1075 12 Commerce em Answer Key March 2017 Exam

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MARCH - 2017
[Time : 3 Hours] STD. XII - COMMERCE (With Key) [Max. Marks : 200]
PART-A 7. A partnership firm may be registered under:

Note : Answer all the questions. (a) 1949 Act
(b) 1956 Act
I. Choose the most suitable answer from
the given alternatives and write the (c) 1932 Act
option code and the corresponding 8. Registration of partnership is:
answer : [401 =40] (a) Compulsory
1. Which of the following is not the (b) Optional
characteristic of sole proprietorship? (c) Not necessary
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(a) Single ownership 9. Table A of the Companies Act is a:
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(b) One man control (a) Model minutes book
(c) Whole profit to proprietor (b) Model form of balance sheet
2.
(d) Non-flexibility
A multinational company is also known
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(d) Model of memorandum of association
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as:
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(a) Global giant
10. Shares can be forfeited for:
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(b) Partnership (a) non-payment of any debt due to the

(c) Co-operative society company
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(d) Public corporation (b) not attending three annual general

meetings consecutively
3. Sole trading business can be started by:
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(c) for non-payment of call money

(a) At least two persons
(d) for violent activities at the annual
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(b) At least seven persons

(c) Any one person general meetings
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4. Sole proprietorship is suitable for: 11. Where the shares are issued at a discount
and the nominal value of share is `100, the
(a) Large scale concerns maximum discount that can be allowed :
(b) Medium scale concerns
(a) ` 5 (b) ` 10
(c) Small scale concerns
5. A Sole trader: (c) ` 20 (d) ` 15
(a) Cannot keep his business secrets 12. Debenture holders of a company are its :
(b) Can keep his business secrets (a) Creditors (b) Members
(c) None of the above (c) Credit customers (d) Borrowers
6. A partnership is formed by: 13. A person can hold directorship of not more
(a) Agreement than ______ public limited companies :
(b) Relationship among persons (a) 10 (b) 15
(c) The direction of government (c) 20 (d) limitless
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2 Suras n XII Std n Commerce n 2017 - March Question Paper with Answers
14. The overall maximum managerial 25. A partner who does not take part in the
remuneration in a public limited company working of the firm is called _______
shall not exceed : partner.
(a) 11% of net profits 26. The minimum of a number of members in
(b) 11% of paid up capital and free reserves a public limited company is _________.
(c) 5% of net profits 27. The manner in which the internal
(d) 5% of paid up capital and free reserves. management of a company carried on is
15. The interval between two annual general contained in _________.
meetings shall not exceed: 28. When a company has issued shares of
(a) 15 months (b) 12 months ` 6000 each only, the minimum number of
(c) 18 months (d) 20 months qualification shares that a director should
16. Stock exchanges deals in: hold is ____________.
(a) Goods 29. Directors act as ______ trustees and
(b) Services officers of the company.
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(c) Financial securities 30. A statutory report must be sent to every
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(d) Countrys currency member of the company atleast ______
17. Number of recognised stock exchange in days before the meeting is to be held.
India:
(a) 20 (b) 21 (c) 22 (d) 24
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31. The minimum number of members
required for a meeting is known as _____.
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18. An optimistic speculator is: 32. Joint stock companies require ______.
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(a) Bull (b) Bear 33. Debentures denote ________ interest.
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(c) Stag (d) Lame duck 34. BOLT is the online trading system in use
19. Co-operative society can be started: at _______ stock exchange.
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(a) Only at villages 35. The Latin word Co-operari means

(b) In towns and villages _______.
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(c) Only in cities 36. The father of the co-operative movement

(d) Only in urban areas was _________.
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20. Public can also subscribe to the share 37. Super market refers to large scale ______.
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capital of: 38. Public Corporations are managed by a

(a) Public Corporation _______ nominated by the Government.
(b) Departmental undertaking 39. The oldest form of public enterprise is
(c) Government Company ________.
(d) None of these 40. When the Government takes over an
II. Fill in the Blanks : existing private concern, it is called _____.
21. Division of work is called _________. PART-B
22. The profit and loss of a Partnership firm Note : (i) Answer any ten questions.
is shared in the___________among the (ii) Answer to each question should
partners. not exceed four lines.
23. The partners liability in India is ________. [10 4 = 40]
24. The maximum number of members in 41. What is scalar principle ?
non-banking firm is ________. 42. Who is a KARTA?

Suras n XII Std n Commerce n 2017 - March Question Paper with Answers 3
43. What is unlimited liability? (b) Explain the objectives of state
44. Define partnership. enterprises.
45. What is Limited Partnership? Explain. 65. (a) Explain the role of sole trading concern
46. What is share premium? in the society.
47. What is cumulative preference share? (OR)
48. What is proxy? (b) Explain clearly the important features
49. What is a statutory meeting? of co-operative organisation. (any ten)
50. What is prospectus? 66. (a) What are the circumstances under
51. What is listing? which a partnership firm is dissolved?
52. Who are Rochdale pioneers? (OR)
53. What is Patronage Dividend? (b) Explain the objectives, features,
54. How can we establish state enterprises? functions and powers of SEBI? (any
20)
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55. What is a Government Company?
67. (a) Bring out the distinction between a
PART-C
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company and a partnership. (any ten)
Note : (i) Answer any five questions. (OR)
(ii) Answer to each question should
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(b) Discuss the powers of directors and
restrictions placed on them.
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not exceed one page.[5 8 = 40]
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56. Write notes on any four principles of
ANSWERS
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organisation.
57. What are the contents of partnership deed? PART - A
58. Briefly explain any four contents in
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I 1. (d); 2. (a); 3. (c); 4. (c);

Memorandum of Association.
5. (b); 6. (a) 7. (c); 8. (b);
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59. What are the conditions for issuing shares

at a discount? 9. (c); 10. (c); 11. (b); 12. (a);
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60. How are directors appointed in a public 13. (b); 14. (a); 15. (a); 16. (c)
limited company?
17. (b); 18. (a); 19. (b); 20. (c);
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61. Explain the different kinds of speculators.

62. Briefly explain any eight demerits of II 21. Departmentation
co-operative societies. 22. Agreed ratio
63. Write any eight differences between public 23. Unlimited
and private Sector.
24. 20
PART-D 25. Sleeping
Note : (i) Answer all questions. 26. Seven
27. Articles of Association
(ii) Answer to each question should
28. One
not exceed two pages.[4 20 = 80]
29. Agents
64. (a) List out the various types of business 30. 21
organisation and explain any five
31. Quorum
types of organisations.
32. Enormous capital
(OR)

33. creditorship 45. (i) A partnership in which the liability of
34. Mumbai the partner is limited is called limited
35. To work with partnership.
36. Robert Owen (ii) The law does not permit the formation
of a limited partnership in India.
37. Retailing
(iii) But in Europe and U.S.A. limited
38. Board of directors
partnership is allowed.
39. Departmental Organisation
(iv) A limited partnership firm must have
40. Nationalisation at least one partner whose liability is
PART - B unlimited.
41. 1. Scalar principle is one of the principles (v) The liability of remaining partners is
of organisation. limited.
2. The line of authority must proceed (vi) Thus, limited of partnership consists of
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from the highest executive to the two types of partners, general partners
worker at the bottom level through a and limited partners.
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downward flow. 46. (i) A company can issue shares at a
3. This is known as chain of command. premium.
4. The superior has a direct authority over
his immediate subordinate.
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(ii) It means that the issue price can be
higher than the face value of the shares.
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5. He is responsible for efficient (iii) In otherwords, the difference between
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performance of the work entrusted.

42. 1. A Joint Hindu family comprises father, constitutes share premium.
mother, sons, daughters, grandsons (iv) For instance, when a share of face value
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and grand daughters. of Rs.10 is issued at Rs.12, shares

2. They do the business under the control premium amount is Rs.2.
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of the head of the family. (v) Share premium is usually collected

along with allotment money.
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3. The head of the Joint Hindu Family is

known as KARTA. 47. (i) In case dividend is not declared,
because of inadequate profit, the right
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43. (i) The liability of the proprietor for the

debts of the business is unlimited. to dividend for that year does not lapse
in the case of cumulative preference
(ii) The creditors have the right to recover
shares.
their dues even from the personal
property of the proprietor in case the (ii) Dividends not declared and paid get
business assets are not sufficient to pay accumulated so that they may be paid
their debts. out of profits of subsequence years as
arrears of dividend before any dividend
(iii) This is known as unlimited liability.
is paid to equity shareholders.
44. According to the section 4 of Indian
48. (i) The term proxy may refer to a person
partnership Act of 1932, partnership is
who is authorised by a member for the
the relationship between persons who have
purpose of attending a meeting.
agreed to share the profits of a business
carried on by all or anyone of them acting (ii) It also means the instrument by which
for all. the proxy is authorised.

49. 1. T he first meeting of the shareholders of or government or partly by the central
a public limited company is known as government and partly by one or more state
statutory meeting. governments and includes a company which
2. It is compulsory for every public is a subsidiary of a government company.
limited company and a guarantee PART - C
company.
56. Four principles of organisation :
3. This is held only once in the life time
of the company. a. Unity of objectives:
4. It should hold within 6 months and not 1. The term objective means a goal to be
earlier than one month from the date achieved.
on which the company is entitled to 2. The organization structure depends
commence business. upon the objectives of the enterprise.
50. The word prospectus means any document 3. Therefore, the objectives of an
described or issued as a prospectus and enterprise must be clearly fixed.
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includes any notice, circular, advertisement 4. Every part of the organization
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or other documents inviting the public to should be designed to facilitate
subscribe the shares or debentures of the the accomplishment of common
company.
51. (i) The inclusion of the name of the
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objectives.
b. Unity of command:
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company in the official trade list of a 1. Each individual should receive orders
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stock exchange is called Listing. from only one boss.
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(ii) Listing is made compulsory for all 2. A person cannot serve under two
public companies. masters.
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52. ROBERT OWEN started the first 3. He is accountable to his immediate

co-operative movement in the year 1844 superior.
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with 28 members called as Rochdale 4. Dual subordination should be avoided.

Society of Equitable pioneers. 5. It creates disorder and confusion and
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53. The profit of co-operative societies is leads to indiscipline.

distributed to the members in proportion of c. Unity of Direction:
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purchases made by them. This is known as

1. There must be one head and one plan
patronage dividend.
for a group of activities directing
54. The state enterprises can be established by towards the same objectives.
the government in two ways:
2. This is necessary to ensure completion
(i) By starting a new unit; of tasks and co-ordination of activities.
(ii) By taking over an existing industrial d. Span of control :
or commercial unit owned by
1. No executive in the organization
private persons. (This is known as
should be required to supervise more
Nationalisation)
subordinates than he can effectively
55. According to Indian Companies Act, manage.
1956, Government company means any
2. An executive should be asked to
company in which not less than 51% of the
supervise a reasonable number of
paid-up share capital is held by the central
subordinates.
government or by any state governments

57. Contents of a partnership deed : c. Objects Clause:
A partnership deed will usually provide for (a) This is the most important clause
the following matters : as it states the activities in which
1. Name of the firm the company can engage itself.
2. Date of agreement and principal place (b) The main objects and other
of business objects are also to be specified.
3. Names and addresses of all the partners d. Liability Clause:
(a) This clause states that the liability
4. Nature of business proposed to be
of members is limited.
carried on by the firm
(b) In the case of a company limited
5. Duration of the partnership, if any
by guarantee, the amount each
6. Amount of capital contributed by each member undertakes to contribute
partner in the event of winding up must
7. Amount of withdrawal of each partner also be mentioned.
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8. Profit sharing ratio 59. Conditions for issuing shares at a
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9. Salary payable to active partner or discount :
partners (i) The shares to be issued at a discount
10. Interest on capital and interest on
drawings
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must be of a class already issued.
(ii) It means a company cannot originally
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11. Procedure for admission or retirement issue shares at a discount. Only
subsequent issues can be at a discount.
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of partners
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(iii) It must be authorised by an ordinary

12. Manner of dissolving the firm and the resolution
mode of settlement of accounts on such
(iv) It should be sanctioned by the Central
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dissolution Government.
13. Maintenance of books of accounts and (v) The resolution must specify the
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their audit maximum rate of discount at which the

14. Interest to be allowed on partners shares are to be issued
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loans and advances to the firm It should not exceed 10% of nominal
15. Mode of valuation of goodwill on value.
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admission, retirement or death of a However, higher percentage of

partner discount may be allowed by the
16. Procedure for settlement of disputes Central Government under special
among partners by arbitration circumstances.
(vi) At least one year should have elapsed
58. Contents of the Memorandum :
since the company was entitled to
A Memorandum of Association must commence business.
contain the following clauses viz., (vii) Shares at a discount must be issued
a. Name Clause: This states the name of within 2 months from the date of
the company. sanction by the Central Government.
b. Situation Clause: 60. First directors: First directors are usually
(a) The state in which the registered named in the Articles. If the articles are
office of the company is to be silent, the signatories to the memorandum
situated is stated here. shall be deemed to be the first directors of
(b) Actual address need not be given. the company.

(a) Appointment of Director by the present and other securities with
Company the intention to sell at higher
(i) The subsequent directors are prices in future.
elected by shareholders at the (iii) He is an optimistic speculator
Annual General Meetings. b. Bear:
(ii) If a company adopts, the principle (i) A Bear or Mandiwala speculator
of retirement by rotation, one expects prices to fall in future and
third of the directors, must retire sells securities at present with a
by rotation. view to purchase them at lower
(iii) The retiring directors are eligible prices in future.
for reappoinment. (ii) A bear does not have securities at
(b) Appointment by Board of Directors: present but sells them at higher
prices in anticipation that he will
(i) The Board can appoint additional supply them by purchasing at
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directors. They can fill up lower prices in future.
casual vacancy caused by death,
(iii) A bear is a pessimistic speculator
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resignation, etc.
c. Stag:
(ii) They can also appoint alternate
directors. If empowered by
articles, the Board may appoint
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(i) A stag is a cautious speculator in
the stock exchange.
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an alternate director during his (ii) He applies for shares in new
companies and expects to sell
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absence for a period of not less
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them at a premium, if he gets an

than 3 months from the date in
allotment.
which meeting of the board are
ordinarily held. (iii) He selects those companies whose
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shares are in more demand and

(c) Appointment by third parties : are likely to carry a premium. He
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If authorised by Articles, third parties is also called a premium hunter

such as vendor of the business, banking d. Lame Duck:
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or financial institutions which have (i) When a bear finds it difficult to

advanced loans to the companies, can fulfil his commitment, he is said
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appoint their nominees on the Board. to be struggling like a lame duck.

(d) Appointment by Central Government : (ii) A bear speculator contracts to sell
The Central Government can also securities at a later date.
appoint directors on an order passed by (iii) On the appointed time he is not
the Company Law Board. able to get the securities as the
61. Kinds of speculators : There are four types holders are not willing to part
of speculators. They are with them.
a. Bull: 62. The following are the demerits of a
(i) A Bull or Tejiwala is an operator co-operative society.
who expects a rise in prices of a. Inefficient management : Members
securities in the future. of the co-operative society do not
(ii) In anticipation of price rise he generally possess the ability and
makes purchases of shares at experience to manage the business
efficiently.

b. Limited Capital : (ii) T hey exploit the society as their
(i) A co-operative society is formed own property.
usually by people with limited f. Non-transferability of interest :
means. (i) The shares of a co-operative
(ii) Therefore, co-operative society society are not transferable.
often faces shortage of funds. (ii) A member has to surrender his
c. Lack of motivation : Absence of shares and get his money back
profit motive and minimum 14% whenever he wishes.
rate of dividend suppress the zeal g. Lack of Secrecy :
and responsibility on the part of the (i) The business affairs of a
management. co-operative society are openly
d. Lack of co-operation : discussed in the meetings.
(i) Sometimes the members may not (ii) Therefore, it becomes difficult to
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have unity among themselves. keep the secrets of the business.
(ii) It might affect the business of h. Excessive government control
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co-operatives. (i) The day to day working of a
e. Domination of vested members : co-operative society is bound by
(i) Some members try to command
the society by virtue of their
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(ii) Reports have to be submitted
managerial interest and political to the registrar of co-operative
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power.
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societies.
63.
A
S.No Public Sector Private Sector

1. Service motive with twin goals achieve Profit motive maximise the profits.
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economic development with democratic

values and economic equality
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2. Sufficient, unlimited resources, successful in Limited resources; not successful

mobilising savings through banks, bonds etc. in mobilising the resources of the
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country.
3. Checks concentration of economic power in Leads to concentration of e conomic power
the hands of a few in the hands of a few individuals.
4. Develop those sectors which are neglected Develop those industries/sectors in which
by the private sector. risk is less and returns are more.
5. Preserves national wealth. Exploitation of natural resources like forests,
mines etc., for personal advantage.
6. Brings in balanced growth; starts industries Do not establish industries in
in backward areas. backward areas.
7. Heavy, basic and defence industries are Consumer goods industries, agriculture are
reserved for public sector. in private sector.
8. Consumer welfare is considered important. Consumers are exploited.
They are supplied goods and services at
cheaper prices.

PART - D c. Partnership
(i) Two or more persons may join
64. (a)
together and provide necessary
Types of business organization capital and skills to do business.
Individualistic Institutions Government Institutions
(ii) The persons who enter into
a. Sole trading institution a. Departmental undertaking
partnership with one another are
b. Joint Hindu family b. Public corporation
c. Partnership c. Government company
called partners.
d. Co-operative society d. Board organization (iii) Partnership should carry on a
e. Joint stock company lawful or legal business.
f. Multinational companies (iv) Partners may share profit or loss
in agreed ratio.
Individualistic Institutions: They are
d. Joint-stock company
established by a single individual or by a
number of individuals. (i) A company is an association of
many persons.
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They are:
(ii) A company is called a
a. Sole trading institution:
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joint-stock company as the
(i) This is the oldest form of capital is contributed by
individualistic organization.
(ii) Any business unit which is
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(iii)
a large number of investors.
It can enter into contract in its
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owned and controlled by a single own name.
individual is known as a sole
www.Padasalai.Net (iv) It must have a common seal as it

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trading concern. cannot sign documents.

(iii) No legal formalities are required. (v) The management of the company
(iv) He enjoys the entire profit and is entrusted to the Board of
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bears all the losses in the business, directors.

All is he and he is all in all. e. Co-operative society
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b. Joint Hindu Family: (i) It is a voluntary association of

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(i) The joint Hindu families have persons.

been engaged in occupation like (ii) Person hailing from the same
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agricultures, handicrafts, small locality voluntarily join together

industries, etc., to achieve a common economic
(ii) The firm is owned by the members objective.
of the family, who have inherited (iii) A person can join a co-operative
their ancestral property. society whenever he likes and
(iii) The head of the family is called leave it whenever he wishes.
KARTA. (iv) One man One vote is the important
(iv) This system of joint Hindu principle of co-operatives.
family came into existence by the f. Multinational companies
operation of Hindu Law. (i) It may be defined as a company that
(v) A joint Hindu family comprises operates in several countries. Such
of father, mother, sons, daughters, a company has factories, branches
grand sons and grand daughters. of offices in more than one
country.


(ii) T hey operate in more than one (iii) Government companies are
country simultaneously. sometimes known as mixed
(iii) They are generally very large in ownership companies.
size. (iv) Hindustan Steel Limited, Bharath
(iv) Their purpose is to reduce Heavy Electricals Limited,
transport cost and to make use of Maruthi Udyog Limited are
raw materials, labour, capital and the examples of government
market of foreign countries. companies.
Government Institutions d. Board organization
a. Departmental undertaking (i) In this organization, management
(i) This is considered as a department is carried on by a government
attached to the ministry of a nominated independent board.
government. (ii) It has its own rules and regulations.
(ii) Its administration is in the hands
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(iii) Tamil Nadu Electricity Board,
of the chief administrative officer Tamil Nadu Housing Board,Tamil
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of the ministry. Nadu Water and Drainage
(iii) This is the oldest form of Board are Examples of Board

organization of States enterprise.
(iv) Railways, B.S.N.L. (telephones)
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(OR)
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Broadcastings, defence industries
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are the examples of Departmental 64. (b)
The main objectives of state
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undertakings. enterprises are as follows.

b. Public corporation 1) Helping all round industrialisation:
(i) This is established under a specific (i) Private entrepreneurs will invest
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law passed by the parliament. only in those industries where

(ii) It is also known as a statutory profit earning chances are more.
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corporation. Because it is created (ii) They will not invest in an

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by a statute. undertaking where profits are

(iii) The corporation is wholly owned low irrespective of its utility for
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by the Government. people.

(iv) Reserve Bank of India, Life (iii) State enterprises are necessary for
Insurance Corporation, Unit those lines where private sector is
Trust of India are the examples of hesitant to invest.
public corporation. (iv) It helps in all-round industrialisa-
c. Government Company tion of the country.
(i) Government companies are 2) Developing Basic Industries:
established under the companies
(i) Certain basic industries like iron
Act 1956.
and steel, chemicals are the most
(ii) It is a company in which not less essential for economic growth.
than 51% of paid up share capital is
(ii) They must be developed only as
held by the central government or
state managed units.
by one or more state governments
or jointly by the central and state
governments.

3) Establishing Enterprises Requiring b. Provides investment avenues : Sole
Heavy Investment: trader organisation provides a chance
(i) Some undertakings need heavy for small investors who has small
investment and the gestation amount of capital to utilise in the
period may also be longer. productive line.
(ii) Private industrialists cannot afford c. Provisions of goods at low price :
to make such huge investments. Goods are sold by sole traders at a price
Hence, Govenment enters into lesser than the maximum retail price
these fields and establishes (MRP) mentioned on the packages
industries. of the goods. This is possible due to
(iii) For example, railways, ship- inexpensive management.
building, energy producing d. Helps to small producers : Most of the
concerns, etc. goods sold by sole traders are procured
4) To Provide Necessities: locally from local producers. Thus
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small local producers are benefited by
(i) Government undertakes to
the sole traders.
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provide various necessities
like electricity, water, coal, e. Supply of quality goods : Sole traders
gas, transport, communication
facilities to the people.
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maintain their reputation. They even
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accept return of defective goods. This
(ii) The aim is to provide these basic
ensures enhancing the welfare of the
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facilities at cheaper rates.
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public.
(iii) So, public utilities are provided
f. Philanthropic Activities : Sole traders
by government undertakings.
form small trading organisation among
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65. (a) themselves and undertake a number

Role of sole proprietorship in the society: of social welfare activities such as
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Consumers are the kings. They decide conducting eye camps, maintaining
success of a business. Their needs, desires parks, provision of barricades on the
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and expectations are to be satisfied by the roads, supplying furniture to schools

businessmen. Sole proprietorship occupies etc.
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a pivotal role in satisfying the multifarious g. Equal distribution of income and

needs of consumers regarding goods and wealth : Equal distribution of income
services. This form of organisation has and wealth is ensured as there are more
social desirability. It provides valuable entry of sole proprietors in trading
services to the society. They are as follows : activities.
a. Solution to unemployment problem : h. Helpful to consumers : The sole
Sole trader business organisation gives traders supply the goods to the
large employment opportunities to the consumers at their door steps. So the
less educated and uneducated persons time and energy of the consumers are
and helps to reduce the unemployment saved.
problem in the society.

(OR) h. Legal capacity: An individual must
65. (b) Features of co-operative society : have the legal capacity to make any
agreement. The members forming
a. Voluntary organisation:
the co-operative society must have

A Co-operative society is a voluntary attained the age of majority.
association of persons. Any person i. Open membership: Any man or
can join the society. No compulsion to woman having a common interest can
become a member of the co-operative join a co-operative society at any time.
society. No discrimination is made on the basis
of caste, creed or religion.
b. Equality: In a co-operative society all
j. Finance: The capital of co-operative
persons are equal. Its members have society is divided into many shares
equal rights. of equal value. The society gets the
c. Democratic Management: capital from its members.
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Co-operative societies are managed 66. (a)
a. Dissolution by agreement (sec. 40)
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on democratic lines. Every member
A partnership is created and dissolved
has only one vote irrespective of the
number of shares held by him. The
society is formed under the principle
O by an agreement. A firm may be
dissolved by an agreement either
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with the consent of all partners or in
of one man one vote. accordance with the contract among
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B
d.
Combination of resources: In this the partners.
organisation members pool their own b. Compulsory dissolution (sec. 41)
resources. They use their resources in A firm is compulsorily dissolved either
A
the interest of all members. by the agreement, of all the partners or

on the insolvency of all the partners
R
e. Concentrated Effort: In this except one. It may also be dissolved

organisation all individuals work on the happening of an event which
U
together. The main principle of makes the object of the firm unlawful.
co-operation is that Each for all and Example, the passing of prohibition
S
all for each Act, declaration of war with another

country.
f. Spirit of Service: Service is primary
c. Dissolution on the happening of
and the profit is secondary is the
certain contingencies. (sec. 42)
objective of all co-operative societies. A partnership may be dissolved
It provides many services to the on the happening of the following
members, such as provision of credit contingencies
facilities, construction of buildings, a) Death of a partner.
supply of seeds, fertilisers, etc. b) Expiry of the time, of partnership
g. Plural membership: It is an if for a fixed period.
association of persons. A minimum c) Completion of the venture for
of 25 persons are required to form a which the firm was formed.
co-operative society. There is no limit d) Adjudication of a partner as an
for the maximum membership. insolvent.

d. Dissolution by notice of partnership Just and equitable grounds:
7)
at will (sec. 43) When the court feels that it is
Where the partnership is at will, the just and equitable, it may order
firm may be dissolved by any partner for dissolution of the firm. Eg. if
by giving a notice in writing to all A and B are partners but do not
the other partners of his intention to speak to each other, the court may
dissolve the firm. order for dissolution.
e. Dissolution through court (sec. 44) (OR)
Any partner may bring a suit in a court SEBI:
66. (b)
of law to get the partnership dissolved
(i) The SEBI was set up as an
on any of the following grounds.
administrative body in April, 1988.
1) Partners insanity: If any partner
(ii) It was given a statutory status by
becomes insane, the court may
passing a Special Act in the parliament
order dissolution.
S
on 30.01.1992, called SEBI Act.
2) Permanent incapacity: When
Objectives:
K
a partner becomes permanently
incapable of doing business the a. The basic purpose of establishing SEBI
court may order dissolution.
3) Persistent breach of agreement:
O is to protect the interest of the investors
in securities.
O
If a partner persistently violates b. To promote, develop and regulate
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the agreement and the other the securities market and deal with
B
partner finds it impossible to do the matters connected therewith or

business in partnership with him incidental thereto.
then the other partner can move Features of SEBI
A
for dissolution. 1. The SEBI shall be a body corporate

R
4) Misconduct of a partner: established under SEBI Act with

If any partner is guilty of perpetual succession and a common
U
misconduct (misuse of money) seal.

then any partner can file a suit for 2. The head office of the board shall be at
S
dissolution of the firm. Mumbai. SEBI can have branch offices

5) Transfer of share: When a at other places in India.
partner transfers his share in the 3. The board shall consist of the following
business to a third party without members.
the consent of other partners, then (i) A Chairman.
the other partners can move to the (ii) Two members from amongst the
court for dissolution. officials of the Ministries of the
6) Continuous loss: When the Central Government dealing with
business of the firm cannot be finance and law.
carried on except at a loss, then (iii) One member from amongst the
the court can order for dissolution. officials of the Reserve Bank of
India.

(iv) Two other members. 6. P romoting investors education and
The chairman and other members training of intermediaries of securities
are appointed by the central market.
government. 7. Prohibiting insider trading in securities.
4. The general superintendence, direction 8. Regulating substantial acquisition of
and management of the SEBI shall rest shares and take-over of companies.
in the Board of members. 9. Calling for information from,
Those members exercise all powers undertaking inspection, conducting
and do all acts and things which may inquiries and audits of the stock
be exercised by the Board. exchanges.
5. Central government shall have the 10. Performing such functions as may
power to remove a member or the be delegated to it by the central
chairman appointed to the Board. government.
S
6. Central government shall provide Powers of the SEBI
finance and also make appropriate The following powers are given to SEBI.
K
grants to the Board. 1. It may call periodical returns from the
7. Central government has power to issue stock exchanges.
direction to the Board on the policy
matters and shall supercede the board
O
2. It has the power to prescribe
maintenance of certain documents by
O
in the event of default by the Board. the stock exchanges.

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Functions of SEBI
B
3. SEBI may call upon the exchange or

SEBI undertake the following functions any member to furnish explanation or
1. Regulating the business in stock information relating to the affairs of
A
exchanges. the stock exchange or any member.

2. Registering and regulating the working 4. It has the power to approve bye-law of
R
of stock brokers, sub brokers, issue the stock exchange for regulation and
bankers, underwriters and such other control of the contracts.
U
intermediaries who may be associated 5. It can amend bye-laws of the stock
with securities markets in any manner. exchange.
S
3. Registering and regulating the working 6. In certain areas it can grant license to
of collective investment schemes the dealers in securities.
including mutual funds. 7. It can compel a public company to list
4. Promoting and regulating self-regulatory its shares.
organisations.
5. Prohibiting fraudulent and unfair trade
practice relating to securities market.

67. (a)
S.No Basis of Partnership Firm Joint Stock Company
difference
1. The Acts It is governed by the Indian They are governed mainly by the
Partnership Act 1932. provision of the Companies Act 1956.
2. Registration Registration with the Registrar of Registration with the Registrar of
Firm is only optional. Companies is compulsory.
3. Number of A minimum of two person The minimum number of persons
Members is necessary to form a partnership. required for starting is 7 in the case of
The maximum is restricted public limited company. The maximum
to 10 in the case of banking number of member is restricted to 50
business and 20 in other types of exclusive of present or past employee
businesses. members in the case of private limited
company and it is limitless for a public
S
limited company.
K
4. Legal Status It has no separate existence. It is an artificial person created by
Partners collectively constitute law. Its existence is independent of its
5. Liability
the firm. O
The Liability of a partner is joint,
members.
The liability of the shareholder is limited
O
several and unlimited. to the unpaid amount of shares held.
www.Padasalai.Net The personal assets of the If the shares are fully paid up, no further
B
individual partners can also be liability is attached to the share holders.

attached for satisfying the firms
debts. Any one partner can also
A
be used for this purpose.

6. Transfer of A partner cannot transfer his Shares are fully transferable. However,
R
shares interest in the firm without the certain restrictions are placed on transfer
consent of all other partners. of shares in the case of private limited
U
companies.
7. Management Management of a firm is carried Direct participation of share holders in
S
on by all or by any of them acting the management of the company is not

for all. In other words, every allowed. It is entrusted to the Board of
partner is entitled to participate Directors elected by them.
in the management.
8. Stability It is not stable. Its continuity A company is stable as it is totally
is threatened by certain unaffected by any such contingencies.
contingencies such as death,
insanity or insolvency of any one
or all its partners.
9. Procedural Both for formation and Both the formation and winding up are
complexities dissolution the procedures are subject to many legal formalities.
simple.
10. Financial The capital contribution as well The scope for mobilising larger resources
resources as the finance that can be raised is very wide.
tend to be limited.

(OR) v) To recommend a certain rate
67. (b) Powers of Directors: of dividend to be declared at
the annual general meeting.
a. General Powers: The Board of
vi) To make investments in
directors of a company is entitled
to exercise all such powers and to the companies in the same
do all such acts and things as the group.
company is authorised to do. vii) To appoint the first auditors
However, the Board shall not do of the company
any act which is to be done by the viii) To fill up the casual vacancy
company in general meeting. in the office of an auditor not
b. Statutory powers: By means of caused by resignation.
resolutions passed at the Board d.
Restrictions on the powers
meetings, the following powers of directors: The following
can be exercised by the directors.
powers cannot be exercised by
S
i) To make calls the Board without the consent of
ii) To issue debentures
K
the shareholders in the general
iii) To borrow money otherwise meeting.
than on debentures
iv) To invest the funds of the
company
O
i) To sell, lease or otherwise
dispose of the whole or
O
substantially the whole
v) To make loans
www.Padasalai.Net of the undertaking of the

B
c. Other powers to be exercised at company.

the Board Meetings
ii) To extend time for
i) To fill up casual vacancy in
repayment of any debt due
A
the office of directors

by a director.
ii) To appoint additional
R
directors, if authorised by iii) To borrow money where

articles. the money to be borrowed
U
iii) To appoint an alternate together with that already

director, if authorised by borrowed is in excess of
S
articles. the aggregate of the paid up

iv) To accord sanction to capital and free reserves.
contracts in which any iv) To contribute to charitable
director or his relative is funds in excess of the
interested. prescribed limit.


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SURA's Guides for 3rd to 12th Std for all Subjects in TM & EM Available

PART-A 7. A partnership firm may be registered under:

(b) Partnership (a) non-payment of any debt due to the

(d) Public corporation (b) not attending three annual general

(c) for non-payment of call money

(b) At least seven persons

(a) Only at villages 35. The Latin word Co-operari means

(c) Only in cities 36. The father of the co-operative movement

capital of: 38. Public Corporations are managed by a

www.surabooks.com Sura's Will to Win Guides For Contact 9600175757

I 1. (d); 2. (a); 3. (c); 4. (c);

59. What are the conditions for issuing shares

61. Explain the different kinds of speculators.

www.surabooks.com Sura's Will to Win Guides For Contact 9600175757

www.Padasalai.Net the issue price and the face value

performance of the work entrusted.

and grand daughters. of Rs.10 is issued at Rs.12, shares

of the head of the family. (v) Share premium is usually collected

3. The head of the Joint Hindu Family is

43. (i) The liability of the proprietor for the

www.surabooks.com Sura's Will to Win Guides For Contact 9600175757

52. ROBERT OWEN started the first 3.  He is accountable to his immediate

with 28 members called as Rochdale 4. Dual subordination should be avoided.

53. The profit of co-operative societies is leads to indiscipline.

purchases made by them. This is known as

www.surabooks.com Sura's Will to Win Guides For Contact 9600175757

(iii) It must be authorised by an ordinary

their audit maximum rate of discount at which the

admission, retirement or death of a However, higher percentage of

www.surabooks.com Sura's Will to Win Guides For Contact 9600175757

them at a premium, if he gets an

shares are in more demand and

If authorised by Articles, third parties is also called a premium hunter

or financial institutions which have (i) When a bear finds it difficult to

appoint their nominees on the Board. to be struggling like a lame duck.

www.surabooks.com Sura's Will to Win Guides For Contact 9600175757

S.No Public Sector Private Sector

economic development with democratic

2. Sufficient, unlimited resources, successful in Limited resources; not successful

www.surabooks.com Sura's Will to Win Guides For Contact 9600175757

www.Padasalai.Net (iv) It must have a common seal as it

trading concern. cannot sign documents.

bears all the losses in the business, directors.

b. Joint Hindu Family: (i) It is a voluntary association of

(i) The joint Hindu families have persons.

agricultures, handicrafts, small locality voluntarily join together

www.surabooks.com Sura's Will to Win Guides For Contact 9600175757

undertakings. enterprises are as follows.

law passed by the parliament. only in those industries where

corporation. Because it is created (ii) They will not invest in an

by a statute. undertaking where profits are

by the Government. people.

www.surabooks.com Sura's Will to Win Guides For Contact 9600175757

65. (a) themselves and undertake a number

and expectations are to be satisfied by the roads, supplying furniture to schools

a pivotal role in satisfying the multifarious g. Equal distribution of income and

www.surabooks.com Sura's Will to Win Guides For Contact 9600175757

the interest of all members. by the agreement, of all the partners or

e. Concentrated Effort: In this except one. It may also be dissolved

all for each Act, declaration of war with another

www.surabooks.com Sura's Will to Win Guides For Contact 9600175757

partner finds it impossible to do the matters connected therewith or

for dissolution. 1. The SEBI shall be a body corporate

of the head of the family. (v) Share premium is usually collected

3. The head of the Joint Hindu Family is

43. (i) The liability of the proprietor for the

52. ROBERT OWEN started the first 3. He is accountable to his immediate

with 28 members called as Rochdale 4. Dual subordination should be avoided.

(iii) It must be authorised by an ordinary

admission, retirement or death of a However, higher percentage of

If authorised by Articles, third parties is also called a premium hunter

or financial institutions which have (i) When a bear finds it difficult to

www.Padasalai.Net (iv) It must have a common seal as it

b. Joint Hindu Family: (i) It is a voluntary association of

(i) The joint Hindu families have persons.

corporation. Because it is created (ii) They will not invest in an

a pivotal role in satisfying the multifarious g. Equal distribution of income and

e. Concentrated Effort: In this except one. It may also be dissolved

for dissolution. 1. The SEBI shall be a body corporate

4) Misconduct of a partner: established under SEBI Act with

3. SEBI may call upon the exchange or

c. Other powers to be exercised at company.

directors, if authorised by iii) To borrow money where

iii) To appoint an alternate together with that already