TN Board 11th Commerce Important Questions Chapter 26 Export and Import

TN State Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 1.
What is meant by indent?
Answer:

  1. An indent is an order placed by an importer with an exporter for the supply of certain goods.
  2. It contains full details regarding goods to be imported the terms and conditions regarding price, shipment, delivery, the method of payment etc.

Question 2.
Write any two export promotion institutions.
Answer:

  • Department of Commerce.
  • Export Promotion Council (EPC).

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 3.
Mention the types of Indent.
Answer:
There are three types of indent, namely

  • Open indent,
  • Closed indent and
  • Confirmatory indent.

Question 4.
What is the Letter of credit?
Answer:
Letter of Credit is opened only for well- established and reputed importer. It is beneficial both to the exporter and importer. Exporter is assured of payment and need not bother about credit worthiness of importer. The letter of credit simply transfers the burden of settling the transactions to the bank.

Question 5.
What are the contents of Indents?
Answer:

  1. Quantity of goods sent,
  2. Design of goods,
  3. Price,
  4. Nature of packing shipment,
  5. Mode of shipment,
  6. Period of delivery,
  7. Mode of payment.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 6.
What is meaning of consular invoice?
Answer:
Where the customs duties are charged on the basis of value of goods at import’s port (ad-valorem basis), the customs officers are empowered to open the consignment to calculate duties. In order to avoid this problem exporter obtains consular invoice and sends it over to the importer.

This document is signed by the consul of importer’s country stationed in exporter’s Country. Hence customs officer at the port of destination will not open the consignment and simply access customs duty based on the value declared in the invoice. They simply accept the invoice as true statement of the content of the consignment.

Question 7.
What is meant Charter Party?
Answer:
A charter party is a formal agreement between shipowner and the exporter under which exporter hires an entire ship or a major part of ship either for a particular voyage or for a specific time period when the shipping is heavy.

Question 8.
Write a short note on Mate’s receipt?
Answer:
Mate’s Receipt is the document issued by the captain of the ship acknowledging the receipt of goods on board by him to the port of specified destination. This contains details like quantity of goods shipped, number of packages condition for packing, etc.,

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 9.
What is Bill of Lading?
Answer:
Bill of Lading, refers to a document signed by ship owner or to his agent mentioning that goods specified have been received and it would be delivered to the importer or his agent at the port of destination if good condition subject to terms and conditions mentioned therein.

Question 10.
What are the procedures relating to Export trade?
Answer:
(i) Receiving Trade enquiry:
Exporter receives trade enquiry (written request) from the importer / his agent who intends to buy the product.
(a) Specification about the goods like, size, design, quality, and brand name.
(b) The period up to which his proposal to import is valid.

(ii) Receiving Indent and Sending Confirmation:
After the scrutiny of quotation / proforma invoice, the buyer who intends to buy the goods sends an indent to exporter. The latter may either receive the order directly from the importer or through an agent who acts as an intermediary between the exporter and the importer.

(iii) Obtaining Importer Exporter Code (IEC) and RBI code Number:
Exporter has to apply in Ayaab Niryatt Form 2A(ANF2A) to the Regional Authority of the Director-General of Foreign Trade (DGFT) in the region where the registered office of the company is located. Exporter has to mention the number in all the shipping documents.

(iv) Obtaining Registration cum Membership Certificate (RCMC) from export Promotion Council /Commodity Board:
An Exporter is required to obtain RCMC from Export Promotion Councils/ Commodity Board/Development Authority in order to avail himself/herself of export incentives, concessions, and other facilities offered by Government.

(v) Manufacturing / Procuring Goods and Packing items:
Exporters steps into manufacturing and procuring of goods required by the importer.

(vi) Export Inspection Certificate:
After specifications of importer, the exporter has to apply to the Export Inspection Agency (EIA) or other designated agency in this connection The agency sends an inspector to inspect the consignment meant for export.

(vii) Insurance of Goods:
Exporter has to arrange for getting the goods insured to protect them against the various risks like deterioration, collision, immersion, fire, entry of seawater etc., as per the instructions of importer if any.

(viii) Certificate of Origin:
Import regulation of foreign countries may require that all these import consignments must accompany a certificate of origin.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 11.
Distinguish between Bill of Lading and Charter Party.
Answer:

TN Board 11th Commerce Important Questions Chapter 26 Export and Import 1

Question 12.
What are the documents used in Export Trade?
Answer:
Documents are used regarding goods:

  1. Open indent
  2. Closed indent
  3. Confirmatory indent.
  4. Certificate of origin.
  5. Certificate of verification.

Document are used regarding shipment:

  1. Mate’s receipt.
  2. Bill of lading.
  3. Marine insurance.
  4. Customs Formalities.
  5. Airway Bill.

Documents are used in payment by away of:

  1. Letter of credit
  2. Bills of exchange
  3. Foreign draft
  4. Excise duty.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 13.
Explain the various functions of Export Trading Houses.
Answer:
The functions of export house are:
(i) Identifying potential market for a product.
(ii) Finding buyers and their agent and eliciting their response for export proposal.
(iii) Establishing product specification in the light of market needs, standards, and regulation in accordance with suppliers capabilities.
(iv) Determining appropriate mode of transportation and routing keeping in mind the cost, quality of service, and security.
(v) Preparing the goods for delivery at destination.
(vi) Determining buyer’s creditworthiness.
(vii) Negotiating the transactions.
(viii) Arranging proper insurance coverage against maritime risks and currency fluctuations. .
(ix) Financing the transactions and paying for goods and services received.
(x) Preparing document for international trade.
(xi) Settling claim.

Question 14.
Import Trade Procedures.
Answer:

  1. Trade enquiry.
  2. Obtain import license
  3. Obtaining foreign exchange.
  4. Placing the indent.
  5. Arranging letter of credit.
  6. Obtaining shipping documents.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 15.
Agencies involved in Import Trade.
Answer:

  • Indent houses.
  • Clearing agents.

Question 16.
You should be able to think to simplify Import Trade Procedures.
Answer:

  • Trade enquiry,
  • Arranging letter of credit.
  • Receiving payments.

Question 17.
Create interest in International Business for yourself.
Answer:

  1. Take interest in International business.
  2. To get more profit.
  3. To give employment opportunities to public.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Choose the Correct Answer:

Question 1.
EPC stands for:
(a) export processing commission
(b) export promotion council
(c) export carriage council
(d) export promotion congress
Answer:
(b) export promotion council

Question 2.
STC is expansion for:
(a) state training centre
(b) state training council
(c) state trading centre
(d) state trading Corporation
Answer:
(d) state trading Corporation

Question 3.
An _______ is document prepared by importer an sent to the exporter to buy the goods.
(a) invoice
(b) indent
(c) enquiry
(d) charter party
Answer:
(b) indent

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 4.
The ______ receipt is an acknowledgement of receipt of goods on the ship issued by the Captain.
(a) shipping bill
(b) bill of lading
(c) mate’s receipt
(d) consular invoice
Answer:
(b) bill of lading

Question 5.
The Exporters appoint the _______ agent to fulfill the customs formalities.
(a) clearing agent
(b) forwarding agent
(c) commission agent
(d) factor
Answer:
(b) forwarding agent

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Samacheer Kalvi 11th Commerce Notes Chapter 26 Export and Import

→ Exports have attained greater importance in the competitive world. No country in the world can produce all the goods and services it required. They have to inevitably buy and sell from one another. Therefore countries have to engage in international trade. Export and Import represent two sides of the same coin of international trade.

→ The goods which are not available in home country same goods were imported. The goods which are produced surplus good which will be exported to other countries.

→ Developing countries like India, Bangladesh, South Korea and so on require substantial amount of foreign exchange in order to acquire machineries, equipment, raw materials, petroleum products, technical know – how and so on for their faster economic development.

→ Government of India has initiated several steps to encourage exports. It has been promoting export by providing cash incentives, tax incentives and relief, institutional, support concessional interest rate, loan assistance, tax exemptions, tax holidays and transport concessions.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 31 Discharge and Breach of a Contract

TN State Board 11th Commerce Important Questions Chapter 31 Discharge and Breach of a Contract

Question 1.
What are the kinds of consent?
Answer:
The kinds of consent are:

  1. Express: Express consent may be given at the time of formation of the contract or subsequent to its formation.
  2. Implied: The contracts are also discharged by implied consent.

Question 2.
What are the types of Impossibility of Performance?
Answer:

  1. Impossibility existing at the time of agreement.
  2. Impossibility arising subsequent to the formation of contract.

Question 3.
What is Quantum merit?
Answer:
The claim for quantum merit may arise if a contract performed by one party has become discharged by breach of the other party. The meaning of the phrase quantum merit is ‘as much as earned’. The claim is not for the original contract that has been discharged or void, but on an implied promise by the other party to pay for what he has done

Question 4.
What are the different modes of discharged by implied consent?
Answer:
The contracts are also discharged by implied consent, different modes of discharge by implied consent are mention below:

  1. Novation,
  2. Alteration,
  3. Recession,
  4. Remission,
  5. Accord and Satisfaction,
  6. Waiver and
  7. Merger.

Question 5.
Define discharge by Performance.
Answer:

  1. Performance implies carrying out the obligation of the contract. Performance must be completed according to the real intentions of the agreement. Performance must be done according to time and manner prescribed.
  2. Performance of contract may be of two types namely
    (a) Actual performance and
    (b) Attempted performance.

Question 6.
What are reasons for impossibility arising after the formation of contract?
Answer:
(i) According to the Section 56 of the Act, all acts to do impossible acts are void. There are two types of impossibility of performance such as
(a) Impossibility existing at the time of agreement,
(b) Impossibility arising subsequent to the formation of contract.

(ii) On the other hand, impossibility of performance existing at the time of performance of a contract may be either
(a) Known to the parties or
(b) Not known to the parties.

(iii) Likewise impossibility arising subsequent to the formation of a contract or supervening impossibility maybe
(a) By some event beyond the control of the parties or
(b) By some act either of the promisor or of the promisee.

Question 7.
What are the various rules regarding damages?
Answer:

  1. Damages are a monetary compensation awarded by the court to the injured party for the loss or injury suffered by him.
  2. As per contract, one party can claim damages if other party breach the contract.
  3. The main purpose of awarding the damages is to make good the loss suffered by him.
  4. There are mainly four types of damages, such as
    (a) Ordinary damages.
    (b) Special damages.
    (c) Vindictive or exemplary damages and
    (d) Nominal damages.

Question 8.
Explain the ways of discharge of Contract.
Answer:
(i) Discharge by performance:
Performance implies carrying out the obligation of the contract. Performance must be completed according to the real intentions of the agreement. Performance must be done according to time and manner prescribed. Performance of contract may be of two types namely
(a) Actual performance,
(b) Attempted performance.

(ii) By agreement on consent:
Agreement between the parties comes to an end by mutually agreeing for it. Any contract is created by an agreement, hence m the same way, it can be discharged by an agreement. In this connection the rule of law is as follows. “Eodem modo qus and quide constitutor, eodem modo destruitur,” the meaning of which is that a thing may be destroyed in the same manner, in which, it is constituted. The consent may be of the following types.

Express:
Express consent may be given at the time of formation of the contract or subsequent to its formation.

Implied:
The contracts are also discharged by implied consent, different modes of . discharge by implied consent are –

  1. Novation,
  2. Alteration,
  3. Recession,
  4. Remission,
  5. Accord and Satisfaction,
  6. Waiver and
  7. Merger charge.

(iii) By Impossibility of Performance:
A contract may be discharged if its performance becomes impossible. The rule of impossibility of performance is based on the following maxims

  • the law does not recognize what is impossible and
  • what is impossible does not create an obligation

(iv) By Lapse of Time:
According to the Limitation Act, 1963 a contract must be performed within a specified time. If it is not performed within this specified time limit and against which if no action is taken by the promisee in the Court of Law within specified time, then the promisee is deprived of his remedy at law. In such cases, the contract is discharged.

(v) By Operation of Law:
A contract can be discharged by the operation of law. The operation of law by which contract can be discharged are as follows:
(a) By Death,
(b) By Merger,
(c) By Insolvency,
(d) Unauthorized Alteration ofthe Terms of a Contract,
(e)Rights and liabilities vesting in the same person.

Question 9.
Write about the various remedies for breach of contract.
Answer:
Remedies for Breach of Contract:
All parties to a contract are expected to perform their promises. When one party refuses to perform his promise, then the breach of contract takes place. The other party or parties are called aggrieved or injured party or parties. There are various types of remedies for the injured parties. They are:
(a) Recession of Contract,
(b) Claim for Specific Performance,
(c) Claim for Injunction,
(d) Claim for Quantum Merit and
(e) Claim for Damages.

(i) Recission of Contract:
In case of breach of contract by one party, then the other parties may rescind the contract and thereby the party is absolved from his all obligations under the contract.

(ii) Claim for Specific Performance:
In some specific cases if the damages are not the adequate remedy, then the court can direct the party in breach for the specific performance of the contract. In such case, the promise is carried out as per terms and conditions of the contract.

(iii) Claimfor damages:
Damages are a monetary compensation awarded by the court to the injured party for the loss or injury suffered by him. As per contract, one party can claim damages if other party breach the contract. The main purpose of awarding the damages is to make good the loss suffered by him. It is known as doctrine of restitution. The Section 73 of the Indian Contract Act, 1872 deals with the compensation for loss or damages caused by a party for breach of contract. There are mainly four types of damages, such as
(a) Ordinary damages,
(b) Special damages,
(c) Vindictive or exemplary damages and
(d) Nominal damages.

(iv) Claim for Quantum Merit:
The claim for quantum merit may arise if a contract performed by one party has become ‘ discharged by breach of the other party. The meaning of the phrase quantum merit is ‘as much as earned’. The claim is not for the original contract that has been discharged or void, but on an implied promise by the other party to pay for what he has done.

(v) Claim for Injunction:
Injunction is an order passed by a competent court restraining a person from doing some act. Injunction can be defined as a mode of securing the specific performance of the negative terms of a contract. Negative terms of contract imply doing something, which a party has promised not to do. Injunction is an order which is granted by the court restraining the person to do what he had promised not to do.

Question 10.
Discuss the different types of damages awarded to the injured party.
Answer:
Claim for damages:
Damages are a monetary compensation awarded by the court to the injured party for the loss or injury suffered by him. As per contract, one party can claim damages if other party breach the contract. The main purpose of awarding the damages is to make good the loss suffered by him. It is known as doctrine of restitution. The Section 73 of the Indian Contract Act, 1872 deals with the compensation for loss or damages caused by a party for breach of contract. There are mainly four types of damages, such as-
(a) Ordinary damages,
(b) Special damages,
(c) Vindictive or exemplary damages and
(d) Nominal damages.

(a) Ordinary damages:
Damages that arises ordinary course of business from the breach ‘ of contract is called ordinary damages.
eg: A, He is a seller, B, He is a buyer. B order the sugar 100 bags ₹ 2000 per bag. Amount to be paid at the time of delivery. At the same time the price increased from ₹ 2,000 to ₹ 2,500. A refused to sell sugar. It is called ordinary damage.Special damage: Special damages .are those damages that are payable for the lose arising due to some special circumstances.

(iii) Vindictive exemplary damages:
These damages are claims against the party who has committed to refuse die contract. So he compensates the aggrieved party, eg: Dishonour of a cheque.

(iv) Nominal damages:
These damages are claimed to the aggrieved party. In this case loss is very small amount. When there is only technical violation of the legal rights.

Question 11.
To draw inference about the nature of contract and legal ways of discharging it.
Answer:
(i) Performance implies carrying out the obligation of the contract.
(ii) Performance must be completed according to die real intentions of the agreement, performance must be done according to the time and manner prescribed.

Question 12.
To understand the modes of discharge of contract.
Answer:
To explain two modes of discharge of contract.
Merger: Two or more contracts combined together to form a contract and discharge of contract.

Question 13.
To interpret the consequence of breach of performance of contract.
Answer:
All parties to a contract are expected to perform their promises when one party refuses to perform his promise. Then the breach of contract takes place.

Question 14.
Illustrate with example the modes of discharge of contract and if not discharged, the consequences.
Answer:
Recission of contract:
In case of breach of contract by one party then the other parties may rescind the contract and thereby the party is absolved from his all obligations under the contract.

Question 15.
To foresee the suitability of remedies for breach of contract violation of which leading to legal consequences.
Answer:
Remedies of breach of contract for that to claim damages.
Ordinary damages:
Damages that arises in the ordinary course of events from, the breach of contract are called ordinary damages.
eg: Annie contracted to sell and deliver Bala 100 bags of Dhall at ₹ 3000 per bag and price to be paid at the time of delivery.
The price of Dhall is raised to ₹ 4000 per bag and Annie refused to sell the dhall. Bala can claim damages at the rate of ₹ 1000 per bag.

Choose the Correct Answer:

Question 1.
On the valid performance of the contractual obligation by the parties, the contract:
(a) is discharged
(b) becomes enforceable
(c) becomes void
(d) none of these
Answer:
(a) is discharged

Question 2.
An agreement to do an act impossible in itself under Section.56 is:
(a) void
(b) valid
(c) voidable
(d) unenforceable
Answer:
(a) void

Question 3.
Any agreement which becomes impossible to perform under various circumstances:
(a) voidable
(b) void
(c) valid
(d) none of these
Answer:
(b) void

Question 4.
Discharge by mutual agreement may involve:
(a) novation
(b) rescission
(c) alteration
(d) all of the above
Answer:
(d) all of the above

Question 5.
The compensation given for breach of contract is:
(a) damage
(b) remuneration
(c) money
(d) cheque
Answer:
(a) damage

Samacheer Kalvi 11th Commerce Notes Chapter 31 Discharge and Breach of a Contract

→ Discharge of contract implies termination of the contractual relationship between the parties. A contract is discharged if it ceases to operate and when the rights and obligations created by it come to an end. Sometimes other rights obligations may arise as a result of discharge of the contract. These are independent of the original contract.

→ Modes of discharge of contract: Different modes of discharge of contract have been provided under different section of the act.

→ Discharge by performance: Performance implies carrying out the obligation of the contract. Performance must be completed according to the real intentions of the agreement. Performance must be done according to time manner prescribed.

→ Performance of contract may be of two types namely:

  • Actual performance,
  • Attempted performance.

→ Agreement between the parties comes to an end by normally agreeing for it. Any contract is created by an agreement. At the same time it can be discharged by an agreement.

→ The consent may be of the following types:

  • Express and
  • Implied.

→ Remedies for breach of contract:
All parties to a contract are expected to perform their promises. When one party refuses to perform his promises. Then the breach of contract takes place. The other party or parties are called aggrieved or injured party or parties.

→ Remedies:
There are various types of remedies for the injured parties listed as follows:

  1. Recission of contract,
  2. Claim for specific performance,
  3. Claim for injuction,
  4. Claim for quantum merit and
  5. Claim for damages.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

TN State Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 1.
State the ways of performing a Contract.
Answer:
There are mainly two ways of performing a contract. They are-

  • Actual Performance and
  • Attempted performance.

Question 2.
Who is a Legal Representative?
Answer:

  1. If the promisor dies, the legal representative of the deceased promisor is bound to perform the contract, (section-37).
    eg: Mr. Raja promises to sell his car for ₹ 5,00,000 to Kannan after a week.
  2. But Raja dies after 5 days of the contract ’ Raja’s representative will be liable to sell the car to Kannan.
  3. Kannan will be liable to pay ₹ 5,00,000 to Raja’s representative.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 3.
Who is an agent?
Answer:
According to Para 2 of Section 40, the promisor may employ a competent person such as agent to perform the promise, if the contract is not formed on personal condition.

Question 4.
Define Reciprocal Promise.
Answer:

  1. According to Section 2 (f) of the Indian contract Act 1872 as defines reciprocal promise.
  2. Promises which form consideration or part – of consideration for each other are called ‘reciprocal promise’.

Question 5.
By whom must contracts be performed?
Answer:
The contract may be performed by the following persons.

  1. The promisor himself.
  2. The agent.
  3. The legal representative.
  4. The third person.
  5. The joint promisor.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 6.
What is a Valid tender?
Answer:
A tender is an offer to do or perform an act which the party offering is bound to perform to’ the party to whom the offer is made. A tender may be of money or of specific articles these will be separately considered. of the lender of money to make a valid tender the following requisites are necessary.

Question 7.
Who can execute and Perform a Contract?
Answer:
(i) Promisor himself:
The contract must be performed by the promisor himself or by his legal representatives, or by any other competent person employed by him then such promise must be performed by the promisor himself Or by his legal representatives or by an other competent person employed by him.

(ii) Agent:
An agent is appointed by the promisor for the purpose of perform a contract.

(iii) Representations:
If the promisor dies. Of course in case of other contracts, the legal representatives of a deceased promisor are bound to perform the contract sec.37.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 8.
Who can demand performance?
Answer:
The following are those who can demand the performance of a valid contract.
(i) Promisee:
Only a promisee can demand performance and not a stranger demand performance of the contract.

(ii) Legal representative:
Legal representative can demand Exception performance. Contrary intention appears from the contract. Contract is of a personal nature.

(iii)Third party:
‘Exception to “Stranger to a contract”.

Question 9.
Write a note on the benefits of Reciprocal Promise.
Answer:
(i) Mutual and Independent:
Where each party must perform his promise independently without the performance of the other, the promise are mutual and independent, eg: Ramu agrees to pay Somu the amount for the rice supplied on 10th June. Somu promises to deliver rice on 18th June.

(ii) Mutual and Dependent:
Where the performance of the promise by one party depends upon prior performance of promise by the other party, the promises are conditional and dependent, eg: A agrees to construct a building for B. B agrees to supply cement for the construction. Hence A’s promise to perform depends on B’s promis

(iii) Mutual and Concurrent:
Where the two promises are said to be performed simultaneously, they are said to be mutual and concurrent.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 10.
Who is a Joint Promisors?
Answer:
Section.42 of Indian Contract Act lays down that “When two or more persons have made a joint promise, then unless a contrary intention appears in the contract, all, such persons, during their joint lives and after the death of the last survivor, representatives of all, jointly must fulfil the promise”.

Question 11.
Explain rules relating to place of performance of promise.
Answer:
(i) Under Section 46:
Performance within a reasonable time: According to Section 46, a promisor is to perform his promise within a reasonable time. On the other hand, reasonable time will depend upon the circumstance of the case, the usage of trade or on the intention of the parties entering into the contract.

(ii) Under Section 47:
Specified time and place for performance: If the promise is to, be performed on a certain day, the promisor may undertake to perform it without application of the promisee. According to the Section 47, In such a case the promisor may perform the promise at any time during the usual hours of business on such day and at the place at which the promise ought to be performed.

(in) Under Section 48:
Performance on a certain day: If the promise is to be performed on a certain day the promisor may undertake to perform it after the application by the promisee to that effect.

(iv) Under Section 49:
Performance of promise when no place is fixed and without application: If the promise is to be performed without application by the promisee and where no place is mentioned to be performed of tlhe contract then it is the duty of the promisor to apply to the promisee to provide a reasonable place for the performance of the promise and to perform it at such place.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 12.
Elucidate the provision regarding time as factor in performance.
Answer:
(i) Under Section 46, performance within a reasonable time:
According to Section 46, a promisor is to perform his promise within a reasonable time. On the other hand, reasonable time will depend upon the circumstance of the case, the usage of trade or on the intention of the parties entering into the contract.

eg: A has given an order of supply of books in July which should be performed within 4 to 5 days of the month of July.

(ii) Under Section 47, specified time and place for performance:
If the promise is to be performed on a certain day, the promisor may undertake to perform it without application of the promisee. According to the Section 47, In such a case the promisor may perform the promise at any time during the usual hours of business on such day and at the place at which the promise ought to be performed.

(iii) Under Section 48, performance on a certain day:
If the promise is to be performed on a certain day the promisor may undertake to perform it after the application by the promisee to that effect.

(iv) Under Section 49, performance of promise when no place is fixed and without application:
If the promise is to be performed without application by the promisee and where no place is mentioned to be performed of the contract then it is the duty of the promisor to apply to the promisee to provide a reasonable place for the performance of the promise and to perform it at such place.

eg: M takes to deliver 1,000 kilos of wheat to N on a fixed day. M must apply to appoint a reasonable place for the purpose of receiving it and must deliver it to him at such place.

(v) Under Section 50, performance is prescribed by the promisee:
According to Section 50, the performance of any promise may be made in any manner or at any time which the promisee prescribes.

eg: T owes S ₹ 2,00,000/- to accept T’s car value of ₹ 1,00,000/- in reduction of the debt. The delivery of the car will amount to a part payment of the debt.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 13.
How do you think appropriation of payments takes place?
Answer:
‘Appropriation means application of payments – The question of appropriation of payments arises when a debtor owes several debts to the same creditor and makes a payment that is not sufficient to discharge the whole indebtedness.

(i) Appropriation of Payments:
Sometimes, a debtor owes several distinct debts to the same creditor and he makes a payment which is insufficient to satisfy all the debts. In such a case, a question arises as to which particular debt the payment is to be appropriated. Section 59 to 61 of the Act lay down following rules as to appropriation of payments which provide an answer to this question.

(ii) Appropriation as Per express Instructions:
Every debtor who owes several debts to a creditor has a right to instruct his creditor to which particular debt, the payment is to be appropriated or adjusted. Therefore, where the debtor expressly states that the payment is to be applied to the discharge of a. particular debt, the payment must be applied accordingly.

eg: X owes Y three distinct debts of ₹ 20,000, ₹ 30,000 and ₹ 50,000 X sends ₹ 50,000 and instructs Y that the payment should be appropriated against the third debt. He is bound to appropriate the payment against the third debt only.

(iii) Application of payment where debt to be discharge is not indicated [60] :
If section 60 is attracted, the creditor shall have the discretion to apply such payment for any lawful debt which is due to him from the person making the payment.

eg: P owes to Q, among other debts, the sum of ₹ 10,000. Q writes to P and demands payment of this sum. P sends to Q ₹ 10,000. This payment is to be applied to the discharge of the debt of which Q had demanded payment.

(iv) Application of payment where neither party appropriates [61]:
The payment shall be applied in discharge of the debts in order of time whether they are or are not based by the limitation Act 1963, if the debt are of equal standing (i.e. payable on the same date) the payment shall be applied in discharge of each of these debt proportionately.

Question 14.
To identify the performance and distinguish the performance as actual or attempted.
Answer:

  1. When the party has done what he had undertaken to do. It is called actual performance.
  2. When the party offers to perform his obligation. Itisnotacceptedbythepromisee, so it is called offer to performance.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 15.
To understand the time and place of performance, so that the contract is established to be discharged or not.
Answer:

  1. If the promise is to be performed on a certain day, the promisor may undertake the perform it without application of promise.
  2. However, the promise should be performed at the place where it was required to be performed.

Question 16.
Suggest ways by which the nature of performance of a contract can be categorised.
Answer:

  1. Apromisor is to perform his promise within a reasonable time.
  2. On the other hand, reasonable time will depend upon the circumstances of the case.

Question 17.
To identify those who are involved in the process of performance of contract and their legal status.
Answer:

  1. The contract should be performed by the promisor by himself. He is like a legal representative.
  2. Contract which are not of personal nature may be performed by an agent who is likely a promisor.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Choose the Correct Answer:

Question 1.
On the validperformance of the contractual obligations by the parties, the contract:
(a) is discharged
(b) become enforceable
(c) becomes void
(d) becomes legal
Answer:
(a) is discharged

Question 2.
Which of the following persons can perform the contract?
(a) Promisor alone
(b) Legal representatives of promisor
(c) Agent of the promisor
(d) All the above
Answer:
(d) All the above

Question 3.
A, B, C jointly promised to pay ₹ 50,000 to D. Before performance of the contract, C dies. Here, the contract:
(a) becomes void on C’s death
(b) should be performed by A and B along with C’s legal representatives.
(c) should be performed by A and B alone.
(d) should be renewed between A, B and D.
Answer:
(b) should be performed by A and B along with C’s legal representatives.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 4.
Which of these parties cannot demand performance of promise?
(a) Promisee
(b) Any of the Joint Promisees
(c) On the death of a Promisee, his Legal Representative.
(d) Stranger to the Contract
Answer:
(d) Stranger to the Contract

Question 5.
A person is said to be a third person if he is hot a:
(a) promisor
(b) promise
(c) agent
(d) Legal Representative
Answer:
(c) agent

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Samacheer Kalvi 11th Commerce Notes Chapter 30 Performance of Contract

→ Regarding the performance of contract, section 37 of the act states that the parties to a contract must be either.
(i) Perform their respective promises of
(ii) Offer to perform the same
(iii) Such performance is dispensed with or
(iv) Excused under the provisions of the act or of any other law.

→ There are mainly two ways of performing a contract such as actual performance, attempted performance. Who will perform the contract?
(i) Promiser himself
(ii) Agent
(iii) Representations
(iv) Third parties
(v) Joint promisors
To explain about the devolution of joint rights and joint liabilities.

→ Joint rights:
“When a person has made a promise to two or more persons jointly, then unless there is a contract to the contrary, the right to claim performance rests as between him and them. With them during their joint lives, and after the death of them with representatives of such deceased person jointly with survivors and after the death of last survivor, with the representatives of all jointly.”

→ Devolution of joint liabilities:
Section 42 of Indian contract act lays down that “when two or more persons have made a joint promise, then unless a contrary intention appears in the contract, all such persons, during the joint lives and after the death of the last survivor, representatives of all jointly must fulfil the promise.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 21 Micro, Small and Medium Enterprises (MSME) and Self Help Groups (SHGs)

TN State Board 11th Commerce Important Questions Chapter 21 Micro, Small and Medium Enterprises (MSME) and Self Help Groups (SHGs)

Question 1.
What do you understand by the manufacturing enterprises?
Answer:
Manufacturing enterprises refer to the enterprises engaged in the manufacturing or production of goods pertaining to any industry specified in the first schedule to the Industries (Development and Regulation) Act, 1951. The manufacturing enterprises are defined in terms of investment in plant and machinery.

Question 2.
Give some examples for micro enterprises.
Answer:
The limit for investment in plant and machinery does not exceed 25 lakhs. Micro enterprises engaged in small scale activities. Such as fruit and vegetable venders, cottage industries, fire works, handicrafts, clay pot making etc.

Question 3.
What is the aim of NEEDS?
Answer:
Government of Tamil Nadu launched “New Entrepreneur-cum-Enterprise Development Scheme (NEEDS)” with a view to encouraging the educated youth to become the first generation entrepreneurs.

The Scheme envisages providing entrepreneurship development training to educated young entrepreneurs, preparing business plans and helping them to tie up with financial institutions to set up new business ventures, besides linking them with major industrial clients.

Question 4.
What is a Self Help Group?
Answer:

  1. Self help group is a small informal voluntary association created for the purpose of enabling members to reap economic benefit out of mutual help, solidarity, and joint responsibility.
  2. The benefits include mobilization of savings and credit facilities for the pursuit of group enterprise activity, eg: (self help women group).

Question 5.
State the investment limit for small enterprise in manufacturing and service sector.
Answer:

  • Size of enterprise: Small enterprises.
  • Manufacturing sector: More than ₹ 25 lakhs but not exceed ₹ 5 crores.
  • For service sector: More than ₹ 10 lakhs but not exceeding ₹ 2 crores.

Question 6.
State the investment limit for medium enterprise engaged in Manufacturing and service sector.
Answer:

  • Size of enterprise: Medium-enterprises
  • Manufacturing sector: More than ₹ 5 Crores but not exceeding ₹ 10 Crores.
  • For service sector: More than ₹ 2 Crores but not exceeding ₹ 5 Crores.

Question 7.
List out the products produced by MSME in Tamil Nadu.
Answer:
In Tamil Nadu MSMEs sector produces a wide variety of products in almost all fields. The prominent among them are the textile, electronic products, engineering products, auto ancillanes, leather products, chemicals, plastics, garments, jewellery etc. There are 12.94 Lakh registered number of units of MSMEs in the State, providing an employment opportunities to about 81 Lakh people. (source cms.tn.gov.in – 12.12.2017)

Question 8.
What is the role and significance of MSMEs in Indian Economy?
Answer:
This Sector consists of 36 million units and provides employment to over 8 Crore people. MSME provides employment opportunity to the people of India. It helps towards industrialisation of rural and backward areas. This sector reduces regional imbalance. It provides equal distribution of national income and wealth.

TN Board 11th Commerce Important Questions Chapter 21 Micro, Small and Medium Enterprises (MSME) and Self Help Groups (SHGs) 1

Question 9.
Explain any three features of Self Help Group.
Answer:

  1. The motto of every group members should be “saving first – credit latter”.
  2. Self Help Group is homogeneous in terms of economic status.
  3. The ideal size of a Self Help Group ranges between 10 and 20 members.

Question 10.
What are the different ways in which banks fund Self Help Groups?
Answer:

  1. There are three distinct modes of credit to SHGs, under the first mode, banks lend directly to the SHGs.
  2. In the second mode banks provide loans to the NGOs for toward lending to the SHGs and ultimately to micro entrepreneurs.
  3. Under the third mode, banks extend credit to the SHGs with the NGOs serving as facilitators.
  4. Out of these three methods, the last method of direct lending by bank with NGOs facilitation is widely practised.

Question 11.
What is the definition of MSME?
Answer:
In accordance with the provisions of Micro, Small and Medium Enterprises Development Act 2006, the micro, small and medium enterprises are classified into two classes.
(i) Manufacturing Enterprises:
They refer to the enterprises engaged in the manufacturing or production of goods pertaining to any industry specified in the first schedule to the Industries (Development and Regulation) Act, 1951. The manufacturing enterprises are defined in terms of investment in plant and machinery.

(ii) Service Enterprises:
They refer to the enterprises engaged in providing or rendering of services.

Question 12.
Explain the advantages of MSMEs?
Answer:
(i) Employment Potential:
MSMEs generate more employment opportunities than large business concerns.

(ii) Low Production Cost:
MSMEs do not require skilled labourers or professionals to run the organisation. It employs cheap labour and thus minimizes the overhead.

(iii) Low Investment:
MSMEs do not require a huge capital to start the unit. It can employ locally available resources within the reach of the owner.

(iv) Quick Decision Making:
MSMEs need not hire professional managers to run the management on a day to day basis.

(v) Supplementary Role:
MSMEs play a complementary role to serve as a feeder to large scale industries.

(vi) Establishment of Socialistic Pattern of Society:
MSME sector contributes towards the establishment of socialistic , pattern of society by reducing the concentration of income and wealth.

(vii) Balanced Regional Development:
By encouraging MSMEs in industrially backward areas of India, balanced development can be achieved across all regions.

(viii) Promotion of Self Employment and Self Reliance Spirit:
MSMEs help to a great deal in developing a class of entrepreneurs. It promotes self employment and a spirit of self reliance in the society, thereby contributing an increase in per capita income or economic development.

(ix) Higher Contribution to Manufacturing and Export:
MSMEs contribute 45% to the total manufacturing output and 40% to the exports from the country. It helps in earning precious foreign exchange in various countries across the world.

Question 13.
What are the objectives of SHGs?
Answer:
(i) Focusing on empowerment of women.
(ii) Saving people from the clutches of money lenders.
(iii) Building capacity of women and to enable them to participate in generating activities.
(iv) Creating the habit of saving in the minds of the people who are economically backward.
(v) Promoting entrepreneurship skills among women.
(vi) Creating awareness about the importance of credit circle or revolving credit and the payment of the circle.
(vii) Elevating the economic standard of the member’s families.
(viii) Developing skills and facilitating credit linkages for eventual economic empowerment.
(ix) Promoting awareness among the members about finding solutions for their economic problems.
(x) Identifying the common interest of the group members and carrying out their operations in the most efficient and economic way.
(xi) Enabling the members to overcome all social and economic barriers.
(xii) Promising and ensuring human rights to women at all stages of their life cycle.

Question 14.
Role of women as entrepreneurs.
Answer:
One of the famous Indian women entrepreneurs is Indira Nooyi. She was bom in Chennai and had her bachelor’s degree in Madras Christian College. Master’s Degree in public management from Yale University. Masters in Finance and Marketing from IIM, Kolkata.

Occupation:
Joined pepsico in 1994 and became CFO in 2001. Earlier she held Senior executive positions in Motorola and Asia Brown Boveri. She was product manager at Johnson and Johnson and then textile firm mettur Beardsell. Awarded PadmaBushan for her business achievements and being an inspiration to India’s corporate leadership. She helped the company to complete 30 billion dollars worth of crucial deals within the last couple of years.

Question 15.
Income-tax exemption for Start-up initiatives.
Answer:
The Government of India has launched Mudra Bank with a capital amount of ₹ 20,000 Crore and credit guarantee corpus of ₹ 3000 Crore to help MSMEs and startups to resolve problems relating to income tax exemption and financing.

Question 16.
World Association of Small & Medium enterprises (WASME).
Answer:
UNICTAD, ITC, WIPO, UNESCO, UNESCAP, global non profit organisation head quarters – Noida (India).

Question 17.
Ministry of MSME and its functions.
Answer:
Ministry of MSME. Its function is honoured the people those who are producing quality goods. Gandhimathi appliances are honoured by Ministry of MSME. National Award 2010. Quality product in Micro and «* small enterprises for LPG operated stoves / appliance.

Choose the Correct Answer:

Question 1.
MSMED Act was enacted in the year:
(a) 2004
(b) 2007
(c) 2006
(d) 2008
Answer:
(c) 2006

Question 2.
MSMEs are important for the nation’s economy because they significantly contribute to:
(a) industrial production
(b) exports
(c) employment
(d) all the above
Answer:
(d) all the above

Question 3.
Self help groups convert the savings into a common fund known as:
(a) common fund
(b) group corpus fund
(c) group fund
(d) none of the above
Answer:
(b) group corpus fund

Question 4.
There are _______ distinct modes of credit to Self Help Groups.
(a) 1
(b) 2
(c) 3
(d) 4
Answer:
(c) 3

Question 5.
Investment limit of a micro enterprise under manufacturing sector does not exceed ______ lakhs.
(a) 10
(b) 20
(c) 25
(d) 50
Answer:
(c) 25

Samacheer Kalvi 11th Commerce Notes Chapter 21 Micro, Small and Medium Enterprises (MSME) and Self Help Groups (SHGs)

→ Entrepreneurship is the key for economic development of any country By empowering entrepreneurs, MSME sector provides more employment opportunities to the people of India. It helps towards the industrialization of rural and backward areas. This sector reduces regional imbalances. It provides equitable distribution of national income and wealth.

→ Micro enterprises are engaged in low scale activities such as clay pot making, fruits and vegetable vendors, transport (three wheeler tempos and autos), repair shops, cottage industries, small industries, handlooms handicraft works etc.

→ Rural development is one of the main pillars of progress of India. It has lagged behind in many aspects of development even after six decades of the independence of India. According to 2011 population census, rural and urban India accounts for 33.8 per cent and 20.09 per cent of people below the poverty line respectively.

→ Self Help Group has emerged as a new model for combating poverty. This concept mainly demonstrates the significance of togetherness. The Self Help Group represents an association of people formed to attain certain common goals.

→ Self Help Group is a small informal voluntary association created for the purpose of enabling members to reap economic benefit out of mutual help, solidarity, and joint responsibility. The benefits include mobilization of savings and credit facilities for the pursuit of group enterprise activity.

→ National Bank for Agricultural & Rural Development (NABARD) has defined Self Help Group as “a homogenous group of rural poor voluntarily formed to save whatever amount they can conveniently save out of their earnings and mutually agree to contribute to a common fund of the group to be lent to the members for meeting their productive and emergent credit needs”.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 29 Elements of Contract

TN State Board 11th Commerce Important Questions Chapter 29 Elements of Contract

Question 1.
What is law?
Answer:
Law means set of rules which governs our behaviour and relating in a civilised society.

Question 2.
Why should one know law?
Answer:
One to should know the law which he is subjected to because ignorance of law is no excuse.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 29 Elements of Contract

Question 3.
Can a minor enter into a Contract?
Answer:
Minor is a person who has not completed at the age of 18. A person legally capable of making an agreement only can enter into contract.

Question 4.
Who can enter into a contract?
Answer:

  1. Person legally capable of making an agreement only can enter into contract.
  2. The parties to a contract must have capacity to make valid contract (legal ability) to make valid contract.
  3. The Indian contract act specifies that every person is competent to contract.
  4. Insolvents, and convicts are not competent to contract.

Question 5.
Define Contract.
Answer:
Contract 2(h) An agreement enforceable by law is a contract.
Contract = Agreement + Enforceability by law.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 29 Elements of Contract

Question 6.
Define Offer.
Answer:
Offer (i.e. Proposal) [section 2(a)] When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other person either to such act or abstinence, he is said to make a proposal.

Question 7.
What do you mean by Agreement?
Answer:
An Agreement is every promise or every set of promises forming consideration for each other. .
Agreement offer / proposal + Acceptance.

Question 8.
Define a Voidable Contract.
Answer:
An agreement which is enforceable by law at the option of one or more parties but not at the option of the other or others is a voidable contract. This is the result of coercion, undue influence, fraud and misrepresentation.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 29 Elements of Contract

Question 9.
What do you mean by Revocation?
Answer:
“Revocation of an offer means withdrawal of his offer” by the offeror.
An offer can be revoked.

  1. Expressly.
  2. Impliedly
  3. The communication of revocation (of an offer or an acceptance) is complete.

Question 10.
Who is a promisor, promisee?
Answer:
A promisor:
A person who makes a promise. The person who has become obliged through a promise towards another.

A promisee:
A person to whom a promise is made. According to sec. 41. If a promisee accepts the performance of the promise by a third person he cannot afterwards enforce it against the promise.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 29 Elements of Contract

Question 11.
Explain the essentials of a Valid Contract.
Answer:
Essentials of a valid Contract:“All agreements are contracts, if they are made among parties – by free consent of the parties, competent to contract, for a lawful consideration and with a lawful object, and not hereby expressly declared to be void.” Sec. 10

(i) Offer and Acceptance:
There must be two parties to an agreement namely one party making the offer and the other party accepting it.

(ii) Legal Relationship:
The parties must have the intention to create legal relationship between them. An agreement of Social or domestic nature is not at all a contract.

(iii) Lawful Consideration (quid pro quo):
As per Contract Act under Sec.2 (d) Consideration means something in return. A contract without consideration becomes invalid.

(iv) Lawful Object (Section 23):
The object of agreement should be lawful and legal. It must not be immoral, illegal or opposed to public policy.

(v) Free Consent (Section 13 & 14):
Consent of the parties must be free and genuine. Consent means agreeing upon same thing in the same sense at the same time i.e. there should be consensus – ad – idem. Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 29 Elements of Contract

Question 12.
Difference between Contract and Agreement.
Answer:

Basis  Contract

 Agreement
Definition  A contract is an agreement enforceable by law.  An Agreement is every promise or every set of promises forming consideration.
Enforceability  Every contract is enforceable.  Every promise is not enforceable.
Interrelationship  A contract includes an agreement.  An agreement does not include a contract.
Validity  Only legal agreements are called contracts.  An agreement may be both legal and illegal.
Legal Obligation  Every contract contains a legal obligation.  It is not necessary for every agreement to have legal obligation.

Question 13.
Explain the classification of Contract on the basis of the validity.
Answer:
(i) Valid Contract:
An agreement which fulfils all the essentials prescribed by law on the basis of its creation.
eg: S offers to sell his car for ₹ 2,00,000 to T. T agrees to buy it. It is a Valid Contract.

(ii) Void Contract (a):
A contract which ceases to be enforceable by law. A contract which does not satisfy any of the essential elements of a valid contract is said to be Void.

(iii) Voidable Contract (b):
An agreement which is enforceable by law at the option of one or more parties but not at the option of the other or others is a voidable contract.

(iv) Illegal Contract:
It is a contract which is forbidden by law. All illegal agreements are Void but all void agreements or contracts are not necessarily illegal. Contract that is immoral or opposed to public policy are illegal in nature.

(v) Unenforceable Contract:
Where a contract is unenforceable because of some technical defect i.e. absence in writing barred by imitation etc. If the parties perform the contract it will be valid, but the Court will not compel them if they do not.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 29 Elements of Contract

Question 14.
Explain the classification of contract on the basis of the Formation.
Answer:
(i) Express Contract:
A contract made by word spoken or written. According to Section. 9, in so for as the proposal or acceptance of any promise is made; in words, the promise is said to be express, eg: P says to Q ‘will you buy my bicycle for ₹ 1,000?” Q says to P “Yes”.

(ii) Implied Contract:
The implied contract is one, which is not expressly written but understood by the conduct of parties. Where the proposal or acceptance of any promise is made otherwise than in words, the promise is said to be implied.
eg: A gets into a public bus, there is an implied contract that he will pay the bus fare.

(iii) Quasi Contract:
It is a contract created by law. Actually, there is no contract. It is based on the principle that “a person shall not be allowed to enrich himself unjustly at the expense of the other”. In other words it is an obligation of one party to another imposed by law independent of an agreement between the parties.

(iv) Tacit Contract:
A contract is said to be tacit when it has to be inferred from the conduct of the parties. For example obtaining cash through automatic teller machine, sale by fall of hammer of an auction sale.

Question 15.
Explain the classification of Contract on tn basis of the Performance.
Answer:
(i) Executed Contract:
A contract in which both the parties have fulfilled their obligations j under the contract.
eg: X contracts to buy a car from Y by paying cash, Y instantly delivers his car.

(ii) Executory Contract:
A contract in which both the parties are yet to fulfil their i obligations, it is said to be an executory contract.
eg: A agrees to buy B’s cycle by promising to pay cash on 15 June, B agrees to deliver the cycle on 20 June.

(iii) Unilateral Contract:
A unilateral contract is a one sided contract in which only one party has performed his promise or obligation, the other party has to perform his promise or obligation, eg: X promises 1 to pay Y a sum of ₹ 10,000 for the goods to be delivered by Y. X paid the money and Y is yet to deliver the goods.

(iv) Bilateral Contract:
A contract in which both the parties commit to perform their respective promises is called a bilateral contract.
eg: R offers to sell his fiat cartoS for ₹ 10,00,000 on acceptance of R’s offer by S, there is a promise by R to Sell the car and there is a promise by S to purchase the car, there are two promises.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 29 Elements of Contract

Question 16.
A agrees to pay B (₹20,000) and in consideration, B agrees to unload 10 bags of sugar from a truck in 5 minutes. Is it a Valid contract?
Answer:
(i) It is hot a valid contract.
(ii) Because unloading time is too short.

Question 17.
X writes to Y, “As a doctor you treat my wife without charging, I promise to pay you ₹ 10,000/-. “X” does not pay. Advise Y.
Answer:
As per your promise, I treated your wife. Hence it is left upto you to fulfil your promise to pay me ₹ 10,000/-.

Question 18.
P owes Q ₹ 10,000/- for the last 10 years and the payment is time barred. P signs a pro-note for it. Is it a valid contract? If yes, give reason.
Answer:
No. It is not a valid contract. The pronote will be renewed every year.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 29 Elements of Contract

Question 19.
After studying this chapter any one can enter into Valid Contract and can also identify the essentials present in the contract.
Answer:
When one person signifies to another his willingness to do or to abstain from doing anything with the accent of that other person.

Question 20.
After understanding this chapter entering into Offer and giving Acceptance becomes easier.
Answer:
An agreement of purity social or domestic nature is not at all a contract.
An invitation to a dinner does not create any legal relation and hence, is not a contract.
Offer = proposal
Acceptance = proposal is accepted.

Question 21.
After going through this chapter the value of consideration and the requirement for return payment can be understood better.
Answer:
A contract is a agreement enforceable by law. Every contract is enforceable. A contract includes an agreement.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 29 Elements of Contract

Question 22.
After reviewing this chapter the parties who are allowed to enter and the parties who are not allowed to enter into a contract can be clearly demarcated.
Answer:
Who are allowed to enter into contract:
An agreement includes not only theseagreements which can be enforceable by law but also these which may not be enforceable. A minor cannot enter into contract.

Who are not allowed to enter into contract:
There may be agreement to do an illegal act. eg: Smuggling goods. Which cannot be enforceable by law.

Question 23.
After analysing this chapter an obligation imposed by law – Quasi Contracts are better understood and distinguished from other contracts.
Answer:
Quasi contract is an obligation of one party to another imposed by law independed of an agreement between the parties.
Illegal contract:
It is a contract which is forbidden by law. All illegal agreement are void but all void agreements or contracts are not necessarily illegal.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 29 Elements of Contract

Choose the Correct Answer:

Question 1.
An agreement enforceable by law is a:
(a) enforceable acceptance
(b) accepted offer
(c) approved promise
(d) contract
Answer:
(d) contract

Question 2.
Every promise and every set of promises, forming the consideration for each other, is an:
(a) agreement
(b) contract
(c) offer
(d) acceptance
Answer:
(a) agreement

Question 3.
Void agreement signifies:
(a) agreement illegal in nature
(b) agreement not enforceable by law
(c) agreement violating legal procedure
(d) agreement against public policy.
Answer:
(b) agreement not enforceable by law

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 29 Elements of Contract

Question 4.
Acceptance to be valid must:
(a) be absolute
(b) be unqualified
(c) both be absolute & unqualified
(d) be conditional.
Answer:
(c) both be absolute & unqualified

Question 5.
A contract with or by a minor is a:
(a) valid contract
(b) void contract
(c) voidable contract
(d) voidable at the option of either party.
Answer:
(b) void contract

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 29 Elements of Contract

Samacheer Kalvi 11th Commerce Notes Chapter 29 Elements of Contract

→ Every promise and set of promises forming consideration for each other is an agreement, in short Agreement = offer + Acceptance.

→ An agreement enforceable by law in a contract. As per the Indian contract act 1872, a “contract” is an agreement enforceable by law. The agreements not enforceable by law are not contracts. An “agreement” means is “a promise or a set of promises” forming consideration for each other.

→ A promise arises when a proposal is accepted. By implication an agreement is an accepted proposal. In other words, an agreement consists of an “offer” and its “acceptance”.
Agreement = Offer / proposal + Acceptance
Contract = Agreement + Enforceability by law.

→ Agreements may be classified into two categories,

  1. Agreement not enforceable by law
  2. Agreement enforceable by law.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 7 Cooperative Organisation

TN State Board 11th Commerce Important Questions Chapter 7 Cooperative Organisation

Question 1.
What do vou mean by cooperative organization?
Answer:
A cooperative is a private business organisation that is owned and controlled by the people who use its products, supplies or services. Although cooperatives vary in type and membership size, all were formed to meet the specific objectives of members, and are structured to adapt to member’s changing needs.

Question 2.
Define cooperatives.
Answer:
Cooperation is a form of organization in which persons voluntarily associate together as human beings on the basis of equality for the promotion of the economic interests of themselves. Cooperation is “better farming, better business and better living”. – Sir Horace Plunkett

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 7 Cooperative Organisation

Question 3.
What is Credit cooperatives?
Answer:
Cooperative credit societies are those formed for the purpose of providing short-term financial help to their members. Agriculturists, artisans, industrial workers, salaried employees, etc., form these credit societies.

Question 4.
Is low taxes possible in Cooperative society?
Answer:
Yes. The low taxes possible in co-operative society are to promote the co-operative movement and also because of the fact that it is a non-profit enterprise, government provides various exemptions and tax concessions.

Question 5.
Who are Rochdale Pioneers?
Answer:
At first, the cooperative movement was started by Robert Owen, in the year 1844. He formed a consumer’s cooperative society in England with 28 workers as members, called “Rochdale Society of Equitable Pioneers”.
[OR]
Robert own started the first ever co-operative movement in the year 1844 with 28 members called as Rochdale society of equitable pioneers, it was a consumer’s co-operative society.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 7 Cooperative Organisation

Question 6.
What are the disadvantages of Co-operatives ?
Answer:
(i) Limited funds:
Co-operative societies have limited membership and are promoted by the weaker sections. The membership fees collected is low. Therefore the funds available with the co-operatives are limited.

(ii)Over reliance on Government funds:
Co-operative societies are not able to raise their own resources. Their sources of financing are limited and they depend on government funds.

(iii) Imposed by Government:
In the Western countries, co-operative societies were voluntarily started by the weaker sections. The objective is to improve their economic status and protect themselves from exploitation by businessmen. But in India, the co-operative movement was initiated and established by the government. Wide participation of people is lacking. Therefore the benefit of the co-operatives has still not reached many poorer sections.

Question 7.
Write a note on Housing cooperatives.
Answer:
Every person likes to have his own house. So people who would like to have own houses and do not have sufficient money may start a co-operative house building society. These societies will advance loans to members for the construction of houses. The loan amount is to be repaid in easy installments.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 7 Cooperative Organisation

Question 8.
What is meant by Producers cooperative society?
Answer:
Producer cooperatives are established and operated by producers. Producers can decide to work together or as separate entities to help increase marketing possibilities and production efficiency. They are organized to process, market, and distribute their own products. This helps lessen costs and strains in each area with a mutual benefit to each producer.
eg: Cooperative weavers’ societies, Cooperative carpenting units, Cooperative match factories.

Question 9.
Write a note on cooperative forming societies.
Answer:
Co-operative farming are organised by landowners and agriculturists. The main aim is to secure the advantage of large scale farming and produce maximum produce with the lowest cost. These societies would solve the problems of agriculture like poor yield.

Question 10.
Write a note on industrial cooperatives.
Answer:
An industrial co-operatives are organized by small scale producers. Co-operative under takings are a useful means of developing small scale and cottage industries. Industrial co-operatives are very useful in obtaining raw materials in improving the quality of products.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 7 Cooperative Organisation

Question 11.
What are the principles of cooperatives?
Answer:
(i) Voluntary and Open Membership:
Cooperatives are voluntary organizations, open to all people able to use its services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.

(ii) Democratic Member Control:
Cooperatives are democratic organizations controlled by their members – those who buy the goods or use the services of the cooperative – who actively participate in setting policies and making decisions.

(iii) Member’s Economic Participation:
Members contribute equally to, and democratically control, the capital of the cooperative. This benefits members in proportion to the business they conduct with the cooperative rather than on the capital invested.

(iv) Autonomy and Independence:
Cooperatives are autonomous, self-help organizations controlled by their members. If the co-operative organisation enters into agreements with other organizations or raises capital from external sources, it is done so based on terms that ensure democratic control by the members and maintains the cooperative’s autonomy.

(v) Education, Training, and information:
Co-operatives provide education and training for members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperative. Members also inform the general public about the nature and benefits of cooperatives.

Question 12.
What are the advantages of co-operative society?
Answer:
(i) Voluntary organization:
The membership of a co-operative society is open to all. Any person with common interest can become a member. The membership fee is kept low so that everyone would be able to join and benefit from cooperative societies.

(ii) Easy formation:
Co-operatives can be formed much easily when compared to a company. Any 25 members who have attained majority can join together for forming a cooperative society by observing simple legal formalities.

(iii) Democracy:
A co-operative society is run on the principle of ‘one man one vote’. It implies that all members have equal rights in managing the affairs of the enterprise. Members with money power cannot dominate the management by buying majority shares.

(iv) Equal distribution of surplus:
The surplus generated by the co-operative societies is distributed in an equitable manner among members. Therefore all the members of the co-operative society are benefited. Further the society is also benefited because a sum not exceeding 10 per cent of the surplus can be utilized for promoting the welfare of the locality in which the cooperative is located.

(v) Limited liability:
The liability of the members in a co-operative society is limited to the extent of their capital contribution. They cannot be personally held liable for the debts of the society.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 7 Cooperative Organisation

Question 13.
What are the types of Cooperative society?
Answer:
(i) Consumers Cooperatives:
Consumer cooperatives are organized by consumers that want to achieve better prices or quality in the goods or services they purchase. In contrast to traditional retail stores or service providers, a consumer cooperative exists to deliver goods or services rather than to maximize profit from selling those goods or services, They also supply essential commodities through Public Distribution System (PDS).

(ii) Producers Cooperatives:
Producer cooperatives are established and operated by producers. Producers can decide to work together or as separate entities to help increase marketing possibilities and production efficiency. They are organized to process, market, and distribute their own products.
eg: Cooperative weavers’ societies.

(iii) Marketing Cooperatives:
Cooperative marketing societies are associations of small producers formed for the purpose of marketing their produce. The marketing cooperatives perform certain marketing functions such as grading, warehousing, advertising etc., They secure better prices for their members by transporting goods even to distant markets.

(iv) Credit Cooperatives:
Cooperative credit societies are those formed for the purpose of providing short-term financial help to their members. Agriculturists, artisans, industrial workers, salaried employees, etc., form these credit societies.

Question 14.
Write a note on Consumer cooperative society.
Answer:
Consumer cooperatives are organized by consumers that want to achieve better prices or quality in the goods or services they purchase. In contrast to traditional retail stores or service providers, a consumer cooperative exists to deliver goods or services rather than to maximize profit from selling those goods or services. They also supply essential commodities through Public Distribution System (PDS).

Nationally, the most widely used cooperative form is the credit union, with some 90 million members. Credit union assets have grown a hundred¬fold in three decades. Credit unions are essentially cooperatives of people that use banking services. Students’ cooperative stores, Cooperative provision stores and supermarkets set up on cooperative societies of India are examples of this type.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 7 Cooperative Organisation

Question 15.
Whether misuse of funds is possible in co-operatives.
Answer:
If the members of the managing committee are corrupt they can swindle the funds of the co-operative society. Many cooperative societies have faced financial troubles and closed down because of corruption and misuse of funds. Yes, misuse of funds is possible in co-operatives.

Question 16.
A group of mechanical and automobile engineers join hands to set up a Cooperative for assembly of scooters. How can they go about it? What principles would you like them to keep in mind? How can they j augment their financial resources and how should they organise the marketing effort?
Answer:
An Industrial co-operative is organised by small scale producer. This co-operatives are very useful in obtaining spare parts of scooters.

Question 17.
Now a days we all live in High rise flats. These are either constructed by builders or built by group of people as a society. Work in groups and collect information regarding any two cooperative housing societies in your neighbourhood.
Answer:
Co-operative community hall, Madipakkam. These types of co-operative giving loans for construction of buildings.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 7 Cooperative Organisation

Question 18.
List out any 2 Co-operative institutions.
Answer:

  1. Amul
  2. Indian farmers fertilizers co-operative Limited.
  3. Mothers diary
  4. Dairy farmers
  5. National rural utilities co-operative finance corporation.

Question 19.
Name any 2 district level cooperative organisations.
Answer:

  1. TamilNadu co-operative marketing Federation Limited.
  2. TamilNadu state co-operative society.

Question 20.
Mention any 3 village level primary cooperatives in your area?
Answer:

  1. Co-operative Marketing societies.
  2. Co-operative fanning societies.
  3. Housing co-operatives.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 7 Cooperative Organisation

Question 21.
Chandru, a trade union activist, lives in a Workers’ colony in the city of Chennai. He is a devoted leader for the cause of workers’ welfare. For the last many months he has been observing that the local vendors of commodities of daily use have been making huge profits by charging high process from workers. He cannot tolerate all this and thinks of the idea of opening a consumers’ cooperative store in the colony.

He calls a few elderly workers of the locality, tells them about their exploitation by merchants and discusses with them all his plans to solve the problem. Merchants and discusses with them all his plans to solve the problem. While some of the workers welcome the scheme. Others express their genuine doubts about its feasibility and success. Take the roles of these workers and list out the possible arguments among them.
Answer:
Chandra a trade union activist to Start consumer co-operative society to buy quality goods. They also supply essential commodities through public distribution system.
(i) Students co-operative stores.
(ii) Co-operative provision stores.
(iii) Supermarket.
So, Chandru think we want to buy quality goods with fair price to open consumer co-operatives. Financial resources collected from members.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 7 Cooperative Organisation

Choose the Correct Answer:

Question 1.
Membership in a cooperative organization is:
(a) not open to all
(b) selective
(c) open to all
(d) none of them
Answer:
(c) open to all

Question 2.
Cooperative fails because of:
(a) unlimited membership
(b) cash trading
(c) mismanagement
(d) loss-making
Answer:
(c) mismanagement

Question 3.
All cooperatives are established with:
(a) philanthropic motive
(b) service motive
(c) profit motive
(d) reform motive
Answer:
(b) service motive

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 7 Cooperative Organisation

Question 4.
Consumers Co-operation was first successful in:
(a) England
(b) USA
(c) Swiss
(d) India
Answer:
(a) England

Question 5.
Rochdale society of equitable pioneers was started by:
(a) Robert owen
(b) H.C.Calvert
(c) Talmaki
(d) Lambert
Answer:
(a) Robert owen

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 7 Cooperative Organisation

Samacheer Kalvi 11th Commerce Notes Chapter 7 Cooperative Organisation

→ Individualistic institutions like sole tradership, partnership and joint stock companies. All these business organisations are profit oriented. The shares are in their control. Their profit is distributed in the ratio of capital invested co-operative society is: just the opposite of these in which members, in order to achieve a common economic objective, voluntarily work together co-operative society is a mid-way between capitalism and communism.

→ There are many economically weaker sections in the society. Among them are farmers, craftsman and small traders. These ill fated people are crushed under the clutches of mediators and moneylenders. Their mainaim is to earn profits. The farmers are unable to sell their products at remunerative prices They are facing hardships from middleman and brokers. In these circumstances co-operative enterprises emerged as an instrument to protect the interest of the weaker sections.

→ The philosophy behind this concept is all for each and each for all. The word co-operation derived from the latin word “co-operari” meaning “to work with” so co-operation means working together with others for a common purpose.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

TN State Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

Question 1.
What are the different types of companies?
Answer:

TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company 1

Question 2.
Define a Company.
Answer:
“A company is an association of many persons who contribute money or money’s worth to a common stock and employ it in some trade or business, and who share the profit and loss (as the case may be) arising there from.”
– James Stephenson

“A company is an artificial person created by law having a separate entity with a perpetual succession and a common seal”.
– Sec 2 of Companies Act 2013

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

Question 3.
What is meant by Limited liability?
Answer:
The liability of the members of the company is called limited liability. When once the full value of the shares is paid up there is no more liability of the shareholders. This feature attracts large number of investors.

Question 4.
Exlain any two characteristics of a company.
Answer:
(i) Capacity to Sue and being sued:
A company can sue or be sued in its own name as distinct from its members.

(ii) Separate Management:
A company is administered and managed by its managerial personnel i.e. the Board of Directors. The shareholders are simply the holders of the shares in the company and need not necessarily the managers of the company.

(iii) Limited liability:
The liability of the members of the company is called limited liability. When once the full value of the shares is paid up there is no more liability of the shareholders. This feature attracts large number of investors.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

Question 5.
What is meant by Chartered Company?
Answer:
Chartered companies are established as a result of charter granted by the King or Queen of a country, eg: East Indian Company, Bank of England, Hudson’s Bay Company.

Question 6.
What are the advantages of Companies?
Answer:
(i) Large Capital:
A company can secure large capital compared to a sole trader or partnership. Large amount of capital is necessary for conducting business on a large scale, eg: Reliance has invested more than ^ 25,000 Crore in its telecom venture. Raising such huge amount of funds would be utter impossible in a sole-tradership or partnership.

(ii) Limited Liability:
The liability of a shareholder is limited. In the case of a company limited by guarantee, his liability is restricted to the amount that he has guaranteed to contribute in the event of winding up of the company.

(iii) Transferability of Shares:
Transaction of Shares between two individuals is easy. So there is liquidity of investment. Any shareholder can easily convert his shares into money by selling his shares.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

Question 7.
What is meant by Private Company?
Answer:
Private limited company is a company which has minimum” paidup capital of rupees one lakh or such higher paid up capital as may be prescribed. The Articles may prescribe the following:

  1. Cannot transfer the shares.
  2. Cannot issue prospectus.
  3. Minimum 2 members maximum 50 members.
  4. The company must end with the word ‘private limited’.

Question 8.
What is meant by perpetual succession?
Answer:
Perpetual Succession – continuity of life:
“Members may come and go but the company can go on forever” (Lord Gower). This is because company’s existence does not depend upon the existence of even promoters who were instrumental in its formation. Neither change in the membership of the company nor the death of its members has any impact on the continuity of its life.

Question 9.
What do you mean by issue of shares at a discount?
Answer:
When shares are issued at a price less than its face value, it is called issue of shares at a discount. When a share of face value of ₹ 10 is issued for ₹ 8, share is said to be issued at a discount of ₹ 2.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

Question 10.
What is the significance of the common seal of the company?
Answer:
Though the separate personality of the company is legally recognised, it needs human agency to act. Obviously it cannot sign. Any contract entered into by a company, to be valid, must bear the official seal of the company.

Question 11.
What are economies of large scale?
Answer:
In view of the suitability of the company form of organisation for undertaking large sized industries, it can reap all the economies of large scale operation. Further there is scope for tremendous growth as raising of capital is not a problem for sound companies.

Question 12.
What are registered companies? Give examples.
Answer:
Companies which are registered under The Companies Act, 1956 are called registered companies. Tata Motors Limited, Satyam Computer Services Ltd, EID Parry Ltd, etc belong to this category.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

Question 13.
What are the contents of Memorandum of Association?
Answer:
(i) Name Clause:
The name clause requires to state the legal and recognized name of the company. The company name is allow to be registered if it does not bear any similarities with the name of an existing company, companies only.

(ii) Situation Clause:
The registered office clause requires to show the physical location of the registered office of the company. It is required to keep all the company registers in this office. The registered office should be established prior to commencing business activities.

(iii) Objective Clause:
The objective clause requires to summarize the main objectives for establishing the company with reference to the requirements for shareholding and use of financial resources. It is required to state the ancillary objectives; that is, those objectives that are required to facilitate the achievement of the main objectives.

(iv) Liability Clause:
The liability clause requires to state the extent to which shareholders of the company are liable to the debt obligations of the company in the event of the company dissolving. There are companies limited by shares and limited by guarantee.

(v) Capital Clause:
The capital clause requires to state the company’s authorized share capital, the different categories of shares and the nominal value (the minimum value per share) oftheshares.lt is also required to list the company’s assets under this clause.

(vi) Association Clause:
The association clause confirms that shareholders bound by the MO A are willingly associating and forming a company. It is required seven members to sign an MOA for a public company and not less than two people for a MOA of a private company. The signing must be done in the presence of witness who must also append his signature.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

Question 14.
What are the contents of Articles of Association?
Answer:

  1. Amount of shares, capital, value and type of shares.
  2. Rights of each class of shareholders regarding voting, dividend, return of capital.
  3. Rules regarding issue of shares and debentures.
  4. Procedures as well as regulations in respect of making calls on shares.
  5. Manner of transfer of shares.
  6. Declaration of dividends.
  7. Borrowing powers of the company.
  8. Rules regarding the appointment, remuneration, removal of directors.
  9. Procedure for conducting proxy, quorum, meetings etc.,
  10. Procedures concerning keeping of books and audits.
  11. Seal of the company. %
  12. Procedures regarding the winding up of the company.

Question 15.
What is meant by Prospectus?
Answer:
According to Section 2(36) of the Companies Act, any document inviting the public to buy its shares or debentures comes under the definition of prospectus. It also applies to advertisements inviting deposits from the public.

  1. The main objectives of the company.
  2. The names, addresses, description and occupations of the signatories to memorandum and the number of shares subscribed by each of them.
  3. The kinds of shares with their total numbers and rights attaching to each class of shares.
  4. Qualification shares which a member must hold in order to be eligible for election as director. It is fixed by the Articles.
  5. The names, addresses, descriptions and occupations, the interest, rights and remuneration of the directors, managing directors and the secretaries and treasures.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

Question 16.
What is meant by Multi National Company?
Answer:
Multi National Companies: A Multi National Company (MNC) is a huge industrial organisation which,
(i) Operates in more than one country.
(ii) Carries out production, marketing and research activities on international Scale in those countries.
(iii) Seeks to maximise profits world over.
A domestic company or a foreign company can be a MNC.
eg: Microsoft Corporation, Nokia Corporation, Nestle, Coca-Cola, International Business Machine, Pepsico, Sony Corporation.

Question 17.
What is meant by Holding and Subsidiary company?
Answer:
Holding Companies:
As per Section 2(87) “subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company.
(i) Controls the composition of the Board of Directors; or
(ii) Exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies:

Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed.

Subsidiary Companies:
“Subsidiary company” or “Subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company.
(i) Controls the composition of the Board of Directors; or
(ii) Exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies:
eg: H Ltd., holds more than 50% of the equity share capital of S Ltd. Now H Ltd., is the holding company of S Ltd., and S Ltd., is the subsidiary of H Ltd.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

Question 18.
Name any 2 Government owned Joint Stock Company.
Answer:

  1. Indian Telephone Industries.
  2. TamilNadu State Transport Corporation Limited.
  3. TamilNadu Agro Industries Corporation.

Question 19.
Name any 2 Joint stock company with private ownership.
Answer:

  1. Nokia
  2. Nestle

Question 20.
Name any 2 Private ownership with Foreign participants.
Answer:

  1. Marathi Suzuki.
  2. Ford.
  3. Hundai.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

Question 21.
Collect advertisements of three different companies inviting the public to subscribe their shares. Compare their contents regarding following points.
Answer:

TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company 2

Question 22.
Ashok is an industrial designer by training. He had the opportunity to learn the technology of fibre glass manufacture while he was in Germany for his training. He plans to set up a plant for the manufacture of fibre glass in India and is able to interest some financiers and technologists. It is estimated that the initial investment in the plant will be of the order of ₹ 50 lakhs.

Ashok and others decide to set up a company for the purpose. Should they set up a public limited company for the purpose? If so, how should I they go about it? If not, what alternative would you suggest? What formalities will be required of Ashok and his associates if they choose the alternative form of organization suggested by you?
Answer:
Ashok started public limited company with a capital of ₹ 50 lakhs.
Incorporation:
(a) Registration,
(b) Approval for the proposed name.

Filling documents:
(a) Memorandum of Association,
(b) Articles of Association,
(c) List of directors,
(d) Written consent to act as a director,
(e) Statutory declaration,
(f) Registrar check all the documents,
(g) Prospectus,
(h) Minimum subscription,
(i) Statement in lies of prospectus,
(j) Filing further documents.
Ashok followed above rules regarding to form a company.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

Question 23.
Collect any 10 items of daily use (Packed items} and list the names of the companies manufacturing those items. Classify those companies as public and private limited companies. Which of them are Multinational Companies?
Answer:

  1. Sakthi Masala – Private Limited.
  2. Aachi Masala – Private Limited.
  3. Aavin milk – Government of Tamil Nadu.
  4. Arokia – Private Limited.
  5. Coca Cola – Multinational company.
  6. Nestle chocolate – Multinational company.
  7. Pepsico – Multinational company.
  8. Bovanto – Private Limited company.
  9. Dairy Milk – Private Limited company.
  10. Colgate – Private Limited company.
  11. Hamam Soap – Multinational company.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

Choose the Correct Answer:

Question 1.
The relationship between outsiders and the company is defined in:
(a) prospectus
(b) articles of association
(c) memorandum of association
(d) certificate of Incorporation
Answer:
(a) prospectus

Question 2.
Table A of the Companies Act is a:
(a) model minutes book
(b) model form of balance sheet
(c) model of AOA
(d) model of MOA
Answer:
(c) model of AOA

Question 3.
Which of the following is created by a Special Act of Parliament or in State Assemblies?
(a) Chartered company
(b) Foreign company
(c) Government company
(d) Statutory company
Answer:
(d) Statutory company

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

Question 4.
The Board of directors of a company is elected by:
(a) creditors
(b) debtors
(c) debenture holders
(d) share holders (members)
Answer:
(d) share holders (members)

Question 5.
Companies established as a result of a charter granted by the King or Queen of a country is called:
(a) chartered companies
(b) statutory companies
(c) registered companies
(d) foreign companies
Answer:
(a) chartered companies

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

Samacheer Kalvi 11th Commerce Notes Chapter 6 Joint Stock Company

→ A company is a long shadow of the boss” with the advent of industrial revolution and the factory system of production. Large scale production has become the order of the day. To meet the ever-expanding needs of the fast growing population. Large sized industrial organisation has become indispensable.

→ The traditional forms of business units, namely, sole proprietary concerns, and partnership firms, with their limited financial resources and managerial capability, cannot meet the challenges forced by the need for massive production and speedy distribution. Joint stock company form of organisation provides to key to this problem.

→ This is better suited for mobilising large capital resources and ensuring highly sophisticated managerial skills for running giant sized industrial enterprises. The term company refers to “ body corporate.”

→ Joint stock company is distinct type of business organisation evolved to overcome the limitations of sole trader and partnership concern.

→ The act came into force on 12 September 2013 with few changes like earlier private companies maximum number of members was 50 and now it will be 200. A new class of company is “one person company ” is included in this act that will be private limited company public limited company minimum 7 maximum unlimited members. To learn kinds of companies memorandum and its contents articles and its contents, prospectus and its contents.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

TN State Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Question 1.
Who is called Karta?
Answer:
The head of the family is known as “KARTA”.

Question 2.
What are the two schools of Hindu law?
Answer:
There are two schools of Hindu Law one is Dayabhaga law, the other is Mitakshara law.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Question 3.
Who is a called a Partner?
Answer:
The persons who enter into partnership, are individually called ‘ Partners ’ and collectively known as‘Firm’.

Question 4.
Who is a Sleeping partner?
Answer:
Such a partner contributes capital and shares in the profits or losses of the firm but does not take part in the management of the business.

Question 5.
Who is a Minor?
Answer:
A minor is a person who has not completed 18 years of age. where a guardian is appointed by a court, his age of majority extends to 21 years. Legally, a minor cannot become a partner.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Question 6.
How many types of Dissolution?
Answer:

TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership 1

Question 7.
What is the meaning of Joint Hindu Family Business?
Answer:

  1. “When two or more families agree to live and work together, invest their resources and labour jointly and share profits or losses together, then this family is known as composite family or HUF” eg: C.Roy & Co (a chartered accountant firm)
  2. There are two schools of Hindu Law-one is Dayabhaga which is prevalent in Bengal and Assam and the other is Mitakshara prevalent in the rest of the-country.
  3. According to Mitakshara law, there is a son’s right by birth in the property of joint family. It means, when a son is bom in the family, he acquires an interest in the property jointly held by the family. Today Hindu succession Act 2005 is applicable to all male and female members of a HUF.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Question 8.
‘Write any three features of HUF.
Answer:
(i) Governed by Hindu Law:
The business of the Joint Hindu Family is controlled and managed under the Hindu law.

(ii) Management:
All the affairs of a Joint Hindu Family are controlled and managed by one person who is known as ‘Karta’ or ‘Manager’. The Karta is the senior most male member of the family.

(iii) Membership by Birth:
The membership of the family can be acquired only by birth. As soon as a child is bom in the family, that child becomes a member. Membership requires no consent or agreement.

Question 9.
Explain the nature of liability of karta.
Answer:
Except the Karta, the liability of all other members is limited to their shares in the business. The amount of debt can be recovered from his personal property also.

Question 10.
What is the meaning of Co-parceners?
Answer:
A person who shares equally with others in the inheritance of an undivided estate. The other members are called Co-parceners.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Question 11.
Define Partnership.
Answer:
According to Spriegal, “Partnership has two or more members each of whom is responsible for the obligatory requirements of the partnership. Each of the partners may bind the others and the assets of the partners may be taken for debts of partnership”.

Question 12.
What is the minimum and maximum number of members in the partnership concern?
Answer:
There must be more than one person. The maximum number of partners has been limited to 10 in the case of banking business and 20 in the case of other business.

Question 13.
What is the meaning of Partnership Deed?
Answer:
A partnership firm can be formed through an agreement among two or more persons. In India, this agreement may be oral or in writing. But it is desirable to have it in writing to avoid any misunderstanding among the partners in future. All the terms and conditions of partnership are included inthe agreement. The partnership agreement is also known as Partnership Deed or Articles of Partnership.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Question 14.
Who is called a Secret partner?
Answer:
Secret partner is one whose name is not disclosed to outsiders. He is not known to the public. He can take part in the business.

Question 15.
What is meant by Joint and Several Liability?
Answer:
The liability of a partner is joint and several. The creditors of partnership firm can claim their dues from the private assets of all the partners taken together or they can take action against private properties of any one of the partners to get back their dues.

Question 16.
What is the implied authority of Karta?
Answer:

  1. In a joint family firm, only Karta has the implied authority to enter into a contract for debts and pledge the property of the firm for the ordinary purpose of the businesses of the firm.
  2. All the affairs of the joint Hindu family is controlled and managed by the Head of the family. He is known as Karta,
  3. Karta is the senior most male member of the family. He alone taking decisions and controlling the whole family.
  4. All the members of the family have full faith and confidence in Karta.
  5. Karta alone entitled to deal with others.
  6. Other members i.e. co-parceners cannot deal with outsiders. But some times he can get permission from Karta he deal with outsiders.
  7. Members of Joint Hindu family liability is limited. So personal assets also liable for outside debts.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Question 17.
Can a minor is admitted in the Joint Hindu Family business. Why?
Answer:
Minor also a co-parcener:
In a Joint Hindu Family firm even a new bom baby can be a co-parcener. As soon as the child is bom in the family. The child becomes the member.
Membership by Birth: The Joint Hindu Family business can be dissolved only at the will of all the members of the family. Any single member has no right to get the business dissolved.

Question 18.
What are the contents of Partnership Deed?
Answer:
Following are the contents of Partnership Deed:
(i) Name of the Firm.

(ii) Nature of the proposed business

(iii) Duration of partnership:
Duration of the partnership business whether it is to be run for a fixed period of time or whether it is to be dissolved after completing a particular venture.

(iv) Capital contribution:
The capital is to be contributed by the partners. It must be remembered that capital contribution is not necessary to become a partner for one who contributes his organising power, business acumen, managerial skill etc., instead of capital.

(v) Withdrawal from the firm:
The amount that can be withdrawn from the firm by each partner.

(vi) Profit/loss sharing:
The ratio in which the profits or losses are to be shared. If the profit sharing ratio is not specified in the deed, all the partners must share the profits and bear the losses equally.

(vii) Interest on capital:
Whether any interest is to be allowed on capital and if so, the rate of interest. If the deed is silent on interest on capital, the rules for interest on capital in partnership act will take effect.

(viii) Rate of interest on drawing:
Whether any interest is to be allowed on drawing, the rate of interest is to be specified.

(ix) Loan from partners:
Whether loans can be accepted from the partners and if so the rate of interest payable thereom.

(x) Account keeping:
Maintenance of accounts and audit.

(xi) Salary and Commission to Partners:
Amount of salary or commission payable to partners for their services. (Unless this is specifically provided, no partner is entitled to any salary).

(xii) Retirement:
Matters relating to retirement of a partner. The arrangement to be made for paying out the amount due to a retired or deceased partner must also be stated.

(xiii) Goodwill valuation:
Method of valuing goodwill on the admission, death or retirement of a partner.

(xiv) Distribution of responsibility:
The work that is entrusted to each partner is better stated in the deed itself.

(xv) Dissolution procedure:
Procedure for dissolution of the firm and the mode of settlement of accounts thereafter.

(xvi) Arbitration of dispute:
Arbitration in case of disputes among partners. The deed should provide the method for settling disputes or difference of opinion. This clause will avoid costly litigations.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Question 19.
Explain the types of dissolution of partner-ship firm.
Answer:
The Partnership firm may be dissolved in any one of the following ways.

TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership 2

(i) Dissolution by Agreement (Sec.40):
A partnership is created and dissolved by an agreement. A firm may be dissolved by an agreement either with the consent of all partners or in accordance with the contract among the partners.

(ii) Compulsory dissolution (Sec.41):
A firm is compulsorily dissolved either by the agreement of all the partners or on the insolvency of all the partners except one. It may also be dissolved on the happening of an event which makes the object of the firm unlawful. Example, the passing of Prohibition Act, declaration of war with another country.

(ii) Dissolution on the happening of certain contingencies (Sec.42):
A partnership may be dissolved on the happening of the following contingencies (a) Death of a partner, (b) Expiry of the time, if partnership is for a fixed period, (c) Completion of the venture for which the firm was formed. (d) Adjudication of a partner as an insolvent.

(iv) Dissolution by notice of partnership-at-will (Sec43):
Where the partnership is at will, the firm may be dissolved by any partner by giving a notice in writing to all the other partners of his intention to dissolve the firm.

(v) Dissolution through Court (Sec.44):
Any partner may bring a suit in a court of law to get the partnership dissolved on any of the following grounds.

(a) Partner’s Insanity:
If any partner becomes insane, the court may order dissolution.

(b) Permanent Incapacity:
When a partner becomes permanently incapable of doing business the court may order dissolution.

(c) Persistent Breach of Agreement:
If a partner persistently violates the agreement and the other partner finds it impossible to do business in partnership with him, then the other partner can move for dissolution.

(d) Misconduct of a Partner:
If any partner is guilty of misconduct (misuse of money) then any partner can file a suit for dissolution of the firm.

(e) Transfer of Share:
When a partner transfers his share in the business to a third party without the consent of other partners, then the other partners can move the court for dissolution.

(f) Continuous Loss:
When the business of the firm cannot be carried on except at a loss, the court order for dissolution.

(g) Just and equitable grounds:
When the court feels that it is just and equitable, it may order for dissolution of the firm, eg: If A and B are partners but do not speak to each other, the court may order for dissolution.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Question 20.
Write any three differences between Dissolution of Partnership and Dissolution of Firm.
Answer:

Dissolution of Partnership

 Dissolution of Firm
One or more of the partners terminate their connections with the firm.  All the partners terminate their connections with the firm.
May or may not bring the business of the firm to an end.  Bring the business of the firm to an end.
Business will continue even after dissolution.  Business cannot be continued.
Need not necessarily results in the dissolution of the firm.  Results in the dissolutions of the partnership.

Question 21.
What is the procedure for Registration of a Firm?
Answer:
A statement should be prepared stating the following particulars.
(i) Name of the firm.
(ii) The principal place of business.
(iii) Name of other places where the firm carried on business.
(iv) Names and addresses of all the partners.
(v) The date on which each partner joined the firm.
(vi) The duration of the firm.
This statement signed by all the partners should be produced to the Registrar of Firms along with the necessary registration fee. Any change in the above, particulars must be communicated to the Registrar within 14 days of such alteration.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Question 22.
Raman with members of his extended family established a Joint Hindu Family business of Handicrafts. Raman being the head of family controlled the business as ‘Karta’. He had authority to take all decisions for the business. Many times, he sold goods for cash without informing other members of the family business. This resulted in lesser profits. He also sold one of the family properties and gave money to his daughter as a wedding gift. What values did Karta ignored in the above case?
Answer:
Raman want to discuss all business matters. Because he is Karta.

Question 23.
Palani is an Electronics Engineer. He has met two businessmen who wish to enter into a partnership with him for the manufacture of tape-recorders. They are prepared to make the investment and offer a fourth share in profits to Palani. Would you have any special words of advice for Palani?
Answer:
No, special words of advice for Palani. Because he needs extra money to manufacture of tape recorders. He knows the field of product manufacturing of tape recorders.

Question 24.
Write any 2 HUF run Hospitals in your nearest place.
Answer:

  1. Apollo Hospitals
  2. Billroth Hospitals
  3. Dr. Agarwal’s eye Hospitals.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Question 25.
How will you run a HUF for export business?
Answer:
In HUF ‘ family including more members each member take response regarding export business.

Question 26.
How will you run a HUF Bus operating business?
Answer:
This type of business need more employees. So, bus operating business suitable to HUF.

Question 27.
How will you organise a partnership business with your friends according to a law?
Answer:
According to Indian partnership Act 1932 (Sec.4)”. The relation between persons who have agreed to share profits of a business carried on by all or any of them acting for all.

  1. According to above law to organise a partnership business.
  2. A written agreement is necessary because to avoid future misunderstandings.

Question 28.
Name a Partnership firm in your town (Nearest).
Answer:
Mothers world Departmental Stores, Mohan Agencies, Parvathy Stores, Vision eye care opticals.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Question 29.
A father had self acquired agricultural land. He transferred the said land in the name of his three sons. The revenue records reflect the names of the three sons with 1/3rd share against each name. Father died recently. However physical partition of the said land amongst the three brothers has not been done as they have mutually decided against it. Eldest son has started managing the land since fathers demise. Is the land in question. ancestral property of the three brothers? Can the three brothers claim to a HUF? If yes, then since when are they HUF – after fathers demise or since the date land transferred in their names?

(i) Is the land is Ancestral property,
Yes, father self acquired agricultural land.

(ii) Can, three brothers claim to HUF?
Answer:
Yes, brothets can claim to HUF. After father’s death. They can get. land from fathers name to son’s name.

Question 30.
Draw a family tree diagram as you think. Just imagine you are running a business under the Joint Hindu Family system.
Answer:

TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership 3

TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership 4

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Choose the Correct Answer:

Question 1.
The firm of Hindu Undivided Family is managed by whom?
(a) Owner
(b) Karta
(c) Manager
(d) Partner
Answer:
(b) Karta

Question 2.
In the firm of Hindu Undivided Family, how one gets the membership?
(a) By agreement
(b) By birth
(c) By investing capital
(d) By managing
Answer:
(b) By birth

Question 3.
The members in the joint hindu family are called:
(a) karta
(b) coparceners
(c) generations
(d) partners
Answer:
(b) coparceners

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Question 4.
‘Only the male members in the family get the right of inheritance by birth’ as:
(a) hindu law
(b) mitakshara law
(c) dayabhaga law
(d) none of these
Answer:
(b) mitakshara law

Question 5.
A partnership is formed by:
(a) agreement
(b) relationship among persons
(c) the direction of government
(d) friendship
Answer:
(a) agreement

Question 6.
Registration of partnership is:
(a) compulsory
(b) Optional
(c) not necessary
(d) none of the above
Answer:
(b) Optional

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Question 7.
A temporary partnership which is formed to complete a specific job doing a specified period of time is called:
(a) partnership-at-will
(b) particular partnership
(c) limited partnership
(d) joint venture
Answer:
(a) partnership-at-will

Question 8.
The partnership deed also called:
(a) articles of association
(b) articles of partnership
(c) partnership act
(d) partnership
Answer:
(b) articles of partnership

Question 9.
A partnership is registered with:
(a) registrar of companies
(b) registrar of co-operatives
(c) registrar of firms
(d) district collector
Answer:
(c) registrar of firms

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Samacheer Kalvi 11th Commerce Notes Chapter 5 Hindu Undivided Family and Partnership

→ The joint hindu family business is a distinct from of organisation peculiar to India joint hindu family firm is created by the operation of law.

→ It does not have any separate and distinct legal entity from that of its members. The business of joint hindu family is controlled under the hindu law. The membership in this form of business organisation can be acquired only by birth or by marriage to a male person who is already a member of joint hindu family.

→ India is unique in the system of joint hindu family.

→ Introduction to partnership:
The need for partnership form of organisation arose from the limitations of sole proprietorship. In sole tradership financial resources is limited, individual capacity is limited skill. It is at this stage need for associating more persons arises so more are associated to form groups to carry on business.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

→ The partnership form of organisation comes into existence in two ways. It may come into existence either as a result of expansion of the scale trading concern or two or more persons joining together through an agreement to form a partnership.

→ History reveals that the partnership organisation was started with the enactment of partnership act in 1907 in England. In india the act was approved in 1932. The act governs the formation, management and control of various partnership firms in the country. Examples of partnership firms are running a cinema theatre, a book shop chit funds etc.

→ “Coming together is a beginning” “keeping together is progress” “working together is success”.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 4 Sole Proprietorship

TN State Board 11th Commerce Important Questions Chapter 4 Sole Proprietorship

Question 1.
Who is called a Sole Trader?
Answer:
Sole Proprietorship is a form of business organisation in which an individual introduces his own capital, uses his own skill and intelligence in the management of its affairs and is solely responsible for the results of its operations.

Question 2.
What are the Non-corporate enterprises?
Answer:
Non-corporate enterprises are:

  1. Sole trading concern,
  2. Partnership firms.
  3. Joint Hindu Family Business.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 4 Sole Proprietorship

Question 3.
What are the Corporate enterprises?
Answer:
Corporate enterprises are:

  1. Government,
  2. Public undertakings,
  3. Public utilities,
  4. Private,
  5. Joint stock companies,
  6. co-operative.

Question 4.
For which of the following types of business do you think a sole proprietorship form of organisation would be more suitable, and why?
Answer:

  1. Grocery store,
  2. Medical store,
  3. Craft centre,
  4. Legal consultancy,
  5. Internet cafe.

Medical store:
Sole proprietorship form of organisation is more suitable for medical store because it is a small scale business. One man can own and manage it very easily. It requires a small amount of capital.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 4 Sole Proprietorship

Question 5.
How is it possible to maintain secrecy in sole proprietorship?
Answer:
In sole trading business started by an individual he is a sole owner of the business he cannot share any business details with any body else. So he can maintain secrecy.

Question 6.
What is unlimited liability?
Answer:
The liability of proprietor for the debts of the business is unlimited. The creditors have the right to recover their dues even from the personal property of the proprietor in case business assets are not sufficient to pay their dues.

Question 7.
Write any three characteristics of Sole Proprietorship.
Answer:
(i) Ownership by one man:
This is owned by single person. The sole trader contributes the required capital. He is not only the owner of the business but also manager of the entire affairs.

(ii) Freedom of work and Quick Decisions:
Since the individual is himself as a owner, he need not consult anybody else. Hence he can take quick decisions.

(iii) Unlimited Liability:
When his business assets are not sufficient to pay off the business debts he has to pay from his personal property.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 4 Sole Proprietorship

Question 8.
Give some examples of Sole trading business.
Answer:

  1. Adyar Anandha Bhavan.
  2. Chennai Silks.
  3. Nalli Silks.
  4. Bakery Shop.
  5. Retail shop.
  6. Jeyachandran Textiles.

Question 9.
Define Sole trading business.
Answer:
“Sole trader is a type of business unit where a person is solely responsible for providing the capital, for bearing the risk of the enterprise and for the management of business”.
Dr. O.R. Krishnasamy defines sole trading business as “the business carried on by a single person exclusively by and for himself’.

Question 10.
Explain the characteristics of Sole Trading Business.
Answer:
(i) Ownership by one man:
This is owned by single person. The sole trader contributes the required capital. He is not only the owner of the business but also manager of the entire affairs.

(ii) Freedom of work and Quick Decisions:
Since the individual is himself as a owner, he need not consult anybody else. Hence he can take quick decisions.

(iii) Unlimited Liability:
When his business assets are not sufficient to pay off the business debts he has to pay from his personal property.

(iv) Enjoying Entire Profit:
He strives tirelessly for the improvement and expansion of his business and enjoys all the benefits of his hard work.

(v) Absence of Government Regulation:
A sole proprietor concern is free from Government regulations. No legal formalities are to be observed in its formation, management or in its closure.

(vi) No Separate Entity:
The sole trading concern comes to an end with death, disability, insanity and insolvency of the individual.

(vii) Maintenance of Secrecy:
Since he/she manages all the affairs of the business, the secrecy can be maintained easily.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 4 Sole Proprietorship

Question 11.
What are the advantages of Sole trading business?
Answer:
(i) Easy Formation:
No legal formalities are required to initiate a sole trading concern. Any person capable of entering into a contract can start it, provided he has the necessary resources for it.

(ii) Incentive to Work hard:
There is a direct relationship between effort and reward. The fact that the entire profit can be taken by himself without sharing with anybody else induces him to work ceaselessly.

(iii) Small Capital:
Small capital is an important as well as specific advantage of sole proprietorship. Sole proprietor can start business with small capital.

(iv) Credit Standing:
Since his private properties are held liable for satisfying business debts, he can get more financial assistance from others.

(v) Personal Contact with the Customers:
Since sole proprietor knows each and every customer individually he can supply goods according to their taste and preferences. Thus he can cultivate personal relationship with the customers.

(vi) Flexibility:
The sole trader can easily adjust himself to the changing requirements of his business.

Question 12.
What are the disadvantages of Sole trading business?
Answer:
(i) Limited Capital:
Since the capital is contributed by one individual only, business operations have necessarily to be on a limited scale.

(ii) Limited Managerial Skill:
Single person’s intelligence and experience may not help him beyond a certain stage. Since he has to focus on each and every activity, his managerial ability is bound to be limited.

(in) Unlimited Liability:
The creditors have the right to recover their dues even from the personal property of the proprietor in case the business assets are not sufficient to pay their debts.

(iv) Lack of Specialisation:
Since the business unit is small and the financial resources are limited, experts in different fields cannot be employed to secure maximum advantages.

(v) Hasty Decisions:
Sole proprietor is more likely to take hasty decision as he need not consult anybody else.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 4 Sole Proprietorship

Question 13.
How to start snack manufacturing unit at home?
Answer:
First we select snacks-
eg: Vada, Popcorn.
One man is enough for preparing Vada and Popcorn.
(i) We want buy black gram Dhall onion and green chilli. Small amount is enough.
(ii) We want to buy maize for preparing popcorn using machine.

Question 14.
Dried Fish-Trading Explain.
Answer:
Small scale trading.
(i) First we have to buy fresh fishes.
(ii) Next we have to try it in open air.
(iii) The try in ready and we can sell them in fish market.
♦ Individual – Independent software companies run by New graduates.
B.E. Software graduates starts this type of companies with small amount of capital and two employees as a helpers.

Question 15.
Rajendran has done tfis B.Com., this year. He wants to do some good business now. Kesavan, his father, is a Sole-proprietor of a small Banian – manufacturing plant in Salem and ask Rajendran to join business with him as a partner. However, Rajendran likes to go in for an independent venture. A discussion follows between them on this issue. Meanwhile Mr. Arul, an advocate and friend of Rajendran’s father, comes there and gives comments on both of them. Assume the role of Rajendran, Kesavan and Arul and state and defend your positions.
Answer:
Mr. Kesavan: He is sole proprietor.
Mr. Rajendran: Rajendran likes to go in for an independent venture. He gives large employment opportunities to uneducated and less educated persons and reduce unemployment problem in the society.
Mr. Arul: He is an advocate. He give suggestion both the father and son. Because reduce unemployment problem in the society.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 4 Sole Proprietorship

Question 16.
Mahesh is a young graduate who has. inherited a sum of ? 1,00,000 by way of family savings. He also has a family house to which he has sole title as the only son of his father. He is thinking of starting a small factory for the manufacture of plastic toys. What form of ownership organisation will you advise him to choose?
Answer:
Sole proprietorship.

Question 17.
Amar started a business on his own. He has his father helping him with the accounts and his brother helps him with looking after customers in the evening. Amar pays a monthly salary to his father and brother. Identify the form of business organisation.
Answer:
Sole trading form of business. Because he engaged father and brother as a employees.

Choose the correct answer:

Question 1.
Which is the oldest form of Business organisation?
(a) Sole Proprietorship
(b) Partnership
(c) Co-operative Society
(d) Company
Answer:
(a) Sole Proprietorship

Question 2.
In which form the owner, establisher and manager is only one?
(a) Joint Enterprise
(b) Government Company
(c) Co-operative Society
(d) Sole Proprietor
Answer:
(d) Sole Proprietor

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 4 Sole Proprietorship

Question 3.
A major disadvantage of sole proprietor-ship is:
(a) limited liability
(b) unlimited liability
(c) easy formation
(d) quick decision
Answer:
(b) unlimited liability

Question 4.
From the following which one is Non-corporate form of business?
(a) Joint stock company
(b) Sole trading business
(c) Government company
(d) Co-operatives
Answer:
(b) Sole trading business

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 4 Sole Proprietorship

Samacheer Kalvi 11th Commerce Notes Chapter 4 Sole Proprietorship

→ A business organisation is an organisation which is engaged in some industrial or commercial activity. It represents an institutional management for carrying on any kind of business activity. It may be owned and controlled by a single individual, or by a group of individuals who have entered into a formal or informal agreement to jointly conduct the business. A sole tradership is the oldest form of business organisation.

→ It is easy and simple to organise it is found in each and every country in the world. Sole proprietorship is a form of organisation in which the individual invests the entire capital, uses his own skill and is solely responsible for the result of his business. He may borrow from his friends and relatives.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 4 Sole Proprietorship

→ He alone enjoy all profit and bears all losses. No legal formality is required. He get license from the local authority municipality, panchayat etc. It is non-corporate form the enterprise and it’s ownership are considered as having the same entity ownership and business are not separated.

→ Role of sole trading business it to solution to unemployment problem, provision of goods at low price. Helps small producers. Supply to quality goods. He is very helpful to consumers. Giving employment opportunities to uneducated and less educated. So to increase the standard of living of the society.

→ “ Business is like riding a bicycle.
Either you keep moving or you fall down.”

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities

TN State Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities

Question 1.
Define commerce.
Answer:
According to Evelyn Thomas, “Commercial operations deal with the buying and selling of goods, the exchange of commodities and the contribution of finished products’’.

Question 2.
What do mean by industry?
Answer:
Industry refers to economic activities. The term industry is used for activities in which mechanical appliances and technical skills are involved. These include activities relating to producing or processing of goods as well as breeding and rising of animals.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities

Question 3.
What is trade?
Answer:
Trade is an essential part of commerce. The term ‘trade’ is used to denote buying and selling. It helps in making the goods produced available to ultimate consumers or users.

Question 4.
Write a short note on transportation.
Answer:
Selling all the goods produced at or near the production place is not possible. Hence, goods are to be sent to different places where they are demanded. The medium which , moves men and materials from one place to another is called transport.

Question 5.
Distinguish between Extractive industries and genetic industries.
Answer:

Extractive industries

 Genetic Industries
These industries extract or draw out products from natural sources.  These industries remain engaged in breeding plants and animals for their use in further reproduction.
Products of these industries are usually transformed into many other useful goods by manufacturing industries. Important extractive industries include farming, mining, oil drilling, hunting and fishing operations.  The seeds, nursery companies poultry, diary, piggery, hatcheries, nursery, fisheries, apiary etc are classic examples of genetic industries.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities

Question 6.
What do you mean by tertiary industries?
Answer:
They do not produce goods. These industries produce utility services and sell them at a profit. They help trade, industry and commerce. This term also includes auxiliaries to trade like banking, insurance, warehouse, advertisement etc.

Question 7.
Write any three characteristics of commerce.
Answer:

  1. Economic activities: Commerce deals with all economic activities undertaken for profit.
  2. Exchange of goods and services: Commerce involves exchange of goods and services to earn profit.
  3. Profit motive: Any activity which have a aim of profit will be a part of commerce. Profit is an incentive for undertaking all commercial activities.

Question 8.
Narrate commerce with an example.
Answer:
Commerce refers to all those activities which are necessary for bringing goods from the place of production to the place of consumption such as transport, warehousing, packaging, insurance, banking arid sales promotion which are incidental or auxiliaries to trade.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities

Question 9.
Explain the various kinds of industries on the basis of size.
Answer:
(i) Micro unit:
A unit wherein investment in plant and machinery is upto ₹ 25 lakhs in case of manufacturing and upto ₹ 10 lakhs in case of service enterprises.

(ii) Small unit:
A manufacturing unit wherein investment in plant and machinery is more than ₹ 25 lakhs but does not exceed ₹ 5 Crore. In case of service enterprises these limits are ₹ 10 lakhs and 2 Crore respectively.

(iii) Medium unit:
A manufacturing unit wherein investment in plant and machinery is more than ₹ 5 Crore but does not exceed ₹ 10 Crore. In case of service enterprises, these limits are ₹ 2 Crore and ₹ 5 Crore respectively.

(iv) Large unit:
A manufacturing unit wherein investment in plant and machinery exceeds ₹ 10 Crores. In case of service unit investment in equipment exceeds ₹ 5 Crores.

Question 10.
Compare industry, commerce and trade.
Answer:

TN Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities 1

TN Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities 2

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities

Question 11.
What are the characteristics of commerce?
Answer:
(i) Economic activities:
Commerce deals with all economic activities undertaken for profit.

(ii) Exchange of goods and services:
Commerce involves exchange of goods and services to earn profit.

(iii) Profit motive:
Any activity which have a aim of profit will be a part of commerce. Profit is an incentive for undertaking all commercial activities.

(iv) Regularity of transaction:
The transaction should be regular. No isolated transaction will be a part of commerce.

(v) Creation of utilities:
Commerce creates form, place and time utility in goods. By conversion of raw material into finished products the form utility is created. For e.g., when a carpenter makes furniture out of wood the goods may not be consumed at the place of production. This may be needed in different places. The goods are taken to those places where they are needed. Transportation facilities help in creating place utility of goods.

The goods are also needed in different periods of time. It may not be possible to produce the goods whenever they are demanded. The producers go on producing goods as per their capacity. The goods are stored up to the time till they are demanded. The production is done at one time and the consumer gets them as per their need. The storage facilities create time utility of goods.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities

Question 12.
Write short notes on:
(i) Analytical Industry,
(ii) Genetic Industry and
(iii) Construction Industry.
Answer:
(i) Analytical Industry:
Analytical Industry which analyses and separates different elements from the same materials, as in the case of oil refinery.

(ii) Genetic Industry:
These industries remain engaged in breeding plants and animals for their use in further reproduction. The seeds, nursery companies’ poultry, diary, piggery, hatcheries, nursery, fisheries, apiary etc are classic examples of genetic industries.

(iii) Construction Industry:
These industries are involved in the construction of building, dams, bridges, roads, as well as tunnels and canals.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities

Question 13.
Briefly explain the auxiliaries to trade.
Answer:

TN Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities 3

(i) Trade:
Trade removes hindrance of person, through wholesalers, retailers and mercantile agents. Goods are owned and possessed by those who produce them. Ownership and possession of goods must pass on from the producers to the ultimate consumers. Then only consumers can enjoy these goods. This is made possible by the organisation of trade. Wholesale traders take goods from the producers. From the wholesale traders, retail traders take the goods to the consumers. Thus trade, through traders removes hindrance of person.

(ii) Transport:
Transport removes place hindrance. Goods may be produced at places where their demand is less. These goods are to be taken to the place of consumption with the help of transport which creates places utility in goods. The place utility helps the producer to increase the production and earn remunerative price. The consumer is also helped with the supply of goods. Various modes of transport i.e., road, rail, sea, air have helped the growth of commerce and industry.

(iii) Warehousing:
Warehousing removes hindrance of time. Many goods such as cotton, jute, food grains, sugar, etc. are produced during particular seasons of the year. But they are needed throughout the year. To make them available throughout the year arrangement must be made for their proper storage. This is done with the help of warehousing; s

(iv) Banking:
There is also difficulty of finance. There is always a time – gap between the time of production and consumption. During this time-gap, traders need funds to cany on their trade. These funds are made available by commercial banks and other financial institutions.

(v) Advertisement and Salesmanship:
The consumers may not be aware of the availability of various goods in the market. The producer will also like to have more consumers. Advertisement and salesmanship in informing the consumers about the availability and usefulness of various products. With the advent of TV, FM Radio, Internet, etc., Consumer awareness is increasing.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities

Choose the correct answer:

Question 1.
The industries engaged in extraction of iron ore are known as:
(a) construction industries
(b) manufacturing industries
(c) extraction industries
(d) genetic industries
Answer:
(c) extraction industries

Question 2.
Auxiliaries to trade is also called as:
(a) trade
(b) advertisement
(c) warehousing
(d) aids to trade
Answer:
(d) aids to trade

Question 3.
Production which involves several stages for manufacturing finished products is known as:
(a) analytical industry
(b) synthetic industry
(c) processing industry
(d) none of the above
Answer:
(c) processing industry

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities

Question 4.
Normally high level risk involved in:
(a) industry
(b) commerce
(c) trade
(d) all of the above
Answer:
(a) industry

Question 5.
Commerce is mainly concerned with:
(a) connecting producer and consumer
(b) pricing of goods
(c) buying and selling of goods
(d) manufacturing of goods
Answer:
(a) connecting producer and consumer

Samacheer Kalvi 11th Commerce Notes Chapter 3 Classification of Business Activities

→ The manufacturers produce the goods for the consumers at one point of location.

→ They distribute the goods to final consumer through intermediaries like wholesalers, retailers distributors and the like.

→ All these process taking place from the point of production to the point of consumption are collectively called as business activities.

→ All business activities can be classified into two broad categories (i.e.) Industry and commerce.

→ Three important inventions viz. Fire, wheel, and money made a remarkable turning point in the history of human life and civilisation.

→ Before invention of money goods were exchanged for goods.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities

→ Due to the growth of civilization production activities developed leading to the gradual expansion of business.

→ What is blood circulation to a human body so, is commercial activity to a business concern.

→ The volume and velocity of business / commercial activities determines the level of employment, income, demand, consumption, profit etc. of an econoihy.

→ Economic growth, which naturally implies growth of business, warrants a high level of commercial activities.

→ Wherein aspects such as industries, transport’ trade, warehousing, advertisement, communication etc. Plays an important role.

TN Board 11th Commerce Important Questions