming.
	$$5.$$ Formed to protect the interest of general consumers by making consumer goods available at a reasonable price.

Select the correct answer from the options given below.

$$P - 5, Q - 3, R - 2, S - 1$$

$$P - 5, Q - 3, R - 1, S - 2$$

$$P - 4, Q - 2, R - 1, S - 3$$

$$P - 3, Q - 5, R - 2, S - 1$$

Solution

A Co-operative Society is an artificial voluntary association of people who work together to promote their economic interest and in order to achieve common goals.

1. Consumer co-operative societies- It is an artificial voluntary association of people who work together to protect the interest of general consumers by making consumer goods available at a reasonable rate in the market.

2. Producers co-operative societies- It is an artificial voluntary association of people who work together to protect the interest of small producers by making available all the materials, tools, and equipment needed for production at a reasonable rate.

3. Co-operative marketing societies- It is an artificial voluntary association of small producers and manufacturers who work together to market their product together in order to achieve the target market.

4. Co-operative credit societies - It is an artificial voluntary association of people who work together to provide financial support inclusion to its member.

Hence, option (B) is the correct answer.

Question 9
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Handloom societies like APPCO, Bayanka, Haryana Handloom, etc., are examples of ____________________.

A
Producers' co-operative societies

B
Co-operative marketing societies

C
Co-operative credit societies

D
Consumers' co-operative societies

Solution

Producers co-operative societies is an artificial voluntary association of people who work together to protect the interest of small producers by making available all the materials, tools, and equipment needed for production at a reasonable rate. For example- APPCO, Bayanka, Haryana handloom.
Hence, option (A) is the correct answer.
Question 10
1 / -0

According to Indian Cooperative Societies Act, $$1912$$, each society must transfer at least ________ of its profits to general reserve.

A
One-third

B
One-fourth

C
One-half

D
One-tenth

Solution

According to Indian Cooperative Societies Act, 1912 it is the responsibility of every type of cooperative society to transfer at least one-fourth of their profit to general reserve in case of future uncertainties.
Hence, option (B) is the correct answer.

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Forms of Business Organisations Test - 45

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Forms of Business Organisations Test - 45

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SHARING IS CARING

Question 1

Artificial legal person

Incorporated body

Capital divisible into shares

All of above

Solution

Question 2

Any partner

Two partners

Three partners

Four partners

Solution

Question 3

He can have a share in the loss only

He can have a share in the profit only

He cannot have any share in profit or loss

He can have a share in the profits only if other partner by majority agrees to give it

Solution

Question 4

Compulsory

Not compulsory

Compulsory if its turnover exceeds specified amount

Compulsory if it is liable to tax audit under the Income Tax Law

Solution

Question 5

$$1$$ only

$$2$$ only

Both $$1$$ & $$2$$

Neither $$1$$ nor $$2$$

Solution

Question 6

Transferability of shares

Perpetual existence

Limited liability

All of above

Solution

Question 7

Sole proprietorship

Company

Co-partnership

Co-operative

Solution

Question 8

$$P - 5, Q - 3, R - 2, S - 1$$

$$P - 5, Q - 3, R - 1, S - 2$$

$$P - 4, Q - 2, R - 1, S - 3$$

$$P - 3, Q - 5, R - 2, S - 1$$

Solution

Question 9

Producers' co-operative societies

Co-operative marketing societies

Co-operative credit societies

Consumers' co-operative societies

Solution

Question 10

One-third

One-fourth

One-half

One-tenth

Solution

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