Large Scale Business Organisations Class 8 Extra Questions and Answers Notes
We have provided here Large Scale Business Organisations Class 8 Extra Questions and Answers Notes by our Experienced Teacher. This Extra Questions and Answers Notes consists of MCQ Questions and Answers; Very Short Type Questions and Answer & Short Type Questions and Answers.
Mcqs
1.) What is the main characteristic of a sole trading concern?
a) Owned by multiple individuals
b) Limited liability for the owner
c) Run by a single person
d) Requires a complex registration process
Answer: c)
2.) Which document outlines the rules and regulations for the administration of a Joint Stock Company?
a) Memorandum of Association
b) Articles of Association
c) Prospectus
d) Partnership Deed
Answer: b)
3.) What is the primary aim of Co-operative Societies?
a) Maximizing profits for shareholders
b) Providing employment to the public
c) Organizing and serving the needs of their members
d) Promoting government control over businesses
Answer: c)
4.) In a public limited company, shares are:
a) Freely transferable
b) Limited to a small number of shareholders
c) Restricted from trading on stock exchanges
d) Owned by the government
Answer: a)
5.) What is the main advantage of Multinational Companies (MNCs) for host countries?
a) Increased competition among local businesses
b) Access to advanced technology and administrative skills
c) Greater control over natural resources
d) Reduced quality of products
Answer: b)
6.) Which organization regulates stock exchanges in India?
a) SEBI (Securities and Exchange Board of India)
b) RBI (Reserve Bank of India)
c) NSE (National Stock Exchange)
d) BSE (Bombay Stock Exchange)
Answer: a)
7.) What is the primary purpose of a Co-operative Marketing Society?
a) Providing employment to members
b) Obtaining loans at a lower interest rate
c) Saving members from middlemen exploitation
d) Distributing wealth among members
Answer: c)
8.) Which type of partner in a partnership firm neither contributes capital nor actively participates in day-to-day transactions but is liable for business losses?
a) Active partner
b) Sleeping partner
c) Nominal partner
d) Minor partner
Answer: c)
9.) In a Joint Stock Company, what is the primary advantage of limited liability for shareholders?
a) Greater control over business decisions
b) Reduced risk of business losses
c) The ability to hold multiple positions in the company
d) Exemption from paying taxes
Answer: b)
10.) What is the main disadvantage of Government Undertakings?
a) Lack of government control
b) The inability to provide essential products or services to the public
c) Limited scope for earning profits
d) Ownership by private individuals
Answer: c)
One liners:
1.) What type of business organization is managed and run by a single person?
Answer: Sole proprietorship
2.) What document outlines the aims and objectives of a company and the types of shares it issues?
Answer: Memorandum of Association
3.) What term describes the ownership units into which the capital of a company is divided?
Answer: Shares
4.) What are the organizations started by economically weaker sections of society to serve their members?
Answer: Co-operative Societies
5.) What is the regulatory body that oversees stock exchanges in India?
Answer: SEBI (Securities and Exchange Board of India)
6.) What are the large companies that operate in two or more countries known as?
Answer: Multinational Companies (MNCs)
7.) What type of partner in a partnership firm takes an active part in daily operations?
Answer: Active partner
8.) What is the document that contains the rules and regulations for the administration of a company?
Answer: Articles of Association
9.) What are the organizations formed by the government for the public’s benefit?
Answer: Government Undertakings
10.) What do you call a market where shares and debentures of listed companies are traded?
Answer: Stock Exchange
Short questions
1: What are the main problems associated with sole proprietorships, partnerships and Hindu Undivided Family Business Organizations that have led to the emergence of large business organizations?
Answer : Sole proprietors, partnerships and Hindu Undivided Family Business Organizations face problems such as insufficient capital, limited management skills, lack of continuity and unlimited liability. These challenges have driven large business organizations to overcome these limitations.
2: What is a cooperative and what are its main objectives? Give an example of the purpose of a cooperative.
Answer : A cooperative is a voluntary organization formed by individuals often belonging to economically weaker groups, whose purpose is to organize and provide services to their members. One example is a credit union that farmers set up to get loans at lower interest rates, freeing them from the influence of local moneylenders.
3: What are the general steps to set up a cooperative in India?
Answer: Forming a cooperative in India usually requires the following steps:
1.) Identify a group of members who share a common financial need.
2.) Prepare an application with information such as proposed name, objectives, business line and share capital information.
3.) Submit an application with the prescribed fees to the registrar of cooperative stores.
4.) The registrar reviews the application and, if approved, issues a registration certificate that officially establishes the association.
4: What are the advantages and disadvantages of cooperatives as a form of business organization?
Answer: The advantages of cooperatives are ease of formation, equal rights for members, democratic governance, limited liability, promotion of frugality and balance between capitalism and socialism. Disadvantages include limited capital resources, difficulties in obtaining adequate personnel, potential for poor management and corruption, and limited opportunities for large-scale entrepreneurship.
5: What is a limited liability company and what are the different types of limited liability companies recognized under the Limited Companies Act, 1956?
Answer: A joint-stock company is an economic entity with a separate legal entity, a permanent heritage and a common seal, owned by shareholders who have transferable shares. The Companies Act, 1956 recognizes various types of public limited companies, including public limited companies, private limited companies, chartered companies, statutory companies, registered companies and more.
6: What are the most important steps to promote a joint stock company?
Answer: The promotion of a joint stock company involves several stages, including promotion or incorporation, registration or incorporation, subscription of capital or increase of share capital and commencement of business.
7: What are the advantages and disadvantages of joint stock companies as a form of business organization?
Answer: Limited liability, access to large capital, freely transferable shares, perpetual succession, mass production, job creation, taxation and professional management are the advantages of limited companies. Disadvantages include complex formation, lack of active shareholder participation, limited personal contacts, possible abuse of power and interference in political affairs.
8: What is the meaning and importance of Multinational Corporations (MNC)? Give examples of well-known international companies.
Answer: Multinational corporations (MNCs) operate in two or more countries and have a centralized management structure. They play an important role in international trade and technology transfer. Examples of multinational companies include Sony (Japan), Coca-Cola (USA), Samsung (South Korea), Hindustan Lever (UK), Philips (Netherlands), and Glaxo (UK).
9: What are the advantages and disadvantages of MNEs from both the home country and host perspectives?
Answer: Domestic advantages include availability of raw materials, export earnings, technology transfer and employment opportunities. Benefits for host countries include increased capital investment, technology transfer, improved exports, research and development opportunities, and the use of internal resources. Disadvantages include domestic dominance, reduced competition, human rights issues, resource depletion, tax evasion and political interference.
10: What are government undertakings, public sector undertakings, and public utilities as forms of business organizations?
Answer : Government undertakings are businesses owned and managed by the government for public purposes.
Public sector undertakings are controlled by both the public and the government.
Public utilities, also government undertakings, provide essential products or services to the public without aiming for profits. Examples of public utilities include water supply, electricity, railways, and postal services.
Long answer type:
1: What are the main challenges faced by sole proprietors, partnerships and Hindu Undivided Family Business Organizations and how have large business organizations such as cooperatives, limited companies and MNCs addressed these challenges?
Answer: Sole traders, partnerships and non-stock family businesses often face problems such as insufficient capital, limited management skills, lack of continuity and unlimited liability. To meet these challenges, large business organizations such as cooperatives, joint stock companies and multinational companies were born. Cooperatives allow people to come together voluntarily and pool resources for mutual benefit. Joint-stock companies enable the pooling of considerable capital from several shareholders, which enables large-scale operations. Multinational companies operate in many countries, which facilitates expansion and acquisition of resources.
2: What is the importance of cooperatives in the business world and what types of cooperatives exist? Give examples of situations where cooperatives are useful.
Answer: Cooperatives are important in business because they are voluntary organizations that aim to provide services and economic success to their members. There are several types of cooperatives including credit, marketing, producers, consumers, farmers, house building and services such as drinking water and education. For example, farmers join credit unions to receive low-interest loans, freeing them from the exploitation of local moneylenders. Marketing cooperatives help small producers secure fair prices for their products, bypassing middlemen.
3: Describe the steps involved in setting up a limited liability company, including promotion, registration, subscription of capital and commencement of business. What are the key documents for this process?
Answer: Establishment of a joint stock company consists of several stages:
1.) Promotion: This is the first stage where the promoters gather information, prepare documents such as memorandum and articles of association and send them to the Companies Registry for registration. They can also pool share capital.
2.) Registration: The promoters send documents, including articles of incorporation and statutes, to the registrar, who inspects and registers the company. Upon approval, a Certificate of Enrollment will be issued.
3.) Subscription of capital: Joint stock companies issue prospectuses that enable them to subscribe for shares. Private limited companies follow a similar process but do not publish a prospectus.
4.) Commencement of business: After obtaining capital, joint stock companies must obtain a “Certificate of Commencement of Business” from the Registrar before starting business. The most important documents are the memorandum of association, the statutes and the prospectus (in the case of joint stock companies).
4: What are the advantages and disadvantages of multinational corporations (MNCs)? How do MNCs benefit from both their home and host countries?
Answer: Multinational corporations (MNCs) have advantages such as access to raw materials, technology transfer, export possibilities, job creation and higher capital investment. However, they also have disadvantages such as profit dominance, monopolistic tendencies, human rights issues, resource depletion, tax evasion and political interference. Multinational companies benefit from their home countries by generating profits and royalties, promoting exports, providing technical and managerial skills and creating jobs. In host countries, they promote capital investment, technology transfer, export opportunities, research and development, and employment. However, they can be criticized for their impact on local culture, work practices and environmental issues.
5: Explain the role of stock exchanges in facilitating the buying and selling of stocks and bonds. What is the role of the Securities Exchange Board of India (SEBI) in regulating these exchanges?
Answer: Stock exchanges provide a platform for buying and selling shares and bonds issued by public limited companies. Investors can trade these securities, allowing for liquidity and price discovery. India’s first stock exchange was established in Mumbai in 1875 and today SEBI controls all stock exchanges in the country.
SEBI plays a key role in regulating stock exchanges by ensuring fair and transparent trading practices, protecting the interests of investors, preventing fraud and market manipulation, and maintaining market integrity. It lays down rules and guidelines for stock exchanges and listed companies to ensure smooth functioning of the capital market in India.