Please refer to Chapter 2 Forms of Business Organisation MCQ Class 11 Business Studies with answers below. These multiple-choice questions have been prepared based on the latest NCERT book for Class 11 Business Studies. Students should refer to MCQ Questions for Class 11 Business Studies with Answers to score more marks in Grade 11 Business Studies exams. Students should read the chapter Forms of Business Organisation and then attempt the following objective questions.

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

The Forms of Business Organisation MCQ Class 11 Business Studies provided below covers all important topics given in this chapter. These MCQs will help you to properly prepare for exams.

Question. Innovation means: 
(a) Production of new commodities
(b) Customer satisfaction
(c) Production according to consumer needs
(d) To maximise sales   

Question.  Which of the following cooperative society is established to help small producers in selling their products?
(a) Producer cooperative society
(b) Marketing cooperative society
(c) Credit cooperative society
(d) Consumers cooperative society

Question. In a cooperative society, the principle followed is
(a) One man one vote
(b) Multiple votes by members
(c) One share one vote
(d) No voting rights to members 

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

Question. Which of the following is a characteristic of a co-operative?
(a) profits are not subject to income tax.
(b) one vote per share.
(c) dividends are paid on a per share basis.
(d) all of the above.

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

Question. 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?
(a) Partner by estoppel
(b) Active Partner
(c) Partner by holding out
(d) Nominal Partner 

Question. A partner whose association with the firm is unknown to the general public is called
(a) Active partner
(b) Sleeping partner
(c) Nominal partner
(d) Secret partner 

Question.  The most effective form of business organization for raising capital is the:
(a) joint venture.
(b) partnership.
(c) corporation.
(d) proprietorship. 

Question. The karta in Joint Hindu family business has
(a) Limited liability
(b) Unlimited liability
(c) No liability for debts
(d) Joint liability 

Question. A prospectus is issued by
(a) A public company seeking investment, from public.
(b) A private company
(c) A public company.
(d) A public enterprise

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

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

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

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

Question. Provision of residential accommodation to the members at reasonable rates is the objective of
(a)Producer’s cooperative
(b) Consumer’s cooperative
(c) Housing cooperative
(d) Credit cooperative 

Question. The capital of a company is divided into number of parts each one of which are called
(a)Share
(b) Dividend
(c) Profit
(d) Interest 

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

Question. In a cooperative society the principle followed is
(a) One share one vote
(b) One man one vote
(c) No vote
(d) Multiple votes 

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

Question. A form of business organization with two or more owners who share the risks and the profits –  
(a) proprietorship
(b) corporation
(c) wholesale
(d) partnership   

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

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

Question. An entrepreneur – 
(a) enforces government regulations
(b) takes the risk to earn profit
(c) sets the interest rates at banks
(d) manages financial investments 

Question. What is the advantage of corporations? 
(a) minimal government regulation
(b) limited liability
(c) short life span
(d) has one owner 

Question. Floral Shops, Bookstores, Farms are examples of what type business
(a) Sole Proprietorship
(b )Corporation
(c) Franchise
(d) Multinational Corporation 

Question. What type of business consists of two or more people?
(a) Sole Proprietorship
(b) Partnership
(c) Corporation
(d) Franchise 

Question. Nike, IBM, and Google are examples of
(a) partnership
(b) franchise
(c) corporation
(d) partnership 

Question. Which of the following is an advantage of a sole proprietorship?
(a) ease of starting a business.
(b) being your own boss.
(c) pride of ownership.
(d) all of the above. 

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

Question. A__________ provides for the greatest degree of continuity: 
(a) general partnership.
(b) joint venture.
(c) corporation.
(d) sole proprietorship.   

Question. Which of the following is an example of a public corporation? 
(a) Imperial Oil.
(b) Hospital for Sick Children.
(c) Mouvement Caisse Desjardin.
(d) YMCA.   

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

Question. A ___________ is a business with two or more owners: 
(a) corporation.
(b) conglomerate.
(c) partnership.
(d) public corporation.

Question. A prospectus is issued by
(a) Public company
(b) Private company
(c) Statutory Corporation
(d) Departmental undertaking 

Question. Which of the following systems allows both male and female members of the family to be coparceners?
(a) Mitakashara
(b) Mutual Agency
(c) Dayabhaga
(d) Particular Partnership 

Question. The maximum no. of members in a partnership business is.
(a) 7
(b) 20
(c) 10
(d) 50

Question. The prospectus is issued by :
(a) private co.
(b) public co.
(c) partnership
(d) HUF

Question. A sleeping partner is otherwise known as. 
(a) Nominal partner
(b) Dormant partner
(c) Partner by estoppel
(d) Limited partner

Question. Which type of business organisation is easy to form and there is no separate low for
(a) Sole Proprietorship
(c) Joint Hindu Family
(b) Cooperative society
(d) Partnership 

Question.one person co.must be converted into a pvt.ltd co.If itcrosses an annual turn over of Rs….
(a) 1cr.
(b) 5cr.
(c) 2cr.
(d) 50 lakh

Fill in the Blanks: 

Question. A type of business organisation where a person individual responsible for capital, bearing risk & management is called ____________ .

Question. To start any Private Ltd. company minimum paid up required is ____________ .

Question. To start a public co.minimum paid up capital is Rs__________

Question. In a Joint Stock Company the board of directors are elected by the ___________. 

Question. After the death of Karta, as the next __________ member takes up the position of Karta. 

True or False: 

Question. hardly any legal formalities are required for the formation of a company.

Question. There is a separate law that governs sole proprietorship.

Question. The shares of a public ltd. co. can easily be sold and can be converted into cash.

Question. In sole proprietorship business operations are confidential and secret.

 Question. Articles of association can be altered from time to time as per the act.

Match the following:

Question. Match ups the work of professionals in capital subscription stage

(a) Brokers	1. Buy the share if they are not subscribe by the public
(b) Underwriters	2. Application of the money receive
	3. Sale of the share

Question. Match the following on the basis of the functions of the promoters

(a) Feasibility study	1. Select name and submit it to registrar
(b) Name approval	2. Detail study of business profitability
	3. Identifying the business opportunity.

Question. Match the business organization on the basis of their features

(a) HUF Business	1. Mutual Agency
(b) Partnership	2. Minor members allowed
	3. Limited liabiliy

Question. Match the following on the basis of registration

(a) Partnership	1. No need of formalities like registration
(b) Co-operative society	2. Registration is optional
(c) Sole Proprietorship Business	3. Compulsory registration
	4. Separate legal entity

One word Answer type Questions :

Question. Why is a company called an artificial person? 
Answer. A company is called an artificial person because it does have a physical body of a natural human being. It cannot breath, drink, eat and so on.

Question. When can a private company commence its business? 
Answer. A private company can commence its business after its incorporation.

Question. Why is it advisable to have a written agreement of partnership? 
Answer. To avoid any dispute among the partners which may arise in future.

Question. In sole proprietorship business, there is no chance of leaking the information to public. Name the merit which this statement is indicating. 
Answer. Confidentiality of information or secrecy.

Question. Is it compulsory for a partnership firm to get it registered? 
Answer. No.

Question. What is the liability of partners? 
Answer. Unlimited, i.e., they may have to sell their personal assets to pay back the debts of the firm.

Question. When can a public company commence business? 
Answer. A public company can commence business only after obtaining ‘Certificate of Commencement of Business’.

Question. In private ltd. company can the allotment of shares be done without receiving minimum subscription?
Answer. Yes.

Question. At which stage in the formation of a company doest it interact with SEBI? 
Answer. Capital subscription stage.

Question. What is meant by formation of a company? 
Answer. It means bringing a company into existence.

Question. To whom are the Memorandum of Association and Articles of Association submitted?
Answer. Registrar of Companies.

Question. Name the statement containing the names and addresses of shareholders and the number of shares allotted to each. 
Answer. Return of Allotment.

Question. Name the clause of memorandum of association which states the objects and powers of the company.
Answer. Objective clause.

Question. Who is called the parent of a company? 
Answer. The promoter is called as the parent of the company.

Question. What is the minimum number of members to form a public and private company? 
Answer. Public Company-Seven. Private Company-Two.

Question. A public company with share capital is required to file a document with the Registrar of Companies in case it does not want to make a public issue through prospectus. Name this document. 
Answer. Statement in Lieu of Prospectus.

Question. Why is a company separate legal entity? 
Answer. A company obtains an identity distinct from its members.

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