MCQ Questions Chapter 2 Forms of Business Organisation Class 11 Business Studies

Please refer to MCQ Questions Chapter 2 Forms of Business Organisation Class 11 Business Studies with answers provided below. These multiple-choice questions have been developed based on the latest NCERT book for class 11 Business Studies issued for the current academic year. We have provided MCQ Questions for Class 11 Business Studies for all chapters on our website. Students should learn the objective based questions for Chapter 2 Forms of Business Organisation in Class 11 Business Studies provided below to get more marks in exams.

Chapter 2 Forms of Business Organisation MCQ Questions

Please refer to the following Chapter 2 Forms of Business Organisation MCQ Questions Class 11 Business Studies with solutions for all important topics in the chapter.

MCQ Questions Answers for Chapter 2 Forms of Business Organisation Class 11 Business Studies

Question. 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  

Question. The life of sole proprietorship business is ………………     
(a) Unstable
(b) Stable
(c) Very short life
(d) Long life  

Question. The maximum number of partners allowed in the banking business are :     
(a) Twenty
(b) Ten
(c) No limit
(d) Two  

Question. Which of the following is not an example of non-economic activity?    
(a) Patriotism
(b) teaching
(c) sentiment
(d) sympathy  

Question. A is running a retail shop of grocery items under the sole proprietorship form of business, A’s son wants him to expand the shop and deal in other types of goods as well but A does not agree with his son’s plan. Do you think that A’s son can execute his plan without A’s consent?   
(a) Yes
(b) No
(c) Yes but after completing a few legal formalities
(d) None of these  

Question. A company cannot came into existence without       
(a) Issuing prospectus
(b) Electing directors
(c) Certificate of incorporation
(d) All of the above  

Question. In a co-operative society, the principle followed is :   
(a) One share one vote
(b) One man one vote
(c) No vote
(d) Multiple votes.

Question. Find out the liability of Anita in a company, who is a shareholder, holding 3,000 shares of  Rs10 each. She has already paid Rs 6 per share.   
(a) Rs 10,000
(b) Rs 1,20,000 
(c) Rs 18,000
(d) Rs 12,000 

Question. The process for forming a Joint Stock Company is:   
(a) Complex
(b) Easy
(c) Easier than sole proprietorship
(d) Easier than Partnership

Question. Provision of residential accommodation to the members at reasonable rates is the objective of   
(a) Consumers cooperative
(b) Credit cooperative
(c) Housing cooperative
(d) Producers cooperative

Question. Following are the characteristics of business risks. One of then is not correct. Please identify it.   
(a) Loss is the reward for risk bearing
(b) Business risks are due to uncertainties
(c) Risk is an essential component of every business
(d) Degree of risk depends mainly upon the nature and size of business

Question. The board of directors of a joint stock company is elected by :   
(a) General public
(b) Government bodies
(c) Shareholders
(d) Employees

Question. Which form of business organisation is discussed in the above case?   
(a) Joint stock company
(b) Cooperative organisation
(c) Partnership
(d) Sole proprietorship

Question. The principle of one man one vote governs the cooperative society.     
(a) True
(b) False
(c) Can’t say
(d) Partially false

Question. The liability of members of a cooperative society is …………. to the extent of their capital contribution.   
(a) born
(b) shared
(c) unlimited
(d) limited

Question. The members of ….. Society comprise of consumers desirous of obtaining good quality products at reasonable prices.   
(a) consumer’s cooperative
(b) producer’s cooperativ
(c) marketing cooperative
(d) farmer’s cooperative

Question. The members of these societies consist of people who are desirous of procuring residential accommodation at lower costs. Identify the society referred here.   
(a) Consumer’s cooperative societies
(b) Producer’s cooperative societies
(c) Marketing cooperative societies
(d) Cooperative housing societies

Question. Which type of organisation is not bound to show its accounts to anyone:   
(a) Company
(b) Partnership
(c) Sole proprietorship
(d) Cooperative society

Question. The board of directors enters into an agreement with others by indicating the company’s approval through a ………..   
(a) risk bearing
(b) common seal
(c) liability
(d) control

Question. A person is considered a partner if, through his/her own initiative, conductor behaviour, he/she gives an impression to others that he/she is a partner of the firm.   
(a) active
(b) sleeping or dormant
(c) secret
(d) partner by estoppel

Question. A partner by………….is a person who though is not a partner in a form but knowingly allows himself/herself to be represented as a partner in a firm.   
(a) active partner
(b) sleeping or dormant partner
(c) secret partner
(d) partner by holding out

Question. _____________ defines the rules regarding internal management of a company,   
(a) Articles of association
(b) Partnership deed
(c) Memorandum of association
(d) Certificate of incorporation

Question. In which type of business organisation the owner does not share his/her profit.
(a) Partnership
(c) Sole proprietorship
(b) Cooperative society
(d) Joint Hindu family 

Question. This type of cooperative society is set up with the aim of eliminating middlemen
(a) Producer?s Cooperative Society
(b) Marketing Cooperative Society
(c) Consumer?s Cooperative Society
(d) Farmer?s Cooperative Society

Question. The cooperative society is required to be registered under the Cooperative Society Act______
(a) 2013
(b) 1932
(c) 1956
(d) 1912

Question. Name the business organisation which has a legal status independent of its members.
(a) HUF
(b) Sole proprietorship
(c) Joint Stock Co.
(d) Cooperative Societies

Question. On the basis of duration partnership is divided into. 
(a) 4
(b) 2
(c) 5
(d) 6

Question. The …………… is a conclusive evidence of the regularity of the incorporation of a company.     
(a) articles of association
(b) partnership deed
(c) memorandum of association
(d) certificate of incorporation

Question. The form of business organization that has the largest sales volume is the:
(a) partnership.
(b) corporation.
(c) cooperative.
(d) multinational.

Question. When is Partnership declared invalid:
(a) On having less than 2 persons
(b) On unlawful business
(c) Number of partners exceeding 50
(d) All of these

Question. Most important objective among business objectives is:
(a) Profit objective
(b) Service objective
(c) Human objective
(d) None of these

Question. 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

Question. The maximum number of partners allowed in the banking business are
(a) Twenty
(b) Ten
(c) No limit
(d) Two

Question. The Head of the joint Hindu family business is called
(a) Proprietor
(b) Director
(c) Karta
(d) Manager

Question. The board of directors of a joint stock company is elected by
(a) General public
(b) Government bodies
(c) Shareholders
(d) Employees

Question. What is the limit of members in case of a Private Company?
(a) 2
(b) 7
(c) 10
(d) 50

Question. The Head of the Joint Hindu family Business is called
(a) Proprietor
(b) Director
(c) Karta
(d) Manager

Question. Profits do not have to be share(d) This statement refers to
(a) Partnership
(b) Joint Hindu family business
(c) Sole proprietorship
(d) Company

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A) 
(b) Both Assertion (Aland Reason(R) are true, but Reason (R) is not the correct explanation of Assertion (A) 
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true 

Question. Assertion (A) The managing committee elected by members of the cooperative society is generally not professionally equipped to handle the management functions effectively. 
Reason (R) Cooperative society is unable to employ experts because of their inability to pay them high salaries. 

Question. Assertion (A) Timely decisions of sole proprietor help him/her to take advantage of market opportunities as and when they arise.   
Reason (R) Sole proprietorship can be easily started or dissolved at any time with minimum legal formalities.

Fill in the Blanks:

Question. Joint stock Company enjoys __________________, as members may come and go, but the co. continues to exist. 

Question. Sole proprietors have __________ liability.

Question. Object clause defines the .__________ for which the co.is formed.

Question. The company acts through its Board of Directors and enters into an agreement through an ________________.

Question. Shareholders of Private Ltd. Company have __________ Liability.  

True/False Answer Questions

Question. Experts who help promoters in the promotion of a company are also called promoters.

Question. A provisional contract is signed by promoters before the incorporation of the company.

Question. It is necessary to get every company incorporated, whether private or public.

Question. ‘Articles of Association’ is the main document of a company.

Question. A private company can commence business after incorporation.

Question. Minimum Paid up capital to start any Private company is 1 lakh rupees.

Question. Sole proprietor bears profit and loss individually.

Question. Communication as well as approval of various proposals in a co. is done very quickly.

Question. The HUF business come to an end after the death of the Karta.

Question. There is no limit on maximum member in a public co. 

Match the following:

Question. Match the forms of business organisation with their merits.

(a) Cooperative society	1. Confidentiality of information
(b) Sole Proprietorship	2. Increase loyalty and Cooperation
(c) Joint Hindu family	3. Balanced Decision Making
(d) Partnership	4. Service motive

Question. Match the following business organisation with their limtations.

(a) Partnership	1. Government control
(b) Joint Hindu family	2. Possiblity of conflicts
(c) Cooperative society	3. Limited resources
(d) Sole Proprietorship	4. Unlimited liability of karta

Question. Match the following forms the business organisation with their suitable example.

(a) Sole Proprietorship	1. Jassus & Siya Book Store
(b) Cooperative society	2. Sharma General Store
(c) Private Company	3. Idea
(d) Partnership	4. Amul milk union ltd.

Question. Match the following forms of business organisation with the minimum number of members required.

(a) Public company	1. 2
(b) Sole Proprietorship	2. 10
(c) Cooperative society	3. 7
(d) Partnership	4. 1

One word Answer type Questions :

Question. Name the partner who shares in profit only.
Answer. Minor partner.

Question. “Gurpreet and Shenoy established a joint stock company to manufacture and sell toys.” Identify this form of business organisation. 
Answer. Private company.

Question. Vikram is the only owner of his restaurant. Name this form of business organisation. 
Answer. Sole proprietorship.

Question. “Working for oneself provides personal satisfaction.” Which advantage of sole proprietorship is highlighted in this statement? 
Answer. Sense of accomplishment.

Question. Is a sole proprietor bound to publish his businesses accounts? 
Answer. No.

Question. Why the size of sole proprietorship generally remains small? 
Answer. Due to limited resources.

Question. Name the two systems that govern membership in the family business. 
Answer. Dayabhaga system and Mitakashara system.

Question. Name the system which allows only male members of the family business to be co-parceners. 
Answer. Mitakashara.

Question. Who are co-parceners? 
Answer. Co-parceners are the members of the Joint Hindu Family Business other than Karta.

Question. Name the Act which governs Joint Hindu Family Business. 
Answer. The Hindu Succession Act, 1956.

Question. Name the person who manages and controls a Hindu Undivided Family Business. 
Answer. Karta.

Question. All the members of a company sitting in a general meeting were killed by a bomb. Was the company wound up? 
Answer. No, company enjoys its existence distinct from its members. The death, retirement or insolvency of the members does not affect the existence of the company.

Question. Name the type of company in which the right of members to transfer its shares is restricted.
Answer. Private company.

Question. What is the main function of a promoter?
Answer. Identification of business opportunity.

Question. Vivaan is hired to conduct financial feasibility of a project. Whether he will be termed as a promoter? 
Answer. No, any specialist hired to conduct the feasibility study does not become the promoter just because he is helping in the promotion stage.

Question. Can a minor become a member of a Hindu Undivided Family Business? 
Answer. Yes.

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