NCERT Solutions for Class 11 Business Studies Chapter 2

Forms of Business Organisation Class 11

Chapter 2 Forms of Business Organisation Exercise Solutions

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Multiple choice questions : Solutions of Questions on Page Number : 51

Q1 :  

The structure in which there is separation of ownership and management is called

(a) Sole proprietorship

(b) Partnership

(c) Company

(d) All business organisations


Answer :

The organisational structure in which there is separation of ownership and management is called a company. In a company, management and ownership lie in the hands of different individuals. A company is owned by its shareholders, while its management is handled by a group of elected persons known as the board of directors. The board of directors in turn appoints the top officials for managing the day-to-day operations of the business.

Hence, the correct answer is option (c).

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Q2 :  

The karta in Joint Hindu family business has

(a) Limited liability

(b) Unlimited liability

(c) No liability for debts

(d) Joint liability


Answer :

The karta is the eldest male member of a Joint Hindu family who is responsible for decision making in the family business. He needs no permission from the coparceners (joint heirs) before taking any action. Since the karta has complete control over the business, his liability is unlimited. On the other hand, the liability of all coparceners is limited to their share in the family business.

Hence, the correct answer is option (b).

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Q3 :  

In a cooperative society the principle followed is

(a) One share one vote

(b) One man one vote

(c) No vote

(d) Multiple votes


Answer :

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Q4 :  

The board of directors of a joint stock company is elected by

(a) General public

(b) Government bodies

(c) Shareholders

(d) Employees


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Q5 :  

The maximum number of partners allowed in the banking business are

(a) Twenty

(b) Ten

(c) No limit

(d) Two


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Q6 :  

Profits do not have to be shared. This statement refers to

(a) Partnership

(b) Joint Hindu family business

(c) Sole proprietorship

(d) Company


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Short answersmultiple choice questions : Solutions of Questions on Page Number : 52

Q1 :  

For which of the following types of business do you think a sole proprietorship form of organisation would be more suitable, and why?

(a) Grocery store

(b) Medical store

(c) Legal consultancy

(d) Craft centre

(e) Internet cafe

(f) Chartered accountancy firm


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Q2 :  

For which of the following types of business do you think a partnership form of organisation would be more suitable, and why?

(a) Grocery store

(b) Medical store

(c) Legal consultancy

(d) Craft centre

(e) Internet cafe

(f) Chartered accountancy firm


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Q3 :  

Explain the following terms in brief

(a) Perpetual succession

(b) Common seal

(c) Karta

(d) Artificial person


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Q4 :  

Compare the status of a minor in a Joint Hindu Family Business with that in a partnership firm.


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Q5 :  

If registration is optional, why do partnership firms willingly go through this legal formality and get themselves registered? Explain.


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Q6 :  

State the important privileges available to a private company.


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Q7 :  

How does a cooperative society exemplify democracy and secularism? Explain.


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Q8 :  

The capital of a company is divided into number of parts each one of which are called

(a) Dividend

(b) Profit

(c) Interest

(d) Share


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Q9 :  

What is meant by 'partner by estoppel'? Explain.


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Q10 :  

The Head of the joint Hindu family business is called

(a) Proprietor

(b) Director

(c) Karta

(d) Manager


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Q11 :  

Provision of residential accommodation to the members at reasonable rate is the objective of

(a) Producer's cooperative

(b) Consumer's cooperative

(c) Housing cooperative

(d) Credit cooperative


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Q12 :  

A partner whose association with the firm is unknown to the general public is called

(a) Active partner

(b) Sleeping partner

(c) Nominal partner

(d) Secret partner


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Long answers : Solutions of Questions on Page Number : 53

Q1 :  

What do you understand by a sole proprietorship firm? Explain its merits and limitation?


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Q2 :  

Why is partnership considered by some to be a relatively unpopular form of business ownership? Explain the merits and limitations of partnership.


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Q3 :  

Why is it important to choose an appropriate form of organisation? Discuss the factors that determine the choice of form of organisation.


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Q4 :  

Discuss the characteristics, merits and limitations of cooperative form of organisation. Also describe briefly different types of cooperative societies.


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Q5 :  

Distinguish between a Joint Hindu family business and partnership.


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Q6 :  

Despite limitations of size and resources, many people continue to prefer sole proprietorship over other forms of organisation? Why?


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Business Studies : CBSE NCERT Exercise Solutions for Class 11th for Forms of Business Organisation will be available online in PDF book form soon. The solutions are absolutely Free. Soon you will be able to download the solutions.

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