Plus One Business Studies - Previous Questions (Chapterwise)
- Chapter 1: Business, Trade and Commerce
- Chapter 2: Forms of Business Organisation
- Chapter 3: Private, Public and Global Enterprises
- Chapter 4: Business Services
- Chapter 5: Emerging Modes of Business
- Chapter 6: Social Responsibility of Business and Business Ethics
- Chapter 7: Formation of a Company
- Chapter 8: Sources of Business Finance
- Chapter 9: Small Business and Entrepreneurship Development
- Chapter 10: Internal Trade
- Chapter 11: International Business
Chapter 1: Business, Trade and Commerce
1. The broad classification of business activities include - and -
a) Trade and aids to trade b) Industry and commerce c) Industry and trade d) Internal trade and external trade (2018 Mar-1 Mark)
Answer: b) Industry and commerce
Hint: Business = Industry + Commerce. Industry produces, commerce distributes.
2. Fill as per the hint given. a) Hindrance of place - Transportation b) Hindrance of risk - (2018 Imp-1Mark)
Answer: Insurance
Hint: Insurance removes hindrance of risk by compensating losses.
3. Which among the following is a 'human cause' of business risk?
a) Earthquake b) Mismanagement c) Change in demand d) Competition in market (2019Mar- 1Mar)
Answer: b) Mismanagement
Hint: Human causes include negligence, dishonesty, mismanagement.
4. Which of the following is not a characteristic of business?
(a) Production (b) Exchange or sale (c) Wages or salaries to investors (d) Risk element (2019 Imp- 1Mark)
Answer: c) Wages or salaries to investors
Hint: Investors get profit/dividend, not wages/salary.
5. Which among the following is a personal cause of business risk?
(a) Strike of employees (b) Famine (c) Change in technology (d) Flood (2020 Mar- 1Mark)
Answer: a) Strike of employees
Hint: Personal/human causes relate to employees or management.
6. Identify the economic cause of business risk from the following
a) Flood b) Market competition c) Strike d) Power Failure (2020 Imp- 1Mark)
Answer: b) Market competition
Hint: Economic causes relate to market, demand, price, competition.
7. Warehousing provides utility.
(a) Time (b) Place (c) Risk (d) Finance (2021 Mar-1Mark)
Answer: a) Time
Hint: Storage creates time utility by making goods available when needed.
8. Trade between two persons belong to the same country is called
(a) External trade (b) Internal trade (c) Foreign trade (d) International trade (2021 Mar 1Mark)
Answer: b) Internal trade
Hint: Trade within national boundaries is internal/home trade.
9. Which among the following is a cause of business risk?
(a) Change in fashion (b) Strike or lockout (c) Theft (d) All of these (2021 Imp - 1Mark)
Answer: d) All of these
Hint: Business risks arise from economic, human, natural, and other causes.
10. Commerce includes trade and
(a) Industry (b) Auxiliaries to trade (c) Business (d) Outsourcing (2022 Mar -1Mark)
Answer: b) Auxiliaries to trade
Hint: Commerce = Trade + Auxiliaries (banking, transport, insurance, etc.).
11. Industries which provide support services to other industries are known as:
(a) Primary Industries (b) Secondary Industries (c) Tertiary Industries (d) None of these (2022 Imp - 1Mark)
Answer: c) Tertiary Industries
Hint: Tertiary industries provide support services like transport, banking.
12. What is the reward of business activity?
(a) Salary (b) Fees (c) Profit (d) Wages (2023 Mar -1Mark)
Answer: c) Profit
Hint: Profit is the reward for risk-taking in business.
13. Transportation removes the hindrance of _____ in trading activities.
(a) Place (b) Time (c) Risk (d) Finance (2024 Mar -1Mark)
Answer: a) Place
Hint: Transport moves goods from place of production to place of consumption.
14. Pick out the non-economic activity.
(a) Neethu cooks food for her children. (b) Deepak works in an office. (c) Adwaith teaches in a school. (d) Dhwani runs a beauty parlour. (2022 Imp - 1 Mark)
Answer: a) Neethu cooks food for her children
Hint: Non-economic activities are done out of love, not for money.
15. Which among the following is not an objective of business?
(a) Market standing (b) Innovation (c) Social responsibility (d) Business risk (2025 Mar -1Mark)
Answer: d) Business risk
Hint: Risk is a characteristic, not an objective. Objectives include profit, innovation, market standing, social responsibility.
16. Fill in the blanks
Business …………………. Profession Fees Employment …………………. (2018 Imp - 2 Marks)
Answer: Business – Profit, Employment – Salary/Wages
Hint: Business earns profit, profession earns fees, employment earns salary/wages.
17. Classify the following activities into economic and non- economic
a) Dr.Prakash runs a clinic b) Mrs.Athulya paints a picture to gift on her daughter’s birthday (2020 Imp - 2 Marks)
Answer: a) Economic – done for earning livelihood; b) Non-economic – done out of love.
Hint: Economic activities have monetary motive; non-economic have personal/emotional motive.
18. Mohan, a teacher in Ernakulam bought a car for Rs. 5 lakhs. After two months he sold it to Raju for Rs. 6 lakhs. Is it a business activity? Why? (2021 Mar - 2 Marks)
Answer: No, it is not a business activity because it is a one-time transaction done not on a regular basis.
Hint: Business requires regularity of dealings; single transaction does not constitute business.
19. Element of risk is one of the main characteristics of business. List out any four other characteristics of business. (2021 Imp - 2 Marks)
Answer: (i) Economic activity (ii) Production/procurement of goods/services (iii) Sale/exchange (iv) Regular dealings (v) Profit motive (vi) Uncertainty of return.
Hint: Any four features from the chapter.
20. List out any four multiple objectives of business (2022 Mar- 2 Marks)
Answer: (i) Market standing (ii) Innovation (iii) Productivity (iv) Earning profit (v) Social responsibility (vi) Physical/financial resources.
Hint: Business has multiple objectives – economic, social, human, national.
21. Write any two examples for extractive industries. (2022 Imp - 2 Marks)
Answer: Mining, farming, fishing, hunting, lumbering.
Hint: Extractive industries extract products from natural sources.
22. Give any two examples of risk arising due to human cause. (2024 Mar- 2 Marks)
Answer: Strike, mismanagement, dishonesty of employees, power failure due to negligence.
Hint: Human causes are related to people – employees, management, public.
23. Insert the following industries into appropriate columns: Transportation, Hunting, Fish-hatchery, Sugar industry (2025 Mar- 2 Marks)
| Primary Industry | Genetic Industry | Secondary Industry | Construction Industry |
|---|---|---|---|
| Hunting | Fish-hatchery | Sugar industry | Transportation |
24. Write any Three differences between profession and employment. (2018 Mar- 3 Marks)
Answer:
| Basis | Profession | Employment |
|---|---|---|
| Qualification | Specialised knowledge/training required | Qualification as per employer |
| Reward | Professional fee | Salary/wages |
| Risk | Some risk present | No or little risk |
25. What do you mean by business risk? What is the reward of businessman for taking this risk? (2018 Imp- 3 Marks)
Answer: Business risk refers to possibility of inadequate profits or losses due to uncertainties. Profit is the reward for risk-taking.
Hint: Risk is uncertainty of loss; profit is return for bearing risk.
26. Dr. Raju is working in City Hospital, Chennai as medical officer. Mention the category of economic activity in which Dr. Raju belongs to. State any two features of this activity? (2019 Imp - 3 Marks)
Answer: Employment. Features: (i) Works for others (ii) Gets salary (iii) Follows employer's rules (iv) No risk.
Hint: Employment involves working for someone else for regular payment.
27. Classify the following industries into Primary, Secondary and Tertiary
a) Mining b) Poultry farming c) Oil refinery d) Construction of dams e) Banking f) Advertising (2020 Mar - 3 Marks)
Answer: Primary: Mining, Poultry farming; Secondary: Oil refinery, Construction of dams; Tertiary: Banking, Advertising.
Hint: Primary – extract/genetic; Secondary – manufacturing/construction; Tertiary – services.
28. Business risk arises due to various causes. State two examples of each causes (2018 Imp - 4 Marks)
Answer: (i) Natural causes: flood, earthquake (ii) Human causes: strike, negligence (iii) Economic causes: change in demand, competition (iv) Other causes: political disturbances, mechanical failure.
Hint: Four categories with two examples each.
29. Explain any five factors that are important to be considered while starting a business. (2019 Imp - 4 Marks)
Answer: (i) Selection of line of business (ii) Size of business (iii) Location (iv) Financing (v) Physical facilities (vi) Workforce (vii) Tax planning.
Hint: Any five factors from the list.
30. Classify the following industries into extractive, genetic, manufacturing and construction.
(a) Mining (b) Poultry farming (c) Building a dam (d) Sugar production (2021 Mar - 4 Marks)
Answer: Extractive – Mining; Genetic – Poultry farming; Manufacturing – Sugar production; Construction – Building a dam.
Hint: Identify based on nature of activity.
31. There are various hindrances in the exchange process of goods and services. Briefly explain the hindrances and removing activities. (2021 Imp - 4 Marks)
Answer: (i) Hindrance of person – removed by trade (ii) Hindrance of place – removed by transport (iii) Hindrance of time – removed by warehousing (iv) Hindrance of risk – removed by insurance (v) Hindrance of finance – removed by banking (vi) Hindrance of knowledge – removed by advertising.
Hint: Commerce removes these hindrances through auxiliaries.
32. Briefly explain the nature of business risk. (2022 Mar - 4 Marks)
Answer: (i) Risk is an essential part of every business (ii) Arises due to uncertainties (iii) Degree depends on nature/size of business (iv) Profit is reward for risk-taking (v) Can be minimised but not eliminated.
Hint: Explain characteristics of business risk.
33. Adawith, a teacher sold his old car at a profit of Rs.10,000. (a) Is it a business activity? (b) State any three features of business. (2022 Imp - 4 Marks)
Answer: (a) No, it is not a business activity because it is a one-time transaction.
(b) Features: (i) Economic activity (ii) Production/procurement of goods (iii) Sale/exchange (iv) Regular dealings (v) Profit motive (vi) Risk.
Hint: Business requires regularity.
34. Classify the following activities into primary and secondary industry:
(a) Timbering (b) Breeding of animals (c) Construction of dam (d) Production of goods (e) Mining (f) Assembling of components (2023 Mar - 4 Marks)
Answer: Primary: Timbering, Breeding of animals, Mining; Secondary: Construction of dam, Production of goods, Assembling of components.
Hint: Primary – extractive/genetic; Secondary – manufacturing/construction.
35. Match the following
| A | B |
|---|---|
| (a) Analytical industry | (i) Cement |
| (b) Synthetical industry | (ii) Sugar |
| (c) Processing industry | (iii) Computer |
| (d) Assembling industry | (iv) Oil refinery |
Hint: Analytical – oil refinery; Synthetical – cement; Processing – sugar; Assembling – computer.
36. Explain briefly the multiple objectives of business. (2018 Mar & 2020 Imp - 5 Marks)
Answer: (i) Market standing – good reputation (ii) Innovation – new ideas/methods (iii) Productivity – efficiency (iv) Physical/financial resources – optimal use (v) Earning profit – for survival/growth (vi) Social responsibility – contribute to society.
Hint: Explain any five objectives.
37. Describe the importance of profit in business (2019 Mar - 5 Marks)
Answer: (i) Source of income for businesspersons (ii) Source of finance for expansion (iii) Indicates efficiency (iv) Society's approval of utility (v) Builds reputation (vi) Essential for survival and growth.
Hint: Profit is essential but not the only objective.
38. 'We want to consider a lot of factors before starting a business.' Explain any 5 of it. (2020 Mar - 5Marks)
Answer: (i) Selection of line of business (ii) Size of business (iii) Location (iv) Financing (v) Physical facilities (vi) Competent workforce (vii) Tax planning (viii) Launching the enterprise.
Hint: Any five factors with brief explanation.
39. Match the following :
| A | B |
|---|---|
| (a) Hindrance of place | Insurance |
| (b) Hindrance of risk | Transport |
| (c) Hindrance of finance | Advertising |
| (d) Hindrance of knowledge | Warehousing |
| (e) Hindrance of time | Banking |
Hint: Match hindrance with correct auxiliary.
40. The activities which assist trade are called auxiliaries to trade. State any five of such activities. (2021 Imp - 5 Marks)
Answer: (i) Transport (ii) Banking (iii) Insurance (iv) Warehousing (v) Advertising (vi) Communication.
Hint: Auxiliaries support trade by removing hindrances.
41. Identify five hindrances in the process of exchange of goods and services and activities undertaken to remove these hindrances. (2023 Mar - 5 Marks)
Answer: (i) Person – Trade (ii) Place – Transport (iii) Time – Warehousing (iv) Risk – Insurance (v) Finance – Banking (vi) Knowledge – Advertising.
Hint: Hindrances and their remedies.
42. (a) What do you mean by the term 'business risk'? (b) Explain in brief, the four causes of business risk. (2023 Imp - 5 Marks)
Answer: (a) Business risk is possibility of inadequate profits or losses due to uncertainties.
(b) Causes: (i) Natural – flood, earthquake (ii) Human – strike, negligence (iii) Economic – price change, competition (iv) Other – political, mechanical failures.
Hint: Define risk and list four causes with examples.
43. Discuss any five basic factors to be considered for starting a business. (2024 Mar - 5 Marks)
Answer: (i) Selection of line of business (ii) Size of business (iii) Location (iv) Financing (v) Physical facilities (vi) Competent workforce (vii) Tax planning.
Hint: Explain any five factors.
44. Mr. Suresh is engaged in the production and distribution of readymade garments. Identify the type of economic activity he is engaged in. Briefly explain any 4 features of it. (2025 Mar - 5 Marks)
Answer: Business. Features: (i) Economic activity (ii) Production/procurement of goods (iii) Sale/exchange (iv) Regular dealings (v) Profit motive (vi) Risk.
Hint: Identify as business and explain features.
45. What is Commerce? Briefly describe the various functions of Commerce. (2021 Mar - 8 Marks)
Answer: Commerce includes all activities that facilitate exchange of goods/services from producer to consumer. Functions: (i) Trade – buying/selling (ii) Transport – removes place hindrance (iii) Warehousing – removes time hindrance (iv) Insurance – removes risk hindrance (v) Banking – removes finance hindrance (vi) Advertising – removes knowledge hindrance (vii) Communication – facilitates information exchange.
Hint: Define commerce and explain each auxiliary's role.
46. What do you mean by industry? Briefly explain its major categories with example. (2021 Imp - 8 Marks)
Answer: Industry refers to economic activities connected with conversion of resources into useful goods. Categories: (i) Primary – extractive (mining) and genetic (poultry) (ii) Secondary – manufacturing (sugar) and construction (dams) (iii) Tertiary – services (banking, transport).
Hint: Explain three categories with examples.
47. Explain the types of Industries with the help of a chart. (2022 Mar - 8Marks)
Answer: Draw chart showing Primary (Extractive, Genetic), Secondary (Manufacturing, Construction), Tertiary. Explain each with examples.
Hint: Use chart and explain.
48. Explain any four multiple objectives of business. (2022 Imp - 8 Marks)
Answer: (i) Market standing – reputation (ii) Innovation – new ideas (iii) Productivity – efficiency (iv) Physical/financial resources – optimal use (v) Earning profit – survival (vi) Social responsibility – welfare.
Hint: Explain any four objectives in detail.
Chapter 2: Forms of Business Organisation
1. Which among the following is the main characteristic of Hindu Undivided Family business?
a)Single ownership b)Transfer of membership c)Membership by birth d) Registration is compulsory (2018 Mar - 1Mark)
Answer: c) Membership by birth
Hint: HUF membership is by birth in the family.
2. 'One man one vote' is the principle of...... form of business organization.
a) Joint stock company b) Partnership c) Co-operative society d) Sole proprietorship (2018 Imp - 1Mark)
Answer: c) Co-operative society
Hint: Cooperatives follow democratic principle of one member one vote.
3. Name a form of business organization found only in India. (2019 Mar - 1Mark)
Answer: Joint Hindu Family Business
Hint: HUF is unique to India, governed by Hindu law.
4. Complete the series. Partnership - Partners Company - ? (2019 Imp - 1Mark)
Answer: Shareholders
Hint: Partners in partnership, shareholders in company.
5. A - partner is one who allows the use of his/her name by a firm, but does not contribute to its capital.
(a) Active (b) Sleeping (c) Nominal (d) Secret (2020 Mar - 1Mark)
Answer: c) Nominal
Hint: Nominal partner lends name only, no capital or management.
6. The liability of Karta in a Joint Hindu Family is:
(a) Limited (b) Unlimited (c) Ability (d) None of these (2021 Mar - 1Mark)
Answer: b) Unlimited
Hint: Karta has unlimited liability; other coparceners have limited liability.
7. The elder most member of HUF business is known as
(a) Shareholder (b) Karta (c) Co-parceners (d) Partner (2021 Imp - 1Mark)
Answer: b) Karta
Hint: Head of HUF is Karta.
8. Which among the following is NOT related to a co-operative society?
(a) One man, One vote (b) Voluntary membership (c) Profit (d) Each for All and All for Each (2023 Imp- 1 Mark)
Answer: c) Profit
Hint: Cooperative's main motive is service, not profit.
9. A co-operative society can be formed with a minimum of - adult members.
(a) 20 (b) 12 (c) 10 (d) 50 (2024 Mar - 1Mark)
Answer: c) 10
Hint: Minimum 10 members required to form a cooperative society.
10. Identify the form of organization from given below. (2025 Mar - 1 Mark) – (Question incomplete in PDF)
Answer: (Cannot answer without options)
11. Co-parceners alone are the members of HUF business. Who is the head of such a business? Comment on his liability. (2018 Imp- 2 Marks)
Answer: Head is Karta. He has unlimited liability – his personal property can be used to repay business debts.
Hint: Karta manages business, has unlimited liability.
12. Write a short note on the following in one or two sentences. (a) Nominal partner (b) H.U.F. (2020 Mar - 2 Marks)
Answer: (a) Nominal partner lends name to firm, no capital contribution, no active part, but liable to third parties.
(b) HUF is a business owned by Hindu Undivided Family, governed by Hindu law, headed by Karta, membership by birth.
Hint: Brief definition.
13. List any two privileges of a Private Company. (2021 Mar - 2 Marks)
Answer: (i) Can be formed with only 2 members (ii) No need to issue prospectus (iii) Can start business immediately after incorporation (iv) Only 2 directors required.
Hint: Any two privileges.
14. Identify the form of organization from given below. (2022 Mar - 2 Marks) – (Question incomplete in PDF)
15. Complete the following as per the given information. (2023 Mar - 2 Marks) – (Incomplete)
16. "Sole proprietors have unlimited liability." Identify the form of organization from given below. (2023 Imp - 2 Marks) – (Incomplete)
17. Name the following with reference to a Joint Stock Company : (a) The official signature of a Joint Stock Company. (b) The chief managing body elected by the shareholders (2024 Mar - 2 Marks)
Answer: (a) Common seal (b) Board of Directors
Hint: Common seal is company's signature; BOD manages company.
18. "I am my own boss, everything is under my control". For which form of business organization the above statement is correct? Give any two merits of such business. (2018 Imp - 3 Marks)
Answer: Sole proprietorship. Merits: (i) Quick decision making (ii) Direct incentive (iii) Confidentiality (iv) Personal satisfaction.
Hint: Sole proprietor has full control.
19. Write any 'three' features of a Co-operative society. (2021 Mar & 2021 Imp - 3 Marks)
Answer: (i) Voluntary membership (ii) Legal status – registration compulsory (iii) Limited liability (iv) Democratic control – one man one vote (v) Service motive.
Hint: Any three features.
20. Write any three differences between Private company and Public company (2023 Mar - 3 Marks)
Answer:
| Basis | Private Company | Public Company |
|---|---|---|
| Members | 2-200 | Minimum 7, no maximum |
| Directors | Minimum 2 | Minimum 3 |
| Share transfer | Restricted | Free transferability |
21. Complete the table.
| Type of partner | Capital contribution | Managing the business | Profit sharing |
|---|---|---|---|
| (a) ? | Yes | Yes | Yes |
| Sleeping partner | Yes | No | ? |
| Nominal partner | ? | No | No |
Answer: (a) Active partner; Sleeping partner – Yes (profit sharing); Nominal partner – No (capital contribution).
Hint: Active contributes capital, manages, shares profit; sleeping contributes capital but no management, shares profit; nominal no capital, no management, no profit.
22. Explain the following features of partnership in one sentence each : (a) Formation (b) Liability (c) Continuity (2025 Mar - 3 Marks)
Answer: (a) Formation – Partnership arises from an agreement between persons.
(b) Liability – Partners have unlimited and joint liability.
(c) Continuity – Partnership lacks continuity; death/retirement of a partner may dissolve the firm.
Hint: Brief explanation of each.
23. Match the following
| A | B |
|---|---|
| a) Formed by an agreement | i) Joint stock companies |
| b) Not sharing profits | ii) Co-operative societies |
| c) One man one vote | iii) Partnership business |
| d) Transferability of shares | iv) Sole Proprietorship |
Answer: a-iii, b-iv, c-ii, d-i
Hint: Partnership formed by agreement; sole proprietorship – one owner (not sharing profits? Actually sole proprietor gets all profit – so 'not sharing profits' matches sole proprietorship); one man one vote – cooperative; transferability of shares – company.
24. In order to avoid the future disputes the partners of Eka Associates decided to prepare a written agreement. Name the document and list out any six contents. (2018 Imp - 4 Marks)
Answer: Partnership deed. Contents: (i) Name of firm (ii) Names/addresses of partners (iii) Nature of business (iv) Capital contribution (v) Profit sharing ratio (vi) Interest on capital/drawings (vii) Salaries/commission (viii) Rules for admission/retirement (ix) Dissolution procedure.
Hint: Any six contents.
25. Write short notes on the following : a) H.U.F. (Hindu Undivided Family Business) b) Partnership deed (2019 Mar - 4 Marks)
Answer: a) HUF – business owned by Hindu Undivided Family, governed by Hindu law, headed by Karta, membership by birth, Karta has unlimited liability, others limited.
b) Partnership deed – written agreement containing terms and conditions of partnership, e.g., name, capital, profit sharing, etc.
Hint: Explain each briefly.
26. Amal, Binu and Chandran decided to start a partnership business. They want to make a Partnership deed. As a commerce student suggest them the possible aspects to be included in their proposed partnership deed. (2019 Imp - 4 Marks)
Answer: (i) Name of firm (ii) Names/addresses of partners (iii) Nature of business (iv) Capital contribution (v) Profit sharing ratio (vi) Interest on capital/drawings (vii) Salaries/commission (viii) Rules for admission/retirement (ix) Dissolution procedure.
Hint: List any six to eight contents.
27. Match the following :
| A | B |
|---|---|
| (a) Partnership | (1) Co-parcener |
| (b) H.U.F. | (2) Service motive |
| (c) Joint Stock Company | (3) Partner |
| (d) Co-Op Society | (4) Shareholder |
Answer: a-3, b-1, c-4, d-2
Hint: Partnership – partner; HUF – co-parcener; Company – shareholder; Cooperative – service motive.
28. State any Four privileges enjoyed by a private company. (2020 Imp - 4 Marks)
Answer: (i) Can be formed with only 2 members (ii) No need to issue prospectus (iii) Can start business immediately after incorporation (iv) Only 2 directors required (v) No index of members required (vi) No restriction on loan to directors.
Hint: Any four privileges.
29. Match the following :
| A | B |
|---|---|
| (a) Partnership | i) Member |
| (b) Joint Stock Company | ii) Partner |
| (c) Sole Proprietorship | iii) Shareholder |
| (d) Co-operative society | iv) Sole Trader |
Answer: a-ii, b-iii, c-iv, d-i
Hint: Partnership – partner; Company – shareholder; Sole proprietorship – sole trader; Cooperative – member.
30. Match the following :
| A | B |
|---|---|
| (a) Sole proprietorship | i) Artificial person |
| (b) Joint stock company | ii) One man one vote |
| (c) Co-operative society | iii) Mutual agency |
| (d) Partnership | iv) Controlled by a single person |
Answer: a-iv, b-i, c-ii, d-iii
Hint: Sole proprietorship – single control; Company – artificial person; Cooperative – one man one vote; Partnership – mutual agency.
31. Write any four merits of sole proprietorship. (2022 Mar - 4 Marks)
Answer: (i) Quick decision making (ii) Confidentiality (iii) Direct incentive (iv) Personal satisfaction (v) Ease of formation/closure.
Hint: Any four merits.
32. Match the following :
| A | B |
|---|---|
| a) Equal voting rights | i) Joint Stock Company |
| b) Unlimited liability | ii) Limited liability |
| c) Common seal | iii) Co-operative Societies |
| d) Co-parceners | iv) Sole proprietorship |
Answer: a-iii, b-iv, c-i, d-? (Co-parceners – HUF, not given in B). Possibly error. Assume: d – HUF (not listed). But as per options, b-unlimited liability – sole proprietorship; c-common seal – company; a-equal voting rights – cooperative.
Hint: Match correctly.
33. A joint stock company may be public or private. Prepare a chart showing any five differences between these two. (2018 Imp - 5 Marks)
Answer: Chart:
| Basis | Public Company | Private Company |
|---|---|---|
| Members | Min 7, no max | Min 2, max 200 |
| Directors | Min 3 | Min 2 |
| Share transfer | Free | Restricted |
| Invitation to public | Can invite | Cannot invite |
| Index of members | Compulsory | Not compulsory |
34. List out four merits and four demerits of sole proprietorship. (2025 Mar - 4 Marks)
Answer: Merits: (i) Quick decision (ii) Direct incentive (iii) Confidentiality (iv) Ease of formation. Demerits: (i) Limited resources (ii) Unlimited liability (iii) Limited life (iv) Limited managerial ability.
Hint: Four each.
35. Briefly explain any five features of a Joint Stock Company. (2021 Mar - 5 Marks)
Answer: (i) Artificial person – created by law (ii) Separate legal entity – distinct from members (iii) Perpetual succession – continues despite member death (iv) Limited liability – members liable only to unpaid amount (v) Common seal – official signature (vi) Transferability of shares – free transfer.
Hint: Any five features.
36. Differentiate between Public Company and Private Company. (2021 Mar - 5 Marks)
Answer: Same as Q33 but with five points.
Hint: Explain five differences.
37. Mr. Manu and Mr. Antony proposed to start a partnership business. Their advocate advised them to prepare a partnership deed in order to avoid future conflicts. As a commerce student, suggest any five matters to be included in partnership deed. (2021 Imp - 5 Marks)
Answer: (i) Name of firm (ii) Names/addresses of partners (iii) Nature of business (iv) Capital contribution (v) Profit sharing ratio (vi) Interest on capital/drawings (vii) Salaries/commission (viii) Rules for admission/retirement (ix) Dissolution procedure.
Hint: Any five contents.
38. Mr. Rahim is the single owner of a stationery shop. His shop is closed after the sudden death of Rahim. Which form of business organization is this? Write any four features of this form of organization. (2021 Imp - 5 Marks)
Answer: Sole proprietorship. Features: (i) Single ownership (ii) Unlimited liability (iii) Sole risk bearer and profit recipient (iv) Full control (v) No separate legal entity (vi) Lack of continuity.
Hint: Identify and explain four features.
39. On the basis of nature of operation, co-operative societies are of different types. Describe any five types of co-operative society. (2022 Mar - 5 Marks)
Answer: (i) Consumer's cooperative – protect consumer interests (ii) Producer's cooperative – help small producers (iii) Marketing cooperative – sell products of members (iv) Farmer's cooperative – provide inputs to farmers (v) Credit cooperative – provide loans (vi) Housing cooperative – construct houses.
Hint: Explain any five types.
40. Explain Partnership Deed and list out its contents. (2022 Imp - 5 Marks)
Answer: Partnership deed is written agreement containing terms and conditions of partnership. Contents: (i) Name of firm (ii) Names/addresses of partners (iii) Nature of business (iv) Capital contribution (v) Profit sharing ratio (vi) Interest on capital/drawings (vii) Salaries/commission (viii) Rules for admission/retirement (ix) Dissolution procedure.
Hint: Define and list contents.
41. Explain any five features of sole proprietorship. (2024 Mar - 5 Marks)
Answer: (i) Single ownership (ii) Unlimited liability (iii) Sole risk bearer and profit recipient (iv) Full control (v) No separate legal entity (vi) Lack of continuity (vii) Ease of formation/closure.
Hint: Any five features.
42. Mr.Mohammed and Mr.Sajan entered into an agreement to share profits. Identify the form of business they decided to start. Explain its Four merits and Three limitations (2018 Mar - 8 Marks)
Answer: Partnership. Merits: (i) Ease of formation (ii) More funds (iii) Balanced decisions (iv) Sharing of risks (v) Secrecy. Limitations: (i) Unlimited liability (ii) Limited resources (iii) Conflicts (iv) Lack of continuity (v) Lack of public confidence.
Hint: Identify and explain 4 merits + 3 limitations.
43. Jisha and Lekha jointly start a business on the basis of an agreement. They contributed capital and sharing risks, engaged in business jointly and severally. a) Identify the form of business organization mentioned above. b) Describe any four merits and three demerits of it. (2019 Mar - 8 Marks)
Answer: a) Partnership. b) Merits: (i) Ease of formation (ii) More funds (iii) Balanced decisions (iv) Sharing of risks (v) Secrecy. Demerits: (i) Unlimited liability (ii) Limited resources (iii) Conflicts (iv) Lack of continuity.
Hint: Same as above.
44. "It is a voluntary association of persons, who join together with the motive of welfare of the members." (a) Identify the form of organization referred above. (b) Explain any three features and four merits of this form of business. (2019 Imp - 8 Marks)
Answer: a) Co-operative society. b) Features: (i) Voluntary membership (ii) Legal status (iii) Limited liability (iv) Democratic control (v) Service motive. Merits: (i) Equality in voting (ii) Limited liability (iii) Stable existence (iv) Economy in operations (v) Government support (vi) Ease of formation.
Hint: Identify cooperative, explain 3 features + 4 merits.
45. 'A company can be described as an artificial person having a separate legal entity, perpetual succession and common seal'. (a) List any 2 merits and 2 demerits of it. (b) Differentiate between private company and public company. (2020 Mar - 8 Marks)
Answer: (a) Merits: (i) Limited liability (ii) Transfer of shares (iii) Perpetual existence (iv) Professional management. Demerits: (i) Complexity in formation (ii) Lack of secrecy (iii) Numerous regulations (iv) Delay in decisions.
(b) Differences: (table as in Q33).
Hint: 2+2 merits/demerits and 4-5 differences.
46. Explain any Eight features of a Joint Stock Company (2020 Imp - 8 Marks)
Answer: (i) Artificial person (ii) Separate legal entity (iii) Perpetual succession (iv) Limited liability (v) Common seal (vi) Transferability of shares (vii) Board of Directors control (viii) Risk bearing by all shareholders.
Hint: Explain eight features.
47. What is Partnership Deed? What are its contents? (2021 Mar - 8 Marks)
Answer: Partnership deed is written agreement containing terms and conditions of partnership. Contents: (i) Name of firm (ii) Names/addresses of partners (iii) Nature of business (iv) Capital contribution (v) Profit sharing ratio (vi) Interest on capital/drawings (vii) Salaries/commission (viii) Rules for admission/retirement (ix) Dissolution procedure (x) Arbitration for disputes.
Hint: Define and list at least 8 contents.
48. Describe Private Company. List out the privileges of a private company over a public company. (2021 Imp - 8 Marks)
Answer: Private company – restricts share transfer, min 2 max 200 members, cannot invite public. Privileges: (i) Can be formed with 2 members (ii) No prospectus (iii) Can start business immediately after incorporation (iv) Only 2 directors (v) No index of members (vi) No restriction on loan to directors.
Hint: Define and list at least 6 privileges.
49. Explain the features of Joint Stock Company. (2022 Mar - 8 Marks)
Answer: Same as Q46.
Hint: Explain eight features.
50. It is a type of business owned and operated by one person. (a) What form of business is mentioned above? (b) Explain it and also list out its features. (2022 Imp - 8 Marks)
Answer: a) Sole proprietorship. b) Explanation – owned/managed/controlled by one person. Features: (i) Single ownership (ii) Unlimited liability (iii) Sole risk bearer and profit recipient (iv) Full control (v) No separate legal entity (vi) Lack of continuity (vii) Ease of formation.
Hint: Identify and explain features.
51. Briefly explain any four merits and four demerits of sole proprietorship. (2023 Mar - 8 Marks)
Answer: Merits: (i) Quick decision (ii) Direct incentive (iii) Confidentiality (iv) Personal satisfaction (v) Ease of formation. Demerits: (i) Limited resources (ii) Unlimited liability (iii) Limited life (iv) Limited managerial ability.
Hint: 4 merits + 4 demerits.
52. Explain briefly the eight features of a joint stock company. (2023 Imp - 8 Marks)
Answer: Same as Q46.
Hint: Explain eight features.
53. What is partnership business? Explain any four advantages and any three limitations of it. (2024 Mar - 8 Marks)
Answer: Partnership – relation between persons who agree to share profits. Advantages: (i) Ease of formation (ii) More funds (iii) Balanced decisions (iv) Sharing of risks (v) Secrecy. Limitations: (i) Unlimited liability (ii) Limited resources (iii) Conflicts (iv) Lack of continuity.
Hint: Define, 4 advantages, 3 limitations.
54. What is a Joint Stock Company? Explain any seven features of it. (2025 Mar - 8 Marks)
Answer: Joint Stock Company – artificial person, separate legal entity, perpetual succession, common seal. Features: (i) Artificial person (ii) Separate legal entity (iii) Perpetual succession (iv) Limited liability (v) Common seal (vi) Transferability of shares (vii) Board of Directors control (viii) Risk bearing by shareholders.
Hint: Define and explain seven features.
Important Exam Questions
- Define business and explain its characteristics. (5 marks)
- Distinguish between business, profession and employment. (5 marks)
- Explain the various types of industries with examples. (6 marks)
- What is commerce? Explain the auxiliaries to trade. (5 marks)
- What is sole proprietorship? Explain its merits and limitations. (5 marks)
- Explain the features, merits and limitations of partnership. (8 marks)
- What is a partnership deed? List its contents. (5 marks)
- Explain the different types of partners. (4 marks)
- Describe the features, merits and limitations of a cooperative society. (8 marks)
- Distinguish between a public company and a private company. (5 marks)
- Explain the features of a joint stock company. (8 marks)
- What factors determine the choice of form of business organisation? (5 marks)