Tag: concept, features, advantages and disadvantages of joint stock company

Questions Related to concept, features, advantages and disadvantages of joint stock company

The Structure in which there is separation of ownership and management is called ______________.

elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

  1. Sole proprietorship

  2. Partnership

  3. Company

  4. All business organisations

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Correct Option: C
Explanation:

Company is the form of business organisation in which there is a separation of ownership and management. Company has a separate legal entity from its members. Management professionals of the firm are not considered as the owners of the firm.

S Ltd. acquired fixed assets worth Rs 15,00,000 by issue of shares of Rs 100 at a premium of 25%. The number of shares to be issued by S Ltd. to settle the purchase consideration = ?

elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

  1. 12,000 shares

  2. 15,000 shares

  3. 18,750 shares

  4. 11,250 shares

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Correct Option: A

Inventory is also referred to as _______________.

elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

  1. Stock

  2. Warehouse capacity

  3. Materials

  4. Materials in hand

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Correct Option: A

Joint Stock Company is board of directors company.

elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

  1. True

  2. False

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Correct Option: A

A company comes into existence only after its ____________.

elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

  1. Promotion

  2. Formation

  3. Registration

  4. Operation

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Correct Option: C
Explanation:

Registered or Incorporated Companies
These companies are formed/incorporated under the companies act passed by the government. These companies come into existence only after these are registered under the act and the certificate of incorporation is passed by the Registrar of companies.


A Joint Stock Company is superior form of business organisation. 

elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

  1. True

  2. False

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Correct Option: A
Explanation:

A joint stock company can be considered as a superior form of business organisation in which people come together to pursue a business activity and it also provides employment to the youth and helps in increasing the GDP of a nation.

A Joint Stock Company is an artificial person created by law.

elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

  1. True

  2. False

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Correct Option: A
Explanation:

It is true that joint stock company is an artificial person created by law. Company has a separate legal entity and have an existence in the eyes of law. It can purchase and sell property or rights in its own name and have a perpetual succession.

Registration of Joint Stock Company is optional.

elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

  1. True

  2. False

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Correct Option: A
Explanation:

It is true that registering the company is optional. One can start the business with other ways also rather than registering like acquiring tax license, service tax registration.

The liability of members of a Joint Stock Company is unlimited.

elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

  1. True

  2. False

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Correct Option: A
Explanation:

The liability of the members of Joint stock company is unlimited i.e. assets of members cannot be used to pay the debts of company as company has a separate legal entity from its members and is termed as an artificial person in terms of law.

The Joint Stock Company collects huge capital from public.

elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

  1. True

  2. False

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Correct Option: A
Explanation:

The joint stock company collects huge capital from public by dividing its capital in a small unit called shares and inviting subscription from general public on these shares. Holding these shares ensures dividend to the shareholders and provides them voting powers in the decision making process of the business.