KSEEB Solutions for Class 8 Business Studies Chapter 3 Forms of Business Organisations

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Karnataka State Syllabus Class 8 Social Science Business Studies Chapter 3 Forms of Business Organisations

Class 8 Social Science Forms of Business Organisations Textbook Exercise Questions and Answers

I. Fill in the blanks in the following sentences with suitable words.

Question:
1. The Business concern that is owned and managed by a single person is called __________.
2. The Indian Partnership Act was passed in the year __________ to regulate the affairs of the partnership firms.
3. The maximum number of partners in a firm which carries out banking business is __________.
4. The Head of the Hindu undivided family business in known as __________.
5. The only business concern under private business organization found in India is __________.
Answer:
1. Sole Trading Concern
2. 1932,
3. Ten Members
4. KARTA,
5. Hindu Undivided family business concern.

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II. Answer the following questions in one or two sentences each:

Question 1.
Which are the small scale business organizations?
Answer:
The small scale business or organizations under the private sector are mainly divided into three types. They are:

  • Sole trading concerns
  • Partnership concerns
  • Hindu undivided family firms.

Question 2.
How do sole trading concerns help consumers?
Answer:
Sole trading concerns provide employment to some people and they help in the distribution of wealth.

Question 3.
What are partnership firms?
Answer:
The business that is carried out with two or more persons Join together is called partnership firms.

Question 4.
Who is sleeping or dormant partners?
Answer:
The partners who contribute capital but do not take active part in day to day transaction of the firm is called sleeping dormant partners.

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Question 5.
How is the dissolution of the partnership firm easy?
Answer:
Any partner can apply for dissolution by giving fourteen days notice or with the consent of all the partners it can be dissolved.

III. Answer the following questions:

Question 1.
Mention any four merits of sole trading concerns.
Answer:

  1. No legal formalities are required to commence the business.
  2. It can be started by its own capital.
  3. No difficulties arise in day to day running of the business.
  4. The owners enjoy all the profits and bear all the losses.

Question 2.
Mention any four limitations of sole trading concerns.
Answer:

  1. Capital is limited.
  2. Cannot expand the business.
  3. Since it is run by a single person the managerial ability is limited.
  4. Life of the sole trading concerns may be short.

Question 3.
How are partnership firms started? Explain briefly.
Answer:
The limitations of sole trading concerns lead to the formation of partnership firms. In these firms, two or more persons join together and carry’ out the business. The partnership act was passed in 1932. According to section 4 of the partnership act, the partnership firm is defined as the relation between the persons who have agreed to share the profits of a business carried on by all or any of them acting for all.

Question 4.
Who are the different types of partners?
Answer:
The different types of partners are:-

  1. Active or working partners.
  2. Sleeping partners.
  3. Nominal Partners and
  4. Minor partners.

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Question 5.
Mention any four merits of partnership firms.
Answer:
Merits of partnership firms:

  • Easy to form: No legal formalities to start these firms.
  • More capital: When there are more than two partners the capital is also more.
  • Better efficiency: When there are more than two persons better managerial ability and efficiency can be expected.
  • Creditworthiness: Sharing of business loss and simple distribution are some of the merits of these firms.

Question 6.
Mention any four demerits of partnership firms.
Answer:
Demerits of partnership firms:

  • Disunity among the partners may hamper business.
  • Unlimited liability discourages many people to join as partners.
  • Reckless and foolish decisions of some partners may lead to a heavy set back of the firm.
  • It is difficult to transfer the share of partners.
  • Owing to the lack of control of the government, partnership firms can not gain public support.

Question 7.
What are the advantages of registering a partnership firm?
Answer:
The following are the advantages of registering a partnership firm.

  • A registered firm can file a suit in the court of law against the third party. But no provision in case of unregistered.
  • A registered firm can file a case against the other partners against the loans they owe to the firm.
  • Any partner can file a case against the firm or other partners for the dissolution of the firm or for the settlement of accounts.

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Question 8.
Explain briefly about “Hindu undivided family business”.
Answer:
These firms are established in accordance with “Hindu Law”, found only in India. All the male members of the family are members of this Hindu undivided family business firm.

Though all-male family members are members of the firm the eldest or senior-most member of the family manages the business and he is called “KARTA”.

Only three successive generations of male members namely, sons, grandsons, and great-grandsons acquire the birthright or interest in the ancestral property. The liability of Karta is unlimited.