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What is the structure called when there is a separation of ownership and management?
What is the structure called when there is a separation of ownership and management?
- Partnership
- Company (correct)
- Sole proprietorship
- All business organisations
What type of liability does the karta in a Joint Hindu family business have?
What type of liability does the karta in a Joint Hindu family business have?
- Unlimited liability (correct)
- Joint liability
- Limited liability
- No liability for debts
In a cooperative society, what principle is followed regarding voting rights?
In a cooperative society, what principle is followed regarding voting rights?
- One share one vote
- No vote
- One man one vote (correct)
- Multiple votes
Who elects the board of directors in a joint stock company?
Who elects the board of directors in a joint stock company?
Which of the following statements is true regarding profit sharing?
Which of the following statements is true regarding profit sharing?
What is the role of every partner in a partnership?
What is the role of every partner in a partnership?
What is the minimum number of adult members required to form a cooperative society?
What is the minimum number of adult members required to form a cooperative society?
Which authority is responsible for issuing the Certificate of Registration to a partnership firm?
Which authority is responsible for issuing the Certificate of Registration to a partnership firm?
What is the maximum number of members allowed in a private company?
What is the maximum number of members allowed in a private company?
In which form of business is it possible to maintain 100% secrecy and confidentiality?
In which form of business is it possible to maintain 100% secrecy and confidentiality?
Which of the following is considered a merit of Sole Proprietorship?
Which of the following is considered a merit of Sole Proprietorship?
Under which Act may a partnership firm be registered in India?
Under which Act may a partnership firm be registered in India?
Which type of company has no restrictions on the transfer of shares?
Which type of company has no restrictions on the transfer of shares?
Which partner does not take part in the day-to-day activities of the business?
Which partner does not take part in the day-to-day activities of the business?
What is the term for a partner who allows the use of his name and goodwill for the benefit of the firm?
What is the term for a partner who allows the use of his name and goodwill for the benefit of the firm?
Under what condition are Preliminary Contracts binding on the Company?
Under what condition are Preliminary Contracts binding on the Company?
With what consent can a minor be admitted to the benefits of an existing partnership?
With what consent can a minor be admitted to the benefits of an existing partnership?
In the event of losses or company debt failures, how much is Akash liable to pay if he holds 200 shares at $10 each?
In the event of losses or company debt failures, how much is Akash liable to pay if he holds 200 shares at $10 each?
Which clause in the Memorandum of Association defines the purpose for which the company is formed?
Which clause in the Memorandum of Association defines the purpose for which the company is formed?
Which document is described as the Charter of the Company?
Which document is described as the Charter of the Company?
Qualification shares are subscribed by whom?
Qualification shares are subscribed by whom?
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Study Notes
Business Organization Structures and Legal Aspects
- Every partner acts as both an agent and a principal of the firm.
- A cooperative society requires a minimum of 10 adult members to form.
- The Certificate of Registration for a partnership firm is issued by the Registrar of Firms.
- A private company has a maximum membership limit of 200 members.
- Sole Proprietorship offers 100% secrecy and confidentiality compared to other business forms.
Advantages of Sole Proprietorship and Partnership
- Key merits of Sole Proprietorship include quick decision-making, direct incentives, and ease of formation and closure.
- A partnership firm can be registered under the Indian Partnership Act of 1932.
Company Types and Share Transferability
- In a public company, there are no restrictions on the transfer of shares.
- In the absence of Articles of Association, Table A is adopted as the default governing document for the company.
Types of Partners and Their Roles
- A sleeping partner does not participate in the day-to-day activities of the business.
- A nominal partner allows the use of their name and goodwill but does not actively participate in management.
Corporate Governance and Obligations
- Preliminary contracts are not binding on the company unless ratified after incorporation.
- A minor can be admitted to the benefits of an existing partnership firm only with the consent of all existing partners.
Shareholder Responsibilities
- In case of company losses, Akash, holding 200 shares at ₹10 each, may face a liability of ₹800, calculated based on unpaid debt obligations.
Company Documents and Governance
- The object clause in the Memorandum of Association states the purpose of the company.
- The Memorandum of Association is often referred to as the Charter of the Company.
- Qualification shares are required to be subscribed by company directors.
Ownership and Management Structures
- A company structure distinctly separates ownership and management roles.
- The karta in a Joint Hindu family business bears unlimited liability for debts.
- In a cooperative society, the principle of "one man, one vote" is applied, ensuring each member has equal voting rights.
Profit Distribution in Different Organizations
- The statement "Profits do not have to be shared" refers specifically to a Sole Proprietorship.
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