Forms of Business Organisation MCQ Class 11 Business Studies are covered in this Article. Forms of Business Organisation MCQs Test contains 74 questions. Answers to MCQs on Forms of Business Organisation Class 11 Business Studies are available after clicking on the answer. These MCQ have been made for Class 11 students to help check the concept you have learnt from detailed classroom sessions and application of your knowledge.
Forms of Business Organisation MCQ Class 11 Business Studies
1.The most popular form of business organisation is:
a) Sole proprietorship
b) Company
c) Partnership
d) Joint Hindu Family business
Answer
Answer: A) Sole proprietorship
2. The form of business organisation which is specifically found in India is:
a) Sole proprietorship
b) NGO
c) Cooperative society
d) Joint Hindu Family business
Answer
Answer: D) Joint Hindu Family business
3. Cooperative Societies are compulsorily registered under which of the following Act:
a) The Companies Act, 2013
b) The Cooperative Societies Act, 1922
c) The Indian Contract Act, 1872
d) The Cooperative Societies Act, 1912
Answer
Answer: D) The Cooperative Societies Act, 1912
4. How many types of Cooperative Societies are there:
a) 5
b) 4
c) 6
d) 8
Answer
Answer: C) 6
5. Satish lost his job during the Covid-19 pandemic now he wants to start a business of his own in his hometown, Satish had limited finance available with him and he does not want many legal formalities to start a business, suggest Satish which forms of business organisation he should go for:
a) Partnership
b) Sole proprietorship
c) Joint hindu family business
d) Cooperative society
Answer
Answer: B) Sole proprietorship
6. Which of the following forms of business organisation has limited liability to his members:
a) Partnership
b) Company
c) Sole proprietorship
d) Joint Hindu Family business
Answer
Answer: B) Company
7. Minimum number of members required to form a public company is:
a) 12
b) 1
c) 7
d) No limit
Answer
Answer: C) 7
8. As per The Companies Act, 2013, a public company is defined as:
a) A company which is not a private company
b) A company which has restrictions on the transferability of its shares
c) A company which is prohibited from issuing shares to the public
d) A company which has limited the number of its members upto 200
Answer
Answer: A) A company which is not a private company
9. Amit is performing a business activity in which he enjoys all the profits and bears all the risk alone, which type of organisation do you think Amit is running:
a) Partnership
b) Company
c) Sole proprietorship
d) Joint stock company
Answer
Answer: C) Sole proprietorship
10. A is running a retail shop of grocery items under the sole proprietorship form of business, A’s son wants him to expand the shop and deal in other types of goods as well but A does not agree with his son’s plan. Do you think that A’s son can execute his plan without A’s consent?
a) Yes
b) No
c) Yes but after completing a few legal formalities
d) None of these
Answer
Answer: B) No
Forms of Business Organisation MCQ Class 11 Business Studies
11. Which of the following is a demerit of a partnership firm:
a) Unfair distribution of profits
b) Unlimited liability
c) Limited managerial ability
d) Dominance of one partner
Answer
Answer: B) Unlimited liability
12. Harish was a sole proprietor and was running a retail shop of gift items. Unfortunately, due to an accident Harish died, due to which his business also came to an end. Which feature of the sole proprietorship is applied here:
a) No separate entity
b) Lack of business continuity
c) Sole risk bearer and profit recipient
d) None of these
Answer
Answer: B) Lack of business continuity
13. Which type of organisation is not bound to show its accounts to anyone:
a) Company
b) Partnership
c) Sole proprietorship
d) Cooperative society
Answer
Answer: C) Sole proprietorship
14. Sense of accomplishment is present in which of business organisation:
a) Partnership
b) Company
c) Joint Hindu Family business
d) Sole proprietorship
Answer
Answer: D) Sole proprietorship
15. Pooja is engaged in a business of clothes. She has to manage all the tasks related to the business alone and because of her weak marketing skills and knowledge her business is not making profits up to her expectations. Pooja’s business is a ________ form of business organisations:
a) Joint Hindu Family Business
b) Sole proprietorship
c) Partnership
d) Cooperative society
Answer
Answer: B) Sole Proprietorship
16. The Indian Partnership Act, 1932 defines Partnership as:
a) The relation between persons who have agreed to share the profits of the business carried on by all or any one of them acting for all.
b) The relation between persons who have agreed to carry on business activities together.
c) The relation between persons who have agreed to share the profits of the business carried on by all of them together.
d) None of these
Answer
Answer: A) The relation between persons who have agreed to share the profits of the business carried on by all or any one of them acting for all.
17. The partners of a partnership firm have unlimited liability, this means that:
a) Partner’s personal assets cannot be used for repaying the firm’s debt
b) Partner’s personal assets can be used to repay the firm’s debt/liability
c) Partners will enjoy unlimited profits
d) Profit is distributed according to the amount of their capital contribution.
Answer
Answer: B) Partners’s personal assets can be used to repay the firm’s debt/liability
18. A, B and C together made a donation of Rs.60,000 to an organization called Smart Healthcare Club. Can this contribution be called as partnership:
a) Yes
b) No
c) Yes, if the amount contributed by A,B and C is equal
d) None of these
Answer
Answer: B) No
19. Which of the following is not an advantage of a partnership firm:
a) Secrecy
b) Ease of Formation and Closure
c) Limited liability of members
d) More funds
Answer
Answer: C) Limited liability of members
20. Ram, Shyam and Kavi were in a partnership firm. Kavi wants his son to enter into the firm, Shyam agrees to this but Ram does not agree to Kavi’s intentions. Can Kavi bring his son to the partnership firm even if Ram does not agree
a) Yes
b) No
c) Yes, but after completing certain legal formalities
d) None of these
Answer
Answer: B) No
Forms of Business Organisation MCQ Class 11 Business Studies
21. Possibility of conflicts is a limitation of which type of business organisation:
a) Sole proprietorship
b) Partnership
c) Company
d) Joint Hindu Family business
Answer
Answer: B) Partnership
22. How many types of partners are there:
a) 5
b) 7
c) 6
d) 2
Answer
Answer: C) 6
23. Partner who does not take part in the day to day activities of the business is a ________ partner:
a) Active
b) Dormant
c) Secret
d) None of these
Answer
Answer: B) Dormant
24. Partner who does not contribute to the capital neither takes part in the management of the firm but still he/she is liable to pay the firm’s debt because they are considered to be a partner of the firm in the eyes of a third party:
a) Dormant
b) Nominal
c) Active
d) Partner by estoppel
Answer
Answer: D) Partner by estoppel
25. On the basis of duration partnership are classified into:
a) Partnership at will and particular partnership
b) General partnership and limited partnership
c) Long partnership and short partnership
d) None of these
Answer
Answer: A) Partnership at will and particular partnership
26. In a limited partnership, the liability of at least one partner is _______ while of other partners is _______:
a) Limited; unlimited
b) Limited; general
c) General; unlimited
d) Unlimited; limited
Answer
Answer: D) Unlimited; limited
27. Document that is made during the formation of a partnership is:
a) Partnership agreement
b) Partnership deed
c) Partnership registration
d) Partnership document
Answer
Answer: B) Partnership deed
28. Which of the following is not mentioned in the partnership deed:
a) Name of the firm
b) Duration of business
c) Method of solving disputes
d) Amount of profit and losses
Answer
Answer: D) Amount of profit and losses
29. It is ________ for a partnership firm to get registered:
a) Mandatory
b) Optional
c) Necessary
d) None of these
Answer
Answer: B) Optional
30. Which of the following is a consequence of not registering the partnership firm
a) A partner cannot file a suit against the partner or the firm
b) A partner cannot file a suit against third parties
c) Firm cannot file a suit against any of its partners
d) All of these
Answer
Answer: D) All of these
Forms of Business Organisation MCQ Class 11 Business Studies
31. A partnership firm can be registered under:
a) The Partnership Act, 1932
b) The Indian Contract Act, 1872
c) The Partnership Act, 1994
d) The Partnership Act,1922
Answer
Answer: A) The Partnership Act, 1932
32. The Joint Hindu Family business is governed by which of the following laws:
a) Hindu law, 2002
b) Hindu Undivided law, 1994
c) Hindu Family law, 1965
d) Hindu Succession Act, 1956.
Answer
Answer: D) Hindu Succession Act, 1956.
33. The person in the Joint Hindu Family business who carries on the business and is the head of the family is called the _______:
a) Karta
b) Director
c) Sole proprietor
d) Head of the business
Answer
Answer: A) Karta
34. All members who have equal ownership rights over the property of an ancestor are known as __________:
a) Family members
b) Coparceners
c) Business Partners
d) Heirs of the Business
Answer
Answer: B) Coparceners
35. The liability of the Karta is______, while that of the other members is _______:
a) Limited; unlimited
b) Unlimited; limited
c) Limited; limited
d) Unlimited; unlimited
Answer
Answer: B) Unlimited; limited
36. Can a minor be a member in a Joint Hindu Family business:
a) Yes
b) No
c) Partially yes
d) Yes, if all the members make an agreement of entering him/her
Answer
Answer: A) Yes
37. Which among these is a merit of a Joint Hindu Family business:
a) Limited managerial skills
b) Disputes among the members
c) Effective control
d) Limited resources
Answer
Answer: C) Effective Control
38. Which of these is a limitation of the Joint Hindu Family business:
a) Unlimited liability of all the members
b) Limited managerial skills
c) Delay in decision making
d) Lack of public confidence
Answer
Answer: B) Lack of managerial skills
39. Can a minor be entered into a partnership firm
a) No
b) Yes
c) Yes, but by mutual consent of the partners and only to share profits
d) None of these
Answer
Answer: C) Yes, but by mutual consent of the partners
40. ________ is an example of a cooperative society in India
a) Amul
b) Infosys
c) Wipro
d) All of these
Answer
Answer: A) Amul
41. Which of the organisation has a feature of separate legal entity from its members:
a) Company
b) Cooperative society
c) Sole proprietorship
d) Both A and B
Answer
Answer: D) Both A and B
42. The main motive of a cooperative society is:
a) To earn profits
b) To provide service to its members
c) To inculcate a habit of savings among members
d) To cooperate and work as a team with members
Answer
Answer: B) To provide service to its members
43. Why does the cooperative societies has a merit of government support:
a) Because these societies exemplifies the idea of democracy
b) Because these societies are formed for the welfare of the members
c) Because these societies help in the development of the country
d) Because government wants to increase the number of such societies
Answer
Answer: A) Because these societies exemplifies the idea of democracy
44. How does the Cooperative societies raise its capital:
a) By issuing shares to its members
b) By issuing shares to the public
c) By getting donations
d) None of these
Answer
Answer:A) By issuing shares to its members
45. Which of the following is a limitation of a Cooperative society:
a) Unlimited resource
b) Government Control
c) Complexity in formation
d) Delay in decision making
Answer
Answer:B) Government Control
46. ________is formed to protect the welfare of farmers:
a) Producers cooperative society
b) Consumers cooperative society
c) Farmers cooperative society
d) Marketing cooperative society
Answer
Answer: C) Farmers cooperative society
47. Gokuldham society is made by a group of people in which these members are able to construct/buy houses at reasonable cost. This is an example of:
a) Cooperative credit society
b) Marketing cooperative society
c) Cooperative housing society
d) Producer’s cooperative society
Answer
Answer: C) Cooperative housing society
48. The chief managing body of a company is:
a) Board of Directors
b) Shareholders
c) Debenture holders
d) All of these
Answer
Answer: A) Board of Directors
49. A private company is one which:
a) Limits the number of members
b) Restricts the transferability of shares
c) Prohibits the public to subscribe to its securities
d) All of these
Answer
Answer: D) All of these
50. Common seal of a company acts as its:
a) Official signature of the company
b) Signature of the Board of Directors
c) Signature of the promoters
d) Signature of the CEO
Answer
Answer: A) Official signature of the company
Forms of Business Organisation MCQ Class 11 Business Studies
51. A company being an artificial person can:
a) Enter into contracts
b) Can sue the third party or its members
c) Can be sued by its members or any other third party
d) All of these
Answer
Answer: D) All of these
52. Which of these is a merit of a company:
a) Quick decision making
b) Lack of secrecy
c) Professional management
d) Ease of formation
Answer
Answer: C) Professional management
53. Priyansh formed a private company named ABC pvt ltd. After the death of Priyansh the company continued its operations because of its_______ feature:
a) Common seal
b) Limited liability
c) Artificial person
d) Perpetual succession
Answer
Answer: D) Perpetual succession
54. ________ are the real owners of a company:
a) Shareholders
b) Board of directors
c) Promoters
d) Employees
Answer
Answer: A) Shareholders
55. The process for forming a Joint Stock Company is:
a) Complex
b) Easy
c) Easier than sole proprietorship
d) Easier than Partnership
Answer
Answer: A) Complex
56. Reliance Industries is a _______ company:
a) Private
b) Public
c) Subsidiary
d) NGO
Answer
Answer: A) Private
57. A company named Tech pvt ltd wants to issue its shares to the general public. Can the company do so:
a) Yes
b) Yes, after taking permission from the government
c) Yes but there will be a few restrictions
d) No
Answer
Answer: D) No
58) The limit of maximum number of members in a public company is:
a) 100
b) 200
c) 500
d) There is no limit of maximum number of members in a public company
Answer
Answer: D) There is no limit of maximum number of members in a public company
59) Minimum number of members required to form a private company is:
a) 5
b) 3
c) 2
d) 4
Answer
Answer: C) 2
60) Aman wants to start a business which requires good managerial skills. Which type of business organisation do you think Aman should form:
a) Sole proprietorship
b) Company
c) Joint Hindu Family business
d) Cooperative society
Answer
Answer: B) Company
Forms of Business Organisation MCQ Class 11 Business Studies
61) Which of these types of partners does not participate in the management of the firm:
a) Sleeping partner
b) Partner by estoppel
c) Partner by holding out
d) All of these
Answer
Answer: D) All of these
62) A _________ partner contributes to the capital but does not participate in the management:
a) Active
b) Dormant
c) Partner by estoppel
d) Partner by holding out
Answer
Answer: B) Dormant
63) Partners who do not share profit or losses:
a) Nominal partner
b) Partner by estoppel
c) Partner by holding out
d) All of these
Answer
Answer: D) All of these
64) _______ type of partner have unlimited liability:
a) Active
b) Sleeping
c) Nominal
d) All
Answer
Answer: D) All
65) Unlike sole proprietorship and partnership, a company has large financial resources and therefore there is a scope for________ of the company:
a) Earning more profit
b) Expansion
c) More recruitment
d) None of these
Answer
Answer: B) Expansion
66) The most inexpensive way of starting a business is:
a) Sole proprietorship
b) Partnership
c) Company
d) Cooperative societies
Answer
Answer: A) Sole proprietorship
67) Ajay wants to start a business in which the initial cost required is the least. He should go for a:
a) Company
b) Cooperative society
c) Sole Proprietorship
d) Joint Hindu Family Business
Answer
Answer: C) Sole proprietorship
68) Minimum number of directors required in a public company is____and in a private company is_____:
a) 7; 2
b) 3; 2
c) 1; 1
d) 10; 5
Answer
Answer: B) 3; 2
69. Binod wants to start a business organisation but he is afraid that in case the assets of his business fall short of repaying the liabilities, his personal assets could also be used to repay the liabilities. Suggest Binod which form of business organisation he should start so that his fear comes to an end:
a) Partnership
b) Sole proprietorship
c) Company
d) Joint Hindu Family Business
Answer
Answer: C) Company
70) A company is created by ______ and only ______ can bring an end to its life:
a) Law; law
b) Promoters; law
c) Shareholders; promoters
d) Directors; promoters
Answer
Answer: A) Law; law
71) Is it compulsory for a private company to have index of members:
a) Yes
b) Partially yes
c) Partially no
d) No
Answer
Answer: D) No
72) The continuity of a company is stable because of:
a) Separate legal entity
b) Perpetual succession
c) Common seal
d) Artificial person
Answer
Answer: A) Separate legal entity
73) Minimum number of members required to form a cooperative society is:
a) 5
b) 4
c) 10
d) 1
Answer
Answer: C) 10
74) In case of running a Joint Hindu Family business there must be at least _____ members in a family.
a) 6
b) 4
c) 2
d) 8
Answer
Answer: C) 2
Class 11 Business Studies MCQs
Business Studies MCQ – Term 1
Part A – Foundations of Business
- Evolution and Fundamentals of Business
- Forms of Business Organisations
- Public, Private and Global Enterprises
- Business Services
- Emerging Modes of Business
- Social Responsibility of Business and Business Ethics
Business Studies MCQ – Term 2
Part B – Finance and Trade
- Sources of Business Finance
- Small Business and Entrepreneurship Development
- Internal Trade
- International Business
Useful Links