ASSIGNMENT 2

FORMS OF BUSINESS ORGANISATION – PART 1

Q1. Enumerate the two conditions necessary for formation of Joint Hindu Family Business.
Q2. Name and define the form of business organization found only in India?
Q3. Ten artisans in a village, decided to form a business organisation with a view to assist them
by providing better technical approach to the art form.
a) Identify the form of business organisation highlighted above.
b) State any four merits.
Q4. Gita visited her native village during her vacations and found that the moneylender in the
village was exploiting the farmers. He was charging very high interest rates. Gita decided to
help the farmers. She met all the farmers along with her grandfather and told them about the
various options for raising funds instead of going to the moneylender. She was able to
convince the farmers to pool their own resources and form an organisation so that members
can take loan as and when required.
a) Identify and explain the form of business organisation.
b) What is the motive of this kind of business organisation?
c) Under which Act, these organisations are governed?
d) Is registration compulsory for the above organisation?
Q5. Which is the least regulated business form of business?
Q6. Name the form of business organisation which is formed with the motive of welfare of the
members.
Q7. “Working for oneself provides self-satisfaction.” Which merit of sole proprietorship is
highlighted here?
Q8. “Employees Union of Hindustan Textiles start a retail store to make daily household articles
at reasonable prices available to its members”. Identify the form of business.
Q9. Name the form of business organisation in which a minor can be a full-fledged member.
Q10. A sole proprietor has __________liability.
Q11. The head of the Hindu Undivided Family is called ___________.
Q12. In Cooperative Society, the principle followed is __________.
Q13. The minimum number of members in a cooperative society is ________.
Q14. The Karta in Joint Hindu Family has ______liability.
Q15. Name the cooperative society set up to provide easy loans on reasonable terms to the
members.
Q16. Name the form of organisation found only in India.
Q17. The registration of Cooperative Society is optional. (True/False)
Q18. Which is the simplest form of business?
Q19. Ms. Nidhi is running a ladies store. She appointed two more ladies to assist her in trading
activities at a salary of 8,000.
a) Identify the form of business organisation highlighted above.
b) State any four demerits of the form of business organisation
Q20. “Every day Amul collects milk from 2.12 million farmers (many literate) and converts the
milk into branded packaged products and delivers goods all over the country. The story of
 Amul started in Dec, 1946 with a group being able to free themselves from intermediaries, gain
access to the market and thereby ensure maximum returns for their efforts.”
a) Identify and define the form of business organisation highlighted above.
b) State all the features of this form of organisation.
c) Identify and explain Amul is a part of which type of industry.
Q21. Radhika opened a boutique along with four workers. No problem of any type was faced in
opening the boutique. At her boutique special dresses made for marriages and parties are
sold. Despite there being a lot of competition in the market, the boutique was earning a good
profit. Since all the profit went into her pocket, Radhika was getting inspired to work with
great efficiency. With the increase in the workload, the number of workers was increased
from 4 to 6 by her. All of them were happy since the business was running successfully.
Unfortunately, one day the boutique caught fire due to a short circuit. Consequently, Radhika
had to suffer a heavy loss. The circumstances deteriorated so much that she had to dispose
off her personal properties to repay the boutique’s debts. In order to revive the boutique, she
approached a bank which did not extend a long-term loan to her.
a) Identify the form of business organization.
b) Explain any three merits of the form of organisation by quoting the lines.
c) Also, any two limitations of form of organisation by quoting the lines.
Q22. Gopal and Balram are two brothers, who inherited some ancestral property. They decided
to form a Hindu Undivided Family (HUF) business consisting of four male members. Gopal is
the elder brother, so he became ‘Karta’. The business took loan of 20 lakh from PNB having
maturity period of five years. Due to poor financial position of the business, they were unable
to repay the loan. The sold the ancestral property for 10 lakh and paid the same to PNB.
They could not pay the balance amount of loan with interest. The bank filed a case for
recovery of the balance amount. Gopal pleaded the court that the loan had been taken for the
purpose of business, therefore, all the members of the business were liable to repay the loan.
The court held that all other members were responsible only to the extent of their share in
business, and the business property was already sold. However, Gopal being the Karta
would have to repay the balance amount even by selling his personal properties. Gopal had
to sell some of his personal assets to repay the balance amount of bank loan.
Is the court’s decision justified? Give reasons.
Q23. A group of people in a locality of Delhi used to go for a walk in the morning. After the walk,
they would often sit together and discuss the subjects like Politics, Demonetisation, Elections,
Market Prices of different goods etc. There were about fifty persons in this group. One day,
instead of other subjects, their focus of discussion was ‘Market Prices of Different Goods’.
During the discussion, the emphasis laid on the point was that goods become very costly by
the time they reach the consumers after getting transported from the producers.
Consequently, everyone’s budget is getting disturbed. To get rid of this problem some people
suggested that they should join together to form a society. The society would sell the goods
to all the members as per their requirements after buying them in a large quantity directly
from the producers. This suggestion was appreciated by all of them. They all became
members of the society and encouraged other people also to become its members. In no
time, 100 members assembled and society was formed. The idea of forming immediately
proved to be successful. Now their budget became successful. A special characteristic of this
society was that apart from its members it also sold goods to the other people of the society
at cheaper rates. All of them were very happy with the formation of the society.
a) Identify and explain the type of the society formed by them.
b) Under what Act, the society must have been formed.
c) What is the liability of the members of the society so formed?