Micro Notes Business Studies 1

📘 Chapter 1: NATURE AND PURPOSE OF BUSINESS | ബിസിനസിന്റെ സ്വഭാവവും ലക്ഷ്യവും

Important trading centres (ancient India) | പ്രധാന വാണിജ്യ കേന്ദ്രങ്ങൾ

• Pataliputra: commercial town – export of stones. പാടലീപുത്രം: വാണിജ്യ നഗരം – കല്ലുകളുടെ കയറ്റുമതി.
• Peshawar: exporting wool & import of horses. പെഷവാർ: കമ്പിളി കയറ്റുമതി, കുതിരകളുടെ ഇറക്കുമതി.
• Taxila: city of financial and commercial banks. തക്ഷശില: ധനകാര്യ, വാണിജ്യ ബാങ്കുകളുടെ നഗരം.
• Indraprastha: commercial junction. ഇന്ദ്രപ്രസ്ഥ: വാണിജ്യ കവാടം.
• Mathura: emporium of trade. മഥുര: വ്യാപാര കേന്ദ്രം.
• Varanasi: centre of textile industry. വാരാണസി: തുണിത്തര വ്യവസായ കേന്ദ്രം.
• Mithila: established trading colonies in China. മിഥില: ചൈനയിൽ വ്യാപാര കോളനികൾ സ്ഥാപിച്ചു.
• Surat: emporium of western trade. സൂറത്ത്: പാശ്ചാത്യ വ്യാപാര കേന്ദ്രം.
• Kanchi: pearls, glass and rare stones. കാഞ്ചി: മുത്ത്, ഗ്ലാസ്, അപൂർവ കല്ലുകൾ.
• Madura: overseas trade. മധുര: വിദേശ വ്യാപാരം.

Business, Profession, Employment | താരതമ്യം

Basis	Business	Profession	Employment
Decision of entrepreneur	Own decision	Membership of professional body	Appointment letter
Nature of work	Production or purchase and sale of goods/services	Rendering expert service	Job assigned by the employer
Qualification	No minimum qualification	Professional qualification	Prescribed by employer
Capital	Depends on nature of business	Limited capital	No capital
Risk	High risk	Less risk	No risk
Transfer	Possible	Not possible	Not possible
Return	Profit	Fees	Salary
Code of conduct	No code	Laid down by professional body	Laid down by employer

Objectives of Business | ബിസിനസ് ലക്ഷ്യങ്ങൾ

1. Earning Profit ലാഭം നേടൽ
2. Market standing വിപണി നില
3. Innovation നവീകരണം
4. Productivity ഉത്പാദനക്ഷമത
5. Efficient utilization of physical and financial resources ഭൗതിക, സാമ്പത്തിക വിഭവങ്ങളുടെ കാര്യക്ഷമ വിനിയോഗം
6. Manager performance and development മാനേജർമാരുടെ പ്രകടനവും വികസനവും
7. Improve workers performance and attitude തൊഴിലാളികളുടെ പ്രകടനവും മനോഭാവവും മെച്ചപ്പെടുത്തുക
8. Social responsibility സാമൂഹിക ഉത്തരവാദിത്തം

Business Risk | ബിസിനസ് അപകടസാധ്യത

Possibility of inadequate profits or even losses due to uncertainties. അനിശ്ചിതത്വങ്ങൾ മൂലമുള്ള ലാഭക്കുറവ് അല്ലെങ്കിൽ നഷ്ട സാധ്യത.

Causes of Business Risk | കാരണങ്ങൾ

1. Natural causes: heavy rain, famine, fire, etc. പ്രകൃതിദത്ത കാരണങ്ങൾ
2. Human causes: theft, strike, lockout, riots etc. മാനുഷിക കാരണങ്ങൾ
3. Economic causes: change in demand and price, market conditions, competitions, etc. സാമ്പത്തിക കാരണങ്ങൾ
4. Political causes: changes in government policies, licensing policy, etc. രാഷ്ട്രീയ കാരണങ്ങൾ
5. Management causes: poor planning, absence of research & development, mismanagement etc. മാനേജ്മെന്റ് കാരണങ്ങൾ

Role of profit in Business | ലാഭത്തിന്റെ പങ്ക്

Source of income, reward for risk, survival of business, growth and development, reputation of business. വരുമാന സ്രോതസ്സ്, അപകടത്തിനുള്ള പ്രതിഫലം, ബിസിനസിന്റെ നിലനിൽപ്പ്, വളർച്ചയും വികസനവും, ബിസിനസിന്റെ പ്രശസ്തി.

Classification of business activities | ബിസിനസ് പ്രവർത്തനങ്ങളുടെ വർഗ്ഗീകരണം

A. Industry | വ്യവസായം – production/processing of goods.

• Primary Industry: extraction of natural resources & reproduction of living organisms.
  • Extractive industry: fishing, mining, oil ഖനന വ്യവസായം
  • Genetic industries: agriculture, dairy farming, poultry ജനിതക വ്യവസായങ്ങൾ
• Secondary Industries: deals with materials extracted at primary stage.
  • Manufacturing industries: raw materials into finished goods.
    • Analytical industry: petroleum വിശ്ലേഷണ വ്യവസായം
    • Synthetic Industry: soap, paint സിന്തറ്റിക് വ്യവസായം
    • Processing industry: textile സംസ്കരണ വ്യവസായം
    • Assembling Industry: cycle industry അസംബ്ലിംഗ് വ്യവസായം
  • Construction industries: dams, bridges, airports നിർമ്മാണ വ്യവസായം
• Tertiary industries: support primary and secondary (transport, banking). തൃതീയ വ്യവസായങ്ങൾ

B. Commerce | വാണിജ്യം = Trade + Aids to trade. വാണിജ്യം = വ്യാപാരം + വ്യാപാര സഹായികൾ

• Trade: sale, exchange or transfer of goods on regular basis.
  • Home trade: wholesale, retail
  • Foreign trade: export, import, entrepot
• Aids to trade: banking, transportation, communication, insurance, advertising, warehousing, packaging. വ്യാപാര സഹായികൾ

Starting a Business – Basic Factors | ബിസിനസ് തുടക്കം – ഘടകങ്ങൾ

Line of business, Size, Form of ownership, Location, Finance, Physical facilities, Plant layout, Workforce. ബിസിനസ് തരം, വലിപ്പം, ഉടമസ്ഥ രൂപം, സ്ഥലം, ധനം, ഭൗതിക സൗകര്യങ്ങൾ, പ്ലാന്റ് ലേഔട്ട്, തൊഴിൽ ശക്തി.

❓ Key Previous Year Questions (Chapter 1)

1. The broad classification of business activities include – (b) Industry and commerce (2018 Mar)

2. Hindrance of place – Transportation; Hindrance of risk – Insurance (2018 Imp)

3. Which is a human cause of business risk? – (b) Mismanagement (2019 Mar)

4. Which is not a characteristic of business? – (c) Wages or salaries to investors (2019 Imp)

5. Personal cause of business risk? – (a) Strike of employees (2020 Mar)

6. Economic cause of business risk? – (b) Market competition (2020 Imp)

7. Warehousing provides ______ utility. – (a) Time (2021 Mar)

8. Trade between two persons belong to same country – (b) Internal trade (2021 Mar)

9. Which is a cause of business risk? – (d) All of these (2021 Imp)

10. Commerce includes trade and – (b) Auxiliaries to trade (2022 Mar)

11. Industries providing support services to other industries – (c) Tertiary Industries (2022 Imp)

12. Reward of business activity? – (c) Profit (2023 Mar)

13. Transportation removes hindrance of ______ – (a) Place (2024 Mar)

14. Pick out the non-economic activity – (a) Neethu cooks food for her children (2022 Imp)

15. Which is not an objective of business? – (d) Business risk (2025 Mar)

📘 Chapter 2: FORMS OF BUSINESS ORGANISATION | ബിസിനസ് സംഘടനയുടെ രൂപങ്ങൾ

🔹 SOLE PROPRIETORSHIP | ഏക വ്യക്തി ഉടമസ്ഥത

Definition: Owned, managed and controlled by a single person. ഒരു വ്യക്തി മാത്രം ഉടമസ്ഥത, നിയന്ത്രണം, മാനേജ്മെന്റ് എന്നിവ നടത്തുന്ന രൂപം.

Features | സവിശേഷതകൾ

• One man ownership & control ഒരാൾ മാത്രത്തിന്റെ ഉടമസ്ഥതയും നിയന്ത്രണവും
• Formation & closure easy രൂപീകരണവും അടച്ചുപൂട്ടലും എളുപ്പം
• Lack of business continuity തുടർച്ചയില്ലായ്മ
• Unlimited liability പരിധിയില്ലാത്ത ബാധ്യത
• No separate entity പ്രത്യേക നിയമസ്ഥിതി ഇല്ല
• No profit sharing ലാഭം മുഴുവൻ ഉടമയ്ക്ക്

Merits | ഗുണങ്ങൾ

• Quick decision making തീരുമാനമെടുക്കൽ വേഗത്തിൽ
• Secrecy രഹസ്യസ്വഭാവം
• Direct incentive നേരിട്ടുള്ള പ്രോത്സാഹനം
• Ease of formation & closure

Demerits | ദോഷങ്ങൾ

• Limited resources പരിമിത വിഭവങ്ങൾ
• Unlimited liability പരിധിയില്ലാത്ത ബാധ്യത
• Limited managerial ability

🔹 HINDU UNDIVIDED FAMILY (HUF) | ഹിന്ദു അവിഭക്ത കുടുംബ ബിസിനസ്

Owned and carried on by members of Hindu undivided family. ഹിന്ദു അവിഭക്ത കുടുംബാംഗങ്ങൾ നടത്തുന്ന ബിസിനസ്.

Features

• Governed by Hindu Succession Act, 1956 ഹിന്ദു പിന്തുടർച്ച നിയമപ്രകാരം
• Liability of members (except karta) limited കർത്താവൊഴികെ മറ്റുള്ളവരുടെ ബാധ്യത പരിമിതം
• Control lies with karta നിയന്ത്രണം കർത്താവിന്
• Business continues even after death of karta
• Minors can be members പ്രായപൂർത്തിയാകാത്തവർക്ക് അംഗത്വം

Advantages | ഗുണങ്ങൾ

• Effective control ഫലപ്രദമായ നിയന്ത്രണം
• Limited liability for coparceners മറ്റുള്ളവർക്ക് പരിമിത ബാധ്യത
• Loyalty & cooperation

Disadvantages | ദോഷങ്ങൾ

• Limited resources പരിമിത വിഭവങ്ങൾ
• Unlimited liability of karta
• Dominance of karta

🔹 PARTNERSHIP | പങ്കാളിത്ത ബിസിനസ്

Relation between persons who agree to share profits. ലാഭം പങ്കിടാൻ ഉടമ്പടി ചെയ്ത വ്യക്തികൾ തമ്മിലുള്ള ബന്ധം.

Features

• Formation through legal agreement നിയമപരമായ കരാർ
• Sharing profit/loss in agreed ratio
• Mutual agency പരസ്പര ഏജൻസി
• Unlimited liability പരിധിയില്ലാത്ത ബാധ്യത
• Lack of continuity

Partnership Deed | പങ്കാളിത്ത രേഖ

Written agreement containing: എഴുത്തുകരാർ – Name of firm & partners, Nature & place of business, Duration, capital contribution, Profit sharing ratio.

Types of Partners | പങ്കാളികളുടെ തരങ്ങൾ

• Active partner: contributes capital, takes part സജീവ പങ്കാളി
• Sleeping partner: capital only, no active role നിഷ്ക്രിയ പങ്കാളി
• Nominal partner: lends name only നാമമാത്ര പങ്കാളി
• Partner by estoppels: by conduct എസ്റ്റോപ്പൽ വഴി
• Partner by holding out: does not deny ഹോൾഡിംഗ് ഔട്ട്
• Secret partner: association unknown to public രഹസ്യ പങ്കാളി

Minor as Partner | പ്രായപൂർത്തിയാകാത്തവർ

Can be admitted only to benefits; liability limited to share; can share profits. പ്രായപൂർത്തിയാകാത്തയാൾക്ക് ലാഭത്തിൽ പങ്കാളിയാകാം, ബാധ്യത പരിമിതം.

Advantages of Partnership

• Ease of formation & closure രൂപീകരണ ലാളിത്യം
• Better management മികച്ച മാനേജ്മെന്റ്
• More capital കൂടുതൽ മൂലധനം
• Risk shared അപകടസാധ്യത പങ്കിടുന്നു

Limitations | പരിമിതികൾ

• Unlimited liability പരിധിയില്ലാത്ത ബാധ്യത
• Limited resources പരിമിത വിഭവങ്ങൾ
• Possibility of conflicts തർക്കസാധ്യത
• Lack of continuity

🔹 JOINT STOCK COMPANY | ജോയിന്റ് സ്റ്റോക്ക് കമ്പനി

Artificial person created by law, separate entity, perpetual succession, common seal. നിയമം സൃഷ്ടിക്കുന്ന കൃത്രിമ വ്യക്തി; പ്രത്യേക നിയമസ്ഥിതി; ശാശ്വതാവകാശം; കോമൺ സീൽ.

Merits | ഗുണങ്ങൾ

• Limited liability പരിമിത ബാധ്യത
• Shares easily transferable
• Scope for expansion വികാസ സാധ്യത
• Professional management

Limitations | ദോഷങ്ങൾ

• Difficulty in formation രൂപീകരണത്തിലെ ബുദ്ധിമുട്ട്
• Lack of secrecy രഹസ്യസ്വഭാവം ഇല്ല
• Numerous regulations നിയന്ത്രണങ്ങൾ
• Delay in decisions തീരുമാനങ്ങളിലെ കാലതാമസം

PRIVATE COMPANY vs PUBLIC COMPANY

Basis	Private Company	Public Company
Min members	2	7
Max members	200	No limit
Directors	Two	Three
Min capital	1 lakh	5 lakh
Prospectus	Not needed	Needed
Share transfer	Restricted	Free
Suffix	Pvt. Ltd.	Ltd.

🔹 CO-OPERATIVE SOCIETY | സഹകരണ സംഘം

Self-help through mutual help; motto "each for all & all for each". പരസ്പര സഹായത്തിലൂടെ സ്വയം സഹായം. (Co-operative Societies Act, 1912)

Features

• Voluntary association സ്വമേധയാ ചേരൽ
• Open membership
• Limited liability
• One man one vote ഒരാൾ ഒരു വോട്ട്
• Service motive സേവനോദ്ദേശ്യം

Merits

• Equality in voting
• Limited liability
• Stable existence സ്ഥിരത
• Government support

Demerits

• Limited resources പരിമിത വിഭവങ്ങൾ
• Inefficiency in management
• Lack of secrecy
• Government control

Types of Co-operative Societies | തരങ്ങൾ

• Consumer's co-operative ഉപഭോക്തൃ സഹകരണം
• Producer's co-operative ഉത്പാദക സഹകരണം
• Co-operative marketing വിപണന സഹകരണം
• Co-operative credit വായ്പ സഹകരണം
• Co-operative farming കാർഷിക സഹകരണം
• Co-operative housing ഭവന സഹകരണം

⚙️ Choice of Form – Factors | ബിസിനസ് രൂപം തിരഞ്ഞെടുക്കുമ്പോൾ ഘടകങ്ങൾ

• Cost / ചെലവ്
• Easy formation / എളുപ്പ രൂപീകരണം
• Liability / ബാധ്യത
• Continuity / തുടർച്ച
• Capital / മൂലധനം
• Management ability / മാനേജ്മെന്റ് കഴിവ്
• Degree of control / നിയന്ത്രണത്തിന്റെ അളവ്
• Nature of business / ബിസിനസിന്റെ സ്വഭാവം

❓ KEY PREVIOUS YEAR QUESTIONS (Chapter 2)

1. Which among the following is the main characteristic of HUF? – c) Membership by birth (2018 Mar)

2. 'One man one vote' is the principle of – c) Co-operative society (2019 Mar)

3. Name a form found only in India – Hindu Undivided Family (HUF) (2022 Mar)

4. Complete: Partnership – Partners ; Company – Shareholders (2022 Mar)

5. A partner who allows use of his/her name but does not contribute capital – c) Nominal partner (2022 Mar)

6. Liability of Karta in HUF is – b) Unlimited (2023 Mar)

7. The head of HUF business is known as – b) Karta (2023 Imp)

8. Which is NOT related to co-operative? – c) Profit (2023 Imp)

9. Minimum members to form a co-operative society – c) 10 (2025 Mar)

10. Co-parceners are members of – c) H.U.F. (2025 Mar)

11. Two privileges of a private company – Can start business after incorporation; No need to issue prospectus (2021 Mar)

12. Distinguish between Private Company and Public Company (any 3 points) – See table above.

📊 QUICK COMPARISON | ദ്രുത താരതമ്യം

Form	Liability	Continuity	Members
Sole prop.	Unlimited	Ends with owner	1
HUF	Karta unlimited; others limited	Continues	Coparceners
Partnership	Unlimited	Dissolves on death/retirement	Min 2, Max 50
Private Co.	Limited	Perpetual	2-200
Public Co.	Limited	Perpetual	Min 7, no max
Co-op Society	Limited	Stable	Min 10

📘 Chapter 3: PRIVATE, PUBLIC AND GLOBAL ENTERPRISES | സ്വകാര്യ, പൊതുമേഖല, ആഗോള സംരംഭങ്ങൾ

🔹 Public Sector Undertakings (PSU) | പൊതുമേഖലാ സ്ഥാപനങ്ങൾ

Organizations owned & managed by government – partly or wholly owned by central/state government. കേന്ദ്ര/സംസ്ഥാന സർക്കാരിന്റെ പൂർണ്ണ/ഭാഗിക ഉടമസ്ഥതയിലുള്ള സ്ഥാപനങ്ങൾ.

1. Departmental Undertaking | വകുപ്പുതല സംരംഭം

Managed by a ministry; part of government department. മന്ത്രാലയത്തിന്റെ കീഴിൽ; സർക്കാർ വകുപ്പിന്റെ ഭാഗം. Examples: All India Radio, Doordarshan, Post & Telegraph, Indian Railways, Electricity, Defence.

• Advantages: Government control, secrecy, easy financing, public accountability.
• Disadvantages: Political interference, red tapism, lack of flexibility & initiative.

2. Statutory Corporation (Public Corporation) | നിയമപരമായ കോർപ്പറേഷൻ

Created by a Special Act of Parliament or State Legislature. Examples: RBI, LIC, Air India, ONGC, IFC, SBI, UTI, KSRTC.

• Advantages: Autonomy, quick decisions, financial independence, efficient staff, public interest protection.
• Disadvantages: Government interference, absence of competition, inefficiency, corruption chance.

3. Government Company | സർക്കാർ കമ്പനി

Registered under Companies Act; at least 51% paid-up capital held by government. Examples: SAIL, BHEL, Hindustan Aeronautics Ltd.

• Merits: Separate legal entity, can raise funds from private, less government interference.
• Limitations: Still subject to audit and parliamentary scrutiny.

Comparison of PSU Forms

Feature	Departmental	Statutory Corp	Government Co.
Establishment	Order of Ministry	Special Act	Companies Act
Legal entity	Part of Government	Separate	Separate
Ownership	Wholly Government	Wholly Government	≥51% Govt
Management	Govt. officials	Nominated board	Board (incl. private)
Employees	Govt. servants	Not govt. servants	Not govt. servants
Autonomy	None	Sufficient	Some
Financing	Budget grants	Own revenue + borrowings	Private financing possible

🔹 Global Enterprises (MNCs) | ആഗോള സംരംഭങ്ങൾ

Examples: General Motors, Cadbury, Brook Bond. Features: Huge capital resources, Foreign collaboration, Advanced technology, International market, Product innovation, Aggressive marketing strategies, Centralised control.

🔹 PUBLIC PRIVATE PARTNERSHIP (PPP) | പൊതു-സ്വകാര്യ പങ്കാളിത്തം

Relationship between public and private entities in infrastructure and other services. Public sector ensures social obligations; private sector brings expertise, innovation. Sectors: power, water, pipelines, hospitals, schools, stadiums, air traffic control, prisons, railways, roads, billing, IT systems.

❓ KEY PREVIOUS YEAR QUESTIONS (Chapter 3)

1. Example of departmental undertaking? – c) Doordarshan (2019 Mar)

2. A government company – minimum govt. shareholding? – c) 51% (2020 Mar)

3. Expand P.P.P. – Public Private Partnership (2025 Mar)

4. A public sector undertaking formed by passing an Act in Parliament – Statutory Corporation (e.g., RBI) (2018 Mar)

5. Railways and Post & Telegram are examples of which type? – Departmental Undertaking (2018 Imp)

6. List any two features of a statutory corporation – Autonomy, created by special act (2020 Mar)

7. Write any two features of Global enterprises – Huge capital, advanced technology (2022 Imp)

8. State any two features of a Government Company – Registered under Companies Act, at least 51% govt. holding (2024 Mar)

9. What is disinvestment? – Selling government's share in public enterprises to private sector (2024 Mar)

10. Identify the public sector undertaking created by the Indian Companies Act, 1956 – Government Company (2018 Imp)

11. Explain any three features of a statutory corporation – Created by special act, autonomy, financial independence (2019 Mar)

12. Classify into Departmental, Statutory Corporation, Government Company: BHEL, RBI, Postal, Indian Railway, SAIL, AIR India. – Departmental: Postal, Indian Railway; Statutory Corp: RBI, AIR India; Government Company: BHEL, SAIL (2020 Imp)

📊 QUICK COMPARISON – PSU FORMS

Form	Advantages	Disadvantages
Departmental	Government control, secrecy	Political interference, red tapism
Statutory Corp	Autonomy, financial independence	Govt. interference, inefficiency
Government Co.	Legal entity, private participation	Less autonomy, subject to audit
Global Enterprise	Huge capital, innovation, global reach	Centralised control, may ignore local needs

📘 Chapter 4: BUSINESS SERVICES | വ്യവസായ സേവനങ്ങൾ

🔹 Nature of Services (5 I's) | സേവനങ്ങളുടെ സ്വഭാവം

• Intangibility – cannot be touched, only experienced. അദൃശ്യത
• Inconsistency – varies with provider/customer. അസ്ഥിരത
• Inseparability – production & consumption simultaneous. വേർതിരിക്കാനാവാത്തത
• Inventory (less) – cannot be stored. ഇൻവെന്ററി ഇല്ല
• Involvement – customer participates in delivery. ഇടപെടൽ

Difference between Goods and Services

Basis	Goods	Services
Nature	Physical object	Activity / process
Tangibility	Tangible	Intangible
Homogeneity	Homogeneous	Heterogeneous
Production & consumption	Separated	Simultaneous
Storage	Can be stored	Cannot be stored
Customer involvement	Not required	Essential

🔹 Types of Services

• Business services – banking, insurance, transport, warehousing, communication.
• Social services – health, education (NGOs, government)
• Personal services – tourism, restaurants

🔹 BANKING | ബാങ്കിംഗ്

Definition: Accepting deposits for lending/investment, repayable on demand, withdrawable by cheque.

Types of Banks

• Commercial banks – public (SBI, PNB) & private (HDFC, ICICI)
• Cooperative banks – rural credit
• Specialised banks – EXIM, industrial banks
• Central Bank – RBI

Functions of Commercial Banks

• Acceptance of deposits: Fixed, savings, current, recurring
• Lending of funds: Overdraft, cash credit, loans, discounting bills
• Cheque facility: Bearer / Crossed
• Remittance of funds: Bank drafts, NEFT, RTGS
• Allied services: Bill payments, locker, underwriting

e-Banking | ഇ-ബാങ്കിംഗ്

Banking using electronic media. Benefits: 24×7 access, transparency, financial discipline, customer satisfaction.

🔹 INSURANCE | ഇൻഷുറൻസ്

Definition: Contract where insurer agrees to compensate loss from uncertain event in exchange for premium.

Functions of Insurance

• Providing certainty, Protection, Risk sharing, Capital formation

Principles of Insurance

• Utmost good faith (uberrimae fidei): Full disclosure of material facts.
• Insurable interest: Financial interest in subject matter.
• Indemnity: Compensate actual loss (not in life insurance).
• Proximate cause (causa proxima): Nearest/dominant cause of loss.
• Subrogation: Insurer’s right to ownership after claim.
• Contribution: Insurers share loss if multiple policies.
• Mitigation: Insured must minimise loss.

Types of Insurance

Life Insurance

Contract to pay sum on death or maturity. Not a contract of indemnity. Types: Whole life, Endowment, Joint life, Annuity, Children's endowment.

Fire Insurance

Contract of indemnity; covers loss/damage by fire.

Marine Insurance

Covers ship (hull), cargo, freight against sea perils.

📊 Life vs Fire vs Marine Insurance

Basis	Life	Fire	Marine
Subject Matter	Human life	Property/assets	Ship, cargo, freight
Indemnity	Not applicable	Applicable	Applicable
Duration	Long period	One year	One year/voyage
Insurable interest	At time of policy	At policy & loss	At time of loss

🔹 COMMUNICATION SERVICES

Postal Services

• Financial facilities: PPF, KVP, NSC, money orders
• Mail facilities: parcel, registered post, insured post
• Other: greeting post, speed post, e-bill post, passport services

Telecom Services

• Cellular mobile, Fixed line, Cable, VSAT, DTH

🔹 WAREHOUSING

Scientific storage. Types: Private, Public, Bonded, Government, Cooperative.

Functions of Warehousing

• Consolidation, Break the bulk, Stock piling, Value added services, Price stabilisation, Financing

❓ KEY PREVIOUS YEAR QUESTIONS (Chapter 4)

1. VSAT is satellite based – b) Communication service (2018 Mar)

2. Warehouses licensed to accept imported goods prior to tax – d) Bonded warehouses (2019 Mar)

3. Warehousing provides ______ utility – (a) Time (2021 Mar)

4. Which is the Central Bank of India? – (b) Reserve Bank of India (2021 Imp)

5. Which one is not a form of e-banking? – (c) Cheque (2022 Imp)

6. Which of the following is not a nature of service? – (b) Innovative (2025 Mar)

7. Bring out any two features of business services – Intangibility, Inseparability (2019 Mar)

8. Write any two differences between goods and services – Goods tangible, services intangible; goods can be stored, services cannot (2022 Imp)

9. Distinguish between public warehouses and bonded warehouses – Public: for general public; Bonded: for imported goods (2019 Mar)

10. List out any three allied services provided by commercial banks – Locker, bill payments, underwriting (2019 Imp)

11. Write any three benefits of e-banking – 24×7, transparency, financial discipline (2024 Mar)

12. Explain any two principles of insurance applicable to life insurance – Utmost good faith, insurable interest (2021 Mar)

📘 Chapter 5: EMERGING MODES OF BUSINESS | ഉയർന്നുവരുന്ന ബിസിനസ് രീതികൾ

Definition | നിർവചനം

e-Business: Conduct of industry, trade and commerce using computer networks. കമ്പ്യൂട്ടർ ശൃംഖലകൾ ഉപയോഗിച്ചുള്ള വ്യവസായം, വ്യാപാരം, വാണിജ്യം എന്നിവയുടെ നടത്തിപ്പ്.

e-Commerce: Subset of e-business; firm's interactions with customers and suppliers over the internet.

Scope of e-Business | വ്യാപ്തി

• B2B (Business to Business): Transactions between businesses.
• B2C (Business to Consumer): Firm to customer transactions.
• Intra-B Commerce: Internal interactions among departments/employees.
• C2C (Consumer to Consumer): Transactions between consumers (e.g., OLX, eBay).

Benefits of e-Business | ഗുണങ്ങൾ

• Ease of formation & lower investment
• Convenience – 24×7×365 access
• Speed – instant information exchange
• Global reach / access
• Movement towards paperless society

Limitations | പരിമിതികൾ

• Low personal touch
• Incongruence between order and delivery speed
• Need for technology competence
• Increased risk due to anonymity
• People resistance to change
• Ethical fallouts

Online Transactions – Procedure | ഓൺലൈൻ ഇടപാടുകൾ – രീതി

1. Registration – Create account with vendor (password protected).
2. Placing order – Add items to shopping cart, then checkout.
3. Payment mechanism – Cash on delivery, cheque, net banking, credit/debit card, digital cash.

Security & Safety Risks | സുരക്ഷാ അപകടങ്ങൾ

• Transaction risks: Default on order, delivery, or payment.
• Data storage/transmission risks: Hacking, virus, data theft.
• Threat to intellectual property & privacy: Unauthorized copying, spam.

Traditional Business vs e-Business

Basis	Traditional	e-Business
Formation	Difficult	Simple
Physical presence	Required	Not required
Location importance	High	None
Cost of setting up	High	Low
Operating cost	High	Low
Nature of contact	Indirect	Direct
Response time	Long	Instant
Global reach	Less	Much
Transaction risk	Low	High

❓ KEY PREVIOUS YEAR QUESTIONS (Chapter 5)

1. TATA Ltd. purchases tyres from MRF Ltd. This is an example of – d) B2B Commerce (2018 Imp)

2. Cash withdrawal by a customer using ATM is an example of – (d) B2C (2020 Mar)

3. List any one method of payment mechanism in online transactions – Credit card / COD / Net banking (2021 Mar)

4. Find the odd one out: Point of Sale, Electronic Fund Transfer, Digital Cash, Cash Payment at the counter – Cash Payment at the counter (2023 Mar)

5. Interaction and dealings among various departments within the firm is known as – (b) Intra-B Commerce (2023 Imp)

6. Manjusha orders old books through OLX from Pramitha. It is an example of – (a) C2C Transactions (2024 Mar)

7. Suggest any two payment mechanisms used in e-business – Credit card, Digital cash (2018 Mar)

8. Write two differences between Traditional Business and e-Business – Traditional requires physical presence; e-business does not. Traditional higher operating cost; e-business lower. (2023 Mar)

9. Mention any two limitations of e-business – Low personal touch, security risks. (2024 Mar)

10. Name any three transaction-risks in e-business – Default on order taking, default on delivery, default on payment. (2023 Imp)

11. Mithra opines that e-business and e-commerce are same. Do you agree? – No. e-commerce is a subset of e-business. (2018 Mar)

📘 Chapter 6: SOCIAL RESPONSIBILITIES OF BUSINESS & BUSINESS ETHICS | ബിസിനസിന്റെ സാമൂഹിക ഉത്തരവാദിത്തങ്ങളും ബിസിനസ് നൈതികതയും

Concept of Social Responsibility | സാമൂഹിക ഉത്തരവാദിത്തം ആശയം

Obligation of business to take decisions and actions desirable in terms of society's objectives and values. Broader than legal responsibility – includes voluntary actions for social benefit.

Arguments FOR social responsibility

• Justification for existence & growth
• Long-term interest of firm
• Avoidance of government regulation
• Maintenance of society
• Availability of resources with business
• Converting problems into opportunities
• Better environment for doing business
• Holding business responsible for social problems

Arguments AGAINST social responsibility

• Violation of profit maximisation objective
• Burden on consumers (cost passed on)
• Lack of social skills
• Lack of broad public support

Kinds of Social Responsibility | തരങ്ങൾ

• Economic responsibility: Produce goods/services society wants, at a profit.
• Legal responsibility: Operate within the laws of the land.
• Ethical responsibility: Behaviour expected by society but not codified in law.
• Discretionary responsibility: Voluntary obligations (e.g., charitable contributions).

Responsibility towards Different Groups

• Owners/shareholders: Fair return, safety of investment, accurate information.
• Workers: Meaningful work, fair wages, good working conditions, union rights.
• Consumers: Right quality & quantity, reasonable prices, avoid adulteration, honest advertising.
• Government & community: Pay taxes regularly, obey laws, protect environment, be a good citizen.

Business and Environmental Protection | ബിസിനസും പരിസ്ഥിതി സംരക്ഷണവും

Environment: Totality of man's surroundings (natural + man-made). Pollution: Injection of harmful substances into environment.

Causes of Pollution

• Air pollution: Carbon monoxide from automobiles, smoke from factories.
• Water pollution: Chemical and waste dumping into rivers, lakes.
• Land pollution: Dumping of toxic wastes on land.
• Noise pollution: Unwanted sound from factories, vehicles.

Need for Pollution Control

• Reduction of health hazards, Reduced risk of liability, Cost savings, Improved public image, Other social benefits.

Role of Business

• Top management commitment, Clear policies & programmes, Complying with laws, Participation in government programmes, Periodical assessment, Educational workshops & training.

Business Ethics | ബിസിനസ് നൈതികത

Concept: Socially determined moral principles which should govern business activities. Examples: fair prices, accurate weights, fair treatment to workers, reasonable profits.

Elements of Business Ethics

• Top management commitment
• Publication of a 'Code'
• Establishment of compliance mechanisms
• Involving employees at all levels
• Measuring results

❓ KEY PREVIOUS YEAR QUESTIONS (Chapter 6)

1. Which among the following is against business ethics? – (d) Charging unfair price (2018 Mar)

2. Give one example for discretionary responsibility of business – Helping flood affected people (2019 Mar)

3. Respecting religious sentiments in advertising is an example of ______ responsibility – (b) Ethical (2019 Imp)

4. Selling adulterated goods is against ______ responsibility – (b) Ethical (2020 Imp)

5. Smoke from factories causes ______ pollution – (b) air (2021 Imp)

6. Carbon monoxide emitted by automobiles causes ______ pollution – (d) Air (2022 Mar)

7. Business Ethics include – (d) All of these (2023 Imp)

8. One of the following is against business ethics – (b) Giving dishonest advertisements (2024 Mar)

9. A business organisation contributing towards flood affected people is an example of ______ responsibility – (d) Discretionary (2025 Mar)

10. Write any two social responsibilities of business towards consumers – Supply right quality goods, reasonable prices. (2018 Mar)

11. Briefly explain any two arguments against social responsibility – Violation of profit objective, burden on consumers. (2019 Imp)

12. List any two elements of business ethics – Top management commitment, code of conduct. (2020 Imp)

📘 Chapter 7: FORMATION OF A COMPANY | കമ്പനിയുടെ രൂപീകരണം

Stages of Formation | രൂപീകരണ ഘട്ടങ്ങൾ

1. Promotion | പ്രൊമോഷൻ – Idea conceiving, feasibility studies, name approval, preparing preliminary documents, fixing signatories, appointment of professionals.
2. Incorporation | ഇൻകോർപ്പറേഷൻ – Registration with ROC, submission of documents (MOA, AOA, etc.), receipt of Certificate of Incorporation (birth certificate).
3. Capital Subscription | മൂലധന സബ്സ്ക്രിപ്ഷൻ – For public companies: SEBI approval, prospectus, minimum subscription (90% of issue), appointment of bankers/brokers/underwriters, stock exchange listing.

Promoter | പ്രൊമോട്ടർ

Person who takes all preliminary work for starting a new company. Functions: identification of business opportunity, feasibility studies (technical, financial, economic), name approval, preparing documents, fixing signatories, appointment of professionals.

Documents for Incorporation

• Memorandum of Association (MOA) | മെമ്മോറാണ്ടം ഓഫ് അസോസിയേഷൻ – Charter of the company, defines objectives. Clauses: Name clause, Registered office clause, Object clause, Liability clause, Capital clause, Subscription clause.
• Articles of Association (AOA) | ആർട്ടിക്കിൾസ് ഓഫ് അസോസിയേഷൻ – Rules and regulations for internal management.
• Prospectus | പ്രോസ്പെക്ടസ് – Invitation to public to subscribe shares/debentures. (Not required for private company)
• Statement in Lieu of Prospectus (if capital raised privately)
• Written consent of proposed directors
• Agreement with directors/managers
• Statutory declaration of compliance

Difference between MOA and AOA

Basis	Memorandum of Association	Articles of Association
Objectives	Defines objectives of the company	Rules for internal management
Position	Main document, charter	Subordinate to MOA
Relationship	With outsiders	With members
Validity	Acts beyond MOA are invalid	Acts beyond AOA can be ratified
Necessity	Every company must have	Not compulsory for a public company (can adopt Table A)

One Person Company (OPC) | ഒരു വ്യക്തി കമ്പനി

Company with only one member; introduced by Companies Act 2013. Only Indian citizen and resident can start. Cannot carry out Non-Banking Financial Investment activities.

❓ KEY PREVIOUS YEAR QUESTIONS (Chapter 7)

1. Identify the document issued by public companies to invite public to subscribe shares – a) Prospectus (2018 Mar)

2. Rules regarding internal management of a company is mentioned in – b) Articles of Association (2018 Imp)

3. Which clause of memorandum of association defines the purpose of company is formed? – (a) Object clause (2020 Mar)

4. The first stage in the formation of a company is – (a) Promotion (2022 Imp)

5. Find the odd one – (c) Declaration clause (2024 Mar) [others are MOA clauses]

6. A prospectus is issued by – (c) Public company (2025 Mar)

7. What is minimum subscription? – Minimum number of shares to be subscribed before allotment (90% of issue size) (2020 Imp)

8. List out the stages in the formation of a Private Company – Promotion, Incorporation (Capital subscription not needed if no public issue) (2021 Mar)

9. Who is a promoter? List out any two functions of him – Person who conceives idea and takes steps to form company; functions: feasibility study, name approval (2020 Mar)

10. Write any four differences between Memorandum of Association and Articles of Association – See table above (2020 Imp)

11. Explain any four clauses of memorandum of association – Name, Registered office, Object, Liability (2021 Mar)

12. Match: (a) Prospectus – Invitation to Public; (b) Public Company – Transferability of shares; (c) Articles of Association – Internal document; (d) Memorandum of Association – Primary document (2019 Imp)

📘 Chapter 8: SOURCES OF BUSINESS FINANCE | ബിസിനസ് ഫിനാൻസിന്റെ സ്രോതസ്സുകൾ

Meaning & Classification

Business finance = money required for business activities. Needs: Fixed capital (long-term assets) and Working capital (day-to-day operations).

Classification of Sources

• Period basis: Long-term (≥5 yrs), Medium-term (1-5 yrs), Short-term (≤1 yr).
• Ownership basis: Owner's funds (equity, retained earnings), Borrowed funds (debentures, loans).
• Source of generation basis: Internal (retained earnings), External (shares, debentures, banks).

Sources of Finance

• Retained Earnings (Ploughing back of profits): Permanent source, no explicit cost, but may cause shareholder dissatisfaction.
• Trade Credit: Credit from suppliers, convenient but limited and costly.
• Factoring: Selling receivables to factor, accelerates cash flow, but expensive for small invoices.
• Lease Financing: Renting asset, lower investment, tax deductible rentals, but lessee never becomes owner.
• Public Deposits: Deposits from public, simple procedure, but unreliable for new companies.
• Commercial Paper (CP): Unsecured promissory note, high liquidity, only for highly rated firms.
• Issue of Shares: Equity (ownership, voting rights, no fixed dividend) and Preference (fixed dividend, preferential claim).
• Debentures: Loan capital, fixed interest, tax deductible, but permanent burden.
• Commercial Banks: Short/medium term loans, flexible but require security.
• Financial Institutions: IDBI, IFCI, etc., provide long-term funds, but rigid criteria.
• International Financing: GDR, ADR, FCCB, IDR – raise funds from global markets.

Factors affecting choice of source

• Cost, Financial strength, Form of organisation, Purpose & time period, Risk, Control, Tax benefits.

❓ KEY PREVIOUS YEAR QUESTIONS (Chapter 8)

1. Fill in: a) Equity shares – Owned capital; b) Debentures – Borrowed capital (2018 Mar)

2. Find the odd one out: Trade credit, Certificate of deposit, Bank overdraft, Ploughing back of profits – Ploughing back of profits (internal) (2019 Mar)

3. A company wants to purchase plant & machinery for modernization. Identify type of fund required – (c) Fixed capital (2019 Imp)

4. Maturity period of commercial paper? – (c) 90 – 364 days (2020 Imp)

5. Identify the document which acknowledges debt of a company – (b) Debenture (2021 Mar)

6. Find odd one out: Equity share, Debentures, Preference shares, Retained earnings – Debentures (borrowed fund) (2021 Imp)

7. The internal source of finance include – (c) Retained earnings (2022 Imp)

8. Debenture holders are termed as – (d) Creditors of the company (2023 Imp)

9. Make correct pair: Debentures – Interest ; Shares – Dividend (2025 Mar)

10. Write any two merits of retained earnings – Permanent source, no explicit cost (2018 Mar)

11. What is factoring? – Service where factor manages debt collection and provides finance against receivables (2023 Mar)

12. Write any three differences between a share and debenture – Share = ownership, dividend, voting rights; Debenture = loan, interest, no voting rights (2020 Mar)

13. Name the arrangement: owner grants right to use asset for periodic payment – Lease; lessor, lessee (2018 Imp)

📘 Chapter 9: MSME AND BUSINESS ENTREPRENEURSHIP | സൂക്ഷ്മ, ചെറുകിട, ഇടത്തരം സംരംഭങ്ങളും ബിസിനസ് സംരംഭകത്വവും

MSME – Definition (MSMED Act 2006)

Type	Investment (₹)	Turnover (₹)
Micro	≤ 1 crore	≤ 5 crore
Small	≤ 10 crore	≤ 50 crore
Medium	≤ 50 crore	≤ 250 crore

Village industries: located in rural area, fixed capital per worker ≤ ₹50,000. Cottage industries: rural/traditional, family labour, small capital.

Role of MSME in India

• 95% of industrial units
• Second largest employer (after agriculture)
• Labour intensive, less capital intensive
• Produces variety of products – consumer goods to sophisticated items
• Balanced regional development, uses local resources
• Low cost of production, quick decisions

Problems of MSME

• Finance: Inadequate capital, lack of creditworthiness.
• Raw materials: Scarcity, high price, low bargaining power.
• Managerial skills: Lack of professional managers.
• Marketing: Weak area, dependence on middlemen.
• Quality: Poor quality, lack of resources for R&D.
• Capacity utilisation: Operate below full capacity.
• Technology: Outdated technology.

Entrepreneurship | സംരംഭകത്വം

Process of setting up one's own business. Characteristics: Systematic activity, Lawful & purposeful, Innovation, Organisation of production, Risk-taking.

Startup India Scheme

Initiative to nurture innovation and startups. Annual turnover ≤ ₹25 crore. Aims: entrepreneurial culture, awareness, motivate youth, promote women/SC/ST.

Intellectual Property Rights (IPR) | ബൗദ്ധിക സ്വത്തവകാശങ്ങൾ

• Copyright: Literary, artistic, musical works; automatic protection.
• Trademark: Word, name, symbol to identify goods.
• Geographical Indication (GI): Indicates origin (e.g., Darjeeling Tea).
• Patent: Exclusive right for invention (new, non-obvious, industrial application). 20 years protection.
• Design: Shape, pattern, arrangement (aesthetic). 10+5 years.
• Plant Variety: Protection for new plant varieties.
• Semiconductor IC Layout Design: For chip designs.

❓ KEY PREVIOUS YEAR QUESTIONS (Chapter 9)

1. Examples for traditional industries include – (d) All of these (Hand looms, Coir, Handicrafts) (2022 Imp)

2. Briefly explain any two problems faced by small business in India – Finance, Marketing (2021 Mar)

3. List out any two features of cottage industries – Family labour, simple equipment (2021 Imp)

4. Point out any four characteristics of entrepreneurship – Systematic activity, innovation, organisation of production, risk-taking (2025 Mar)

5. List out any three features of cottage industries – Rural based, family labour, simple tools (2018 Mar)

6. Briefly explain any three problems faced by MSME – Finance, raw materials, marketing (2021 Imp)

7. Illustrate any four major problems faced by small business in India – Finance, raw materials, marketing, technology (2019 Mar)

8. "Entrepreneurship can really take India to the heights of becoming a super economic power." Discuss any four features – Innovation, risk-taking, organisation, systematic activity (2023 Imp)

9. Small business units face many problems. Analyze any five – Finance, raw materials, managerial skills, marketing, quality (2024 Mar)

10. What is a cottage industry? Give two features – Rural industry, family labour, small capital (2021 Imp)

11. What is the MSMED Act? When was it passed? – Micro, Small and Medium Enterprises Development Act, 2006 (2018 Mar)

📘 Chapter 10: INTERNAL TRADE | ആഭ്യന്തര വ്യാപാരം

Meaning of Internal Trade | ആഭ്യന്തര വ്യാപാരം - അർത്ഥം

Buying and selling of goods and services within the boundaries of a nation. Two categories: Wholesale trade and Retail trade.

Wholesale Trade | മൊത്ത വ്യാപാരം

Buying and selling in large quantities for resale or intermediate use.

Services of Wholesalers

• To Manufacturers: Facilitating large scale production, Bearing risk, Financial assistance, Expert advice, Help in marketing functions, Storage.
• To Retailers: Availability of goods, Marketing support, Grant of credit, Specialised knowledge, Risk sharing.

Retail Trade | ചിലറ്റ വ്യാപാരം

Sale of goods directly to ultimate consumers.

Services of Retailers

• To Manufacturers/Wholesalers: Help in distribution, Personal selling, Enabling large scale operations, Collecting market information, Help in promotion.
• To Consumers: Regular availability, New products information, Convenience in buying, Wide selection, After-sales services, Credit facilities.

Types of Retailers

A. Itinerant Retailers (no fixed place): Peddlers & Hawkers, Market traders, Street traders, Cheap jacks.

B. Fixed Shop Retailers:

• Small retailers: General stores, Speciality shops, Street stall holders, Second-hand goods shops, Single line stores.
• Large retailers: Departmental stores, Chain stores (Multiple shops), Mail order houses, Consumer cooperative stores, Super markets, Vending machines.

Departmental Stores vs Multiple Shops

Basis	Departmental Store	Chain / Multiple Shops
Location	Central place	Many localities
Range	Wide variety	Limited line
Services	Maximum	Limited
Pricing	Not uniform	Uniform fixed prices
Credit	Sometimes	Cash only

Goods and Services Tax (GST) | ചരക്ക് സേവന നികുതി

Introduced July 1, 2017 – 'One Nation, One Tax'. Destination-based consumption tax. Slabs: 0%, 5%, 12%, 18%, 28%. CGST + SGST + IGST. Input tax credit avoids cascading effect.

❓ KEY PREVIOUS YEAR QUESTIONS (Chapter 10)

1. Find the odd one: Super markets, Multiple shops, Market traders, Mail Order Houses – Market traders (itinerant) (2018 Mar)

2. Petty retailers with temporary shops changing locality are called – (c) Cheap jacks (2018 Imp)

3. Suggest products suitable for vending machines – Soft drinks, chocolates, milk, newspapers (2019 Mar)

4. Identify retail outlets selling goods through mail – (a) Mail order houses (2020 Mar)

5. I am a retailer selling goods on fixed days at different places – (a) Market trader (2020 Imp)

6. This type of retail shop operates on self-service principle – Super market (2022 Mar)

7. Which retailers provide door-to-door service? – (b) Peddlers and hawkers (2022 Imp)

8. The term VPP is associated with which business? – (d) Mail order (2023 Mar)

9. Supermarkets are also known as – (b) Self-Service stores (2023 Imp)

10. Who acts as link between wholesaler and ultimate consumers? – (c) Retailer (2024 Mar)

11. List any two services rendered by retailers to consumers – Regular availability, after-sales services (2018 Mar)

12. Bata Shoe Store is an example of which type of large retailer? – Multiple shops / Chain stores (2022 Mar)

13. Outline any three features of itinerant retailers – No fixed place, limited resources, move from place to place (2024 Mar)

14. Describe the services rendered by wholesalers to manufacturers – Bulk purchasing, bear risk, market info, storage (2018 Mar)

15. Differentiate between Departmental Store and Multiple Shops – See table above (2019 Imp)

📘 Chapter 11: INTERNATIONAL BUSINESS | അന്താരാഷ്ട്ര ബിസിനസ്

Meaning of International Business | അന്താരാഷ്ട്ര ബിസിനസ് - അർത്ഥം

Business activities crossing national frontiers – includes trade (goods & services), capital, personnel, technology, IP rights. Broader than international trade – includes foreign investment, licensing, franchising.

Reasons for International Business

• Unequal distribution of natural resources, Differences in productivity & production costs, Geographical specialisation.

Domestic vs International Business

Basis	Domestic	International
Nationality of buyers/sellers	Same country	Different countries
Mobility of factors	High within country	Restricted across borders
Customer homogeneity	Relatively homogeneous	Heterogeneous
Political system & risk	Single country, known risks	Multiple systems, higher political risk
Currency	Domestic currency	Multiple currencies, exchange rate risk

Scope of International Business

• Merchandise exports & imports
• Service exports & imports (invisible trade)
• Licensing & franchising
• Foreign investments: FDI (controlling interest) & FPI (portfolio)

Benefits of International Business

To Nations

• Earning foreign exchange, More efficient use of resources, Improves growth & employment, Increases standard of living.

To Firms

• Prospects for higher profits, Increased capacity utilisation, Growth prospects, Way out to intense domestic competition, Improved business vision.

Modes of Entry into International Business

• Exporting & Importing: Easiest, less investment, but additional costs and trade barriers.
• Contract Manufacturing (Outsourcing): Get goods produced locally abroad, low cost, but quality control issues.
• Licensing & Franchising: Grant rights to use technology/trademark for royalty, low risk, but risk of disclosing secrets.
• Joint Ventures: Shared ownership, local partner's knowledge, but potential conflicts.
• Wholly Owned Subsidiaries: Full control, but high investment and political risk.

Export Procedure (Major Steps)

1. Receipt of enquiry & sending proforma invoice
2. Receipt of order / indent
3. Assess importer's creditworthiness & obtain letter of credit
4. Obtain export licence (IEC, RCMC, ECGC registration)
5. Pre-shipment finance from bank
6. Production / procurement of goods
7. Pre-shipment inspection
8. Excise clearance / duty drawback formalities
9. Obtain certificate of origin
10. Reservation of shipping space, packing, forwarding
11. Insurance of goods
12. Customs clearance – shipping bill, carting order
13. Obtain mate's receipt, pay freight, get bill of lading
14. Prepare invoice, send documents to bank for negotiation
15. Securing payment – sight draft or usance draft

Import Procedure (Major Steps)

1. Trade enquiry & receipt of proforma invoice
2. Procurement of import licence / IEC number
3. Obtain foreign exchange sanction from bank
4. Placing order / indent
5. Obtaining letter of credit (if agreed)
6. Arrange for finance
7. Receipt of shipment advice from exporter
8. Retirement of import documents (acceptance/payment)
9. Arrival of goods – import general manifest
10. Customs clearance – bill of entry, pay duty, port trust dues, release order

Important Documents

• Export: Proforma invoice, indent, letter of credit, shipping bill, mate's receipt, bill of lading, airway bill, marine insurance policy, certificate of origin, packing list, bill of exchange.
• Import: Trade enquiry, proforma invoice, import order, letter of credit, shipment advice, bill of lading, bill of entry, dock challan, import general manifest.

International Institutions

• IMF (International Monetary Fund): Promotes monetary cooperation, exchange stability, short-term credit.
• World Bank (IBRD): Reconstruction & development of underdeveloped nations.
• WTO (World Trade Organisation): Reduces tariffs & trade barriers, dispute settlement.

❓ KEY PREVIOUS YEAR QUESTIONS (Chapter 11)

1. Which one is not an export document? – (c) Bill of entry (import document) (2018 Mar)

2. Identify the first step in export procedure – (a) Receipt of enquiry and sending quotations (2018 Imp)

3. Access international allows C-Tech to use logo & name for consideration. This is example of – (c) Franchising (2018 Imp)

4. Which is a document relating to payment in international business? – (c) Letter of credit (2019 Mar)

5. A receipt issued by commanding officer of ship when cargo is loaded is known as – (b) mates receipt (2019 Imp)

6. Which is a mode of entry into international business? – (d) All of these (2020 Mar)

7. The document containing guarantee from importer's bank to exporter's bank is – (a) Letter of credit (2021 Imp)

8. Name the document evidencing that shipping company has accepted goods for carriage – Bill of lading (2022 Mar)

9. The most important document used in import is – (a) Bill of Entry (2025 Mar)

10. Differentiate between Licensing and Franchising – Licensing for production; Franchising for services, more stringent rules. (2018 Mar)

11. What is franchising? – Granting rights to use service business model, trademark, etc., in return for fee. (2019 Mar)

12. Write any two reasons for international business – Unequal distribution of resources, differences in production costs. (2020 Mar)

13. Name the documents: (a) issued by customs house for export permission – Shipping bill; (b) evidence goods accepted by shipping company – Bill of lading. (2020 Imp)

14. Explain Mate's receipt and Bill of lading – Mate's receipt issued by ship's commander when cargo loaded; Bill of lading issued by shipping company, evidence of contract, document of title. (2022 Imp)

15. List any six steps involved in export procedure – See steps above. (2025 Mar)