Class 11 OCM Chapter 4: Forms of Business Organisation - I (Private Sector)

Key concepts: Forms of Business Organisation - I (Private Sector)

Private sector

Part of the economy run by individuals or groups of individuals for profit. Guided by private initiative and profit motive.

Sole proprietorship

Owned and managed by one person (the proprietor). Simple and quick decisions, but unlimited liability and limited capital.

Partnership

Two or more persons carry on a business and share profits under an agreement (Indian Partnership Act, 1932).

Joint Hindu Family business

Business run by members of a Hindu undivided family under the control of the head, the Karta.

Co-operative society

Voluntary association of persons for mutual benefit; service motive and democratic management.

Joint stock company

Artificial legal person formed under the Companies Act, 2013, with limited liability and perpetual succession; private or public.

Quick revision: important points

• Name board 'Proprietor' shows sole proprietorship; partnership firms show partners' names.
• Companies are owned by shareholders and managed by professional managers.
• Private sector examples: Indian BPOs, software companies, private banks.

Practice MCQs with answers

1. The owner of a sole proprietorship is called the:

   1. Proprietor
   2. Karta
   3. Shareholder
   4. Director
   Show answer

   Answer: A. Proprietor
   Proprietor means owner.

2. The head of a Joint Hindu Family business is the:

   1. Karta
   2. Chairman
   3. Secretary
   4. Partner
   Show answer

   Answer: A. Karta
   The Karta controls the business.

3. Partnership is governed by the:

   1. Indian Partnership Act, 1932
   2. Companies Act, 2013
   3. Contract Act
   4. IT Act
   Show answer

   Answer: A. Indian Partnership Act, 1932
   Partnership is governed by the Indian Partnership Act, 1932.

4. A joint stock company is formed under the:

   1. Companies Act, 2013
   2. Partnership Act
   3. Cooperative Act only
   4. FEMA
   Show answer

   Answer: A. Companies Act, 2013
   It is registered under the Companies Act, 2013.

5. The main motive of private sector organisation is:

   1. Profit
   2. Only service
   3. Only welfare
   4. Politics
   Show answer

   Answer: A. Profit
   Private sector is mainly driven by profit.

All Class 11 OCM chapters

• Chapter 1: Introduction of Commerce and Business
• Chapter 2: Trade
• Chapter 3: Small Scale Industry and Business
• Chapter 4: Forms of Business Organisation - I (Private Sector)
• Chapter 5: Forms of Business Organisation - II (Public Sector)
• Chapter 6: Institutes Supporting Business
• Chapter 7: Business Environment
• Chapter 8: Introduction to Management

Class 11 OCM notes: all chapters