case study class 11 business studies chapter 2

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Class 11 Business Studies Case Study Questions

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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 as an occupying subject as compared to all other core subjects of the CBSE class 11 commerce stream. To ace this CBSE exam, students are not only required to work hard but they ought to learn to do smart work too.

Among all the other core subjects of the Commerce stream i.e accountancy, economics and business studies, Business Studies is the one that is purely theoretical. It is termed to be comparatively easier and more scoring than the other mandatory subjects of the commerce stream. Many students who opt for the commerce stream after their 10-grade exams desire to learn in-depth about the business organizations and their work, for them the subject is of utmost importance. Business Studies is an essential component of the class 11 commerce stream curriculum.

In order to ace the subject the student needs to have conceptual clarity. CBSE has designed the syllabus for class 11 Business Studies so as to provide students with a basic understanding of the various principles prevalent in the Business organizations as well as their interaction with their corresponding environment.   

Case Study Questions in class 11 (Business Studies)

Case-based questions have always been an integral part of the Business Studies question paper for many years in the past. The case studies have always been considered to be challenging for the students, for such questions demand the application of their knowledge of the fundamental business concepts and principles. Last year i.e-  2021 CBSE introduced a few changes in the Business Studies question paper pattern to enhance and develop analytical and reasoning skills among students.

It was decided that the questions would be based on real-life scenarios encountered by the students.CBSE not only changed the way case-based questions were formulated but also incremented their weightage in the Business Studies question paper. The sole purpose of increasing the weightage of case-based questions in the class 11 curriculum by CBSE was to drift from rote learning to competency and situation-based learning.

What is a case study question? (Business Studies)

In Business Studies, a case study is more like a real-world test of how the implementation works. It is majorly a report of an organization’s implementation of anything, such as a practice,a product, a system, or a service. The questions would be based on the NCERT textbook for class 11 Business Studies. Case-based questions will definitely carry a substantial weightage in the class 11 Business Studies question paper. questions.

A hypothetical text will be provided on the basis of which the student is expected to solve the given case-based question asked in the Business Studies class 11 exam. Initially, the newly introduced case-based questions appeared to be confusing for both the students and the teachers. Perhaps, they were reluctant to experiment with something new but now a lot more clarity is there that has made the question paper quite student-friendly.

Case study questions could be based on any chapter or concept present in the NCERT textbook. Thus, it is expected from the students to thoroughly revise and memorize the key business fundamentals. 

Business Studies syllabus of class 11 CBSE   

The entire Business Studies course is divided into 2 parts:

• Part A, Foundation of Business
• Part B, Finance and Trade

The class 11 Business Studies exam is for a total of 100 marks, 80 marks are for the theory and the remaining 20 for the project. Most of the questions are based on the exercises from the NCERT textbook. It is recommended to rigorously go through the contents of the book. A single textbook has been published by NCERT for Class 11 Business studies. There are a total of 10 chapters in this book divided into 2 parts. 

CBSE Class – 11

Business Studies (Code No. 054)

Theory: 80 Marks Time: 3 Hours Project: 20 Marks

Case Study Passage (Business Studies class)

As part of these questions, the students would be provided with a hypothetical situation or text, based on which analytical questions will have to be answered by them. It is a must for the students to read the passage in depth before attempting the questions. In the coming examination cycle (2022-23), case-based questions have a weightage of around 30%. These questions can be based on each chapter in the NCERT book for Business Studies, grade 11.

Students must prepare well for the case-based questions before appearing for their Business Studies exam as these questions demand complete knowledge of the various concepts in their syllabus. CBSE plans to increase the weightage of such questions in the upcoming years.

Sample case-based Questions in Business Studies

Business Studies as a subject provides a way of perceiving and interacting with the business ecosystem. It is a core subject of the commerce stream that is purely theoretical and relevantly easier than the other compulsory subjects of the stream. Class 11 Business Studies syllabus is closely related to trade and commerce. The subject cannot be ignored as it is the foundation of many concepts and theories which are studied at an advanced level in class 12.

The case-based questions asked in the CBSE Business Studies question paper for class 11 are of two types:

As per the latest circular issued by CBSE on Assessment and Evaluation practices of the board for the session 2022-23, CBSE has clearly mentioned that competency-based questions including case studies will be different from subjective questions.  

The questions can also be categorized on their difficulty level:

• Direct: such questions can be easily solved. Their answer is visible in the given passage itself.
• Indirect/ Analytical: such questions are confusing and tricky. These can be solved by the application of the theory or principle that is highlighted in the provided text. 

How To Prepare For Case-based Questions? (Business Studies grade 11)

Students need to prepare well for the case-based questions before appearing for their class 11 Business Studies exam. Here are some tips which will help the student to solve the case-based questions at ease:

• Read the provided text carefully
• Try to comprehend the situation and focus on the question asked
• Analyze and carefully answer the question asked
• In general, the passage given would be lengthy in Business Studies case-based questions but their solutions are comparatively short and simple
• One can significantly save time if they follow a reversal pattern, that is going through the questions before reading the comprehensive case study passage.
• Answer in a concise manner
• One should concentrate on solidifying key fundamental principles/theories
• Go through the NCERT textbook in depth. The language used is crisp and simple.
• While providing solutions to the case-based question, pick the keyword/keyline based on which you are driving insights.

 In order to excel in the Business Studies class 11 exam, one needs to ignore the shortcut techniques and get to read the NCERT textbook rigorously. Case studies can be easily solved if your key fundamentals are strong and clear. The best part of having these questions is that the asked question itself projects a hint of its answer. These simple points if kept in mind will definitely help the students to fetch good marks in case study questions, class 11 Business Studies. 

Case study question examples in Business Studies

Here a re some given case study questions for CBSE class 11 Business Studies. If you wish to get more case study questions and other study material, download the myCBSEguide app now. You can also access it through our student dashboard.

Business Studies Case Study 1

Read the hypothetical text given and answer the following questions:

Manish, Rahul and Madhav live in the same locality. They used to meet and discuss their ideas. After discussing the recent fire breakout in their area, they decided to take fire insurance for their house or work area. Manish gets his house insured against fire for ₹1 lakh and during the policy period, his house gets damaged due to fire and the actual loss amounts to ₹2.5 lakh. The insurance company acquired the burning material and approved his claim. Rahul gets his godown insured against fire for ₹1 lakh but does not take enough precautions to minimize the chances of fire like installing fire extinguishers in the factory. During the policy, a fire takes place in his godown and he does not take any preventive steps like throwing water and calling the employees from the fire fighting department to control the fire. He suffered a loss of ₹1,20,000. Madhav took a fire insurance policy of ₹20 lakh for his factory at an annual payment of ₹24,000. In order to reduce the annual premium, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make payment for the claim as it became aware of the highly explosive chemicals.

How much can Manish claim from the insurance company?

• None of the above

How much compensation can Rahul get from the insurance company?

Which principle is violated in the case of Rahul?

• Insurable Interest
• Utmost Good Faith

How much amount is the insurance company liable to pay to Madhav if he files a case against it?

• Insufficient information

Which principle of Insurance is violated by Madhav?

• Insurable interest
• Subrogation
• Proximate Cause

The insurance company acquired the burnt material and approved his claim. Which principle of Insurance is highlighted in the given statement.

• (a) Mitigation
• (a) Utmost Good Faith
• (d) Subrogation

Business Studies Case Study 2

 Sarthak Electronics Ltd. has a loss of Rs 15,00,000 to pay. They are short of funds so they are trying to find means to arrange funds. Their manager suggested a claim from the insurance company against stock lost due to fire in the warehouse. He actually meant that they can put their warehouse on fire and claim from insurance companies against stock insured. They will use the claim money to pay the loan.

• Will the company receive a claim if the surveyor from the insurance company comes to know the real cause of fire?
• Write any two Values which the company ignores while planning to arrange money from false claims.
• State any three elements of fire insurance

Business Studies Case Study 3

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.

Advantages of case study questions in Business Studies

Class 11 Business Studies syllabus is not very vast but has to be focussed upon as it forms the base for your 12th grade Business Studies syllabus. Students are supposed to prepare themselves thoroughly from the NCERT textbook. The Case-based questions prominently focus on the real and current scenarios of the Business world. Approximately 30% of the question paper will comprise case study questions that demand high-order thinking and reasoning skills from the students. The students ought to practice class 11 Business Studies case-based questions from the various options available to them, so as to excel in the subject.

• Enhance the qualitative and quantitative analysis skills of students
• Provides an in-depth understanding of the key Business theories/concepts
• Inculcate intellectual capabilities in students
• Help students retain knowledge for a longer period of time
• The questions would help to discard the concept of rote learning
• Case studies promote and strengthen practical learning.

“Failure is success if you learn from it”

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NCERT Solutions for Class 11 Business Chapter 2 - Forms Of Business Organisation

• NCERT Solutions
• Business Studies
• Chapter 2 Forms Of Business Organisation

Class 11 NCERT Solutions Business Studies - Chapter 2 - Free PDF Download

This study consists of the Class 11 Business Studies Chapter 2 NCERT solutions in a PDF format and students can download the PDF file for free from Vedantu. These NCERT Solutions for Business Studies Class 11 Chapter 2 will help students to learn the concepts covered in this chapter properly.

By referring to these NCERT questions and solutions, students can prepare well and secure maximum marks in their examinations. Also, they can solve the exercise questions on their own and compare them with the NCERT Solutions to identify and rectify their mistakes.

NCERT Solutions for Class 11 Business Studies Chapter 2 Forms of Business Organisation

1. The structure in which there is separation of ownership and management is called (a) Sole proprietorship (b) Partnership (c) Company (d) All business organisations

Ans: (c) Company

2. The karta in Joint Hindu family business has (a) Limited liability (b) Unlimited liability (c) No liability for debts (d) Joint liability

Ans: (b) Unlimited liability

3. In a cooperative society the principle followed is

(a) One share one vote (b) One man one vote (c) No vote (d) Multiple votes

Ans: (b) One man one vote

4. The board of directors of a joint stock company is elected by

(a) General public (b) Government bodies (c) Shareholders (d) Employees

Ans: (c) Shareholders

5. Profits do not have to be shared. This statement refers to

(a) Partnership (b) Joint Hindu family business (c) Sole proprietorship (d) Company

Ans: (c) Sole proprietorship

6. The capital of a company is divided into number of parts each one of which are called

(a) Dividend (b) Profit (c) Interest (d) Share

Ans: (d) Share

7. The Head of the joint Hindu family business is called

(a) Proprietor (b) Director (c) Karta (d) Manager

Ans: (c) Karta

8. Provision of residential accommodation to the members at reasonable rate is the objective of

(a) Producer's cooperative (b) Consumer's cooperative (c) Housing cooperative (d) Credit cooperative

Ans: (c) Housing cooperative

9. A partner whose association with the firm is unknown to the general public is called (a) Active partner (b) Sleeping partner (c) Nominal partner (d) Secret partner

Ans: (d) Secret partner

10. Compare the status of a minor in a Joint Hindu Family Business with that in a partnership firm.

Ans: A male minor child becomes a member of a Joint Hindu Family Business as soon as he is born into the family. The minor has the same ownership rights as the rest of the family over the inherited property.

His liability, on the other hand, is limited to his portion of the joint property.

In the case of a partnership, a minor can be admitted as a member-only when all other partners have given their consent, and only for advantages; he cannot be required to contribute capital or pay the business's losses. Because a minor lacks the legal capacity to enter into legal contracts, he or she cannot be called a partner.

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

Ans: Although registration for a partnership firm is optional, many firms choose to do so. This is due to the numerous legal ramifications that come with not registering. Here are a few examples:

A non-registered firm's partners cannot sue a third party; but, a partnership firm's non-registration does not restrict other firms from employing it.

The firm is prohibited from bringing a lawsuit against any of its partners.

A partner in a non-registered firm, likewise, cannot sue his or her co-partners or the firm.

A non-registered partnership firm's claims against a third party cannot be enforced in court. As a result, to avoid these drawbacks, partnerships are formed.

12. State the important privileges available to a private company.

Ans: When a company is formed as a private company, it receives various benefits and exemptions not available to public companies. The following are some of the significant advantages that a private company has:

A private company can be created with only two members, but a public company requires seven.

A prospectus is not required because the public is not asked to subscribe to a private company's shares.

Shares can be distributed without the requirement of a minimum subscription.

A private firm can begin operations as soon as the certificate of incorporation is received. The public corporation, on the other hand, must wait for the certificate of commencement to be received before it may begin operations.

A private business requires only two directors, whereas a public firm requires a minimum of three directors.

A private corporation is not required to maintain a member index, whereas a public firm is required to do so.

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

Ans: In a cooperative society, each member has one vote, regardless of the number of shares they own. This means that all members have equal voting rights, resulting in a fully democratic management structure in which all decisions are made by a majority of the society's members. The company's membership is open and not restricted, and no one is discriminated against because of their religion, caste, or gender. As a result, a cooperative society is representative of a secularist system.

14. What is meant by 'partner by estoppel'? Explain.

Ans: A person is deemed a partner by estoppel if he or she provides the impression to others that he or she is a partner of the firm through his or her initiative, conduct, or behavior. Even though they do not provide cash or participate in management, such partners are held liable for the firm's debts since they are deemed partners in the perspective of a third party.

15. Briefly explain the following terms in brief.

Perpetual succession

Ans: Perpetual succession: Because a business is a legal creation, it can only be ended by legislation. It will only be decommissioned after a precise procedure known as winding-up is finished. Members may come and go, but the company does not cease to exist.

Common seal

Ans: Common seal: Because a company cannot sign any documents because it is an artificial person, it utilizes a common seal in place of signatures. Any agreement that isn't stamped with the business seal isn't legally binding on the company.

Ans: Karta is the family's eldest member, with infinite obligations and complete decision-making authority. A Joint Hindu family's Karta is in charge of running the family company and exercising complete control over it.

Artificial person

Ans: Artificial person: Company is an artificial person, yet it has the same rights, liabilities, and functions as a natural person.

It can own property, incur debts, borrow money, enter into contracts, sue, and be sued, yet it cannot breathe, eat, run, talk, or do any of the other things that humans can. As a result, it is referred to as an artificial human.

16. What do you understand by a sole proprietorship firm? Explain its merits and limitation?

Ans: A sole proprietorship is a type of business entity that is owned, managed, and controlled by a single person who receives all profits and bears all risks. The word "sole" means "only," while "proprietor" means "owner." As a result, a sole proprietor is the business's owner. The following are some of the advantages of a sole proprietorship business:

Quick Decision-Making: A solo owner has a lot of leeways when it comes to making business decisions.

Ease of Formation and Closure: There are very few legal requirements for forming a sole proprietorship business.

Personal Satisfaction: Working for oneself provides a sense of development. This also gives the person a sense of success and self-assurance in their talents.

Direct Incentive: A sole proprietor receives all of the revenues and benefits generated by the business. This encourages the solo proprietor to run his or her company efficiently and effectively.

The Following Are Some of the Limitations of a Sole Proprietorship Firm: 

Limited Resources: Alone proprietor's resources are limited to his or her savings and borrowings from others. Banks and other lending institutions may be hesitant to give a solo proprietor a long-term loan. As a result, business does not grow rapidly and often remains modest.

Limited Life of a Business Concern: The proprietorship and the owner are deemed the same in the eyes of the law. A proprietor's death, insolvency, or illness has an impact on the firm and can lead to its closure.

Unlimited Liability: If a firm fails, creditors can collect their debts not just from the company's assets, but also from the proprietor's assets.

Limited Managerial Skills: A sole proprietor is responsible for all of the company's essential tasks, such as purchasing, selling, and financing. A solo entrepreneur may also be unable to hire and retain talented and ambitious personnel due to a lack of resources.

17. Why is partnership considered by some to be a relatively unpopular form of business ownership? Explain the merits and limitations of partnership.

Ans: Because of the inherent limits that come with partnership, it is seen as a rather unpopular type of corporate ownership. These constraints include infinite liability, limited resources, conflict potential, and a lack of consistency.

Ease of Creation and Closure: A partnership firm can be formed quickly by putting an agreement in place between prospective partners. There is no requirement for a company to be registered.

Balanced Decision-Making: Depending on their areas of competence, the partners can manage different functions.

As a result, a partnership firm's decision-making process is more balanced than any other type of corporate ownership.

More Funds: In a partnership, each partner contributes a portion of the money. As a result, compared to a sole proprietor, it is possible to obtain a larger quantity of money and perform extra operations as needed.

Risk Sharing: All partners share the risks that come with running a partnership firm. Individual partners have less anxiety, strain, and stress as a result of this.

Confidentiality: A partnership firm is not compelled by law to publish its financial statements or submit reports. As a result, it can keep information about its operations discreet.

The Partnership has the Following Limitations:

Unlimited Liability: If the business's assets are insufficient to meet its debts, partners are responsible to repay debts from their assets.

Limited Resources: Because the number of partners is limited, capital investment contributions are usually insufficient to support large-scale commercial activities. As a result, partnership businesses have difficulty growing beyond a particular size.

Conflicts of Interest: In a partnership firm, decision-making authority is divided among the partners.

This is also contingent on their levels of ability, capability, and foresight.

Lack of Continuity: A partnership comes to an end when one of the partners dies, retires, becomes bankrupt, or becomes insane.

The surviving partners, on the other hand, can engage in a new agreement and continue to operate the company.

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

Ans: It is critical to select an appropriate form of company organization since one of the most crucial decisions to make when starting a business or growing an existing one is the form of organization. A company can be owned and operated in a variety of ways. It is tough to change a business model after it has been chosen. As a result, the type of commercial enterprise should be chosen with caution and deliberation.

The Following Considerations Influence the Choice of Organizational Structure:

Cost and Convenience of Beginning a Business: A sole proprietorship is simple to start in terms of initial business costs and legal requirements; a partnership, on the other hand, has the advantage of fewer legal formalities and lower costs due to its smaller scale of operations. In the case of cooperative societies and businesses, registration is required. The process of forming a business is time-consuming and costly.

Liability: In the case of a sole proprietorship or a partnership, the owners/partners' liability is unlimited. This could lead to debt repayment using the owners' assets.

Continuity: Events such as the death, insolvency, or insanity of the owners can disrupt the continuity of sole proprietorship and partnership businesses. Such elements, on the other hand, have little bearing on the longevity of the business in organizations such as joint Hindu family businesses, cooperative societies, and corporations.

Management Skills: It is tough for a sole proprietor to be knowledgeable in all aspects of the business. In other types of organizations, such as partnerships and corporations, members divide their labor, allowing management to specialize in specialized areas and make better decisions.

Capital Requirements: For big-scale activities, the corporate form is best since it can raise a huge quantity of money by issuing shares. Partnership or single proprietorship are two options for medium and small businesses. Expansion capital requirements can also be handled more simply in the form of a corporation.

Degree of Control: A sole proprietorship allows for complete control over operations and decision-making authority. However, if the owners desire to share ownership to make better decisions, they can join a partnership or a company.

Nature of Business: A sole proprietorship is better suited to enterprises that require direct human interaction with consumers, such as a beauty salon or a grocery shop. Large production units benefit from the company type of organization.

In the case of professional services, the partnership form is far more appropriate.

19. Discuss the characteristics, merits, and limitations of a cooperative form of organization. Also, describe briefly different types of cooperative societies.

Ans: "A cooperative organization is a society whose objectives are for the development of economic interests of its members under cooperative principles," according to the Indian Cooperative Societies Act, 1912. The following are characteristics of a cooperative organization:

Voluntary Membership: A cooperative society's membership is entirely voluntary. An individual has the freedom to join a cooperative organization and to leave at any moment.

Legal Status: Cooperative society registration is required. Society gains a distinct identity from its members as a result of this. Society has the authority to enter into contracts and hold property in its name, as well as to sue and be sued by others.

Limited Liability: The members of a cooperative society's liability is limited to the amount of capital they have contributed.

Control: Decisions are made by an elected managing committee, which is elected by all members of society using the "one man, one vote" system.

Service Motive: Society's primary goal is to emphasize the virtues of mutual aid and wellbeing. As a result, the motive of service guides its operations.

The Following are Some of the Advantages of a Cooperative Organization:

Voting Equality: The cooperative society is governed by the idea of "one man, one vote," regardless of the amount of capital invested.

Restricted Responsibility: A cooperative society's members' liability is limited to the amount of their capital contribution.

Stable Existence: A cooperative society's continuance is unaffected by the death, bankruptcy, or insanity of its members.

Cost-Effectiveness of Operations: Members typically provide honorary services to society. Because the focus is on eliminating middlemen, costs are reduced.

The following are some of the limitations of the cooperative type of organization: 

Limited Resources: A cooperative society's resources are comprised of capital contributions from members with limited means.

Management Inefficiency: Due to their unwillingness to pay high salaries, cooperative organizations are unable to attract and retain experienced managers.

Lack of Confidentiality: It is difficult to preserve secrecy regarding a cooperative society's operations due to open discussions at member meetings and disclosure duties under the Societies Act (7).

Government Control: In exchange for the benefits provided by the government, cooperative societies must follow a set of laws and regulations relating to account auditing, filing of accounts, and so on.

Differences of Opinion: Internal quarrels coming from opposing ideas can make decision-making harder.

Consumer Cooperative Societies are one type of cooperative organization. They are founded to provide consumer goods at reasonable costs to their members.

Producer Cooperative Societies: The goal of producer cooperative societies is to obtain low-cost raw materials and other inputs for small producers.

Marketing Cooperative Societies: These organizations pool members' outputs and provide marketing services such as transportation, labeling, packaging, and warehousing.

Farmers' Cooperative Societies: These organizations are made up of small farmers who pool their resources to gain access to the benefits of large-scale operations. These organizations ensure that farmers have access to higher-quality, more modern inputs at affordable prices.

Credit Cooperative Societies: These organizations ensure that funds are available to their members at a low-interest rate and on appropriate terms.

20. Distinguish between a Joint Hindu family business and partnership.

21. Despite limitations of size and resources, many people continue to prefer sole proprietorship over other forms of organization? Why?

Ans: A sole proprietorship is a type of business that is owned, managed, and controlled by a single person who bears all risks and reaps all profits. There are numerous advantages to operating as a sole proprietorship over other business structures. As a result, many individuals still prefer it. Here are a few examples:

Ease of Formation and Closure: There are very few legal requirements for forming a sole proprietorship business. Because a sole proprietorship is the least regulated type of business, it is simple to open and close the business according to the owner's wishes.

Direct Incentive: A sole proprietor receives all of the revenues and gains generated by the business. This encourages the solo proprietor to run his or her company efficiently and effectively.

Operational Flexibility: A sole proprietorship is extremely flexible in its operations. It can adapt to a variety of conditions and incorporate important changes, depending on the dynamism of the business environment.

NCERT Solutions for Class 11 Business Studies - Chapter 2 - Benefits for the Students

Check out the following benefits that are rendered to the students by referring to the NCERT solutions of Class 11 Business Studies:

Students will be benefited as they can practice more questions and answers by studying these NCERT solutions. 

NCERT is a very useful material for the CBSE examination. Questions based on NCERT solutions can appear in the exam. Thus, the students can study from these NCERT notes so that they can get common questions. 

NCERT questions and answers will help the students to know what type of questions can appear in the exam and they will gain insights about how to answer in the exam. 

By referring to the NCERT solutions, one can know the marks distribution and the pattern of the Business Studies question paper. 

NCERT Solutions for Class 11 Business Studies - Chapter 2: Important Topic Coverage 

The important topic coverage of this chapter is as follows:

Business Organisation

The business organisation is an entity formed to carry on commercial enterprise. This kind of organisation is predicated on law systems governing property rights, contract and exchange, and incorporation. The four primary forms of organisation are Sole Proprietorship, Partnerships, Corporations, and Limited Liability companies.

Sole Proprietorship

The majority of small businesses start as sole proprietorships. One person owns these firms, usually the individual who has day-to-day responsibility for running the business. Sole proprietorships own all the profits and the assets of the business generated by it. They also assume complete responsibility for any of their debts. For law and the public, you are the same as the business.

Partnerships

In a partnership, for a single business, two or more people share ownership. Like proprietorships, the law does not differentiate between the business and its owners. The partners should have a legal agreement that sets forth how disputes will be resolved, and decisions will be made. How future associates will be admitted to the partnership, how partners can be bought out, or what steps will be taken to dissolve the partnership when needed. Yes, it's hard to think about a "break-up" when the business is just new, but many partnerships split up during crises, and unless there is a defined process, there will be even more significant problems. They should also decide upfront how much time and capital each will contribute, etc.

Corporations

A corporation hired by the state where it is headquartered is considered by law to be a unique entity, separate from those who own it. A corporation can be taxed, can be appealed, and can enter into contractual agreements. The owners of a corporation are its shareholders. The shareholders elect a board of directors to oversee the significant policies and decisions. The corporation does not dissolve when ownership changes; it has its own life.

Limited Liability Company

The Limited Liability Company is a relatively new type of hybrid business structure that is now permissible in most states. It is plotted to provide the tax efficiencies and operational flexibility of a partnership and limited liability features of a corporation. The formation is more complicated than that of a general partnership.

Decisions You Will Need to Make When Choosing a Business Type

Debt and Liability: Most small businesses and startups accept the personal liability or responsibility associated with a sole partnership as a necessary risk of doing business. The downside is that this typically takes more paperwork, costs more to register, and may have more significant reporting or upkeep requirements than more specific business types.

Filing Taxes: You have two options when it comes to filing your business taxes. Most owners of small businesses prefer the simplicity of filing taxes on their returns, but filing business taxes one by one can help you keep your personal and business finances separate.

Partners or Investors: If you're beginning your business with a partner or private investor, you won't be able to form a sole proprietorship. You can choose between a partnership (where all responsibilities are shared equally), a limited partnership (where you can dictate responsibilities and liabilities for individual members), or an LLC (to protect all members from personal liability).

Hiring Employees: Some of the easy business types—such as sole proprietorships—can make it difficult to hire employees down the road. If you already have employees or plan to hire employees, it may be better to be future-proof with a more formal business structure like an LLC or corporation.

NCERT Solutions for Class 11 Business Studies - Chapter 2  - Extra Questions and Answers 

Question: The capital of a company is divided into several parts each one of which is called____.

Answer: (4) Share

Question: Who elects the board of Directors in a Joint Stock Company?

Answer: The Shareholders elect the board of Directors in a Joint Stock Company. 

Question: Who is a Secret partner?

Answer: A secret partner is such a partner whose membership in the company is kept secret from the public. 

Studying Business Studies - Tips to Study Better

The following are the tips which will help the students to study in a better manner:

Practice writing the answers after understanding the concepts in your language. 

Pay attention to the important topics discussed in the chapters. 

Practice with the mock test papers and sample questions. 

Revise the subject on a regular basis. 

Study the HOTs and practice MCQs as well. 

Conclusion 

We hope the students have understood the importance of studying the NCERT-based questions and answers. You can also practise extra questions as provided in the article. Take care of the topics covered in this particular chapter and study the important ones among them that need more focus. Download the PDF and prepare well to see the improvement in your performance and scores in exams.

FAQs on NCERT Solutions for Class 11 Business Chapter 2 - Forms Of Business Organisation

1. What do you mean by Nonprofit organizations?

A nonprofit organisation is pretty self-explanatory, in that it's a business organisation that's intended to promote educational or charitable purposes. The "nonprofit" aspect comes into play where the organisation must keep the amount earned by the company to pay for its expenses, programs, and all. It would help if you kept in mind that there are several types of nonprofits available, many of which can receive "tax-exempt" status. This process requires filing paperwork with the government for them to recognize you as a nonprofit organisation. Depending on the parameters of your new business, they will be able to tell you which category you best fall for.

2. What is the most important reason for incorporating?

One of the primary reasons businesses incorporate is to protect the personal assets of the owners. When you combine your business, a separate legal entity is formed. This means your business can gather assets and debts, separate from your personal assets and debts.

Besides, incorporating your business is helpful in terms of reducing your liability. For example, suppose your business gets sued by a creditor or other third party. In that case, your risk of losing your house or personal assets is significantly reduced compared to a sole proprietor. In most cases, the extent that creditors can go to receive payment is limited to the interest of your ownership in the business.

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

Vedantu is the top-most pick by every student when it comes to seeking help regarding any academic matter. There are 11 chapters in  Business Studies in Class 11 , and all of them are extremely important from the examination point of view. To get a broader idea about what kind of 1 mark questions are asked in this subject, refer to this list of Important Questions for CBSE Class 11 Business Studies. 

4. How should I learn Class 11 Business Studies concepts easily?

The more questions you solve, the more well-versed you are bound to be in any subject. As the saying goes, practice makes perfect. When it comes to Class 11 Business Studies, topics like debts and liabilities, sole proprietorships, and partnerships should be crystal clear. Chapter 2 of the NCERT syllabus, like Forms of Business Organisation, is most important. You can check out all its solutions Class 11 NCERT Business Studies Chapter 2. The solutions are free of cost and also available on the Vedantu Mobile app.

5. What are the forms of business organisation Class 11?

As discussed in depth in the Class 11 NCERT Business Studies Chapter 2 of Forms of Business Organisation, we have four primary forms of organisation. These types commonly include Sole Proprietorship, Partnerships, Corporations, and Limited Liability Companies. Each of these types of organisations has the right to carry on commercial enterprise and to abide by the rules set by the government of the country. 

6. Which of the following is the form of a business organisation answer?

We have talked about the four types of business organisations. However, before starting a business, there are some decisions you will need to make about the business model beforehand. You need to consider your debt and liabilities before deciding upon which business pattern you will follow. Most of the businesses start as sole proprietorships and later expand into partnerships or corporations. Depending on the number of employees you want to hire, make an informed decision. 

7. Which form of business organisation lacks motivation?

It is generally noted that there is a lack of motivation in a company organisation form of business set-up. This is primarily because the team responsible for running the company, namely the directors and managers who look into managerial matters, do not get a share in the profits of the business. There is an absence of a direct link between effort and reward and it leads to a lack of motivation. 

NCERT Solutions for Class 11 Business Studies

Cbse study materials.

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NCERT Solutions for Class 11 Business Studies

NCERT Solutions for Business Studies Subject for Class 11 Students are given here. The 11th grade is an important milestone because it lays the foundation for your final board exams the next year. For students who plan to study commerce, Business Studies is an integral part of your syllabus.

Business studies require you to memorise a lot of business laws and trade sanctions. At LearnCBSE.in, we provide the Class 11 Business Studies NCERT Solutions. You can easily download the solutions and start solving questions to make it easier for yourself!

• Chapter 1 Nature and Purpose of Business
• Chapter 2 Forms of Business Organisation
• 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-I
• Chapter 12 International Business-II

NCERT Solutions for Class 11 Business Studies PDF

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NCERT Solutions for Class 11 Business Studies

Cbse class 11 business studies solutions guide.

Shaalaa.com provides the CBSE Class 11 Business Studies Solutions Digest. Shaalaa is undoubtedly a site that most of your classmates are using to perform well in exams.

You can solve the Class 11 Business Studies Book Solutions CBSE textbook questions by using Shaalaa.com to verify your answers, which will help you practise better and become more confident.

CBSE Class 11 Business Studies Textbook Solutions

Questions and answers for the Class 11 Business Studies Textbook are on this page. NCERT Solutions for Class 11 Business Studies Digest CBSE will help students understand the concepts better.

NCERT Solutions for Class 11 Business Studies Chapterwise List | Class 11 Business Studies Digest

The answers to the NCERT books are the best study material for students. Listed below are the chapter-wise NCERT Business Studies Class 11 Solutions CBSE.

•  • Chapter 1: Business, Trade and Commerce
•  • Chapter 2: Forms of Business Organisation
•  • 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 and Entrepreneurship
•  • Chapter 10: Internal Trade
•  • Chapter 11: International Business
• Commerce (English Medium) Class 11 CBSE
• Arts (English Medium) Class 11 CBSE

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NCERT Class 11 solutions for other subjects

• NCERT solutions for Biology Class 11
• NCERT solutions for Biology Class 11 [जीव विज्ञान ११ वीं कक्षा]
• NCERT solutions for Chemistry Part 1 and 2 Class 11
• NCERT solutions for Chemistry Part 1 and 2 Class 11 [रसायन विज्ञान भाग १ व २ कक्षा ११ वीं]
• NCERT solutions for Accountancy - Financial Accounting Class 11
• NCERT solutions for Computer Science Class 11
• NCERT solutions for Introductory Microeconomics - Textbook in Economics for Class 11
• NCERT solutions for Economics - Statistics for Economics Class 11
• NCERT solutions for Ncert Class 11 English (Core Course) - Hornbill
• NCERT solutions for Ncert Class 11 English (Core Course) - Snapshots
• NCERT solutions for Ncert Class 11 English (Elective Course) - Woven Words
• NCERT solutions for Geography - Fundamentals of Physical Geography Class 11
• NCERT solutions for Geography - India Physical Environment Class 11
• NCERT solutions for Geography - Practical Work in Geography Class 11
• NCERT solutions for Geography Class 11 [भूगोल - भौतिक भूगोल के मूल सिद्धांत ११ वीं कक्षा]
• NCERT solutions for Ncert Class 11 History - Themes in World History
• NCERT solutions for Ncert Class 11 Political Science - Indian Constitution at Work
• NCERT solutions for Ncert Class 11 Political Science - Political Theory
• NCERT solutions for Ncert Class 11 Psychology
• NCERT solutions for Ncert Class 11 Sociology - Introducing Sociology
• NCERT solutions for Ncert Class 11 Sociology - Understanding Society
• NCERT solutions for Economics Class 11 [अर्थशास्त्र - अर्थशास्त्र में सांख्यिकी ११ वीं कक्षा]
• NCERT solutions for Economics - Introductory Microeconomics Class 11 CBSE [अर्थशास्त्र - व्यष्टि अर्थशास्त्र एक परिचय परिचय ११ वीं कक्षा]
• NCERT solutions for Geography Class 11 [भूगोल - भारत: भौतिक पर्यावरण ११ वीं कक्षा]
• NCERT solutions for Geography Class 11 [भूगोल - भूगोल में प्रयोगात्मक कार्य ११ वीं कक्षा]
• NCERT solutions for Hindi - Aaroh Class 11 [हिंदी - आरोह ११ वीं कक्षा]
• NCERT solutions for Hindi - Antara Class 11 [हिंदी - अंतरा ११ वीं कक्षा]
• NCERT solutions for Hindi - Vitan Class 11 [हिंदी - वितान ११ वीं कक्षा]
• NCERT solutions for History Class 11 [इतिहास - विश्व इतिहास के कुछ विषय ११ वीं कक्षा]
• NCERT solutions for Mathematics Class 11
• NCERT solutions for Mathematics Class 11 [गणित ११ वीं कक्षा]
• NCERT solutions for Physics Part 1 and 2 Class 11
• NCERT solutions for Physics Class 11 (Part 1 and 2) [भौतिकी भाग १ व २ कक्षा ११ वीं]
• NCERT solutions for Political Science Class 11 [राजनीति विज्ञान - भारत का संविधान सिद्धांत और व्यवहार ११ वीं कक्षा]
• NCERT solutions for Political Science Class 11 [राजनीति विज्ञान - राजनीतिक सिद्धांत ११ वीं कक्षा]
• NCERT solutions for Psychology Class 11 [मनोविज्ञान ११ वीं कक्षा]
• NCERT solutions for Sanskrit - Bhaswati Class 11 [संस्कृत - भास्वती कक्षा ११]
• NCERT solutions for Sanskrit - Sahitya Parichay Class 11 and 12 [संस्कृत - साहित्य परिचय कक्षा ११ एवं १२]
• NCERT solutions for Sanskrit - Shashwati Class 11 [संस्कृत - शाश्वत कक्षा ११]
• NCERT solutions for Sociology Class 11 [समाजशास्त्र - समाज का बोध ११ वीं कक्षा]
• NCERT solutions for Sociology Class 11 [समाजशास्त्र - समाजशास्त्र परिचय ११ वीं कक्षा]

Chapters covered in NCERT Solutions for Class 11 Business Studies

Ncert solutions for class 11 business studies (11th) chapter 1: business, trade and commerce, ncert class 11 business studies (11th) chapter 1: business, trade and commerce exercises.

NCERT Solutions for Class 11 Business Studies (11th) Chapter 2: Forms of Business Organisation

Ncert class 11 business studies (11th) chapter 2: forms of business organisation exercises.

NCERT Solutions for Class 11 Business Studies (11th) Chapter 3: Private, Public and Global Enterprises

Ncert class 11 business studies (11th) chapter 3: private, public and global enterprises exercises.

NCERT Solutions for Class 11 Business Studies (11th) Chapter 4: Business Services

Ncert class 11 business studies (11th) chapter 4: business services exercises.

NCERT Solutions for Class 11 Business Studies (11th) Chapter 5: Emerging Modes of Business

Ncert class 11 business studies (11th) chapter 5: emerging modes of business exercises.

NCERT Solutions for Class 11 Business Studies (11th) Chapter 6: Social Responsibilities of Business and Business Ethics

Ncert class 11 business studies (11th) chapter 6: social responsibilities of business and business ethics exercises.

NCERT Solutions for Class 11 Business Studies (11th) Chapter 7: Formation of a Company

Ncert class 11 business studies (11th) chapter 7: formation of a company exercises.

NCERT Solutions for Class 11 Business Studies (11th) Chapter 8: Sources of Business Finance

Ncert class 11 business studies (11th) chapter 8: sources of business finance exercises.

NCERT Solutions for Class 11 Business Studies (11th) Chapter 9: Small Business and Entrepreneurship

Ncert class 11 business studies (11th) chapter 9: small business and entrepreneurship exercises.

NCERT Solutions for Class 11 Business Studies (11th) Chapter 10: Internal Trade

Ncert class 11 business studies (11th) chapter 10: internal trade exercises.

NCERT Solutions for Class 11 Business Studies (11th) Chapter 11: International Business

Ncert class 11 business studies (11th) chapter 11: international business exercises.

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NCERT Solutions for Class 11 Business Studies CBSE

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NCERT Solutions for Class 11 Business Studies Chapter 2

NCERT Solutions for Class 11 Business Studies Chapter 2 Forms of Business Organisation. Chapter end exercise answers, long answers type questions and short answers type questions are given with answers. All the answers are prepared by subject experts for the academic session 2024-25.

Download Class 11 Business Studies Chapter 2 Study Material in Hindi and English

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Class 11 Business Studies Chapter 2 Short Answer Questions

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

As per the Indian law, any person below the age of 18 years is considered a ‘minor’. The status of a minor in a Joint Hindu Family differs from that in a partnership firm. In case of a Joint Hindu Family, membership in the family business is by birth. This means that as soon as a boy child is born in a Joint Hindu Family, he is automatically entitled to a share in his family business. In this case, the minor enjoys an equal ownership right over the inherited property as the other members of the family. However, his liability is limited only to the extent of his share in the joint property. As per the Partnership Act, 1923, no minor can be a partner in a partnership firm. But a partnership firm, with the consent of all the partners, can admit a minor to share the profits of the firm; but he cannot be asked to either contribute capital or bear the losses incurred by the business. A minor is not legally competent to enter into any legal contracts, and therefore, he or she cannot be considered a partner. However, a minor, after attaining the age of 18 years, has the option of either continuing with the partnership firm or withdrawing his interest from it.

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

Although registration in case of a partnership firm is optional and not enforced by law, yet many firms voluntarily opt for it. This is because the partners want to avoid legal disadvantages and disputes that arise because of non-registration. A few of these disadvantages are listed below: (a) The partners of a non-registered firm cannot file a suit against a third party; however, non-registration of a partnership firm does not prevent other firms from suing it. (b) The firm cannot file a case against any of its partners. Similarly, a partner of a non-registered firm cannot file a case against his or her co-partners or the firm. (c) A non-registered partnership firm cannot enforce its claims against a third party in a court and may bear a huge loss.

State the important privileges available to a private company.

A private company enjoys various exemptions or privileges which are often not available to a public company. Some of the privileges enjoyed by a private company are given below: Less number of members required : A private company requires only two members for formation, while a public company requires at least seven members. Commencement of business : A private company can start its business operations right from the day of receiving the certificate of incorporation. On the other hand, it is mandatory for a public company to obtain a certificate of commencement along with a certificate of incorporation before starting business. No restriction on advancing loans to the directors : There is no restriction in the case of a private company for the amount of loans that can be granted to the directors. No prior permission is required to be sought for advancing such loans. In contrast, a public company has to seek permission from the government before advancing loans to its directors. Lesser number of directors required for operations : A private company can continue operations with just two directors, whereas a public company must have at least three directors to continue its operations.

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

In a cooperative society, management is in the hands of a managing committee elected by the members of the society. The elections in such societies are governed by the principle of “one member, one vote”.

All members have equal voting rights irrespective of the amount of capital they have contributed to the society. This principle prevents the superiority of the richer members who own a higher number of shares in the decision-making process. Thus, as in a democracy, a cooperative society treats all its members equally and provides equal rights to its members. Moreover, there is no discrimination among the members on the basis of their religion, caste or sex. In addition, the members are free to elect the members of the managing committee of their choice. Therefore, a cooperative society exemplifies a secularist system.

What is meant by ‘partner by estoppel’? Explain.

If a person acts and behaves in such a way that leaves an impression on third parties that he or she is a partner in a particular firm, it can be regarded as a ‘partner by estoppel’. This means that if a person behaves in a manner that makes third parties consider this individual as one of the actual partners. Such a partner is actually not a partner, as he or she neither contributes any capital to the firm nor actively participates in the operations of the firm and is not entitled to any share in the firm’s profits or losses. Nevertheless, he or she can be held liable for the debts that the firm owes to third parties. Accordingly, if the funds available to the firm fall short of requirement for the repayment of debts, then the private assets of a partner by estoppel can be used to repay the debts.

Explain the following terms in brief (a) Perpetual succession (b) Common seal (c) Karta (d) Artificial person.

• (a) Perpetual succession: It implies that a company continues to exist until it is forced by the law to wind up. This implies that a company has a separate legal entity and cannot come to an end by itself. It will continue to operate forever. It will not cease to exist even in situations such as death, retirement or insolvency of any of its members—that is, a company will continue to operate even if all its members die.
• (b) Common seal: A company is an artificial entity that is created under the law. Unlike human beings, it cannot sign official documents. Thus the role of a common seal becomes significant. It is the official signature of a company that is used by its board of directors in almost all the important official documents. The presence of this seal authenticates the documents, and documents with a common seal can be provided as evidence in a court of law.
• (c) Karta: Karta is the head of a joint Hindu family who owns and runs a family business. The karta of a Joint Hindu family is responsible for decision making and carrying business operations of the family business. He is the eldest member of the family with full control and has unlimited liabilities.
• (d) Artificial person: By the term artificial person, we mean that a company is considered as a separate legal entity under the law and is a juristic person. However, unlike human beings, a company, as an artificial person, cannot sign the documents. However a company does have its own life that is truly independent and is not affected by the life/death of its members.

11th B. St. Chapter 2 Long Answer Questions

What do you understand by a sole proprietorship firm explain its merits and limitation.

In a sole proprietorship form of business, the business is owned, managed and controlled by a single individual who is known as the sole proprietor. As the sole owner of the business, the proprietor becomes the single recipient of all the profits earned by the business and, in the same way, has to bear all losses. Merits of Sole Proprietorship A sole proprietor enjoys the following benefits. (a) Ease in formation and closure of business : The legal formalities are handful to be dealt with for setting up a sole proprietorship firm. The exception being if a proprietor is dealing in drugs and liquor products, then a licence has to be acquired. The procedure for closing down a sole proprietorship firm is also hassle-free and easy. (b) Quick decision making : A sole proprietor enjoys complete control over the business. This makes decision making quick and easy. There is no interference. (c) Direct incentive : A sole proprietor is the sole bearer of all types of risks associated with the business and, at the same time, is the single recipient of all the profits and gains earned in the business. Thus, this direct link between efforts and rewards motivates the sole proprietor to operate the business efficiency and effectively. Limitations of Sole Proprietorship The following are a few limitations of a sole proprietor firm. (a) Limited capital : The financial resources available to a sole proprietor are limited merely to this person’s personal savings and borrowings that can be raised from outside sources. Thus, expansion prospect of the sole business is impacted. (b) Limited managerial abilities : A sole proprietor manages all the important functions such as purchasing, selling and planning, due to which, the benefits of specialisation are not available to a sole proprietor. Also, because of limited resources, a sole proprietor may not be able to employ specialised employees to handle specific business operations. (c) Uncertain life : In the eyes of the law, a sole proprietor and his or her business are regarded as the same entity. In the circumstances of death, insanity, bankruptcy or physical disability of a sole proprietor, the life of the business is adversely affected.

Why is partnership considered by some to be a relatively unpopular form of business ownership? Explain the merits and limitations of partnership.

Partnership is considered to be a relatively unpopular form of business ownership because of the various limitations associated with it. These limitations include unlimited liability, limited resources, possibility of conflicts and lack of continuity. Limitations of Partnership (a) Unlimited liability : In a partnership, all the partners have unlimited liability. This implies that if the firm’s assets fall short of the requirement for the repayment of the firm’s debts, then the personal assets of the partners can be used. (b) Limited resources : A partnership firm faces limited availability of finance, because of the restrictions imposed on the following fronts: (i) maximum number of partners allowed in a partnership firm by definition (ii) maximum number of new partners who can be admitted in the firm Hence, as a result, a partnership firm faces financial constraints further affecting growth prospects. (c) Possibility of conflicts : In a partnership firm, the power of decision making is shared among the partners. Every partner has their own opinion and difference of opinion can lead to a dispute among partners. This further depends on their respective levels of skills, capabilities and foresightedness. The differences in these qualities may possibly lead to conflicts among the partners.

Merits of Partnership (a) Easy formation and closure : A partnership firm involves an agreement (oral or written) between two or more partners. The registration of a partnership firm is not compulsory, which eases its formation. Similarly, a partnership firm can be shut down at any time with the mutual consent of all the partners. (b) Balanced decision making : All the decisions related to the business are taken unanimously by all the partners. This makes the decision-making process in a partnership firm comparatively more balanced than in any other form of business ownership. (c) Sharing of risks : The risks in a partnership firm are shared jointly by all the partners. As a result individual partners have less burden of liability as it is shared among all the partners.

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

The choice of an appropriate form of business organisation is important for the following reasons. (a) Options to choose among various business forms : There are various forms of business organisations such as sole proprietorship, partnership, cooperative society and company, the choice of an appropriate business organisation is important, because each business form has its own merits and demerits. (b) Business factors : A number of factors influence respective business namely, need of funds, risk involved, amount of profits and legal obligations. Therefore, the choice of the appropriate business form is made only after the evaluation of all these business factors if a business is feasible or not. (c) Long-term growth prospects : The growth prospects of each type of business form are different. If a business person opts for a particular business form without correctly evaluating the growth prospects, then the business may fail or the long-term growth prospects of the business will suffer. Factors determining Choice of a Business Form The following are the factors that determine the choice of a business organisation.

• (a) Nature of business activity : Any individual first needs to decide upon the nature or kind of business activity that he or she desires to undertake. In case the business type requires direct personal contact with customers, then the sole proprietorship form of business proves beneficial. On the other hand, if direct personal contact is not required, then a partnership or a company form of business is more suitable.
• (b) Degree of control : The choice of a business form also depends on the degree of control that a businessperson wants to exercise over its management. If a businessperson aims to have direct control over all the business operations, then sole proprietorship may be considered appropriate. However, if he or she does not mind sharing the decision-making powers with others, then a partnership or company form of business would be more suitable.
• (c) Degree and specialisation of managerial abilities : If the business operations are large and require specialised and skilled professionals for managing them, then a company form of business may be selected. However, if the business operations are not very complex and the scale of operations is also not very large, then sole proprietorship proves to be a better alternative.

Discuss the characteristics, merits and limitations of cooperative form of organisation. Also describe briefly different types of cooperative societies.

The word ‘cooperative’ means an organisation in which the stakeholders work with one another. Thus, a cooperative society is a voluntary association of individuals who join together to protect or promote their common interests. Features of Cooperative Societies (a) Separate legal entity : The registration of a cooperative society is compulsory under the Cooperative Societies Act, 1912. Once the registration is complete, the cooperative society is granted the status of a separate legal entity. This implies that the cooperative society can hold properties in its own name and enter into contracts. Moreover, it can sue others and can be sued by others. (b) Management and control : A cooperative society is a democratic form of organisation as it is managed and controlled by a managing committee which is elected by the members of the society on the principle of ‘one member, one vote’. Merits of Cooperative Societies (a) Ease of formation : The formation of a cooperative society is quite easy as it requires the induction of only 10 adult members. The registration procedure of a society under the Cooperative Societies Act, 1912, is quite simple. (b) Continued existence : A cooperative society is a stable form of organisation as it enjoys the status of a separate legal entity that is considered distinct from its members. As a result, the life of a cooperative society remains unaffected by the death, insolvency or insanity of its members. Limitations of Cooperative Societies (a) Excessive government control : Cooperative societies have to follow certain rules and regulations as imposed on them by the cooperative departments of the state government concerned. These rules include submission and auditing of accounts. (b) Inefficiency in management : The management of a cooperative society generally comprises part-time or inexperienced people. They may not be well equipped with the skills required to handle the managerial functions effectively. Consequently, cooperative societies often lack efficiency. Types of Cooperative Societies Cooperative societies are classified into the following six types.

• Consumer cooperative societies : These are formed to provide consumer goods at reasonable prices to its members.
• Producer cooperative societies : The objective of producer cooperative societies is to procure raw materials and other inputs at low costs and supply them to small producers.
• Marketing cooperative societies : These societies pool the outputs of the member and perform certain marketing functions for them such as transportation, labelling, packaging and warehousing.
• Farmers’ cooperative societies : Such societies are formed by small farmers who pool their resources to reap the benefits associated with large-scale operations. These societies ensure the availability of better and advanced inputs at low rates to farmers.
• Credit cooperative societies :These societies ensure the availability of funds to its members at comparatively low interest rates on reasonable terms.
• Cooperative housing societies : The aim of housing cooperative societies is to solve the problem of finding residential accommodation of its members by constructing houses for them. These societies provide its members with easy repayment schemes through which the cost of the houses can be repaid in form of installments.

Despite limitations of size and resources, many people continue to prefer sole proprietorship over other forms of organisation? Why?

Despite the limitations in terms of size and resources, many people prefer sole proprietorship over any other forms of business primarily because of the numerous benefits associated with the sole proprietorship business form. The following are a few important benefits that a businessperson enjoys by being a sole proprietor. (a) Ease in formation and closure : There are hardly any legal formalities that are required to be fulfilled for setting up a sole proprietorship firm. However, if a proprietor wants to deal in drugs and liquor, then he or she must to acquire a licence. Just as setting up a sole proprietorship firm is easy, its closure is also hassle-free. (b) Quick decision making : A sole proprietor enjoys complete control over the business, facilitating quick and easy decision making.

(c) Direct incentive : A sole proprietor is the sole bearer of all types of risks associated with the business and at the same time is the single recipient of all the profits and gains earned from the business. Thus, it is due to this direct link between the businessperson’s efforts and the rewards which keeps this individual motivated to operate the business efficiency and effectively. (d) Flexibility in operations : A sole proprietorship firm is highly flexible in operations. It can adapt itself to various situations, and vital changes can be incorporated, as per the dynamism of the business environment. The reason for the high degree of flexibility can be attributed to the fact that a sole proprietor is the only person who is involved in every aspect of the business.

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• CBSE Class 11 Business Studies Chapter 2 – Forms of Business Organisation Class 11 Notes

Forms of Business Organisation Class 11 Revision Notes            

The  forms of business organisation class 11 notes help you to identify and distinguish between different forms of business organizations. Forms of Business organization refer to the type of organizations that differ in terms of ownership and management. To start a business or to expand an existing business, one of the important decision is to choose the form of organization. Thus, we need to determine the advantages and disadvantages of each form of business organization. Various forms of business organization include sole proprietorship, joint Hindu family business, cooperative society, partnership firm, and joint-stock company.

It discusses the factors determining the choice of an appropriate form of business organization. Various factors to consider while deciding the form of organization for one’s business are initial cost, liability, continuity, capital contribution, managerial ability, degree of control and nature of business.

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Sub-topics covered under Forms of Business Organisation:

• Introduction and Evaluation to Forms of Business Organisations : This subtopic explains evaluating each form of organization that we require to choose as the most appropriate one.
• Sole Proprietorship : It explains the organization owned, controlled and managed by a single individual.
• Joint Hindu Family Business : It explains the organization owned and carried on by the members of the Hindu Undivided Family and controlled by Karta.
• Cooperative Society : The subtopic explains the voluntary association of persons who comes together to protect their economic interest with the desire to earn greater benefits.
• Partnership : This topic explains the meaning of partnership which is an association of two or more persons who agree to carry on a business together.
• Partnership Deed and Registration : It deals with the partnership deed and registration of a partnership firm.
• Joint Stock Company : It deals with the meaning of a Joint Stock Company.
• Types of Companies : It explains the meaning of Private companies and public companies.
• Forms of Organising Public Sector : It explains Departmental undertaking, Statutory corporations, and Government company.

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CBSE Class 11 Business Studies Revision Notes

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NCERT Solutions for Class 11 Business Studies Chapter 2

Home » NCERT Solutions » NCERT Solutions for Class 11 Business Studies Chapter 2

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NCERT Solutions for Class 11 Business Studies Chapter 2 by Extramarks are a compilation of detailed answers to the questions given at the end of Chapter 2 of Class 11 Business Studies textbook. The solutions are prepared by subject matter experts and written in a simple and easy to understand language. To get the most out of these resources, students should ideally first go through the chapter, attempt the questions on their own and then refer to the solutions provided here for guidance.

Class 11 NCERT Solutions Business Studies – Chapter 2 

Access ncert solutions for class 11 business studies chapter 2 – forms of business organisation, ncert solutions for class 11 business studies – chapter 2 – forms of business organisation .

One of the most important decisions when starting a business or expanding an existing one is the type of organisation to use. The different forms of business organisations are defined by their ownership and management structures. In Chapter 2 of Class 11 Business Studies, students will learn the different forms of business organisations, factors influencing the selection of an appropriate business structure, the merits and demerits of each type, and much more.

Business Organisation 

A business organisation is an entity formed to carry on commercial enterprise. This kind of organisation is predicated on law systems governing property rights, contract and exchange, and incorporation.  

The four primary forms of organisation are sole proprietorship, partnerships, corporations, and limited liability companies. 

Sole proprietorship  

Most small businesses start as sole proprietorships. The owner of such firms is mainly one person who controls the day-to-day responsibilities of running the firm. Sole proprietorships own all the profits and assets generated by the business. They also assume total responsibility for all their debts. 

Partnerships 

For a single business in partnership, two or more people share ownership of the business. Just like in proprietorship, the law does not differentiate between business and its owners. There should be a legal document made by the partners which will depict how issues between partners will be resolved and how decisions for the business will be made. The legal document should also explain how future associates will be added to the partnership, how partners can be bought out or how the partnership can be dissolved. It is hard to imagine a new-made partnership splitting up, but some partnerships do split up when they find themselves in a crisis. In such cases, if there are no defined steps on how to dissolve the partnership, there will be more significant problems. The partners should also decide at the start about how much time and capital each partner will contribute. 

Corporations

A corporation hired by the state where it is headquartered is considered to be a unique entity, separate from those who own it. A corporation can be taxed, can be appealed, and can also enter into contractual agreements. The owners of a corporation are its shareholders. The shareholders elect a board of directors to carry out policy decisions and other crucial decisions. The corporation does not dissolve when the ownership changes; it has its own life. 

Limited Liability Company 

The Limited Liability Company is a relatively new type of hybrid business structure that is now legal in the majority of states. It is designed to provide the tax advantages and operational flexibility of a partnership as well as the limited liability features of a corporation. The formation process is more difficult than that of a general partnership. 

Decisions You Will Need to Make While Choosing a Business Type 

Debt and Liability: The personal liability or responsibility of a sole partnership is accepted as a necessary risk of doing business by the majority of startups or small businesses. The disadvantage is that it may necessitate more paperwork, cost more to register, and have more stringent reporting or upkeep requirements than most other types of businesses.

Filing Taxes: When it comes to filing business taxes, you have two options. Most small business owners prefer to file taxes on their returns. However, filing business taxes separately can help you keep your personal and business finances separate.

Partners and Investors: You will not be able to form a sole proprietorship if you start your business with a partner or private investor. You have the option of forming a Partnership (where all responsibilities are shared equally), a Limited Partnership (LP) (where you can dictate responsibilities and liabilities to individual people), or a Limited Liability Company (LLC) (to protect all members from personal liability).

Hiring Employees: Businesses that start off as sole proprietorships may face difficulties in hiring employees later. If you already have employees or plan to hire new ones, an LLC or corporation might be a better choice.  

Solved Examples

Question: The capital of a company is divided into several parts, each of which is called________.

Answer: 4. Share

Question: If a business defaults on its loans, under which of the following types of business organisations, the owner’s personal assets can be used to pay off those loans?

• Corporation
• Limited Liability Company
• Sole proprietorship
•  None of the above

Answer: 3. Sole proprietorship

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Q.1 Compare the status of a minor in a Joint Hindu Family Business with that in a partnership firm.

In a Joint Hindu family business, membership in the family business is by birth. This means that as soon as a child is born in the family, he is automatically entitled to share in his family business. Hence a minor enjoys the equal ownership right over the inherited property. As per Partnership Act, 1923, no minor can be a partner in a partnership firm. But partnership firm with the consent of the partners can admit a minor to share the profits of the firm but he cannot be asked to either contribute capital or bear the losses incurred by the business. A minor is not legally bound to enter into any legal contract. He can therefore not be considered to be a partner.

Q.2 If registration is optional, why do partnership firms willingly go through this legal formality and get themselves registered? Explain.

Registration in case of a partnership firm is optional yet many firms voluntary opt for it as there are various disadvantages for not registering. Some of the advantages of registration are as follows –

• A suit can be filed by the partners in the court of law against third party
• A suit can be filed by the partners against other partners firm for the recovery of loans
• A suit can be filed by the partners against an unregistered firm for the recovery of loans
• A suit can be filed by the partners against the firm or other partners for the dissolution of the firm
• A suit can be filed by the partners against the firm or other partners for the settlement of accounts.

Q.3 State the important privileges available to 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.

Q.4 How does a cooperative society exemplify democracy and secularism? Explain.

In a cooperative society, the power to take a decision lies in the hands of an elected managing committee. The right to vote gives the members the chance to choose the members who will constitute the managing committee and this lends the cooperative society a democratic character. Moreover there is no discrimination among the members on the basis of their religion, caste or sex. The members are free to elect the members of the managing committee of their choice. Hence a cooperative society exemplifies a secularist system.

Q.5 What is meant by ‘partner by estoppel’? Explain.

A person is considered to be a partner by estoppel if, through his/her own initiative, conduct or behavior , he /she gives an impression to others that he/she is a partner of the firm. Such partners are held liable for the debts of the firm because in the eyes of the third party they are considered partners, even though they do not contribute capital or take part in its management.

Q. 6 Explain the following terms in brief.

• Perpetual succession
• Common seal
• Artificial person
• Perpetual succession: This means that the existence of a company is not affected by the death, retirement, resignation, insolvency or insanity of its members. The company will continue to exist even if all the members die.
• Common Seal: A common seal is the official signature of a company that is used by its board of directors in all the official documents. Any agreement which does not have a company common seal put on , it is not legally binding on the company.
• Karta: In a Joint Hindu family business , the business is controlled by head of the family who is the eldest member and is called karta. All the members in the family have limited liability to the extent of their property but karta has unlimited liability.
• Artificial person: A company is a creation of law and exists independent of its members. Like natural persons, a company can own property, incur debts, borrow money, enter into contracts, sue and be sued but unlike them it cannot breathe, eat, run, walk , talk and so on.

Long Questions for NCERT Business Studies Solutions Class 11 Chapter 2

Q.1  What do you understand by a sole proprietorship firm? Explain its merits and limitations.

Sole proprietorship firm is run by a single person. He is the owner and the manager. He solely invests in business ,enjoys profits andfully responsible for losses.

Merits proprietorship firm-

A sole proprietorship firm has the following merits-

i.Formation and closure: It is very easy and simple to form a sole proprietorship form of business organisation. No legal formalities are required to be observed. Similarly, the business can be wound up any time if a proprietor so decides. ii. Direct incentives: In sole proprietorship form of business organisation, the entire profit of the business goes to the owner. This motivates the proprietor to work hard and run the business efficiently. iii. Prompt decision making: As the sole trader takes all the decisions himself, the decision making becomes quick, which enables the owner to take care of the available opportunities immediately and provide immediate solutions to the problems. iv. Confidentiality of information: The business secrets are known only to a proprietor. He/she is not required to disclose any information to others unless and until he/she himself so decides. He/she is also not bound to publish his/her business accounts. v. Better control: An owner has full control over his/her business. He/she plans, organises and co-ordinates the various activities. Since he/she has all the authority, there is always effective control.

Limitations of a sole proprietorship firm-

i. Limited Capital Resources – Limited financial resources and borrowing capacity of a sole trader which leads to limited scope for expanding its operations.

ii. Limited Managerial Ability – Limited organising ability and managerial skills of the proprietor may lead to errors of judgement and unbalanced decisions.

iii. Unlimited Liability – The sole trader is held personally liable for the losses incurred in the business which means personal property of the owner may be taken for paying debts in case business assets are insufficient.

iv. Limited Scope for Expansion – Limited financial and managerial resources give a little scope for expansion and growth of business and benefits of economies of scale can’t be taken due to its small scale operations.

Q.2  Why is partnership considered by some to be a relatively unpopular form of business ownership? Explain the merits and limitations of partnership.

Partnership is considered to be a relatively unpopular form of business ownership because of the various limitations associated with it . These limitations are unlimited liability, limited resources, possibility of conflicts and lack of continuity.

The merits of partnership are:

i. Ease of formation and closure : The partnership business can be formed easily without any legal formalities. It is not necessary to get the firm registered. A simple agreement, either oral or in writing, is sufficient to create a partnership firm.

ii. More funds : Two or more partners join hand to start partnership business, pooling more resources compared to sole proprietorship. The partners can contribute more capital, more efforts and also more time for the business.

iii. Sharing of risks : In a partnership firm all the partners share the business risks. This reduces the anxiety, burden and stress on individual partners.

The limitations of partnership are: i. Unlimited liability – In partnership, if the business assets prove to be insufficient, then the partners are liable to repay the debts even from their personal resources. ii. Limited resources – The capital invested is usually not sufficient to support large scale business as there is restriction on the number of partners, thus, resulting in less contribution in terms of capital investment. iii. Lack of continuity – Partnership lacks stability as with death, lunacy, or insolvency of any partner. Therefore, the partnership comes to an end, resulting in lack of continuity. iv. Lack of public confidence – There is no legal requirement to publish a firm’s financial reports or other related documents. This results in low confidence among the public for partnership firms. v. Possibility of conflicts – In a partnership firm, every partner has an equal right to participate in the management. Every partner can place his or her opinion before the management regarding any matter at any time. Difference of opinion may give rise to quarrels and lead to dissolution of the firm.

Q.3 Why is it important to choose an appropriate form of organisation? Discuss the factors that determine the choice of form of organisation.

It is important to choose an appropriate form of business organisation because there exist numerous forms of business organisations like sole proprietorship, partnership, joint stock company, cooperative society etc, the choice of an appropriate business organisation is very important as each business has its merits and demerits. Selection of an appropriate form of business organisation can be made after taking various factors into consideration like initial costs, liability, continuity etc. The growth prospects of different forms of business organizations are different. If a business opts for a particular type of business organization without evaluating its merits and demerits, the business might not survive. Hence it is very important to choose an appropriate form of business organisation.

The factors affecting choice of the form of Business Organisation are:

• Nature of Business: Businesses providing direct services as small retailers, tailors, and professional services as doctors, lawyers, etc. depend for their success upon personal attention to customers and their skills. Business activities requiring pooling of skills and funds as in wholesale trade, stock brokers, etc., are better organised as partnerships.
• Degree of control desired: A person who desires direct control of business prefers proprietorship rather than a company that has separate ownership and management. However, in large scale operations, it is desirable to adopt the company form of ownership.
• Division of surplus: A sole trader receives all the profits of his business but he also bears all the risks. If a person is ready to bear unlimited personal liability and desires maximum share of profits then proprietorship or partnership is preferable.
• Flexibility of operations: Businesses which require a high degree of administrative flexibility should be better organised as proprietorship or partnership. Flexibility of operations is linked with internal organisation of business. The internal organisation of proprietorship or partnership is simple.
• Duration of business: Temporary and ad-hoc ventures can be organised as proprietorship or partnership as they are easy to form and dissolve. Long term form of businesses should adopt company form of organisation.

Q.4 Discuss the characteristics, merits and limitations of cooperative form of organisation. Also describe briefly different types of cooperative societies.

Following points state the characteristics of cooperative organisation:

i. Voluntary Association – It is a voluntary association of individuals. It involves people desirous of improving their economic status through joint action. People having common interest are free to join. ii. One man one vote – It is a democratic organisation. Irrespective of the shares held by members, every member has one vote. There is equal voice of all members in its management. iii. Service Motive – It mainly aims at providing services to its members. The profit is earned for the benefit of its members. It stands by the motto – each for all & all for each.

iv.Limited liability – The liability of the members of a cooperative society is limited to the extent of the amount contributed by them as capital. v. Legal status – Registration of a cooperative society is compulsory. A registered cooperative society can enter into contracts and hold property in its name, can sue and be sued by others.

vi. Control- In a cooperative society, the power to take decisions lies in the hands of an elected managing committee.

Following are the merits of Cooperative organisation: i . Ease of Formation – It requires only ten adult individuals. Less money & time are needed for its registration. Few simple legal formalities are to be followed. ii. State Patronage – Several concessions in taxes, finance, etc. is provided by the government. It enjoys special privileges & exemptions. iii. Limited liability – There is limited liability to the extent of the share of the member in society’s capital. Risk faced by every member is limited and known. iv . Democratic Management – Every member has an equal vote or voice. There is no discrimination on the basis of member’s capital contribution. It follows the principle of one man one vote. No small group of members can dominate the control of the society. v . Internal Financing – Every year, a large part of the profit is transferred to general reserve. Not more than 10% is paid as dividend. It facilitates expansion & growth of the society due to the profits that are ploughed back in.

Following are the limitations of cooperative organisation: i. Limited Capital – It is formed by people with limited means. They are not able to mobilise adequate capital for large scale operations. ii. Inefficient Management – Often, the office bearers elected are not competent & are do not have adequate experience. It cannot afford to employ expert professionals at high salaries. iii. Excessive Government Control – It is bounded by legal rules & regulations. There is less flexibility & initiative due to time consuming formalities. iv . Rift Among Members – Often, disputes arise between the managing committee & the members. As members are from different sections of the society, often, there is lack of harmony & amity between them . v. Lack of Secrecy – Open discussions of the affairs of the society is discussed in their meetings . Inspection of books and records can be done by every member.

Q.5 Distinguish between Joint Hindu family business and Partnership.

Q.6 Despite limitations of size and resources, many people continue to prefer sole proprietorship over other forms of organizations. Why?

Despite limitations of size and resources, many people continue to prefer sole proprietorship over other forms of organizations due to the following reasons:

Formation and closure: It is very easy and simple to form a sole proprietorship form of business organisation. No legal formalities are required to be observed. Similarly, the business can be wound up any time if a proprietor so decides. ii. Direct incentives: In sole proprietorship form of business organisation, the entire profit of the business goes to the owner. This motivates the proprietor to work hard and run the business efficiently. iii. Prompt decision making: As the sole trader takes all the decisions himself, the decision making becomes quick, which enables the owner to take care of the available opportunities immediately and provide immediate solutions to the problems. iv. Confidentiality of information: The business secrets are known only to a proprietor. He/she is not required to disclose any information to others unless and until he/she himself so decides. He/she is also not bound to publish his/her business accounts. v. Better control: An owner has full control over his/her business. He/she plans, organises and co-ordinates the various activities. Since he/she has all the authority, there is always effective control.

Application Questions for NCERT Business Studies Solutions Class 11 Chapter 2

Q.1 In which form of organization is a trade agreement made by one owner binding on the others? Give reasons to support your answer?

Ans- It is under partnership that the trade agreement made by one owner becomes binding for others. This is because every partner acts for each other. In other words, every partner is both a principle as well as an agent. As an agent he binds others through his actions and as a principle he is bind by the action of others.

Q.2 The business assets of an organisation amount to Rs 50000 but the debts that remain unpaid are Rs 80,000. What course of action can the creditors take if

• The organisation is a sole proprietorship firm
• The organisation is a partnership firm with Anthony and Akbar as partners. Which of the two partners can the creditors approach for repayment of debt? Explain giving reasons.
• In case of a sole proprietorship the creditors can claim the personal property of the property. This is because the proprietor has unlimited liability.
• The creditors can approach any of the two partners for repayment as both the partners have the liability to pay according to their profit sharing ratio. The creditors can approach one of them in case the other is insolvent.

Q.3 Kiran is a sole proprietor. Over the past decade, her business has grown from operating a neighbourhood corner shop selling accessories such as artificial jewellery, bags, hair clips and nail art to a retail chain with three branches in the city. Although she looks after the varied functions in all the branches, she is wondering whether she should form a company to better manage the business. She also has plans to open branches countrywide.

• Explain two benefits of remaining a sole proprietor.
• Explain two benefits of converting to a joint stock company
• What role will her decision to go nationwide play in her choice of form of the organisation?
• What legal formalities will she have to undergo to operate business as a company?

(a) The benefit of remaining a sole proprietor is that

(i) A sole proprietor will benefit from all the profits as she will not be required to share profits with anybody

(ii) A sole proprietor can take quick decisions and enjoy complete control over the business.

(b) The benefits of converting to a joint stock company are

(i) Availability of large resource – Company form of ownership enables the collection of huge financial resource

(ii) Limited liability – In case of joint stock company the liability of the members is limited to the extent of value of shares held by them

(c) If she plans to go nationawide then converting to a Joint Stock Company would be more appropriate as it will lead to large scale production and this in turn will increase profit.

(d) Some of the legal formalities to be completed for operating a joint stock company are as follows –

(i) Promotion of a company

(ii) Submitting documents such as Memorandum of association, Artciles of Association, statutory declaration and agreement

(iii) Getting the certification of incorporation

(iv) Getting the certificate of commencement of business

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Faqs (frequently asked questions), 1. how should i study class 11 business studies concepts easily.

The more questions you practise, the better you get at any subject. As the saying goes, practice makes one perfect. When it comes to Class 11 Business Studies, topics like debts and liabilities, sole proprietorships, and partnerships should be understood clearly by the students. Chapter 2 of NCERT Business Studies Forms of Business Organisation is a very important topic. Students can access all the answers from NCERT Solutions for Class 11 Business Studies Chapter 2 from Extramarks to help them with their preparations further.

2. What are the forms of business organisations in Class 11?

There are four primary forms of organisation, which are sole proprietorship, partnerships, corporations, and limited liability companies. Each of these types of organisations has the right to carry on commercial enterprise and abide by the rules set by the government. 

3. Which form of Business Organisation lacks motivation?

There is a general notion that there is a lack of motivation in joint-stock companies or corporations. This is because in this type of organisation, the management does not get a share in the profits earned by the business. There is an absence of a direct link between effort and reward and this causes a lack of motivation. However, corporations do realize this problem now and in order to bridge this gap, many companies have employee stock option plans wherein employees also get part ownership in the company to align their incentives. 

4. What do you mean by a Non – Profit Organisation?

A non-profit organisation is a business organisation that is intended to promote educational or charitable purposes. The non-profit aspect comes into play when the company uses its profits to pay for its expenses and other needs. There are several types of non-profit organisations available, and most of them could get “tax-exempt” status. This process requires filling out paperwork with the government for them to recognise your company as a non–profit organisation. Depending on the parameters of your new business, they would tell you which category your business falls upon. 

5. What is the most important reason for incorporating businesses?

One of the primary reasons businesses incorporate is to protect the personal assets of the owners. When you combine your business, a legal entity is formed. This means the business can get assets and debt apart from personal assets and debts. 

Besides, incorporating your business will help in reducing the liability. For example, suppose your business gets sued by a third party or creditor. In that case, the risk of losing your house or personal assets is considerably reduced compared to a sole proprietor. In most cases, the extent to which creditors go to get payment is limited to the interest of ownership in the business. 

6. Why is partnership considered to be a relatively unpopular form of ownership? Explain the merits and limitations of partnership.

Partnership is viewed as a relatively unpopular form of corporate ownership due to the risks that come with it. These limitations include unlimited liability, limited resources, the possibility of conflict, and a lack of consistency.

However, there are certain advantages that partnership offers. They include: 

• Ease of creation and closure: A partnership can be formed by putting an agreement in place between two prospective partners. There is no need to register a company. 
• Balanced decision making: Depending on their areas of competence, partners can manage different functions of the business. As a result, a partnership firm’s decision-making is more balanced than any other type of corporate ownership. 
• More funds: In a partnership, each partner invests a sum of money. Hence compared to a sole proprietor, a larger sum of money can be collected in a partnership and can be used for various operations.
• Risk Sharing: In a partnership, the risk is shared equally by all the partners. As a result, individual partners have less stress, strain, and anxiety.
• Confidentiality: A partnership is not compelled by law to publish its financial statements. Hence it can keep the secrets about its operations discreet 

The other limitations of partnership include:  

• Unlimited liability: If the business’s assets don’t meet the debts, the partners have to repay debts from their personal assets.
• Limited resources: Since there are only a few partners, the capital investment is less, and hence large-scale commercial operations cannot be done. As a result of this, partnership firms have difficulty growing. 
• Conflicts of Interests: In a partnership firm, decision-making is divided among partners. This is also contingent on their levels of ability, capability, and foresight.  
• Lack of Continuity: A partnership comes to an end when one of the partners dies or withdraws due to any reason. The surviving partners can forge a new agreement and run the company 

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Forms of Business Organisation Class 11 Notes PDF (Handwritten & Short Notes)

Students who have opted commerce stream, need to understand better and score well in questions regarding the chapter Forms of Business Organisation. Class 11 students can smoothly perform better with the help of Forms of Business Organisation Class 11 notes. Accordingly students can also understand other chapters of Class 11 Business Studies in a better way. 

Students can also practise some sort of questions from the Forms of Business Organisation Class 11 notes. Practising Forms of Business Organisation questions on a regular basis can help students to increase their accuracy level. Accordingly, students can also improve their inner confidence in attempting questions of the chapter Forms of Business Organisation. Inner confidence is a must for all students to decrease the level of stress while giving the Class 11 Business Studies board exam. Therefore, here we provide the Forms of Business Organisation Class 11 Notes in PDF file format.

Forms of Business Organisation Notes Class 11 PDF

The Forms of Business Organisation notes Class 11 PDF are one of the important study materials while preparing for the chapter. Students generally refer to the notes after completing the chapter Forms of Business Organisation. Class 11 notes is a collection of short summaries of sub-topics, topics and key points. With the help of these summaries, students can remember the important points on their fingertips. 

How to Download the Forms of Business Organisation Notes Class 11 in PDF?

All students studying in Class 11, need to have easy and free access to the Forms of Business Organisation notes Class 11 in PDF. Steps to download the Class 11 Business Studies Notes are:

• Open the Selfstudys website on any of the electronic devices. 
• Bring the arrow towards NCERT Books & Solutions which can be seen in the navigation bar. 
• Drop-up menu will appear, select NCERT notes from the list.

• A new page will appear, select Class 11th from the list of classes.

• Now select Business Studies from the list of subjects.

• Again a new page will appear, now select Forms of Business Organisation from the list of chapters. 

Features of the Forms of Business Organisation Notes Class 11

Features of Forms of Business Organisation notes Class 11 are considered to be an important and noticeable part. Those important features of Class 11 Business Studies notes are: 

• Number of the Unit is Given: Inside the Class 11 Forms of Business Organisation notes, the number of the unit is given. Accordingly students can easily identify the chapter name with the help of unit number of Class 11 Business Studies. 
• All Concepts are Completed: In the Class 11 Forms of Business Organisation notes, all the concepts are completed. Students can get a brief knowledge about the chapter Forms of Business Organisation. 
• Questions are Given: On the last page of the Class 11 Business Studies notes, different questions regarding the chapter Forms of Business Organisation are given to practise. Accordingly students can also improve their comprehensive skill for the chapter Forms of Business Organisation. 
• Chapter Name is Included: The chapter name of Forms of Business Organisation is mentioned inside the Class 11 Forms of Business Organisation notes. Through the notes, students can get a brief idea about the chapter Forms of Business Organisation. 
•  Provided in a Simple Language: The Forms of Business Organisation Class 11 notes are provided in a simpler language. Through this, students can easily understand all complex topics in a simpler manner. 
• For CBSE Board And State Boards: It is generally created for students studying in Class 11; thus, CBSE board as well as state board students can use the Forms of Business Organisation Class 11 Notes as it is suitable for them.

Benefits of Forms of Business Organisation Notes Class 11

The Forms of Business Organisation notes Class 11 has been associated with many benefits which includes helps to pay attention, helps in remembering the topics, etc. Through these students can easily score well in Class 11 Business Studies board exam papers. 

• Helps in Paying Attention: Class 11 Forms of Business Organisation notes can help students to pay attention and to stay alert throughout the preparation. Accordingly, Class 11 students can easily discover and cover different types of topics and concepts in a creative way. 
• Helps in Revising the Topics: With the help of Forms of Business Organisation notes Class 11, students can smoothly revise all the topics. According to which, students can boost their preparation for the chapter The Forms of Business Organisation and can perform well. 
• Can Attract Many Students as Eye-Catching Format of Notes is Given: The Class 11 notes of the chapter Forms of Business Organisation in the PDF have an eye-catching format. This format can attract many Class 11 students to complete the chapter The Forms of Business Organisation. 
•  Can Increase Comprehensive Skill: The Class 11 notes of the chapter The Forms of Business Organisation can aid students to increase their comprehensive skill. According to these skills, students can easily score well in the questions of the chapter The Forms of Business Organisation. 
• Helps Students to be Active During the Preparation: It is a must for all students to remain active and alert while preparing for the chapter The Forms of Business Organisation. Students can be active and alert with the help of Class 11 Forms of Business Organisation notes. Accordingly students can cover and revise each and every concept included in the Business Studies chapter The Forms of Business Organisation. 
• All Topics Are Covered: Inside the Class 11 Forms of Business Organisation notes, all topics are covered in a perfect manner so that students can easily complete the whole chapter. 

Strategy Tips to Cover the Chapter Forms of Business Organisation  

It is a must for Class 11 students to follow some strategy tips to cover The Forms of Business Organisation. Important strategy tips are: 

• Finish off the Chapter: First and foremost tip is to finish off the chapter The Forms of Business Organisation in a proper and accurate way. 
• Routine Practise of Questions: After completing the chapter Forms of Business Organisation, students need to have a routine practice of questions. Regular practice can help students to improve their accuracy level in attempting questions. 
• Jot Down The Mistakes: While analysing the questions, students can get to know their flaws. After identification, it is very important that students jot down their mistakes. Through this step, students can easily remove their earlier mistakes while attempting Forms of Business Organisation questions. 
• Try to Study During the Day: Many students prefer studying during the night but it is good to study during the day. As students would have a higher ability to concentrate in the chapter The Forms of Business Organisation. There are many benefits other than this, those are: natural daylight is better than artificial light, both friends and teachers are contactable to clear doubts. 
• Remain Focused: Throughout the preparation of the chapter Forms of Business Organisation, students are advised to remain focused. Accordingly, students can cover various topics whether it is easy, moderate, or difficult. 
• Revise Within a Day: After starting the revision process of Class 11 Forms of Business Organisation it is very important to complete the revision within a day otherwise the extension in revision will not aid much value in the preparation.
• Take Constant Breaks: It is a must to take constant breaks while preparing for the chapter Forms of Business Organisation. As students can lose their track of preparation if proper short breaks are not taken.  
• Try to Remain Calm: Class 11 students need to remain calm while preparing for the chapter Forms of Business Organisation in order to try to remove their exam stress and anxiety. 

Why Is It Important To Go Through The Forms of Business Organisation Class 11 Notes? 

It is a must to go through the Forms of Business Organisation Class 11 notes as it is considered as important study material. In this Class 11 Business Studies notes, topics and concepts are explained in a brief manner. Through this study material, students can understand all Forms of Business Organisation topics in an effective manner. These notes can be generally used during the last minute revision that help students memorise all topics of Forms of Business Organisation easily and help them solve questions in a better way. 

What Are Class 11 Forms of Business Organisation Notes and Why Is It Popular? 

The Class 11 Forms of Business Organisation notes are short and compressed content which includes all topics and concepts brief in an organised manner, better presentation and easier explanations. These notes help students to improve their grip for the chapter Forms of Business Organisation. Strong foundation for the chapter Forms of Business Organisation can help students to improve their score and because of these reasons the revision notes of Class 11 Forms of Business Organisation is popular among students.

Is Forms of Business Organisation Class 11 Notes Relevant to Exam Preparation?

Yes, the Forms of Business Organisation Class 11 notes are very much relevant during the preparation. The Class 11 Accountancy content is very accurate and contains relevant topics for students to study. Accordingly, students don’t need to search for various important topics here and there. Accordingly, students can easily study relevant content of the Class 11 Business Studies chapter Forms of Business Organisation if they refer to the NCERT Class 11 Business Studies Notes. 

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NCERT Books for Class 11 Business Studies PDF Download in English & Hindi Medium

NCERT Books Class 11 Business Studies: The National Council of Educational Research and Training (NCERT) publishes Business Studies textbooks for Class 11. The NCERT Class 11th Business Studies textbooks are well known for it’s updated and thoroughly revised syllabus. The NCERT Business Studies Books are based on the latest exam pattern and CBSE syllabus.

NCERT keeps on updating the Business Studies books with the help of the latest question papers of each year. The Class 11 Business Studies books of NCERT are very well known for its presentation. The use of NCERT Books Class 11 Business Studies is not only suitable for studying the regular syllabus of various boards but it can also be useful for the candidates appearing for various competitive exams, Engineering Entrance Exams, and Olympiads.

NCERT Class 11 Business Studies Books in English PDF Download

NCERT Class 11 Business Studies Books are provided in PDF form so that students can access it at any time anywhere. Class 11 NCERT Business Studies Books are created by the best professors who are experts in Business Studies and have good knowledge in the subject.

NCERT Books for Class 11 Business Studies – English Medium

• Chapter 1 Nature and Purpose of Business
• Chapter 2 Forms of Business Organisation
• 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-I
• Chapter 12 International Business-II

Class 11 Business Studies NCERT Book PDF Download

NCERT Books for Class 11 Business Studies – Hindi Medium

• Chapter 1: व्यवसाय, व्यापार और वाणिज्य
• Chapter 2: व्यावसायिक संगठन के स्वरुप
• Chapter 3: निजी, सार्वजानिक एवं भूमंडलीय उपक्रम
• Chapter 4: व्यावसायिक सेवाएँ
• Chapter 5: व्यवसाय की उभरती पद्यतियाँ
• Chapter 6: व्यवसाय का सामाजिक उत्तरदायित्व एवं व्यावसायिक नैतिकता
• Chapter 7: कंपनी निर्माण
• Chapter 8: व्यावसायिक वित्त के स्रोत
• Chapter 9: लघु व्यवसाय एवं उघमिता
• Chapter 10: आंतरिक व्यापार
• Chapter 11: अंतर्राष्ट्रीय व्यापार

Class 11 Business Studies NCERT Book in Hindi PDF Download

The NCERT syllabus mainly focuses on this book to make it student-friendly to make it useful for both the students and the competitive exam aspirants. The book covers a detailed Business Studies based on the syllabuses of various boards. NCERT Business Studies Books for Class 11 is perfectly compatible with almost every Indian education state and central boards.

We hope that this detailed article on NCERT Books Class 11 Business Studies helps you in your preparation and you crack the Class 11 exams or competitive exams with excellent scores.

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