Free Nature and Forms of Business Organisation MCQs with Answers
30 Nature and Forms of Business Organisation MCQs from Introduction to Business, each with the correct answer and a written explanation of why it is correct. Free and unlimited, with no account needed.
Business organisation combines people, capital, materials and entrepreneurship to produce goods or services and earn profit, while also meeting customer and social needs. Coverage includes sole proprietorships, partnerships, companies and cooperatives, with comparisons of ownership, liability, control, profit sharing, continuity and legal status.
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30 questions · page 2 of 2
- A. Nominal partner
- B. Sleeping partner
- C. Minor partner
- D. Holding partner
Explanation: A sleeping partner contributes capital and shares in profits but remains inactive in daily management.
Correct answer: Sleeping partner- A. Particular partnership
- B. Limited partnership
- C. Partnership at will
- D. Registered partnership
Explanation: A partnership at will continues for an indefinite period until a partner gives notice of dissolution.
Correct answer: Partnership at will23. In a limited partnership, the liability of a limited partner is normally restricted to the amount:
- A. Withdrawn from the firm
- B. Approved by the court
- C. Earned as profit
- D. Invested in the firm
Explanation: A limited partner usually risks only the capital contributed to the partnership.
Correct answer: Invested in the firm- A. Shares
- B. Debts
- C. Reserves
- D. Partnership units
Explanation: Share capital is divided into units called shares, which represent ownership interests in the company.
Correct answer: Shares- A. Articles of association
- B. Memorandum of association
- C. Partnership deed
- D. Annual report
Explanation: The memorandum of association sets out the company’s basic constitution, including its objects and permitted scope.
Correct answer: Memorandum of association- A. Sole proprietorship
- B. Joint stock company
- C. Cooperative society
- D. Private partnership
Explanation: Cooperative societies generally follow democratic control, giving each member one vote regardless of the amount invested.
Correct answer: Cooperative society- A. Joint stock company
- B. Sole proprietorship
- C. Ordinary partnership
- D. Cooperative partnership
Explanation: Shareholders own the company, while the board of directors provides overall direction and supervision.
Correct answer: Joint stock company- A. Issuing shares to its members
- B. Inviting the general public to subscribe for its shares
- C. Maintaining a separate bank account
- D. Appointing directors to manage its affairs
Explanation: A private company raises capital privately and cannot make a general invitation to the public to subscribe for its shares.
Correct answer: Inviting the general public to subscribe for its shares- A. Retirement
- B. Insolvency
- C. Agreement
- D. Notice by one partner
Explanation: Partners may dissolve the firm by mutual agreement because the partnership relationship is based on consent.
Correct answer: Agreement- A. Holding company
- B. Public trading company
- C. Limited partnership
- D. Non-profit company
Explanation: A non-profit company is formed to advance stated social, charitable, educational or similar objectives rather than distribute profits to…
Correct answer: Non-profit company