Forms of Business Organisation MCQs with Answers

Question-1. A company cannot came into existence without

1. All of the options.
2. Issuing prospectus
3. Electing directors
4. Certificate of incorporation

Question-2. A partner whose association with the firm is unknown to the general public is called

1. Sleeping partner
2. Active partner
3. Nominal partner
4. Secret partner

Question-3. A prospectus is issued by

1. A public enterprise
2. A public company seeking investment, from public.
3. A private company
4. A public company.

Question-4. Application for approval of name of a company is to be made to which authority?

1. State Government
2. Registrar of the company
3. SEBI
4. Government of India

Question-5. At least 10 adults, no maximum limit in case of ________

1. Partnership
2. Joint Hindu Family
3. Cooperative Society
4. Company

Question-6. Every partner is both an agent and a principal. Identify the characteristic of partnership being referred here.

1. Formation
2. Mutual Agency
3. Risk Bearing
4. Membership

Question-7. Hindu Succession Act was passed in _____________

1. 1932
2. 1960
3. 1956
4. 1952

Question-8. In a cooperative society, the principle followed is

1. No voting rights to members
2. One man one vote
3. Multiple votes by members
4. One share one vote

Question-9. In how many days the amount of minimum subscription must be received

1. Within 3 weeks of the date of issue.
2. Within 120 days of the date of issue.
3. Within 110 days of the date of issue.
4. Within 10 weeks of the date of issue

Question-10. It is a form of business organization which is owned, managed and controlled by an individual who is the recipient of all profits and bearer of all risks. Identify the concept.

1. Partnership
2. Sole Proprietorship
3. Cooperative Society
4. Joint Hindu family business

Question-11. Provision of residential Accommodation to the members at reasonable rates is the objective of:

1. Credit Cooperative
2. Housing Cooperative
3. Producers Cooperative.
4. Sleeping Partner.

Question-12. Romi is a friend of Somi who is a partner in a software firm Simplex Solutions. On Somis request, Romi accompanies her to a business meeting with Mohan softwares and actively participates in the negotiation process for the business deal and gives the impression that she is also a partner in Simplex Solutions. Which type of partner is Romi?

1. Nominal Partner
2. Partner by estoppel
3. Active Partner
4. Partner by holding out

Question-13. The board of directors of a joint stock company are elected by

1. Government
2. Shareholders
3. Employees
4. General public

Question-14. The maximum number of partners allowed in the banking business are

1. Two.
2. Ten
3. No limit
4. Twenty

Question-15. The members of which of the following business organizations do not have limited liability?

1. Government Company
2. Sole Proprietorship
3. Joint Stock Company
4. Cooperative Societies

Question-16. The partnership deed generally includes the following

1. All of the above
2. Name of firm
3. Nature of business
4. Location of business

Question-17. What do you understand by the term unlimited liability?

1. The personal assets of owner can be sold, only to a limited extent.
2. The personal assets of owner can be sold when the assets of the business are not enough to
3. The personal assets of owner cannot be sold at all.
4. The personal assets of owner can be sold, according to the wish of the creditors

Question-18. Which of the following business enterprises does not have a separate legal entity?

1. Cooperative Society
2. Sole Proprietorship
3. Partnership
4. Company

Question-19. Which of the following contract is signed by the promoters with the third party on behalf of the proposed company?

1. Memorandum of association
2. Preliminary contracts
3. Provisional contract
4. Prospectus

Question-20. Which of the following cooperative society is established to help small producers in selling their products?

1. Consumers cooperative society
2. Producer cooperative society
3. Marketing cooperative society
4. Credit cooperative society

Question-21. Which of the following forms of business enterprises suffer from lack of public confidence because they are not required to publish its accounts legally?

1. None of the options
2. Partnership
3. Cooperative Society
4. Company

Question-22. Which of the following is a specific form of business organization where membership is by birth?

1. Government Company
2. Hindu Undivided Family
3. Sole Proprietorship
4. Cooperative Societies

Question-23. Which of the following is not a feature of a Joint Stock Company?

1. Lack of business continuity
2. Artificial person
3. Separate legal entity
4. Formation

Question-24. Which of the following is the relation between persons who have agreed to share the profit of the business carried on by all or any one of them acting for all.?

1. Sole Proprietorship
2. Partnership
3. Cooperative Society
4. Joint Hindu family business

Question-25. Which of the following statement is NOT true about a minor partner?

1. He shares only profits.
2. He has to bear losses also
3. He can inspect books of accounts
4. He has an option to continue with a firm even after attaining majority

Question-26. Which of the following systems allows both male and female members of the family to be coparceners?

1. Particular Partnership
2. Mitakashara
3. Mutual Agency
4. Dayabhaga

Question-27. Which one of the following is the CORRECT sequence of stages in the formation of a company?

1. Promotion, Incorporation, Certificate of commencement, capital subscription
2. Promotion, incorporation, capital subscription, commencement of business
3. Incorporation, capital subscription, promotion , commencement of business
4. Promotion, commencement of business, incorporation , capital subscription

Question-28. A ___________ is a business with two or more owners:

1. public corporation.
2. corporation.
3. conglomerate.
4. partnership.

Question-29. A partner who is not actually involved in the partnership but lends his name for public relations purposes is a:

1. dominant partner.
2. silent partner.
3. general partner.
4. nominal partner.

Question-30. A partner whose association with the firm is unknown to the general public is called

1. Secret partner
2. Active partner
3. Sleeping partner
4. Nominal partner

Question-31. A_____________partner is an owner who has unlimited liability and is active in managing the firm:

1. limited partner.
2. senior partner.
3. general partner.
4. silent partner.

Question-32. At least 10 adults, no maximum limit in case of ________

1. Company
2. Cooperative Society
3. Joint Hindu Family
4. Partnership

Question-33. Co-operatives play an important role in:

1. all of the above.
2. aerospace.
3. agriculture.
4. manufacturing.

Question-34. Hindu Succession Act was passed in _____________

1. 1956
2. 1952
3. 1960
4. 1932

Question-35. In a cooperative society the principle followed is

1. Multiple votes
2. One share one vote
3. One man one vote
4. No vote

Question-36. In case of ___________ Registration is compulsory

1. Company
2. Sole Proprietorship
3. Partnership
4. None of these

Question-37. Profits do not have to be shared. This statement refers to

1. Partnership
2. Company
3. Sole proprietorship
4. Joint Hindu family business

Question-38. Provision of residential accommodation to the members at reasonable rates is the objective of

1. Producers cooperative
2. Consumers cooperative
3. Credit cooperative
4. Housing cooperative

Question-39. The board of directors of a joint stock company is elected by

1. Employees
2. General public
3. Government bodies
4. Shareholders

Question-40. The capital of a company is divided into number of parts each one of which are called

1. Interest
2. Share
3. Dividend
4. Profit

Question-41. The form of business organization that has the largest sales volume is the:

1. multinational.
2. partnership.
3. corporation.
4. cooperative.

Question-42. The Head of the joint Hindu family business is called

1. Director
2. Manager
3. Proprietor
4. Karta

Question-43. The karta in Joint Hindu family business has

1. Limited liability
2. No liability for debts
3. Unlimited liability
4. Joint liability

Question-44. The life of sole proprietorship business is ___________

1. Long life
2. Unstable
3. Stable
4. Very short life

Question-45. The main disadvantage of a general partnership is:

1. difficulty of termination.
2. the unlimited liability of the partners.
3. disagreement amongst partners.
4. shared management.

Question-46. The major advantage of a franchise is:

1. all of the above.
2. training and management assistance.
3. personal ownership.
4. nationally recognized name.

Question-47. The maximum number of partners allowed in the banking business are

1. Ten
2. Two
3. Twenty
4. No limit

Question-48. The most effective form of business organization for raising capital is the:

1. proprietorship.
2. joint venture.
3. partnership.
4. corporation.

Question-49. The simplest form of business ownership is a:

1. cooperative.
2. proprietorship.
3. partnership.
4. corporation.

Question-50. The structure in which there is separation of ownership and management as per law is called

1. Sole proprietorship
2. Company
3. All business organisations
4. Partnership

Question-51. What is the limit of members in case of a Private Company?

1. 50
2. 2
3. 7
4. 10

Question-52. Which of the following is a characteristic of a co-operative?

1. all of the above.
2. profits are not subject to income tax.
3. one vote per share.
4. dividends are paid on a per share basis.

Question-53. Which of the following is an advantage of a sole proprietorship?

1. all of the above.
2. ease of starting a business.
3. being your own boss.
4. pride of ownership.

Question-54. Which of the following is an example of a non profit organization?

1. Air Canada.
2. Royal Bank.
3. YMCA.
4. BCE.

Question-55. Which of the following is an example of a public corporation?

1. YMCA.
2. Imperial Oil.
3. Hospital for Sick Children.
4. Mouvement Caisse Desjardin.

Question-56. Which of the following is probably the most important reason for incorporating?

1. shared management.
2. limited liability of shareholders.
3. more money for investment.
4. increased flexibility.