Forms of Business Organisation — Practice Quiz

Sole Proprietorship

Step 1: Identify the key needs — small business, complete personal control, easy formation, and willingness to accept unlimited liability. Step 2: Sole Proprietorship perfectly matches all these criteria — it is the easiest to form with no legal formalities, gives complete control and all profits to one person, and the owner has unlimited liability. Step 3: Why Partnership is wrong — Partnership involves at least two people, so complete individual control is not possible. Step 4: Why Private Limited Company is wrong — It involves complex legal formalities, minimum 2 members, and has limited li

Continuity and Stability

Step 1: The question asks about a specific factor defined as 'certainty in the working and existence of a business.' Step 2: Continuity and Stability is the factor that refers to how long and how consistently a business can operate without disruption. Step 3: The famous saying supports this — 'members may come, members may go but a company goes on forever' — this describes the stability of a Joint Stock Company. Step 4: Why other options are wrong — Flexibility refers to adapting to changing circumstances. Direction and Control refers to who manages the business. Ease of Formation refers to ho

Cooperative Society

Step 1: Understand the classification — Private enterprises are divided into Non-corporated and Corporated forms. Step 2: Non-corporated forms include Sole Trader, Joint Hindu Family Business, and Partnership. These do not collect capital through shares and are not registered under a specific companies act. Step 3: Corporated forms include Joint Stock Company (Private and Public) and Cooperative Society. These collect capital in the form of shares and are registered under relevant laws. Step 4: Cooperative Societies are registered under the Cooperative Societies Act, 1912, making them a corpor

The Parliament and the general public

Step 1: Recall the features of Public Sector Enterprises — these are owned and managed by the government. Step 2: Since the government uses public money (taxpayers' funds) to run these enterprises, they must answer to the public and their representatives in Parliament. Step 3: This is called 'public accountability' — a key characteristic of public sector enterprises. Step 4: Why other options are wrong — Private shareholders are associated with private sector enterprises. The Board of Directors alone is not sufficient for accountability in public enterprises. Employees are not the ones to whom