Tag: elements of business

Questions Related to elements of business

If at the time of admission partner pays premium then on dissolution, he is entitled to demand the return of a proportion of the premium if the partnership was for a fixed term and was dissolved before the expiry of that term, unless dissolution was caused by ___________________.

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. Agreement

  2. Misconduct of the party seeking return of the premium

  3. Death of a partner

  4. All of the above

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Correct Option: D

Which of the following are grounds for compulsory dissolution of the firm by court?

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. Insanity of a partner

  2. Misconduct of a partner

  3. Perpetual losses in business

  4. All of these

Show answer
Correct Option: A
Explanation:

Insanity of a partner is one of the grounds for compulsory dissolution of the firm by court. Dissolution of partnership implies not only a complete closure or termination of partnership business but it also includes any change in the existing agreement among the partners due to a change in the number of partners.

Which of the following are the conditions needed to prove an act of a partner is an act of a partnership firm?

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. Such an act be done in a ordinary course of a partnership firm

  2. It must be related to the business of the firm

  3. Act must have been done in the name and on behalf of the firm

  4. All of the above

Show answer
Correct Option: D
Explanation:

Every act of the partners must be done according and related to the firm. Partner is an agent of the firm and his other partners for the purpose of the business of the partnership, and the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which he is a member bind the firm and his partners, so it should be done according to the business. An act or instrument relating to the business of the firm done or executed in the firm name, or in any other manner showing an intention to bind the firm, by any person there to authorised, whether a partner or not, is binding on the firm and all the partners.

State the following statement is True or False:
A public company can commence (start) its business only after obtaining the trading certificate.

elements of business joint stock company - formation meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

  1. True

  2. False

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Correct Option: A
Explanation:
A public company, has to goes through the capital subscription stage and then receives the certificate of commencement. Only after obtaining the trading certificate, a public company can commence its business.

State the following statement is True or False:
A public company can start business after getting 'Trading Certificate'.

elements of business joint stock company - formation meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

 A public company can start business after getting "trading certificate". Without trading certificate, all the contracts would be considered void in the eyes of law and operations of business cannot be carried out.

State the following statement is True or False:
Underwriter purchase unsold shares of the company.

elements of business joint stock company - formation meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

  1. True

  2. False

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Correct Option: A
Explanation:

It is true. A company must have an underwriter, who helps the companies in introducing their securities to the market. An underwriter is required to sell securities and if he is not able to sell, then underwriter is liable to purchase the unsold shares of the company.

Legal controls, restrictions are more & strict on public companies ____________.

elements of business joint stock company - formation meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

  1. True

  2. False

  3. Not relevant

  4. Nothing applicable

Show answer
Correct Option: A

State the following statement is True or False:
Minimum subscription is guaranteed by the directors.

elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

  1. True

  2. False

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Correct Option: B
Explanation:

Minimum subscription is not guaranteed by the directors. Minimum subscription refers to the minimum shares the company needs to get subscribed from the general public.

Presently, every company needs to raise 90% of the issued capital. Else the company shall refund the whole amount received.

State the following statement is True or False:
Shareholders take initiative to form a company.

elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

It is not true that shareholders take initiative to form a company. Shareholders are the one who invests in the company and helps in the capital formation of company. Entrepreneur initiates to form a company with the help of Promoters.

State the following statement is True or False:
The certificate required by public limited company to start business activities is the certificate of commencement of business.

elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

  1. True

  2. False

Show answer
Correct Option: A