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KARNATAKA class 11 commerce Business studies fast track revision notes

KARNATAKA class 11 commerce Business studies fast track revision notes

KARNATAKA class 11 commerce Business studies fast track revision notes:- we will provide complete details of KARNATAKA class 11 commerce Business studies fast track revision notes in this article.

KARNATAKA class 11 commerce Business studies fast track revision notes

Nature and Purpose of Business

State the different types of economic activities.

 The following are the different types of economic activities.

(a) Business: It basically involves trading of goods and services on a regular basis. The sole motive with which a business is conducted is profit.

(b) Profession: A profession is an occupation that requires highly specific and in-depth knowledge of the relevant field. Every profession is different from another in terms of the knowledge and skills required to practise it. For instance, a doctor cannot engage in the profession of an engineer.

(c) Employment: In this type of economic activity people are hired by organisations to work on a regular basis and are paid in exchange of their services. Normally, a monthly salary is paid. The payments are generally in monetary terms along with certain non-monetary compensations such as perks and other types of allowances. The remuneration paid to blue-collar employees (basically, workers) is termed ‘wages’, while the remuneration paid to white-collar employees (particularly, officers) is termed ‘salary’. All the employees of an organisation work together for the achievement of the common goals.

Explain the characteristics of business.

Business refers to an economic activity that basically involves trading of goods and services on a regular basis. The sole motive with which a business is conducted is profit. The following are the main characteristics of business.

(a) As mentioned in the definition, business is considered to be an economic activity as it is run with the sole objective of earning a profit.

(b) Business involves procurement of raw materials and semi-finished goods and services, which are then processed further and thereafter sold to the final consumers at higher prices. It is because of this value addition that the prices of finished goods and services are higher.

(c) All types of business activities are conducted to pursue just one single motive, profit. It is the capacity to earn profits that decides the sustainability and future growth prospects of a business.

(d) Business basically involves an exchange of goods and services. The common medium of exchange is money.

(e) The exchange of goods and services (as mentioned in the point above) is done on a regular basis. Business is a continuous process in which semi-finished goods are procured, some value is added to them and the final goods are traded in the market. It should be noted that one single deal or transaction cannot be called a business.

(f) Every business, irrespective of its size (whether it is a large or a small business) and the types of goods produced, faces business risk. Although the degree of risk may differ from business to business, there is no way in which a business can escape risk. It is because of risks that no business can accurately anticipate the returns on investments.

(g) Besides the profit motive, a business aims at satisfying consumers’ wants. A business must produce goods and services considering consumers’ needs. If goods and services are produced only to fulfill the businessperson’s own needs, then this activity cannot be considered a business as the goods and services are meant merely for self-consumption.

Forms of Business Organisation

Compare the status of a minor in a Joint Hindu Family Business with that in a partnership firm.

As per the Indian law, any person below the age of 18 years is considered a ‘minor’. The status of a minor in a Joint Hindu Family differs from that in a partnership firm. In case of a Joint Hindu Family, membership in the family business is by birth. This means that as soon as a boy child is born in a Joint Hindu Family, he is automatically entitled to a share in his family business. In this case, the minor enjoys an equal ownership right over the inherited property as the other members of the family. However, his liability is limited only to the extent of his share in the joint property.

As per the Partnership Act, 1923, no minor can be a partner in a partnership firm. But a partnership firm, with the consent of all the partners, can admit a minor to share the profits of the firm; but he cannot be asked to either contribute capital or bear the losses incurred by the business. A minor is not legally competent to enter into any legal contracts, and therefore, he or she cannot be considered a partner. However, a minor, after attaining the age of 18 years, has the option of either continuing with the partnership firm or withdrawing his interest from it.

important privileges available to a private company.

A private company enjoys certain exemptions or privileges which are often not available to a public company. Some of the privileges enjoyed by a private company are given below.

(a) Lesser number of members required: A private company requires only two members for formation, while a public company requires at least seven members.

(b) Commencement of business: A private company can start its business operations right from the day of receiving the certificate of incorporation. On the other hand, it is mandatory for a public company to obtain a certificate of commencement along with a certificate of incorporation before starting business.

(c) No restriction on advancing loans to the directors: In the case of a private company, there is no restriction on the amount of loans that can be granted to the directors. No prior permissions are required to be sought for advancing such loans. In contrast, a public company has to seek permission from the government before advancing loans to its directors.

(d) Lesser number of directors required for operations: A private company can continue operations with just two directors, whereas a public company must have at least three directors to continue its operations.

KARNATAKA class 11 commerce Business studies fast track revision notes

Recommended post :-KARNATAKA class 11 commerce Business studies fast track revision notes

KARNATAKA class 11 commerce Business studies fast track revision notes

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