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FYJC Subject: Secretarial Practice SOLUTION J. K. SHAH CLASSES CLASS ROOM TEST FYJC Marks: 40 Subject: Secretarial practice Time: 1.̎ Hrs. Topic – Joint Stock Company (Chap. 02) SOLUTION Q.1. Give One Word. (8 Marks) 1) The owner who is the sole manager and decision maker of his business. Ans. sole trader 2) The senior most family member of Joint Hindu Family Business. Ans. Karta 3) The members of Joint Hindu Family Business. Ans. Co-parceners 4) An artificial person created by law. Ans. Joint Stock Company 5) The persons who have entered into an agreement of partnership. Ans. Partners 6) A person who purchases shares of Joint Stock Company. Ans. Shareholders 7) The official signature of Joint Stock Company. Ans. Common seal 8) Name a company that is created by a special legislation of parliament or state assembly. Ans. Statutory Company Q.2. Complete the sentences. (2 Marks) 1) A company is a creation of law, hence it is called as Artificial Person. 2) A company which is incorporated under a special Act is called as Statutory company. 3) A Company which has only one member is called as one person company . 4) A listed company is must follow the provisions of Companies Act and SEBI Guidelines. Q.3. Distinguish between the following. (Any Two) (10 Marks) 1) Sole Trading concern and Joint Hindu Family Business Ans . Sole Trading concern Joint Hindu Family Business 1. Meaning A business which is owned, managed The ancestral business which is And controlled by one individual called continued and conducted by the sole trader for earning profit is called members of a Hindu Undivided Family sole trading concern. under the direction of the senior most member for earning profit is called Joint Hindu Family firm. 1 J. K. SHAH CLASSES CLASS ROOM TEST 2. Membership Since, sole trading concern is owned The minimum or maximum number of and managed by a single person, coparceners is not regulated by Hindu there cannot be more than one law. It changes with the number of member. birth and death in the family. 3. Ownership The business assets (properties) are All the members of the Hindu entirely owned by the sole proprietor Undivided family are the joint owners himself. of the ancestral business property. 4. Liability The liability of a sole trader is The liability of each coparcener is unlimited. It means if the assets of the limited to the extent his share in the business are insufficient to pay its coparcenary, However, the liability of liability then the property of the sole to the Karta is unlimited. trader will be attached and sold to pay business debts. 5. Financial Resources The financial resources of the sole The Financial resources of a Joint trader are very limited in comparison Hindu Family Firm are relatively more to the Joint Hindu Family Firm. than that of sole trading concern. 6. Stability The sole trading concern lacks stability The Joint Family Firm is comparatively because the survival and continuity of more stable because in the case of business are affected by death, lunacy death of the Karta , the business is or insolvency of a sole trader. taken over and continued by the next senior most family member. 2) Partnership Firm and Joint Stock Company. Ans . Partnership Firm Joint Stock Company 1. Meaning A partnership firm is a form of business A Joint stock company is an organization owned and managed by incorporated voluntary association of two or more persons i.e. partner for individuals for profit, credited by law, earning profit. owned by the shareholders but managed by their few representatives, i.e. Directors. 2. Membership The minimum number of member is 2, In the case of a private company the while the maximum number of member minimum number of member is 2 and is 10 in the case of banking business the maximum of number member of and 50 in the case of any other 200. In the case of public Company, business. the minimum number is 7 and the maximum number is unlimited. 3. Formation The formation of a partnership firm is The formation of Joint stock company easy and simple. Minimum legal is rather difficult and complicated. formalities are involved. Only an Numerous legal formalities are agreement is necessary. Even involved. Registration is compulsory, registration is not compulsory. costly, complicated and time However, it is compulsory in the state consuming. of Maharashtra. 2 J. K. SHAH CLASSES CLASS ROOM TEST 4. Liability The liability of all the partners except The liability of the shareholder is minor partner is unlimited, Joint as well limited to the extent of the unpaid as several. amount, if any, on the shares held by them. 5. Regulatory Act The Partnership firm is regulated and A joint stock company is regulated and governed by the provisions of the governed by the provision of the Indian Partnership Act, 1932 and also Indian Companies Act,1956. by the companies Act 2013. 6. Legal Status The partnership firm has no separate A joint stock companies has separate legal status distinct from its members legal status distinct from its members (Partners). (Shareholders). 3) Private company and Public company. Ans . Private company Public company 1. Meaning A private company is the one which A public company is the one which restricts the rights of its members to does not restricts the rights of its transfer shares. Limits the maximum members to transfer shares. Does not number of member to 50 and prohibits limits its membership to 50 and can an invitation to public to subscribe to invite the public to subscribe to its its shares and debentures. shares and debentures 2. Number of directors A private company must have least 2 A public company must have minimum directors. directors. 3. Transfer of shares In private company, transferability of In case of public company shares are share is restricted by its articles. freely transferable and usually quoted on a Stock Exchange. 4. Number of member The minimum number of members is The minimum number of members is 7, 2 while the maximum number of while there is no limit to the maximum members is 200 in a private company. number of members in a public company. 5. Name A private company is required to add A public company required to add the the word ‘Private Limited’ After its word ‘Limited’ after its name. name. 6. Minimum capital A private company is required to raise A public company required to raise minimum amount of paid up capital of minimum amount of paid up capital of ` 1 lakh. ` 5 lakh 3 J. K. SHAH CLASSES CLASS ROOM TEST Q.4. Short notes. (Any Two) (10 Marks) 1) State the features of sole trading concern. Ans. A Sole Trading Concern is a form of business organization. It is owned, managed and controlled by one person. It is also called as "One Man Business'. A person who conducts the business is called 'Sole Trader'. Features: 1) There is no separate Law or Act governing Sole Trading Concern, but it has to follow all the laws of Land. 2) Sole Trading Concern has only one owner. 3) Capital contributed by sole trader is very small. 4) There is no division of profit or loss as there is a single owner. 5) All decisions of business are taken by sole trader. 6) The proprietor (sole trader) can ensure maximum business secrecy. 7) The liability of sole trader is unlimited. 8) This business does not enjoy a separate legal status. 9) Sole Trading Concern is not suitable for large scale business operations. 2) State the features of Joint Hindu Family Business. Ans . When a Hindu Undivided Family conducts business, inherited by it as per Hindu Law, it is called a Joint Hindu Family Business. It exists only in India. It is governed by Hindu Succession Act 1956. Features: 1) Membership in the Joint Hindu Family Business is by birth only. Every child born in the family becomes a member. 2) The Head of the Family is known as 'Karta'. 3) Other members of the family are called as 'Co-parceners'. 4) Number of members - There is no limit on minimum and maximum number of members. 5) All Family members are engaged in the business. 6) The Liability of Karta is unlimited. 7) The Liability of co-parceners is limited. 8) Karta is the manager, controller and co-ordinator of the business. 9) Karta being the sole decision maker can take quick decisions. 10) The profit sharing ratio keeps on changing depending upon the births and deaths in the family. 3) Stale the features of Partnership firm. Ans. The business organization which is owned, managed and controlled by two or more persons is called Partnership Firm. The owners are called Partners and the organization is called a Firm. Registration of Partnership firm is compulsory in Maharashtra state. This form of organization is governed by Indian Partnership Act 1932. Features: 1) This business is started by an agreement between two or more persons. 2) Number of partners - Minimum-Two Maximum- Fifty for general business. 3) The liability of partners is Unlimited and it is joint and several. 4) Capital is contributed by partners. 5) Partnership firm does not enjoy separate legal status. 4 J. K. SHAH CLASSES CLASS ROOM TEST 6) In Partnership Firm partners, cannot transfer their shares without the permission of other partners. 7) All partners are joint owners as well joint managers of business. 8) No separation of ownership and management in Partnership firm. 9) Partners share profit and losses in the agreed ratio as mentioned in partnership deed.
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