Students of class 11 Business Studies should refer to MCQ Questions Class 11 Business Studies Forms of Business Organisation with answers provided here which is an important chapter in Class 11 Business Studies NCERT textbook. These MCQ for Class 11 Business Studies with Answers have been prepared based on the latest CBSE and NCERT syllabus and examination guidelines for Class 11 Business Studies. The following MCQs can help you to practice and get better marks in the upcoming class 11 Business Studies examination

Chapter 2 Forms of Business Organisation MCQ with Answers Class 11 Business Studies

MCQ Questions Class 11 Business Studies Forms of Business Organisation provided below have been prepared by expert teachers of grade 11. These objective questions with solutions are expected to come in the upcoming Standard 11 examinations. Learn the below provided MCQ questions to get better marks in examinations.

Question. The person or group of persons who perform the work of promotion and form a company is/are known as promoter(s).   
(a) True
(b) False
(c) Can’t say
(d) Partially true

Question. The documents for registration of a company were filed on 21st March, 2021. The Certificate of Incorporation was issued on 28th March, 2021. But the date mentioned on the Certificate of Incorporation was 27th March, 2021. From which date will the company be considered to be in existence and the contracts signed will be considered valid.   
(a) 21st March, 2021
(b) 28th March, 2021
(c) 27th March, 2021
(d) None of these

Question. Name the form of business organisation in which the members are jointly and individually liable for payment of firm’s debts.     
(a) Sole proprietorship
(b) Partnership
(c) Company
(d) HUF

Question. A ……… partner is one whose association with the firm is unknown to the general public.   
(a) secret
(b) active
(c) sleeping
(d) nominal

Question. These partners take actual part in carrying out business of the firm on behalf of other partners. Identify the partner being referred here.     
(a) Active partner
(b) Sleeping or dormant partner
(c) Secret partner
(d) Nominal partner

Question. Name the type of partner who is not really a partner but is liable to third parties for the repayment of the firm’s debts.       
(a) Sleeping
(b) Active
(c) Nominal
(d) Secret

Question. Registered office clause in MoA contains the legal and recognised name of the company, which has been approved by the registrar of companies.       
(a) True
(b) False
(c) Can’t say
(d) Partially false

Question. It can continue as long as the partners want and is terminated when any partner gives a notice of withdrawal from partnership to the firm.   
(a) Partnership at will
(b) Particular partnership
(c) General partnership
(d) Limited partnership

Question. Find out the liability of Anita in a company, who is a shareholder, holding 3,000 shares of ` 10 each. She has already paid ` 6 per share.     
(a) ` 10,000
(b) ` 1,20,000
(c) ` 18,000
(d) ` 12,000

Question. A company cannot come into existence without     
(a) electing directors
(b) getting certificate of incorporation
(c) issuing a prospectus
(d) All of the above

Question. Suppose Amit is a shareholder in a company holding 500 shares of `10 each on which he has already paid ` 8 per share. His liability in the event of losses or company’s failure to pay debts can be only up to     
(a) ` 4,000
(b) ` 5,000
(c) ` 1,000
(d) ` 2,000

Question. Producer’s cooperative society is a society in which small farmers join together and pool their resources for cultivating their land collectively.   
(a) True
(b) False
(c) Can’t say
(d) Partially true

Question. The society aims to eliminate middlemen and improve competitive position of its members by securing a favourable market for the products.     
(a) Consumer’s cooperative societies
(b) Producer’s cooperative societies
(c) Marketing cooperative societies
(d) Farmer’s cooperative societies

Question. It is optional for a partnership firm to get registered.       
(a) True
(b) False
(c) Can’t say
(d) Partially true

Question. Abhishek and Nidhi want to start a shop to sell Rajasthani sweets. They did not know how to develop the agreement for this purpose. So, they approached a chartered accountant who advised them to prepare a document which may stipulate the terms and conditions of the agreement. On the basis of given information, name the document about which the chartered accountant advised Abhishek and Nidhi.     
(a) MoA
(b) AoA
(c) Partnership deed
(d) Prospectus

Question. ‘Return of allotment’, signed by a director or secretary is filed with the registrar companies within how many days of allotment of shares?     
(a) 15 days
(b) 8 days
(c) 10 days
(d) 30days

Question. A ……….. has its objectives for the promotion of economic interest of its members in accordance with cooperative principles.   
(a) sole proprietorship
(b) joint hindu family business
(c) partnership
(d) cooperative society

Question. The cooperative society is compulsorily required to be registered under the Cooperative Societies Act, …….. .   
(a) 1912
(b) 1956
(c) 1932
(d) 1965

Question. The principle of ‘one man one vote’ governs the cooperative society.     
(a) True
(b) False
(c) Can’t say
(d) Partially false

Question. A type of business organisation where a person is individually responsible for capital, bearing risk and control of management is called …… .   
(a) Joint stock company
(b) Cooperative society
(c) Sole proprietorship
(d) Partnership

Question. The liability of members of acooperative society is ………….. to the  extent of their capital contribution.   
(a) born
(b) shared
(c) unlimited
(d) limited

Question. ….. society aims to fight against the big capitalists and enhance the bargaining power of the small producers.     
(a) Consumer’s cooperative
(b) Producer’s cooperative
(c) Marketing cooperative
(d) Farmer’s cooperative

Question. Contracts assigned after incorporation but before commencement of business are provisional contracts.   
(a) True
(b) False
(c) Can’t say
(d) Partly true

Question. A person is considered a …………. partner if, through his/her own initiative, conductor behaviour, he/she gives an impression to others that he/she is a partner of the firm.   
(a) active
(b) sleeping or dormant
(c) secret
(d) partner by estoppel

Question. A partner by………….is a person who though is not a partner in a firm but knowingly allows himself/herself to be represented as a partner in a firm.     
(a) active partner
(b) sleeping or dormant partner
(c) secret partner
(d) partner by holding out

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

Question. ……. society’s aim is to gain the benefits of large scale farming and increase the productivity.     
(a) Consumer’s cooperative
(b) Producer’s cooperative
(c) Marketing cooperative
(d) Farmer’s cooperative

Question. The directors take all decisions on behalf of the shareholders, keeping in mind their own benefit. Identify the demerit stated above.   
(a) Delay in decision-making
(b) Numerous regulations
(c) Lack of secrecy
(d) Oligarchic management

Question. ………….. clause limits the liability of the members to the amount unpaid on the shares owned by them.   
(a) Name
(b) Registered office
(c) Objects
(d) Liability

Question. …………… clause specifies the maximum capital which the company will be authorised to raise through the issue of shares.   
(a) Name
(b) Capital
(c) Objects
(d) Liability

Question. Anish, Anuj and Harish mutually decided to start a partnership business of manufacturing bulbs. They also decided that Harish’s association with firm will not be disclosed to general public. Here, Harish will be associated with firm as a sleeping partner.     
(a) True
(b) False
(c) Can’t say
(d) Partially true

Question. The company form of organisation is governed by The Companies Act, …..   
(a) 1912
(b) 2013
(c) 1932
(d) 1965

Question. The members can be asked to contribute to the loss only to the extent of the unpaid amount of shares held by them. Identity the merit of a company highlighted here.   
(a) Risk bearing
(b) Common seal
(c) Liability
(d) Control

Question. A company is a creation of law and exists independent of its members. Identify the feature of company highlighted in the given line.     
(a) Formation
(b) Separate legal entity
(c) Perpetual succession
(d) Artificial person

Question. Name the process by which the shares of a company are allowed to be traded on a stock exchange.     
(a) Trading on shares
(b) Listing of shares
(c) Mutualisation of shares
(d) None of the above

Question. ……….. cooperative society is formed by consumers for obtaining good quality products at reasonable prices.     
(a) Consumers
(b) Producers
(c) Marketing
(d) Farmers

Question. Which form of organisation is suitable if direct control over operations and absolute decision-making power is required in business?     
(a) Joint stock company
(b) Cooperative society
(c) Sole proprietorship
(d) HUF

Question. Partnership is the relation which subsists between persons who have agreed to combine their property, labour or skill in some business and to share the profits between them.   
(a) True
(b) False
(d) Can’t say
(c) Partly true

Question. In a joint stock company, the board of directors are elected by the ………   
(a) government
(b) customers
(c) shareholders
(d) promoter

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

Question. Members may come and members may go, but the company continues to exist. Identity the feature of company highlighted here.     
(a) Perpetual succession
(b) Formation
(c) Separate legal entity
(d) Artificial person

Question. A …………. is one who allows the use of his/her name by a firm, but does not contribute to its capital. 
(a) active partner
(b) sleeping or dormant partner
(c) secret partner
(d) nominal partner

Question. Identify the type of partnership highlighted in the given case.     
(a) General partnership
(b) Limited partnership
(c) Partnership at will
(d) Particular partnership

Question. A public company publishes and files its annual accounts and reports, as it helps company to maintain secrecy.       
(a) True
(b) False
(c) Can’t say
(d) Partially false

Question. …………. is the most important document as it defines the objectives of the company.     
(a) Articles of association
(b) Partnership deed
(c) Memorandum of association
(d) Incorporation certificate

Question. Identify the agreement on the basis of which Rishi gets his salary.     
(a) Partnership deed
(b) Memorandum of association
(c) Both (a) and (b)
(d) None of the above

Question. The shareholders do not have the right to be involved in the day-to-day functioning of the business. Which characteristic of company is highlighted here?     
(a) Risk bearing
(b) Common seal
(c) Liability
(d) Control

Question. …………….. clause contains the name of the company with which the company will be known, which has already been approved by the registrar of companies.   
(a) Name
(b) Registered office
(c) Objects
(d) Liability

Question. …………….is a type of business unit where a person is solely responsible for providing the capital.   
(a) Sole proprietorship
(b) Joint hindu family business
(c) Partnership
(d) Cooperative societies

Question. ………. clause defines the purpose for which the company is formed.     
(a) Name
(b) Registered office
(c) Objects
(d) Liability

Question. The board of directors enters into an agreement with others by indicating thecompany’s approval through a ………     
(a) risk bearing
(b) common seal
(c) liability
(d) control

Question. ……….. defines the rules regarding internal management of a company.     
(a) Articles of association
(b) Partnership deed
(c) Memorandum of association
(d) Certificate of incorporation

Question. Application for approval of name of a company is to be made to     
(a) SEBI
(b) Registrar of companies
(c) GOI
(d) State government in which company is registered

Question. The purpose of this study is to assess if the raw materials and technology required to pursue a particular business proposal are easily available.     
(a) Economic feasibility study
(b) Financial feasibility study
(c) Technical feasibility study
(d) None of the above

Question. The liability of all the co-parceners except the ……… is limited to their share in the business, and consequently their risk is well-defined and precise.   
(a) karta
(b) partners
(c) members
(d) shareholders

Question. The ………… is a conclusive evidence of the regularity of the incorporation of a company.       
(a) articles of association
(b) partnership deed
(c) memorandum of association
(d) certificate of incorporation

Question. The risk of loss gets spread over a large number of shareholders. Identify the feature of company highlighted here.       
(a) Risk bearing
(b) Common seal
(c) Liability
(d) Control

Question. At which stage in the formation of a company does it interact with the SEBI?   
(a) Promotion
(b) Incorporation
(c) Capital subscription
(d) Commencement

Question. Which of the following types of partners is Miss Jyoti?     
(a) Active partner
(b) Sleeping partner
(c) Secret partner
(d) Nominal partner

Question. The liability of a shareholders is limited to the extent of the amount …….. on the shares held by them.     
(a) paid
(b) unpaid
(c) re-paid
(d) None of the above

Match the following:

Question. Match the following on the basis of types of partners

(a) Do not participate in management	1. Active Partner
(b) Only name is available in partnership deed	2. Sleeping Partner
(c) Participates in management	3. Nominal Partner

Question. Match the following Act

(a) Indian Partnership Act	1. 1912
(b) Hindu Succession Act	2. 1932
(c) Indian Companies Act	3. 1956
(d) Co-operative societies Act	4. 2013

Question. Match the following

(a) Unlimited	1. Partnership business
(b) 200	2. Public Company
(c) 50	3. Private Company

Question. Match the columns on the basis of features of Joint Stock Co.

(a) Company aquires an identity of its own.	1. Control
(b) A co. can not breath, eat like a human being.	2. Separate legal entity
	3. Artificial person

One word Answer type Questions :

Question. Name any two documents which are filed with the Registrar of Companies for incorporation of a company. 
Answer. (a) Memorandum of Association. (b) Articles of Association.

Question. What does promotion stage of formation of a company involve? 
Answer. It involves discovering a business opportunity and taking appropriate steps to form a company.

Question. Which type of cooperative society is formed to protect the interests of consumers?
Answer. Consumers’ cooperative societies.

Question. Name the document which authorises a public company to start its business. 
Answer. Certificate of Commencement of Business.

Question. Who analyse the prospects of a business opportunity and brings together the various resources and managerial abilities to form a company? 
Answer. Promoter.

Question. What is minimum subscription? 
Answer. The minimum amount of application money which a company must receive before allotment of shares is called minimum subscription.

Question. Which document is called as charter or constitution of the company? 
Answer. Memorandum of Association.

Question. Name the document which contains the rules and regulations for the internal management of the company. 
Answer. Articles of Association (AoA).

Question. Name the document containing the rules and bye-laws of the company. 
Answer. Articles of Association.

Question. Name the business organisation which is not formed for making profits. 
Answer. Cooperative society.

Question. Which document of the company is practically an unalterable document? 
Answer. Memorandum of Association (MoA).

Question. Which clause of Memorandum of Association mentions the name of the state in which the registered office of the company is proposed to be situated. 
Answer. Registered office clause.

Question. Define Quorum.
Answer. Quorum means the minimum number of members present in a general meeting. In case of private company, Quorum-Two. In case of public company, Quorum-Five.

Question. Define Return of Allotment. 
Answer. The names and addresses of shareholders and the number of shares allotted to each is submitted to the Registrar of Companies within 30 days of allotment in a statement called return of allotment.

Question. Who manages and controls the affairs of the company? 
Answer. Board of Directors.

Question. A person forged the signatures of others on the Memorandum of Association. But the Registrar issued the ‘Certificate of Incorporation’. Was the registration of the company valid? 
Answer. Yes, the registration of the company was valid since the ‘Certificate of Incorporation’ is the conclusive proof of the legal existence of the company.

Question. Name the type of cooperative society established to help the small producers in selling their products. 
Answer. Marketing cooperative society.

We hope the above multiple choice questions for Class 11 Business Studies for Chapter 2 Forms of Business Organisation provided above with answers based on the latest syllabus and examination guidelines issued by CBSE, NCERT and KVS are really useful for you. Forms of Business Organisation is an important chapter in Class 11 as it provides very strong understanding about this topic. Students should go through the answers provided for the MCQs after they have themselves solved the questions. All MCQs have been provided with four options for the students to solve. These questions are really useful for benefit of class 11 students. Please go through these and let us know if you have any feedback in the comments section.