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Practice each question, then open the answer or worked solution.
The structure in which there is separation of ownership and management is called (a) Sole proprietorship (b) Partnership (c) Company (d) All business organisations
Ans: (c) Company
The karta in Joint Hindu family business has (a) Limited liability (b) Unlimited liability (c) No liability for debts (d) Joint liability
Ans: (b) Unlimited liability
In a cooperative society the principle followed is
(a) One share one vote (b) One man one vote (c) No vote (d) Multiple votes
Ans: (b) One man one vote
The board of directors of a joint stock company is elected by
(a) General public (b) Government bodies (c) Shareholders (d) Employees
Ans: (c) Shareholders
Profits do not have to be shared. This statement refers to
(a) Partnership (b) Joint Hindu family business (c) Sole proprietorship (d) Company
Ans: (c) Sole proprietorship
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
Ans: (d) Share
The Head of the joint Hindu family business is called
(a) Proprietor (b) Director (c) Karta (d) Manager
Ans: (c) Karta
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
Ans: (c) Housing cooperative
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
Ans: (d) Secret partner
Compare the status of a minor in a Joint Hindu Family Business with that in a partnership firm.
Ans: A male minor child becomes a member of a Joint Hindu Family Business as soon as he is born into the family. The minor has the same ownership rights as the rest of the family over the inherited property.
His liability, on the other hand, is limited to his portion of the joint property.
In the case of a partnership, a minor can be admitted as a member-only when all other partners have given their consent, and only for advantages; he cannot be required to contribute capital or pay the business's losses. Because a minor lacks the legal capacity to enter into legal contracts, he or she cannot be called a partner.