Forms of Business Organisation MCQs with Answers

Question-1. A company cannot came into existence without

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

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

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

Question-3. A prospectus is issued by

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

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

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

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

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

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

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

Question-7. Hindu Succession Act was passed in _____________

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

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

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

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

1. Within 120 days of the date of issue.
2. Within 110 days of the date of issue.
3. Within 10 weeks of the date of issue
4. Within 3 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. Sole Proprietorship
2. Cooperative Society
3. Joint Hindu family business
4. Partnership

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

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

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

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

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

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

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

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

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

Question-16. The partnership deed generally includes the following

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

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

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

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

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

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

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

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

1. Producer cooperative society
2. Marketing cooperative society
3. Credit cooperative society
4. Consumers 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. Partnership
2. Cooperative Society
3. Company
4. None of the options

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Question-34. Hindu Succession Act was passed in _____________

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

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

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

Question-36. In case of ___________ Registration is compulsory

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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