case study based questions for class 11 business studies

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CBSE Sample Papers for Class 11 Business Studies with Solutions 2023-2024

Solved CBSE Sample Paper Class 11 Business Studies 2023-2024 with Solutions: Solving Pre Board CBSE Sample Papers for Class 11 Business Studies with Solutions Answers 2023-2024 Pdf Download helps to understand the pattern of questions asked in the board exam. Know about the important concepts to be prepared for CBSE Class 11 Business Studies board exam and Score More marks. Here we have given CBSE Class 11 Business Studies Sample Papers 2023.

Board  – Central Board of Secondary Education (CBSE) Subject – CBSE Class 11 Business Studies Year of Examination – 2023-2024

CBSE Sample Paper Class 11 Business Studies 2023-2024 with Solutions

According to the new CBSE Exam Pattern, MCQ Questions for Class 11 Business Studies also carry marks in the board exam. Click on the link below to access the CBSE Class 11 Business Studies Sample Paper 2023 Solved.

CBSE Class 11 Business Studies Sample Papers 2023 with Solutions

• CBSE Sample Papers for Class 11 Business Studies Set 1
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Business Studies Sample Paper Class 11 Question Paper Design 2023-24

We hope these CBSE Sample Papers for Class 11 Business Studies with Solutions 2023-2024 will help in self-evaluation. Stay tuned for further updates on the CBSE Sample Paper of Business Studies Class 11 2023 for their exam preparation.

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Business Studies Class 11 Important Questions with Answers Chapter Wise BST

February 17, 2021 by Veerendra

CBSE Class 11 Business Studies Chapter Wise Important Questions and Answers 2020: Here we are providing CBSE Important Extra Questions for Class 11 Business Studies Chapter Wise Pdf download of Part 1 Foundations of Business and Part 2 Corporate Organisation, Finance and Trade in Hindi and English Medium. Students can get Business Studies Class 11 NCERT Solutions , Business Studies Class 11 Important Extra Questions and Answers designed by subject expert teachers.

CBSE Class 11 Business Studies Important Extra Questions and Answers Chapter Wise Pdf

Business Studies BST Class 11 Important Questions with Answers Chapter Wise Pdf Part 1 Foundations of Business

• Chapter 1 Nature and Purpose of Business Class 11 Important Questions
• Chapter 2 Forms of Business Organisation Class 11 Important Questions
• Chapter 3 Private, Public and Global Enterprises Class 11 Important Questions
• Chapter 4 Business Services Class 11 Important Questions
• Chapter 5 Emerging Modes of Business Class 11 Important Questions
• Chapter 6 Social Responsibilities of Business and Business Ethics Class 11 Important Questions

Important Questions of Business Studies BST Class 11 Part 2 Corporate Organisation, Finance and Trade

• Chapter 7 Formation of a Company Class 11 Important Questions
• Chapter 8 Sources of Business Finance Class 11 Important Questions
• Chapter 9 Small Business and Entrepreneurship Class 11 Important Questions
• Chapter 10 Internal Trade Class 11 Important Questions
• Chapter 11 International Business Class 11 Important Questions

We hope the given CBSE Class 11 Business Studies Important Questions Chapter Wise Pdf download of Part 1 Foundations of Business and Part 2 Corporate Organisation, Finance and Trade in Hindi and English Medium will help you. If you have any queries regarding NCERT Business Studies Class 11 Extra Important Questions and Answers, drop a comment below and we will get back to you at the earliest.

FAQ’s on Business Studies Class 11 Important Questions

Question 1. Where do I get Class 11 Business Studies 1 Mark Questions?

Answer: Important Questions for Class 11 Business Studies are provided on Learninsta.com by the subject experts. Check out chapter-wise Business Studies Class 11 Important Questions and Answers and prepare well for the exam.

Question 2. How do I score 90 plus in Business Studies Class 11 CBSE?

Answer: Score 90 Plus marks in the Business Studies Class 11 CBSE by referring to previous papers. Also, preparation notes are given on our website for better preparation for the exams.

Question 3. How should I learn class 11 Business Studies concepts easily?

Answer: Note down all the concepts of Class 11 Business Studies and prepare notes with all the Important Questions and Answers. Check out Business Studies Class 11 Important Questions with Answers on Learninsta.com

Question 4. Where can I get the list of Business Studies Class 11 Important Questions?

Answer: Stay tuned to Learninsta.com to get Business Studies Class 11 Important Questions. We update every important question of Business Studies Class 11 according to the new syllabus.

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• Business Studies

Class 11 Business Studies Notes & Model Test Papers

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Cbse last year papers, user submitted papers,   mock tests, nature and purpose of business, forms of business organisations, public private and global enterprises, business services, emerging modes of business, social responsibility of business and business ethics, sources of business finance, small business and enterprises, internal trade, international trade.

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As we know business is something that sustains an economy. We are surrounded by a business world which makes it pertinent to have an operational knowledge of Business Studies. This subject is introduced in the plus-two level as an academic elective of the commerce stream. Students can access all valuable resources related to senior secondary Business Studies on the student’s best app myCBSEguide .

Study Material for CBSE Class 11 Business Studies

Knowledge of Business Studies gives a point of view of the business world and methods of interacting with the business environment. The senior secondary Business Studies curriculum develops an understanding of many social and ethical issues among the students. To prepare for this subject well, students can take the help of myCBSEguide where they can find the study material for Class 11 Business Studies. Right from the CBSE syllabus, NCERT textbook, Textbook Solutions, Revision Notes, Important Questions, online tests, test papers, learning videos, model question papers of class 11 Business Studies, etc. Our premium content has been trusted by millions of teachers and students alike.

CBSE Class 11 Business Studies Syllabus

The syllabus for CBSE Class 11 Business Studies prepares students to analyze and respond to the changes in the business world. The idea is based on the fact that business influences our social, political, and legal surroundings. Therefore the Business Studies syllabus attempts to keep the students up-to-date with the business market. The table below names the chapters included in the class 11 Business Studies syllabus for the current session. Knowing the syllabus right is the first step in beginning your preparation. To get more details about the topics of the mentioned units click on CBSE Class 11 Business Studies-syllabus 2022-23 .

Class 11 Business Studies NCERT Solutions & Important Questions

As we know NCERT solutions are very important while preparing for the CBSE examination. These questions give an outline of the basic types and formats of questions that are probable. Knowing the NCERT textbook solution is a must for every CBSE student. Sometimes, the final board examination question paper is completely based on the NCERT. You can download the NCERT solutions for Class 11 Business Studies on the myCBSEguide mobile app .

We also get some important questions prepared by experienced teachers from significant sections of each chapter. These questions can be found under the extra questions or important questions section of our student dashboard . To know the important questions for Class 11 Business Studies, check out our course content now.

Class 11 Business Studies Sample Papers

Sample papers are the best tool to prepare for the final examination. The sample papers available on myCBSEguide are the true copy of the latest CBSE sample papers with the same blueprint and Marking Scheme. We have a team of experts who do a detailed analysis of the Business Studies question paper to prepare the model question papers provided by us. It is one of our most valued and marketed products. The best part is, we prefer to abide by the latest CBSE syllabus and guidelines for examination (if any). Therefore, students get huge benefits from our sample papers which are reflected on their mark sheets. You can check the details of Class 11 Business Studies Sample Paper 2023 from the app or website and download the same. At the senior secondary level, students need to be more attentive and serious towards their preparation and so they should not miss out the solving sample papers before writing their final papers.

Class 11 Business Studies Test Papers & Mock Tests

Students can also find chapter-based test papers for class 11 Business Studies on the dashboard. These test papers are a good tool for the formative learning process. The sample papers can be accessed after the CBSE releases its official sample paper. But test papers can be used at any point in time.

We also provide online tests for Class 11 Business Studies. These tests are good for objective types of questions like MCQs or one-word answers. Before the final examination, we also arrange for mock tests and test series for core CBSE subjects. Registered students are notified about these tests.

This year CBSE has already released its practice papers, check them on Practice Paper 2023 Class 11 Business Studies question papers are also available here.

Class 11 Business Studies Case Study Questions

Being a subject of profession Business Studies have a huge scope of presenting real-life situational questions. Hence, senior secondary Business Studies students need good practice with these types of questions.

According to the new education policy , competency-based education is promoted. With this aim, case-based questions were introduced last year. These types of questions are designed to hone the analytical thinking of the students and apply the knowledge and technique that they have acquired in the due course in solving real-life situation-based questions. It enhances the rational thinking of the learners and they eventually gain a critical and analytical understanding of the subject. We have best case study questions for Class 11 Business Studies. You may find many such questions in publication books, but we have an assortment of Business Studies CBQs which require the application of key business concepts covering all important topics. Check the link for Class 11 Business Studies Case-Studies Questions .

Class 11 Business Studies Case Study Sample Question

OLX and qickr are examples of well-known websites used to conduct business. Tarasha’s sofa set got spoiled in the rain. Her friend suggested that she should change the fabric so that it looks new and put it for sale on Olx. Tarasha followed her friend’s advice and got her sofa repaired so that it looked better and uploaded nicely clicked pictures on the website without disclosing the fact that it was damaged from the inside. She found a buyer and sold it for Rs 10,000. After five days the buyer found the real state of the sofa set and called Tarasha but she did not answer any of the calls.

• identify the type of business highlighted in the above case.
• Identify any two values which are overlooked by Tarasha.
• Explain any two benefits and limitations of e-business.

A well-furnished course plan of preparation is a must if you plan to shine in your exams. We have been assisting students in their learning process through our reliable content for a decade. We are a one-stop platform where you can get literally everything (for Class 11 Business Studies (be its textbook, syllabus, revision notes, or model question papers and mock tests. To get study material in other classes and subjects check our CBSE module . From the google play store download the myCBSEguide app now.

CBSE Class 11 Business Studies Case Study Questions are available on myCBSEguide App. You can also download them from our student dashboard. For students appearing for grade 11 CBSE exams from the Commerce stream, Business Studies is a fundamental subject. Business Studies is considered to be quite interesting as well …

CBSE Class 11 Business Studies Syllabus 2022-23

CBSE Class 11 Business Studies Syllabus 2022-23 includes Nature and Purpose of Business, Forms of Business Organisations, Public, Private and Global Enterprises, Emerging Modes of Business etc for the session 2022 – 2023. Here is the detailed syllabus. To download class 11 Business Studies CBSE latest sample question papers for …

CBSE to Conduct Two Term Exams in 2021-22

CBSE has issued a circular on 5th July 2021 regarding the Special Scheme of Assessment for Board Examination Classes X and XII for the Session 2021-22. Here is the complete text of the circular. COVID 19 pandemic caused almost all CBSE schools to function in a virtual mode for the …

CBSE Class-11 New Stream Selection Rules

The New Education Policy-2020 has suggested eliminating rigid stream selection rules. We know that there are three streams in class 11 and the choices to select subjects are limited. Students have to select subjects within the stream only. Thus, if you are taking Science Stream, you have no option to …

CBSE Syllabus 2021-22 Released

The syllabus for the session 2021-22 has been released by CBSE, New Delhi. It is available on the myCBSEguide App and CBSE official Website for free download. Here are some important points to note: The syllabus is almost similar to last year without 30% reduction. There are some minor changes …

CBSE Reduced Syllabus by 30% for Session 2020-21

CBSE, New Delhi has reduced the syllabus for classes 9 to 12 by 30%. The CBSE Revised Syllabus 2020-21 is available in CBSE official website and myCBSEguide mobile app. Here is the complete circular regarding CBSE Revised Syllabus 2020-21: CBSE Reduced the Syllabus The prevailing health emergency in the country …

Create CBSE Question Papers Online

Creating question papers online is easy. You can create question papers online with your name and logo in minutes. So, why to waste time consulting many books and finding suitable questions. Just log in to myCBSEguide Test Generator here and create question papers online. Follow 3 simple steps: Select your …

CBSE Syllabus for Class 11 Business Studies 2019-20

CBSE Syllabus for Class 11 Business Studies 2019-20 contains all the topics of this session. myCBSEguide provides you latest Syllabus for Class 11 Business Studies. The study of business is about how individuals and groups of people organize, plan, and act to create and develop goods and services to satisfy …

CBSE Released Syllabus for 2019-20

CBSE syllabus for 2019-20 is now available for download in CBSE official website and myCBSEguide Mobile App. The new syllabus for 2019 and exams to be held in March 2020. CBSE 2019-20 syllabus for March 2020 examination is released by CBSE, New Delhi. CBSE class 10 Syllabus for 2019 and …

Revision Notes of Class 11 Business Studies

Revision Notes of for Class 11 Business Studies in PDF are available for free download in myCBSEguide mobile app. The best app for CBSE students now provides class 11 Notes latest chapter wise notes for quick preparation of CBSE exams and school-based annual examinations. Class 11 Business Studies notes are …

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Business Studies Class 11 Chapter 2 Important Questions and Answers

Home » CBSE » Business Studies Class 11 Chapter 2 Important Questions and Answers

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Business Studies is a subject taught in a Commerce student’s syllabus beginning in Class 11 and continuing through Class 12. Students will master an understanding of the area of management and other business disciplines if they study this subject. Forms of Business Organisation is the second chapter of the Class 11 syllabus, and it teaches about different forms of Business. This chapter covers concepts such as various forms of business organisation, features, merits, and demerits, and factors determining the appropriate form of business organisation. It carries significant weightage in the Business Studies syllabus. Students can easily access all this and more on the Extramarks website.

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Students must read through all the chapters to score well in Business Studies. Extramarks understands the importance of solving questions. As a result, we’ve gathered them from various sources, such as the NCERT Textbook, NCERT Exemplar, other reference books, past exam papers, and so on. Our Business Studies experts have curated step-by-step solutions to help students better comprehend the topics. Students can register with Extramarks and access Important Questions Class 11 Business Studies Chapter 2. 

Apart from Chapter 2 Class 11 Business Studies Important Questions, there is so much that the Extramarks website has to offer. Students can easily find materials like NCERT Solutions, CBSE revision notes , past year question papers, NCERT books, and more on the Extramarks website.

Get Access to CBSE Class 11 Business Studies Important Questions 2022-23 with Solutions

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A team of Extramarks specialists have developed an entire list of Business Studies Class 11 Chapter 2 Important Questions taking cues from numerous sources. The questions comprise a wide variety of topics, including the different forms of business organisation, features, merits, and demerits of business organisation, factors determining the appropriate form of business organisation, and so on. These questions and their solutions help students better comprehend Forms of Business Organisations.

Mentioned below are a few Important Questions from Class 11 Business Studies Chapter 2 and their solutions:

Q1. What are the important privileges available to a private company?

Answer: When a business is formed as a private corporation, it has several advantages and exemptions that are not accessible to public companies. Some of the main benefits that a private corporation has are as follows:

• A private business can be formed with as few as two members, but a public corporation requires seven.
• In private business the public is not asked to subscribe to company’s shares and hence a prospectus is unnecessary.
• Shares can be distributed without a minimum subscription requirement.
• A private company can start operating as soon as it receives its establishment certificate. On the other hand, the public company must wait until it gets the starting certificate before it may begin operations.
• A private company only needs two directors, but a public company requires at least three.
• A member index is not necessary for a private organisation but is required for a public corporation.

Q2. With a notable example, explain mutual agency in partnership.

Answer: Mutual agency refers to the legal connection between participants in a partnership who have authorization powers and the authority to engage the collaboration in business contracts. In another way, each partnership member has the authority to make business choices that commit or bind the entire partnership to a commercial contract with a third party or entity. For example, even if the partnership agreement prohibits it, a grocery store partner who acquires a delivery truck in the partnership’s name enters a legally enforceable transaction. On the other hand, such behaviour would be unlawful if a law firm partner purchased a snowmobile for the firm.

Q3. What is meant by “partner by estoppel”? Explain.

Answer: A person who shows others that they are a company partner via their actions, behaviour, or statements, is referred to as Partner by estoppel. Such a person is not a partner, and they are not responsible for providing any cash to the company, nor are they accountable for any  portion of the company’s profit or loss. The same individual, however, may be held accountable for the firm’s debts. Hence, as a result, if the Business has adequate assets or finances, debt repayment can be obtained by selling off the partner’s private assets via estoppel.

Q4. What exactly is HUF?

Answer: Although the Income Tax Act does not define the Hindu Undivided Family (HUF), it is recognised under Hindu law. Unmarried daughters are included in the HUF, as are all those who are lineally settled from the same ancestor. A person does not create HUF but by a family’s standing, i.e., it is created automatically in any Hindu household.

Q5. Why do some consider partnership a relatively unpopular form of business ownership? Explain the merits and limitations of partnership.

Answer: A partnership is viewed as a relatively unattractive sort of company ownership due to the inherent limitations that come with it. These limits include infinite responsibility, limited resources, the possibility of conflict, and a lack of consistency.

• Ease of closure and creation: A partnership business can be established rapidly by agreement amongst potential partners. A company doesn’t need to be registered.
• Balance decision-making: The partners might manage various responsibilities depending on their expertise. As a result, the decision-making process in a partnership business is more balanced than in any other kind of corporate ownership.
• A large amount of funds: Each partner in a partnership provides a certain amount of money. Consequently, compared to a single owner, it is feasible to collect a more considerable sum of cash and carry out additional activities as needed.
• Confidentiality: There is no legal requirement for a partnership business to publish its financial accounts or submit reports. As a result, it may maintain secrecy regarding its operations.
• Sharing the risk: The risks that come with running a partnership business are shared by all partners. As a result, individual partners experience less worry, tension, and stress.

Limitations of business partnership:

• Restricted Resources: Capital investment contributions are frequently insufficient to sustain large-scale commercial activity due to the limited number of partners. As a result, partnership firms struggle to expand beyond a particular scale.
• Conflicts of Interest: The decision-making authority in a partnership business is distributed among the partners. This is also dependent on their level of competence, foresight, and ability.
• Unlimited liability: Partners are accountable for repaying debts from their assets if the Business’s assets are insufficient to fulfil its obligations.
• Lack of continuity: When one of the partners dies, retires, becomes bankrupt, or becomes mad, the partnership comes to an end. On the other side, the surviving partners might enter into a new agreement and continue to run the business.

Q6. In what form of Business do individuals associate freely for profit, with capital dividends into transferable shares, and ownership of which is a requirement of membership? Explain in terms of characteristics.

Answer. A joint-stock company is a non-profit organisation formed by a group of people to do profitable economic activities. It has a legal status distinct from its members and a capital structure separated into transferable shares. A corporation is an independent legal entity with its legal identity, perpetual succession, and a common seal. In a corporation, the shareholders are the company’s owners, and the Board of Directors, which the shareholders elect, is the company’s central management body.

The company’s capital is divided into smaller components known as “shares,” which can be freely transferred from one shareholder to the next (except in a private company). A joint-stock firm has the following characteristics:

• A corporation is a made-up entity. It is a legal entity that exists without the participation of its members.
•  The legal personality of a corporation is established. The law does not regard the Business and its owners as the same.
• Starting a business is a time-consuming, costly, and challenging endeavour. Therefore, incorporation is required for all enterprises.
• It will only be deactivated after completing a specialised operation known as winding up. Members may come and go, but the firm does not cease to exist.
• A company’s common seal may or may not exist.
• All shareholders share the risk of a company’s losses.

Q7. Even though there are limitations of size and resources, several people continue to prefer sole proprietorship compared to other forms of organisation? Why?

Answer: Due to the numerous sheer benefits, it provides despite the size and resource limits. The sole proprietorship is the company’s form of choice. The following are some of the advantages:

• A single proprietorship firm is simple to set up since there are few legal requirements. Similarly, closing a firm is a painless process.
• The sole owner controls the firm as the only decision-maker, allowing for swift choices.
• The sole proprietor enjoys all the Business’s gains while bearing all its misfortunes.
• Because the lone proprietor is the only person in charge of the business, it is highly flexible.

Q8. Which business model is best for the following businesses, and why?

• Coaching centre for the students of science subject
• A beauty salon
• A shopping centre
• Little repair shops

Answer. The suitable business model for the businesses as mentioned earlier would be:

• Coaching center for the students of science subject: Collaboration with a science coaching facility. It’s simple to set up and run, and it’s inexpensive. Partners report their share of profit or loss on their tax returns.
• A beauty salon: A salon can be run as a sole proprietorship. Created and ran straightforwardly and cost-effectively. The owner declares profit or loss on their tax return.
• A shopping center: shopping malls are JSCs (joint-stock corporations). Personal responsibility for commercial debts is restricted for business owners.
• Hotel: In the hotel industry, there are joint-stock companies. Small businesses are drawn to LLCs and corporations because they minimize their owners’ liability for corporate debts and court judgments against the company. Another factor to consider is income taxes: you may set up a limited liability company (LLC) or a corporation to benefit from reduced tax rates. Furthermore, an LLC or company may be able to deduct the cost of a range of fringe benefits passed on to its employees (including the owners) as a business expense.
• A little repair shop: A sole proprietorship is appropriate for a small repair shop. Created and ran straightforwardly and cost-effectively. The owner declares profit or loss on their tax return.
• Restaurant: Ownership of a restaurant as a sole proprietor. Created and ran straightforwardly and cost-effectively. The owner declares profit or loss on their tax return.

Q9. How does a cooperative society exemplify democracy and secularism? Explain.

Answer: A cooperative society is run by persons chosen by all members through a democratic process. Each member has an equal right to vote, regardless of the amount of money they have invested. As a result, it functions as a democracy in which all members are treated equally and have similar rights. Members are not discriminated against because of their caste, religion, or gender. People of the management committee can select the members they believe best represent them. As a result, it denotes secularism.

Q10. What does it mean to have unlimited liability?

Answer: General partners and sole proprietors with unlimited liability are jointly and severally liable for the company’s debts and obligations. However, this obligation is not limited and can be paid off by seizing the owners’ assets, distinguishing it from limited liability partnerships.

Q11. Compare the status of a minor in a Hindu joint family business with that in a partnership firm.

Answer: A person under 18 is considered a minor in Indian law. By being born into a Joint Hindu household, a minor becomes a member of the family company. Like other family members, the minor has equal ownership and rights to the property and company. However, his obligation is limited to his part of the property.

As per the Indian Partnership Act of 1932, a minor cannot become a partner in a partnership business. However, if all partners agree, a minor can be initiated and partake in a firm’s profits. Still, a minor does not need to contribute capital or carry any obligation if the Business supports the firm. Therefore, minors aren’t regarded as partners. However, once they reach the age of 18, they have the option of continuing the relationship or terminating it.

Q12. Who has equal ownership rights to an ancestor’s property? Emphasise its most important aspects

Answer: A Joint Hindu Family is a form of business owned and operated by members of the Hindu Undivided Family (HUF). The company’s membership is based on birth in a specific family, and three generations of the same family can be members. The family’s business is run by the eldest member of the family, known as Karta. Joint Hindu Family Business members with equal ownership rights over an ancestor’s property are known as coparceners.

A combined Hindu family company has the following characteristics:

• Because membership is by birth, there is no requirement for an agreement.
• Except for the Karta, all members are only responsible for their portion of the Business’s co-coparcenary property. The Karta’s responsibility is boundless.
• Karta oversees the family company, and his choices bind everyone.
• After Karta’s death, the business is carried on by the next eldest son, Karta.

Q13. Why is it important to choose an appropriate form of organisation? Discuss the factors that determine the choice of form of organisation.

Answer: Choosing an appropriate business organisation is necessary since it is one of the most important decisions to make when beginning a business or expanding an existing one. A business can be owned and run in several ways. It’s challenging to modify a company model after it’s been decided. As a result, the type of business company chosen should be done with care and consideration.

The following factors influence organisational structure selection:

• Control: With a sole proprietorship, you have complete control over your operations and decision-making authority. If the owners, on the other hand, want to share ownership to make better judgments, they can form a partnership or a corporation.
• Nature of Business: Businesses that involve direct personal connection with customers, such as beauty salons or grocery stores, are better suited to a single proprietorship. The corporate kind of structure benefits large manufacturing units. The partnership structure is significantly more served in the case of professional services.
• Management Skills: Being informed in all firm parts is difficult for a sole owner. Members split their labour in other organisations, such as partnerships and businesses, allowing management to specialise in specific areas and make better judgments.
• Capital Requirements: The corporation form is suitable for large-scale activity since it may generate a large amount of money by issuing shares. There are two options for medium and small firms: partnership or sole proprietorship. In the framework of a company, expansion capital requirements may be managed more easily.
• Continuity: The continuity of sole proprietorship and partnership enterprises can be disrupted by events such as the owners’ death, insolvency, or insanity. In organisations like joint Hindu family companies, cooperative societies, and corporations, such factors, on the other hand, have minimal influence on the business’s survival.
• Liability: The liability of the owners/partners of a sole proprietorship or partnership is unlimited. This might lead to the owners’ assets being used to repay the debt.
• Cost and Convenience of Starting a Company: A sole proprietorship is straightforward to start in terms of initial business costs and legal procedures, but because of its more minor activities, a partnership has the advantage of less legal formalities and lower prices. Registration is necessary in the case of cooperative societies and companies. The process of founding a company takes time and money.

Q14. What are the reasons for the formation of cooperative forms of organisation? Describe the different sorts of cooperative societies.

Answer. A cooperative society is a collection of individuals who get together voluntarily for the common welfare of its members. They are motivated by a desire to defend their economic interests from potential exploitation by intermediaries looking to increase their profits. The process of founding a cooperative organisation is simple, and all that is necessary is the agreement of at least ten adults. A society’s capital is raised by selling shares to its members. An organisation acquires a distinct legal character when it is registered.

One sort of cooperative society is the consumer cooperative society.

• It was designed to protect consumers’ interests.
• To improve operational savings, society strives to eliminate intermediaries. Instead, it purchases things in bulk from wholesalers and resells them to its members.
• Profits are dispersed depending on capital contributions to the organisation or purchases made by individual members.

Producer Cooperative Societies are a specific sort of producer cooperative society.

• It was established to protect the interests of small farmers.
• Members are producers looking for inputs to create commodities to fulfil customer demands.
• Profits are distributed according to their contributions to the society’s overall pool of products produced or sold.

Cooperative Societies Marketing-this organisation was established to help small manufacturers market their products.

• Producers that demand fair pricing for their commodities are among the group’s members.
• It combines individual members’ production and marketing activities such as shipping, storage, and packaging to sell the commodities for the best feasible price. Profits are dispersed according to the amount of money each member puts in.

Farmers’ Cooperative Societies were formed to protect farmers’ interests by providing high-quality inputs at a reasonable price.

• Members are farmers who want to collaborate on farming projects.
• The idea is to increase productivity while reaping the benefits of large-scale farming. Improving farmer output and returns while addressing challenges associated with farming on fragmented land holdings.

Cooperative Financing Societies were established to give members timely credit at reasonable rates.

• Members are individuals seeking financial assistance in the form of loans.
• The purpose of such groups is to protect members from being taken advantage of by lenders who demand high-interest rates on loans.

A cooperative housing organisation is a sort of Cooperative Housing Societies.

• It was established to assist low-income people in constructing homes at a reasonable cost.
• These societies are people looking for a cheaper location to reside in.
• The purpose is to alleviate members’ housing issues by constructing homes and allowing them to pay in instalments.

Q15. If registration is optional, why do partnership firms willingly go through this legal formality and register themselves? Explain.

Answer: Although partnership business registration is optional, many firms choose to do so. This is owing to the severe legal consequences of failing to register. Listed below are a few examples:

• The partners of a non-registered business cannot sue a third party, but the non-registration of a partnership firm does not prevent other firms from hiring it.
• The company is forbidden from filing a lawsuit against any of its partners. Similarly, a partner in a non-registered firm cannot sue their co-partners or the company.
• Claims against a third party by a non-registered partnership entity cannot be enforced in court. As a result, partnerships are established to overcome these disadvantages.

Forms of Business Organisation Class 11 Important Questions – Key Topics Covered 

Class 11 Business Studies Chapter 2 Important Questions covers the following key topics:

Forms of business organizations

There are several different types of business organizations from which to choose:

• Sole proprietorship 

Joint Hindu family business

• Partnership 
• Cooperative societies

Joint-stock company

Sole Proprietorship

It is a type of Business owned, managed, and controlled by a single person who carries all the risks and reaps all the rewards.

• It can be formed and disbanded without the need for any legal requirements.
• In this business organisation, the lone proprietor’s responsibility is unrestricted.
• As the single risk carrier and profit recipient, he bears all the risks and reaps all the rewards.
• There is no distinction between the owner and the Business in the eyes of the law.
• All choices must be made by the owner, which necessitates prompt decision-making.
• As a lone proprietor, it is simple to keep company secrets.
• Because there is no one to share gains with, the owner enjoys all the profits.
• There are no legal requirements for establishing and closing a business, making creating and completing one simple.

Limitations:

• The owner’s savings or money borrowed from friends and family might be used to support the Business.
• A business’s life expectancy is limited as it is dependent on the owner’s health and mental state.
• His assets are at stake if the firm fails to satisfy its debts.
• A single individual may not be able to oversee all of the functions.

It is a type of business that is owned and managed by members of an undivided Hindu family, with three generations of family members potentially participating.

• Hindu Undivided Families are created when at least two family members have ancestral property. The Hindu Succession Act of 1956 governs it.
• Except for the Karta, all family members have limited responsibility for their part of the company property.
• Karta oversees all actions inside the corporate organisation.
• It can be stopped if all members of the family agree to it.
• Organisation membership is based on birth.
• With ‘Karta,’ you have complete control over your firm and can make better decisions.
• If ‘Karta’ dies, the Business continues until all members desire to continue, and then control is given to the next eldest member.
• Family members are only liable for their share of the business party.
• Because family members feel connected and loyal, they work together to achieve a common goal of progress.
• Businesses might be supported primarily via inheritance, restricting financial resources.
• Karta’s personal property is at risk due to his unlimited liability.
• Differences of opinion among members and the ‘Karta’ might lead to conflict.
• Karta’s managerial abilities are limited, and he may not be familiar with all of the Business’s functions.

Partnership:

According to the Partnership Act of 1932, a partnership is a relationship between people who have agreed to share the earnings of a firm run by all or by one acting on behalf of all of them.

• The partnership Act of 1932 governs the establishment of the Business.
• The liability of all company partners is unlimited.
• All the partners share the risk in the Business.
• All decisions are made with the approval of all partners, and each partner bears responsibility for the company’s day-to-day operations.
• Because registration is optional, a business can be formed and ended with the approval of all partners.
• As partners take on tasks according to their competence, all choices are made by consensual partners.
• All partners contribute money, broadening the scope of large-scale company operations.
• There is no need to report financial results; therefore, maintaining corporate secrets is simple.
• Their complete responsibility covers each partner’s personal property.
• All parties may have differing viewpoints, which can lead to conflict.
• Any disagreement between partners or the death of a partner might put the company out of operation.
• Due to a lack of financial disclosures, an outsider can’t determine the actual economic situation.

Cooperative society

An organisation of volunteers working for a shared goal to protect members’ economic and social interests. The Cooperative Societies Act of 1912 requires it to be registered.

• Any individual with a shared interest, regardless of caste, gender, or religion, is free to join or leave a cooperative organisation at any time.
• A cooperative society has a different identity from its members, and the registration of such a group is required.
• The goal of forming a society is to provide mutual assistance to team members.
• Each member has the same right to vote and elect managing committee members.
• Cooperative societies maintain their existence in the face of death, bankruptcy, or insanity among their members.
• Members of society work willingly, which helps to save expenses.
• The only funding source is the member’s capital contribution, and the low dividend discourages members from contributing money to the organisation.
• Volunteer members may lack the requisite competence and skills, resulting in inefficient operations and management.
• It’s challenging to preserve secrets since members provide all information about the society’s operations at the meeting.

“A corporation is an artificial person with a separate legal existence, eternal succession, and a common seal,” according to the Companies Act of 2013.

• A corporation is a legal entity with legal standing but does not act as humans do. The board of directors conducts all corporate actions in the corporation’s name.
• Companies are founded following the legal requirements outlined in the Companies Act of 2013.
• A corporation is formed by law and may only be disbanded by legislation. Therefore, the company’s existence is unaffected by the status of its members.
• The responsibility of shareholders is limited to their investment in the firm. Therefore, there is no chance of personal assets being lost.
• The firm’s existence is unaffected by its stockholders’ status; it continues to exist.
• Companies can borrow vast sums of money from financial institutions or banks and solicit cash from the public.
• The formation of a corporation necessitates the completion of several documents and legal requirements, making the process lengthy and complicated.
• There is no confidentiality or secrecy because all financial information is given to the general public.
• Decision-making must adhere to a hierarchy, leading to delays in making judgments and implementing actions.

Choice of the Type of Business organisation

• Nature of Business
• Cost of setting up the organisation
• Capital consideration
• Degree of control
• Management ability

The briefly described topics in the above sections are covered in the Important Questions Class 11 Business Studies Chapter 2. 

Benefits of Solving Class 11 Business Studies Chapter 2 Important Questions

Business Studies is one subject that requires a lot of reading and revisions. This subject is introduced in Class 11, and it prepares the base for Class 12 board examinations. Therefore, students are advised to access Important Questions of Business Studies Class 11 Chapter 2 . Students will get a sense of confidence by solving essential questions from all the chapters and overlooking their solutions. 

Mentioning below are some benefits of solving Important Questions Class 11 Business Studies Chapter 2:

• Students will benefit from practising questions similar to exam questions to do better in their examinations and earn high grades.
• The questions and answers follow CBSE criteria and are based on the most recent CBSE syllabus . As a result, students can rely on them.
• These important questions are prepared by following the exam writing pattern. Therefore, going through these will help students prepare for exams too.

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Q.1 The North Coast Cooperative that was Established in 1973 was the large consumer cooperative that offered a full service grocery store and deli. Director started to deal with bulk purchasing and packaging issues. Many people in the college-campus area wanted a supply of natural food products, which didnt exist. They wanted a cheaper, more reliable supply if they purchased togetherin bulk.

From the start, the co-op tried to provide a market for local produce. Initially, the farmers provided a fairly limited variety, mostly tomatoes, sweet corn, zucchini and other common garden vegetables. The co-op uses purchasing contracts, which act as a type of insurance to motivate farmers to produce new and different varieties

Explain the type of cooperative society that is refered to here. Also give three points to support the formation of such a form of business enterprise.

Marks: 1 Ans

This is a consumer cooperative society. These are formed to protect the interests of consumers. Members are consumers who want to get good quality products at reasonable prices. The society aims at eliminating middlemen for economy in operations.

Society purchases goods in bulk directly from the wholesalers and sells goods to the members directly.

Profits are distributed on the basis of either their capital contributions to the society or purchases made by individual members.

Merits of cooperative form of organisation are:

(i) Equal voting status: There is a principle of ‘one man one vote’ i.e., irrespective of the capital contribution by a member, each member is entitled to equal voting rights.

(ii) Limited liability: As the liability of members of a cooperative society is limited to the extent of their capital contribution, their personal assets of the members are safe from being used to repay business debts.

(iii) Stability: Death, bankruptcy or insanity of the members do not affect continuity of a cooperative Society i.e., it remains unaffected by any change in the membership.

(iv) Economy in operations: Focus of society is on elimination of middlemen which helps in reducing costs.

(v) Government support: Cooperative society exemplifies the idea of democracy and hence Government supports in the form of low taxes, subsidies, and low interest rates on loans.

(vi) Ease of formation: It can be started with a minimum of ten members and registration procedure is simple with few legal formalities.

Q.2 A friends group of a hotel management institute wants to start their own catering house that will serve parties, weddings, church functions and business events. All 4 of them are very good cooks and have managed the university parties very well. They want to start and see that how this business works with contributing small small savings initially.

What form of business organisation shall they form with limited funds

Looking at their conditions and case, the friends shall form a partnership initially. Partnership offers the advantage of less legal formalities and lower cost because of limited scale of operations.

After being successful, this partnership can take form of any other form of business organisation based on the decisions of partners.

Q.3 Karan is the sole owner of a shoe manufacturing factory. He took loan of `30 lakhs from a bank so as to expand his business further. However, he incurred losses in the business, due to which Karan was not able to pay the loan on time and his assets were also not sufficient enough repay back the loan. As a result, the bank asked him for repayment of loan, but he refused to pay on the ground that the loan was taken in the name of business and not for personal use. The bank file a case against Karan and the court gave the decision in favor of Bank on the on the basis that Karan is the sole proprietor and his business doesnt have separate identity from his own. The Court further stated that Karan is liable to repay the loan even by selling his personal property.

State the demerits of the business organisation being highlighted in the above case.

Marks: 6 Ans

The form of business organisation being highlighted above is Sole proprietorship.

Demerits of Sole proprietorship

• Limited life: Death, insolvency or illness of proprietor affects the business and may even lead to its closure as he/she is the sole owner of the business.
• Unlimited liability: Owner has unlimited liability. In case of business failure, creditors can recover their dues not only from the business assets, but also from the personal assets of proprietor. It makes the sole proprietor less inclined towards taking risks in the form of innovation or expansion
• Limited resources: Resources are limited to his/her personal savings or borrowing from other parties. Banks and other financial institutions might hesitate in lending long term loan to the sole proprietor. Size of the business rarely grows much and generally remains small due to lack of resources.
• Limited Managerial Ability: The proprietor has to assume responsibility of varied managerial tasks. Since a business owner may not be a specialist in every field, there is a possibility of unbalanced decision making. Moreover, proprietor may not be able to employ and retain talented and ambitious employees, due to limited resources.

Q.4 A private company is superior to a public company. Discuss this statement in the light of privileges of a private company.

Privileges of a private limited company as against a public limited company:i. A private company can be formed only by two members, whereas seven persons are needed to form a public company. ii. There is no need to issue a prospectus as public is not invited to subscribe to the shares of a private company. iii. Allotment of shares can be done without receiving the minimum subscription. iv. A private company can start business as soon as it obtains the certificate of incorporation, whereas a public company can start its business only after receiving the certificate of commencement of the business. v. A private company needs to have only two directors as against the minimum of three directors in case of a public company. vi. A private company is not required to keep an index of members, while it is necessary in case of a public company.

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Cbse class 11 business studies important questions, chapter 1 - business, trade and commerce.

Chapter 3 - Private, Public and Global Enterprises

Chapter 4 - business services, chapter 5 - emerging modes of business, chapter 6 - social responsibilities of business and business ethics, chapter 7 - formation of a company, chapter 8 - sources of business finance, chapter 9 - small business, chapter 10 - internal trade, chapter 11 - international business, faqs (frequently asked questions), 1. how many business studies books are there for class 11.

For Class 11 Business Studies, the Central Board of Secondary Education (CBSE) only recommends one book. Therefore, the National Council of Educational Research and Training (NCERT) has released this book, which is available in both English and Hindi. This book is broken into two sections and has ten chapters. Part A comprises six units that address business foundation information, while part B contains the remaining four units that discuss financial and trade knowledge.

2. What are the essential chapters in Business Studies in Class 11?

There are ten chapters in the Business Studies syllabus for Class 11. Chapter 7 – Sources of Business Finance, Chapter 8 – Small Business, Chapter 9 – Internal Trade, and Chapter 10 – International Business are the most significant. It is so because they have a greater weight than the rest of the syllabus. Students can refer to Important Questions Class 11 Business Studies Chapter 2 for easier comprehension of these chapters.

3. What is so special about Important Questions Class 11 Business Studies Chapter 2 that it makes Extramarks stand out from the rest?

 These Important Questions Class 11 Business Studies Chapter 2 are developed exclusively by the Extramarks subject experts. These solutions are 100 percent authentic and have been made after much research. They cover the concepts of the entire chapter and are written in simple and easy language.

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Class 11th Business Studies - Business Service Case Study Questions and Answers 2022 - 2023

By QB365 on 09 Sep, 2022

QB365 provides a detailed and simple solution for every Possible Case Study Questions in Class 11 Business Studies Subject - Business Service, CBSE. It will help Students to get more practice questions, Students can Practice these question papers in addition to score best marks.

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Business service case study questions with answer key.

11th Standard CBSE

Final Semester - June 2015

Business Studies

Demonetization in India led to the need for cashless economy. It had a great impact on banking industry. Banks were overflowing with old currency on the one hand and were in cash crisis for new currency. Gradually the problem smoothened but now a hawker and peddler are accepting Paytm, mpesa and other forms of digital cash. Promotion of "mera mobile mera batuaa" concept motivated even the cobbler, hair cutters, vegetable and fruit vendors and other small service providers to accept digital cash and cashless forms. Popularity of plastic money (debit and credit cards) also increased. (a) In the light of above facts, discuss the importance of banking in business and trade. (b) How will demonetization create new aids to trade?

Sanjana obtained a life insurance policy of her husband. After 5 years, her husband dies of cancer. At the time of policy also Sanjana and her husband were aware of the disease but they did not disclose it to the insurance company. (a) Can she claim the amount of policy from the insurance company? (b) Identify the principle of insurance involved. (c) Explain two more principles of insurance.

A person gets his house insured, but he hides the fact that he stores petrol in his house. His house catches fire. He does not bother to minimize the loss as he felt that his house is insured so it is not his headache to make an effort to minimize the loss. (a) Can he claim compensation? (b) State the name of principles involved. (c) Explain these principles.

Mr. X applied for a loan from State Bank of India to expand his shop under Pradhan Mantri Mudra Yojna. Later he purchased a home by taking a home loan from bank. Then he purchased a car on EMI financed by a bank. He also has a saving account with the bank. All his EMIs are getting deducted from his saving account. He has also taken a locker facility from the bank where he keeps his important documents and valuables. (a) Identify primary functions of commercial bank that Mr. X is availing of. (b) Identify agency functions of commercial bank Mr. X is availing of. (c) Identify general utility functions of commercial bank Mr. X is availing of.

One fine day, government announced some policy which was against the interests of truck drivers. As a result, all truck drivers went on strike. Strike continued for three days. It created a calamity kind of situation in the country. People started facing problems even for basic needs. Businesses had to pay labour without work. Many factories could not•..be operational. Many others had to send goods at a higher price to maintain their market. It led to rise in prices of even basic goods. Ultimately government has to accept the demands of truck drivers so that they discontinue the strike. (a) In the light of above facts, discuss importance of transportation in business and trade. (b) How can transportation strike create calamity kind of situation?

Shilpi is planning to start a business. She is having a place where she will establish her factory. But she has no space for warehouse. She is under an impression that she must have a private warehouse if she wants to run business successfully. She is not having enough funds to own a private warehouse. (a) Is she right in her opinion? (b) What are other options she has?

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Business service case study questions with answer key answer keys.

(a) Banking is very important for business and trade. It helps in transfer of funds in transactions. Modern means of transfer of funds include: • Debit cards • Credit cards • NEFT • Mobile banking • Digital cash. (b) Digital cash like Paytm, Mpesa etc are new aids to trade.

(a) No, he cannot claim the compensation. (b) Principle of utmost good faith is not followed.   According to this principle, it is the duty of the insurer and insured to voluntarily make full accurate disclosure of all facts, material to the insurance contract. (c) Principle of indemnity: Indemnity means security or compensation against loss or damage. The principle of indemnity is such principle of insurance stating that an insured may not be compensated by the insurance company in an amount exceeding the insured's economic loss. In type of insurance, the insured would be compensation with the amount equivalent to the actual loss and not the amount exceeding the loss. This is a regulatory principal. This principle is observed more strictly in property insurance than in life insurance. The purpose of this principle is to set back the insured to the same financial position that existed before the loss or damage occurred. Principal of subrogation: The principle of subrogation enables the insured to claim the amount from the third-party responsible for the loss. It allows the insurer to pursue legal methods to recover the amount of loss, For example, if you get injured in a road accident, due to reckless driving of a third party, the insurance company will compensate your loss and will also sue the third party to recover the money paid as claim.

(a) No, he cannot claim the compensation (b) Principle of utmost good faith (c) Principle of utmost good faith is not followed:  According to this principle, it is the duty of the insurer and insured to voluntarily make full accurate disclosure of all facts, material to the insurance contract. Principle of mitigation: If refers that the insured should try to minimize the loss of the subject matter of the insurer even if it is insured.

(a) (i) Accepting of Deposits: He also has a saving account with the bank. (ii) Granting of Loans: Mr. X applied for a loan from State Bank of India to expand his shop under Pradhan Mantri Mudra Yojna. Later he purchased a home by taking a home loan from bank. Then he purchased a car on EMI financed by a bank. (b) Payments and Acceptance of collections on behalf of client: All his EMIs are getting deducted from his saving account. (c) Locker Facility: He has also taken a locker facility from the bank where he keeps his important documents and valuables.

(a) Transportation is extremely important for business and trade. (i) Transportation removes the hindrance of place and makes goods available to the consumer from the place of production. It helps a factory or business house to get raw material and sell finished goods to the final consumer. (ii) It helps to stabilize prices by moving the goods from the place where they are in excess supply to the place where they are scarce. Transportation removes the hindrance of place and makes goods available to the consumer from the place of production. (iii) Transportation is required in the process of production and distribution offinished goods to market. (iv) Efficient transportation reduces the cost of production and distribution and thereby the selling price of a product - Low price - mass consumption. (v) It helps to stabilize prices by moving the goods from the place where they are in excess supply to the place where they are scarce. (b) When basic needs like fruits, vegetables, milk etc are not available, it creates calamity kind ofsituation. Household do not get basic needs. Business houses are not getting raw material and are unable to sell their finished goods. Certainly it creates calamity kind of situation in the country.

(a) No, she is not right. (b) She has following two options (i) Public warehouse: Govt. regulates their operation by issuing licenses for them to private parties. They can be used for storage of goods by traders, manufacturers or public after payment of fees. (ii) Cooperative warehouse: Owned, managed and controlled by some marketing cooperative societies for their own members. In India, the National Cooperative Development cooperation is developing co-operative warehouse.

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Important Questions for CBSE Class 11 Business Studies Chapter 7 - Formation of a Company

• Class 11 Important Question
• Business Studies
• Chapter 7: Formation Of Company

CBSE Class 11 Business Studies Chapter-7 Important Questions - Free PDF Download

Free PDF download of Important Questions with Answers for CBSE Class 11 Business Studies Chapter 7 - Formation of a Company prepared by expert Business Studies teachers from latest edition of CBSE(NCERT) books. Register for Online tuition on Vedantu.com to score more marks in CBSE examination.

Study Important Questions for Class 11 Business Studies Chapter 7 - Formation of A Company

Very short answer questions (1 or 2 marks).

1. State the three stages in the formation of a company?

Ans: There are three stages in the formation of a business namely:

Incorporation

Subscription of capital

2. What do you mean by Formation of the company?

Ans: The formation of a business is a lengthy process that requires the fulfillment of numerous legal formalities and processes. It involves three distinct stages, which are Promotion, Incorporation and Subscription of capital. In contrast to public limited businesses, which are forbidden from raising capital from the public, private corporations are not required to produce a prospectus or complete the formality of a minimum subscription.

3. Who are the first directors of the company?

Ans: The members who will sign the prospective company's Memorandum of Association must be decided by the promoters. The people who sign the memorandum are also the company's first directors.

4. When a company is said to be born?

Ans : A company is legally born on the date printed on the Certificate of Incorporation. It gains the ability to enter into legally binding contracts. On that date, it becomes a legal entity with perpetual succession. The Certificate of Incorporation serves as solid documentation of a company's legal existence.

5. In a public company how many members must sign Memorandum of association?

Ans:  The memorandum of association must be signed by at least seven members in case of a public company.

6. In a private company how many members must sign Memorandum of association?

Ans: Two members' signatures are sufficient for a private business.

7. Explain technical feasibility?

Ans: Technical feasibility refers to the analysis of an idea that may be good but technically not possible to execute. It may so that the required raw material or technology is not easily available.

8. Explain Financial feasibility?

Ans: Every business activity requires funds. The promoters must calculate the amount of money needed to pursue the selected business prospects. If not able to arrange funds, then the project needs to be given up.

9. Explain Economic feasibility?

Ans: The promoters must calculate the amount of money needed to pursue the selected business prospects.

Short Answer Questions (3 or 4 Marks)

10. 'Promoter enjoys a fiduciary position with the company" Explain?

Ans: The reasons are:

A firm's promoters have a fiduciary relationship with the company, which they must not abuse.

They can only make a profit if it is publicly acknowledged, and they must not create any hidden gains.

The corporation can withdraw the contract and recoup the purchase price paid to the promoters if there is a non-disclosure.

It can also sue for damages for losses incurred as a result of material information not being disclosed.

Promoters are not legally entitled to reimbursement for expenses incurred in the company's promotion. The company, on the other hand, may choose to reimburse them for their pre-incorporation costs.

The corporation may also pay the promoters a lump sum payment or a commission on the purchase price of a property obtained through them or on the shares sold as compensation for their efforts.

The corporation may also provide them stock or debentures, or give them the option to buy the securities at a later date.

11. List down the documents needed for registration for incorporation.

Ans: The documents needed for registration for incorporation.

Memorandum of Association: The Memorandum of Association is duly stamped, signed, and witnessed. In the case of a public business, it must be signed by at least seven members. For a private business, however, two members' signatures are sufficient.

Articles of Association: As with the Memorandum, the Articles of Association must be legally stamped and witnessed. This is also a very important document for the company that describes the way through which the objectives of MOA could be achieved.

Director’s Approval: The prospective directors' written approval to serve as directors, as well as an agreement to purchase qualification shares. The proposed Managing Director, Manager, or whole-time director's agreement, if any also needed.

List of Directors: The names, addresses and all the details of the persons who have agreed to become and work as directors are provided.

Registrar's Letter: A copy of the Registrar's letter approving the name of the company.

Statutory Declaration: A statutory declaration attesting to the fact that all registration requirements have been met. This must be duly signed.

Documentary Evidence: Documentary evidence of payment of registration fees.

Prospectus: If a company wants to raise money from the public, prospectus is also needed.

Registered Office: A notice about the exact address of the registered office may also be submitted along with these documents

12. Define Promoter?

Ans:   A promoter, according to Section 69, is a person 

A person who has been named as such in a prospectus or is identified by the company in the annual return in section 92; or

A person who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or

A person who is in agreement with whose advice, directions or instructions the Board of Directors of the company is accustomed to act.

Long Answer Questions (5 or 6 marks)

13. Explain the process of capital subscription?

Ans: To raise money from the general public, you must take the following steps:

Step 1. Approval by the Securities and Exchange Commission (SEBI):

SEBI (Securities and Exchange Board of India), our country's regulatory body, has set standards for information disclosure and investor protection.

A public company inviting funds from the general public must make adequate disclosure of all relevant information and must not conceal any material information from the potential investors.

Step 2. Filing of Prospectus:

A copy of the prospectus or statement in lieu of the prospectus is filed with the Registrar of Companies.

A prospectus is defined as "any document described or released as a prospectus, including any notice, circular, advertisement, or other document inviting public deposits or inviting public offers for the subscription or purchase of any securities of a body corporate."

Step 3. Bankers, Brokers, and Underwriters are Appointed:

Raising money from the general people is a huge undertaking. The money for the application will be received by the company's bankers.

The brokers try to sell the shares by handing out application forms and pushing people to apply. If the public does not subscribe to the shares, the underwriters agree to buy them.

Step 4. Minimum Subscription:

To prevent enterprises from coming into business with insufficient finances, the corporation must collect applications for a specific minimum number of shares before proceeding with the allotment of shares. This is referred to as the 'minimum subscription' under the Companies Act.

Applications received for the shares are for an amount less than 90 percent of the issue size, the allotment cannot be made and the application money received must be returned to the applicants.

Step 5. Application to Stock Exchange:

At least one stock exchange is approached for approval to trade in its shares or debentures.

If such permission is not granted before the expiry of ten weeks from the date of closure of the subscription list, All money received from the applicants must be refunded to them within 8 days of the allotment becoming void.

Step 6. Allotment of Shares:

Till the time shares are allotted, application money received should remain in a separate bank account and must not be used by the company.

If the number of shares allocated is less than the number applied for, or if no shares are allotted to the applicant, any excess application money must be returned to the applicants or added to the money owed for allocation.

Allotment letters are issued to the successful allottees. Within 30 days of allotment, a "return of allotment," signed by a director or secretary, is filed with the Registrar of Companies.

14. Distinguish between Memorandum of Association and article of association on the basis of objective, position, relationship, validity and necessity?

Ans: The differences between memorandum and articles of association are as follows:

15. Jindal and his brothers wanted to start a new business of steel. To start up a business what documents are required to be submitted by them to the registrar of companies?

Ans: The documents required are:

Memorandum of association

It defines the objective of the company. No company can legally undertake activities that are not contained in its MoA 

MoA contains following clauses:

Name clause: Contains the name of the company which has already been approved by the registrar of companies.

Registered office clause: Contains the name of the state in which the registered office of the company is proposed to be situated. The exact address is not required but the same must be notified to the register within 30 days of the incorporation of the company.

Object Clause: It defines the purpose for which the company is formed. A company is not legally entitled to undertake an activity, which is beyond the object stated in this clause.

Liability clause: This clause limits the liability of the members to the amount unpaid on the share owned by them. 

Capital clause: This clause specifies the maximum capital which the company will be authorized to raise through the issue of shares. The authorized share capital of the proposed company along with its division into the number of shares having a fixed face value is specified.

Subscription Clause: In this a group of persons signs the MOA, and express their intention and willingness to establish the company.

Articles of association

They are the rules regarding internal management of a company. It is a very important document after the Memorandum of Association

These rules are subsidiary to the memorandum of association and hence, should not contradict or exceed anything stated in the memorandum of association.

According to Section 2(5) of the Companies Act 2013, articles means the article of association of a company as originally framed or as altered from time to time or a blood in pursuance of any previous company law of this act.

Consent of proposed directors

Apart from the memorandum and articles of association, a written consent of each person named as a director is required for confirming that they agree to act in that capacity and undertake to buy and pay for qualification shares.

The agreement which the company enters with an individual as director or whole time director or manager is another document which is required to be submitted to the registrar for getting the company registered under the act.

Statutory declaration

A declaration stating that all the legal requirements pertaining to registration have been  complied with is to be submitted to the registrar with the above mentioned documents for getting the companies registered under the law.

Receipt of payment of fee

Necessary fees have to be paid for the registration of the company. 

The amount of such fees shall depend on the authorized share capital of the company.

16. Mr. Mohan conceived an idea to start a garment business. He consulted a Company secretary to get the details. Company secretary helped list down Mr. Mohan's function in the process of starting up the business. Explain briefly the function of the promoter?

Ans: The functions of the promoter are explained as follows:

Identification of business opportunity:

The opportunity could be in the form of developing a new product or service, making a product available through a different channel, or any other investment opportunity. The technical and economic feasibility of the opportunity is then assessed.

Feasibility studies: 

Converting all potential business ideas into real enterprises may not be viable or lucrative. The promoters, therefore, undertake detailed feasibility studies. The following feasibility studies could be carried out:

Technical feasibility: An idea may be good but technically not possible to execute. It may be so because the required raw material or technology is not easily available.

Financial feasibility : Every business activity requires funds. The promoters must calculate the amount of money needed to pursue the recognized business idea. If money cannot be secured, the project must be abandoned.

Economic feasibility: The project might be technically and financially possible, but it may have a slim possibility of being profitable. Hence this step focuses on the cost-benefit analysis of the company to find out its future viability.

Name approval:

The promoters must choose a name for it and file an application with the registrar of companies in the state where the company's registered office is located for its approval.

If the proposed name has been rejected, several substitute names may be adopted.

In the application to the Registrar of Companies, three names are listed in order of precedence.

Assembling the Memorandum of Association Signatories:

The members who will sign the prospective company's Memorandum of Association must be decided by the promoters.

The people who sign the memorandum are also the company's first directors.

It is important to obtain their written approval to serve as Directors and to purchase the company's qualification shares.

Appointment of professionals:

The promoters employ specialists such as mercantile bankers, auditors, and others to assist them in preparing the appropriate documents that must be filed with the Registrar of Companies.

Preparation of necessary documents:

The promoter takes measures to prepare necessary legal documents that must be submitted to the Registrar of Companies in order for the company to be registered under the law.

Memorandum of Association, Articles of Association, and Consent of Directors are the documents in question.

CBSE Class 11 Business Studies Important Questions

Cbse study materials.

Chapter-wise MCQs for CBSE Class 11 Business Studies: Based on latest CBSE Syllabus 2023-2024

Find chapter-wise mcqs for cbse class 11 business studies. also, find attached the chapter-wise pdf download link for the same. these mcq-type questions will come in handy for class 11 students in preparation for end-term examinations in 2024.

MCQs for CBSE Class 11 Business Studies: Jagran Josh brings to you chapter-wise MCQs for CBSE Class 11 Business Studies. PDF download links for all chapters have been attached here, for your reference. These questions and answers have been specially prepared by subject experts, as per the Revised CBSE Syllabus 2023-2024. This article will be useful for CBSE students of Class 11. Also, find attached links to important resources for preparing for the end-term examinations in 2024.

• Direct Text-based Question Answer
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• Match the following
• Check which statement is true
• Pick the odd one out
• Assertion and Reasoning
• Case studies based/ Source-based

How to prepare for Multiple-Choice Questions (MCQs)

• Thoroughly read your chapters
• Prepare/ Read mind maps
• Solve in-text NCERT Questions
• Solve Sample papers
• Practice from Previous-Year Question Papers
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CBSE Class 11 Business Studies Revised Syllabus 2023-2024 (PDF)

Mind Maps for CBSE Class 11 Business Studies 2023-2024 (PDF)

Find Chapter-wise MCQs for CBSE Class 11 Business Studies:

Here, we have provided MCQs for all chapters of Class 11 Business Studies. PDF download links for each chapter have been attached to the article for students. We have considered CBSE' s updated guidelines, curriculum, and other relevant details while preparing these Multiple Choice Questions for you. As per the competency-focused questions released by the boards, MCQs are going to play an essential role in the process.  

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• NCERT Class 11
• NCERT Class 11 Business Studies
• Chapter 1: Business Trade And Commerce

NCERT Solution for Class 11 Business Studies Chapter 1 - Business, Trade and Commerce

NCERT Solutions are considered an exceptionally helpful book while preparing for the CBSE Class 11 Business Studies examinations. This study resource contains in-depth knowledge, and the Solutions collated by the subject matter experts are no different.  NCERT Solutions for Class 11 Business Studies Chapter 1 – Business, Trade And Commerce briefly introduces the basic concepts in Business Studies.

Download PDF Of Ncert Solution for Class 11 Business Studies Chapter 1 – Business, Trade And Commerce

Access the NCERT Solution for Class 11 Business Studies Chapter 1 – Business, Trade and Commerce

Short Questions for NCERT Business Studies Solutions Class 11 Chapter 1

1. List any five major commercial cities of ancient India.

Commercial cities of Ancient India are given below:

1. Pataliputra

3. Indraprastha

4. Mohenjodaro

2. What is Hundi?

Hundi is a financial instrument that was developed in Medieval India to carry out transactions related to trade and credit. It is an unconditional order in writing made by a person directing another to pay a certain sum of money to a person named in the order. It is capable of being changed through transfer by valid negotiation.

3. List the major exports and imports in ancient India.

Items exported from India were spices, wheat, sugar, indigo, opium, cotton, parrot, sesame oil, live animals, animal products such as hides, skin, horns, furs, tortoise shells, and other materials like sapphires, pearls, quartz, crystal, lapis, granites, lazuli, turquoise and copper.

Items imported into India were horses, animal products, Chinese silk, flax and linen, wine, glass, gold, silver, tin, lead, copper, rubies, coral, amber, etc.

4. What were the different types of Hundi in use by traders in ancient times?

Types of hundi are as follows:

1. Shah Jog Hundi: Payable to a respectable man

2. Jokhmi Hundi: It is a type of hundi which is applicable to goods transported by ship

3. Nam Jog Hundi: Payable to the named party or his order

4. Dhani Hundi: Payable to the owner of hundi

5. Jawabi Hundi: A type of hundi that resembles a money order.

6. Darshani Hundi: Payable on sight

7. Miadi Hundi or Muddati Hundi: Hundi that is payable after a specified period of time

5. What do you understand by maritime trade?

A kind of trade that involves the transportation of goods by sea using ships as the primary medium is called maritime trade. There are specific regulations for this kind of trade as there is risk involved in transporting goods by sea.

6. State the different types of economic activities.

Various economic activities are as follows:

1. Profession: These are activities that require specialised skills and knowledge, and people involved in these are known as professionals.

2. Employment: It is the type of economic activity where people get paid for the service they provide, and they are known as employees.

3. Business: It is the economic activity that deals with the trading of goods and services with a motive to earn profit.

7. Why is business considered an economic activity?

Business is said to be an economic activity as the sole purpose of starting a business is to earn a livelihood and also make a profit from the activity. Hence, it is considered to be an economic activity.

8. State the meaning of business.

Business is the occupation where people engage themselves in activities that are related to purchase or production and sale of goods and services with the sole purpose of earning profit, and therefore produce or sell goods and services that are in demand.

9. How would you classify business activities?

Business activity can be classified as follows:

1. Industry

2. Commerce

Industry: It involves activities that are concerned with the processing of raw materials to shape them into the final product. The role of an industry is to provide value to the raw material so that it can be consumed by the end users (consumers). Industries are classified as primary, secondary and tertiary based on the functions they perform.

Commerce: It is mainly concerned with trading and related activities. It includes the exchange of goods and services. Commerce deals with two types of activities: trade and auxiliaries to trade. When goods are bought and sold, it is referred to as trade, and auxiliaries to trade involve activities that include banking, transportation, advertising, and communication. Commerce provides the necessary link that needs to exist between producers and consumers.

10. What are the various types of industries?

Industries can be broadly categorized into three types:

1. Primary Industries: These types of industries focus on getting raw materials; examples are mining, fishing and farming.

2. Secondary Industries: Such industries mainly involve the manufacturing of goods from raw materials and include the automobile,, steel and electronics industry.

3. Tertiary Industries: These industries provide services and support to primary and secondary industries with activities related to trade.

11. Explain any two business activities which are auxiliaries to trade.

Activities that facilitate the exchange of goods and services are referred to as auxiliaries to trade. Two examples are given below:

1. Banking and Finance: Funds are necessary for acquiring assets, purchasing raw materials and meeting other expenses. These funds can be obtained from a bank. Therefore, banking helps business activities to meet the required funds.

2. Advertising: It is an important component of marketing that involves the promotion of products, and accurate promotion helps reach potential viewers, which will result in sales.

12. What is the role of profit in business?

Profit is the only purpose for which business is done. Without profit, a business will not sustain itself for a long time. For a business to operate on a regular basis, a part of the profit needs to be reinvested. It helps in the growth of the business. The role of profit in a business is that it is necessary for the expansion of the business.

13. What is business risk? What is its nature?

Business risk refers to the possibility of earning inadequate profits or sustaining losses due to unforeseen or unexpected circumstances. It can happen when the demand for a particular product declines due to increased competition or changes in customer preferences.

The nature of business risks are:

1. Profit related to risk: Profit is obtained as a reward for the risk taken in business.

2. Degree of risk taken depends upon the scale of operation of the business.

3. Risk is an essential part of any business.

4. Business risk arises due to uncertainties in business.

Long Questions for NCERT Business Studies Solutions Class 11 Chapter 1

1. Discuss the development of indigenous banking system in Indian subcontinent.

The indigenous banking system played a prominent role in lending money and also in financing domestic and international trade with the help of currency and later with letter of credit. As the banking system developed, people began depositing precious metals with individuals who were known as Seths. Money became the means that manufacturers could use to produce more goods. Later, documents in the form of Hundi and Chitti were used for carrying out monetary transactions. In ancient India, intermediaries played a prominent role in trade promotion. The financial security offered by them helped in taking risks in foreign trade. The institutions such as of Jagat Seth also exercised great influence during the period of the Mughals and later in the time of the East India Company. The availability of loans and the rise in credit transactions helped in the growth of commercial establishments.

India enjoyed a great balance of trade, with exports holding the upper hand in comparison to imports. This system helped manufacturers, traders and merchants get funds for expansion and development. Industrial and commercial banks evolved to become institutions that financed trade and commerce, and agriculture banks provided short and long-term loans to finance those involved in agriculture activities.

2. Define business. Describe its important characteristics.

Business is the occupation where people engage in activities related to the purchase or production and sale of goods and services with the sole purpose of earning a profit, therefore producing or selling goods and services that are in demand.

Characteristics of business are given below:

1. Business is considered to be an economic activity as the sole purpose of starting a business is to earn profit.

2. Business deals with procuring raw materials and converting them into finished products and selling to consumers.

3. The sustainability and future growth of a business are determined by the profit it is earning.

4. Business involves the exchange of goods and services using a common medium, i.e., money.

5. Any business, whether small or big, will face business risks.

6. There will be uncertainty of returns as the business may incur loss or gain profit.

3. Compare business with profession and employment.

4. Define industry. Explain various types of industries giving examples.

Industry refers to the economic activities that convert resources into useful goods. It involves the use of machines and technical skills, which are used for producing a variety of goods, breeding animals, etc. There are three types of industries:

1. Primary Industries: These types of industries deal with products that are obtained from natural sources. The main purpose of such industries is to convert raw material into a consumable form. Examples of such industries are farming, hunting, mining, and fishing industries. Primary industries can be classified into two types based on the activities performed.

a. Extractive Industries: These industries deal with products that need to be refined so that they can be used in other industries. Examples are mining and fisheries.

b. Genetic Industries: These industries deal with breeding plants and animals and using them for further use.

2. Secondary Industries: These industries deal with the manufacturing of products; they acquire raw materials and convert them into goods to which further value can be added. Such types of industries can be categorised as follows:

a. Manufacturing Industries: Here, the raw materials get converted into finished products to become readily usable, such as petroleum, wax obtained from mineral oil, etc.

b. Synthetic Industries: These combine raw materials to form a new product. An example is the cosmetic industry.

c. Processing Industries: Here, the raw material is processed and purified in order to arrive at a final product. Examples are the paper and sugar industries.

d. Assembling Industries: Combining various components in order to arrive at the final product is the speciality of assembling industries. Examples are the electronics industry, automobile companies and construction companies.

3. Tertiary Industries: These industries serve as the facilitator of primary and secondary industries. These industries are mainly involved in providing service to the industries; examples are baking and transportation.

5. Describe the activities relating to commerce.

There are two types of activities in commerce: (i) trade and (ii) auxiliaries to trade.

Buying and selling of goods is called trade, whereas auxiliaries to trade involve activities such as banking, communication, transportation and advertising. Commerce enhances the link between consumers and producers.

1. Banking and Finance: It is one of the most important requirements to run any business. Without finance, the free movement of goods is restricted. A banking arrangement helps in the availability of credit to traders, thus acting as an auxiliary to trade.

2. Warehousing: It refers to storing of goods till the time it is ready to be transported. Warehousing ensures proper storage and facilitates the easy availability of goods.

3. Transportation: It helps producers in purchasing goods and other necessary items from different places and selling them in different areas. It helps in the buying and selling of goods.

4. Advertising: Advertisements through various channels, such as radio, TV, etc., help in reaching the information to the audience and increaseing sales.

5. Insurance: There will be risks in business, and to cover against them, you need to get insured.

6. Explain any five objectives of business.

Business objectives can be discussed as follows:

1. Maximum Profit: The only motive for doing business is to earn a profit. Growth prospects can be determined by the capacity to earn profits. The profit earned can be reinvested to earn higher growth.

2. Market Share: A business will have competition, and by staying ahead of competitors, a business develops a market share. Maximum market share can be captured by providing quality products at reasonable prices.

3. Worker performance: A business will perform at its best if the workers are motivated and satisfied. It requires a healthy working environment for the workers to make a great contribution.

4. Innovation: Innovation is the key to cutting down costs while improving performance, and by doing this, a business can stay ahead of its competitors.

5. Social Responsibility: A business has certain responsibilities towards society, including removing poverty, unemployment, pollution, etc. Fulfilling those responsibilities helps a business to earn goodwill.

7. Explain the concept of business risk and its causes.

Business risk refers to the possibility of earning inadequate profits or losses due to unforeseen or unexpected circumstances. It can happen when the demand for a particular product declines due to increased competition or changes in customer preferences. It is very difficult to determine customer preferences as they are subject to change.

Business risk is of two types, namely pure business risk and speculative business risk.

a. Pure Business Risk: In this type of risk, there is a chance of loss or no loss whatsoever. Such risks can be associated with theft, various natural calamities and fire.

b. Speculative Business Risk: In this type of risk, there is an equal chance of earning profit or incurring loss. Such type of risk arises due to changes in government policy, competitor’s policy, price change or a change in consumer preferences.

Business risk is caused due to the following as discussed below:

1. Economic Causes: These types of business risks arise due to the uncertainty surrounding the changes in the policies of competitors, price changes or changes in the preferences of consumers.

2. Natural causes: Natural calamities, such as floods, earthquakes, and famine can cause extensive loss to a business. Such risks are beyond our control.

3. Human causes: These are caused by negligence on the part of humans, like carelessness, riots, and strikes.

4. Other causes: Some events are unpredictable, such as political disturbances and interest and exchange rate fluctuations.

8. What factors are to be considered while starting a business? Explain.

It is common for a business to check all the aspects before starting operations. Here are some of the important points to consider:

1. Line of Business: This helps determine the line of business, as it will help boost confidence.

2. Scale of business: This determines the scale on which the business will be run.

3. Location: The location for setting up a business requires considering factors such as cheap labour, availability of raw materials, good transportation facilities, sufficient power and infrastructural facilities.

4. Finance: Business is impacted in every step by finance – from purchasing raw materials to machinery and then the further investments needed for growth. Therefore, raising funds is necessary for business.

5. Efficiency of Workforce: A trained workforce is a prerequisite to carrying out different business activities; therefore, identifying a skilled workforce is a must before starting a business.

6. Physical requirements of business: These include the tools, machinery and technology that increase business efficiency. So it should be chosen as per the nature and scale of the business.

Concepts covered in this chapter:

The concepts covered in Chapter 1 of NCERT Class 11 Solutions Business Studies are –

• Meaning of Business
• Indigenous banking system
• Rise of intermediaries
• Merchant corporation
• Major trade centers
• Characteristics of business
• Classification of business activities
• Meaning of industry

NCERT Solutions for Class 11 Business Studies Chapter 1 provide a broad range of illustrative examples, which help the students to comprehend and learn quickly. The above-mentioned are the illustrations for the Class 11 CBSE syllabus. For more solutions and study materials of NCERT solutions for Class 11 Business studies , visit BYJU’S or download the app for more information and the best learning experience.

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