PARTNERSHIP(FLIP CLASS)

Advantages of Partnership

· Capital – Due to the nature of the business, the partners will fund the business with start up
capital. This means that the more partners there are, the more money they can put into the
business, which will allow better flexibility and more potential for growth. It also means more
potential profit, which will be equally shared between the partners.

· Flexibility – A partnership is generally easier to form, manage and run. They are less strictly
regulated than companies, in terms of the laws governing the formation and because the
partners have the only say in the way the business is run (without interference by shareholders)
they are far more flexible in terms of management, as long as all the partners can agree.

· Shared Responsibility – Partners can share the responsibility of the running of the business. This
will allow them to make the most of their abilities. Rather than splitting the management and
taking an equal share of each business task, they might well split the work according to their
skills. So if one partner is good with figures, they might deal with the book keeping and accounts,
while the other partner might have a flare for sales and therefore be the main sales person for
the business.

· Decision Making – Partners share the decision making and can help each other out when they
need to. More partners means more brains that can be picked for business ideas and for the
solving of problems that the business encounters.

Disadvantages of Partnership

· Disagreements – One of the most obvious disadvantages of partnership is the danger of

disagreements between the partners. Obviously people are likely to have different ideas on how
the business should be run, who should be doing what and what the best interests of the
business are. This can lead to disagreements and disputes which might not only harm the
business, but also the relationship of those involved. This is why it is always advisable to draft a
deed of partnership during the formation period to ensure that everyone is aware of what
procedures will be in place in case of disagreement and what will happen if the partnership is
dissolved.

· Agreement – Because the partnership is jointly run, it is necessary that all the partners agree
with things that are being done. This means that in some circumstances there are less freedoms
with regards to the management of the business. Especially compared to sole traders. However,
there is still more flexibility than with limited companies where the directors must bow to the
will of the members (shareholders).
· Liability – Ordinary Partnerships are subject to unlimited liability, which means that each of the
partners shares the liability and financial risks of the business. Which can be off putting for some
people. This can be countered by the formation of a limited liability partnership, which benefits
from the advantages of limited liability granted to limited companies, while still taking advantage
of the flexibility of the partnership model.

· Taxation – One of the major disadvantages of partnership, taxation laws mean that partners
must pay tax in the same way as sole traders, each submitting a Self Assessment tax return each
year. They are also required to register as self employed with HM Revenue & Customs. The
current laws mean that if the partnership (and the partners) bring in more than a certain level,
then they are subject to greater levels of personal taxation than they would be in a limited
company. This means that in most cases setting up a limited company would be more beneficial
as the taxation laws are more favourable (see our article on the Advantages and Disadvantages
of a Limited Company).

· Profit Sharing – Partners share the profits equally. This can lead to inconsistency where one or
more partners aren’t putting a fair share of effort into the running or management of the
business, but still reaping the rewards

1. CBSE Class 11 Business Studies Chapter -4 Important Questions

· Question 1

· Mention the 5 I’s of services?

· Answer: Inconsistency, Inventory, Intangibility, Involvement and Inseparability

· Question 2

· What is Insurance?

· Answer: Insurance is a contract, embodied by policy, in which an individual or entity receives

financial security or reimbursement against losses from an insurance company. The company
pools clients’ risks to make payments more affordable for the insured.

· Question 3

· Mention the name of two companies that offer DTH services in India.

· Answer: Tata Sky and Airtel are the two companies that offer DTH services in India.

· Question 4

· What is Banking?
· Answer: A bank is a financial institution authorised to receive deposits and make loans. Banks
may also give financial services, such as currency exchange, wealth management, and safe
deposit boxes. There are two types of banks. Namely, commercial/retail banks and investment
banks.

· Question 5

· What are the types of insurance policies?

· Answer: There are 5 types of insurance policies. Namely,

· Whole life policy

· Joint life policy

· Annuity policy

· Endowment life assurance policy

· Children’s endowment policy

· Question 6

· Mention 6 functions of warehousing.

· Answer: Functions of warehousing:

· Consolidation

· Stockpiling

· Value-added services

· Price stabilisation

· Financing

· Break the bulk

· Question 7

· What are the 3 significant types of insurance that are involved in Marine insurance?

· Answer:

· Ship or hull insurance

· Freight insurance

· Cargo insurance

· Question 8

· Expand RTGS and NEFT.

· Answer:

· RTGS – Real Time Gross Settlement

· NEFT – National Electronic Funds Transfer

· Question 9

· What are the principles of insurance?

· Answer:

· 7 principles of insurance are,

· Utmost good faith

· Insurable interest

· Indemnity

· Proximate cause

· Subrogation

· Contribution

· Mitigation

· Question 10

· What are the types of warehouses?

· Answer:

· Private warehouse

· Public warehouse

· Bonded warehouse
 · Government warehouse

· Cooperative warehouse

Important Questions for Chapter 5 EMERGING MODES OF BUSINESS

· Question 1

· What is ‘e’ in e-business?

· Answer: ‘e’ stands for electronic in e-business.

· Question 2

· Define e-commerce.

· Answer: E-commerce, also called as electronic commerce or internet commerce, refers to the
purchasing and selling of commodities or services utilising the internet and the transfer of
money and data to perform these transactions.

· Question 3

· What is Intra B Commerce?

· Answer: Intra B Commerce refers to transactions between the people who are a part of one
enterprise only. This is broadly due to Intra B Commerce has become feasible for the firms to get
into the flexible production of goods.

· Question 5

· What is the scope of the business based on the business function?

· Answer: The scope of business based on the basis of function are – finance, marketing,
manufacturing and personnel management as well as the managerial pursuits like – organising,
planning, controlling.

· Question 6

· What is the scope of the business based on the parties involved in the electronic transaction?

· Answer: Scope of the business based on the parties involved in the electronic transaction are
B2B which is an enterprise’s interactions with other businesses, B2C, i.e., an enterprise’s
interactions with its customers and Intra-B or a firm’s internal processes.

· Question 7
 · Expand B2B Commerce.

· Answer: B2B Commerce – Business to Business Commerce

· Question 8

· Expand B2C Commerce.

· Answer: B2C Commerce – Business to Consumers Commerce

· Question 9

· Expand C2C Commerce.

· Answer: C2C Commerce – Consumers to Consumers Commerce

· Question 10

· What is Traditional Business?

· Answer: Traditional business is a local shop which gives its services or goods to its local
consumers. It is a set-up where consumers will have to visit the shop physically to purchase the
goods

Important Questions for Chapter 6 SOCIAL RESPONSIBILITIES OF A BUSINESS

QUESTION 1

Explain the social responsibility of business.

Answer: Social Responsibility of a business can be defined as an activity or a responsibility that a

business carries up and beyond the legal requirement of business for the good and well-being of the
society.

QUESTION 3

Give two examples of noise pollution

Answer: The two examples of noise pollution are malfunctioning of heart and hearing problem

QUESTION 4

Define environment pollution.

Answer: The environment refers to all types of mankind surrounding both natural and man-made. These
surroundings are natural resources which include water, air, flora, and fauna, etc. Environment pollution
is the infusion of harmful chemicals or substances into the natural environment and causes unfavourable
change.
QUESTION 5

How does an organization have a social responsibility towards owners’ and shareholders’?

Answer: An organization should provide full and detailed information about the present financial status
and well-being of the company and future plans.

QUESTION 6

Define discretionary responsibility.

Answer: Discretionary responsibility refers to the company’s management responsibility to protect the
capital investment by bypassing insecure activity and engaging with a healthy business venture.

QUESTION 7

State three responsibilities of a company towards its employees.

Answer: The three responsibilities of a company towards its employees are

Giving employees the right working culture to win the assistance of employees.

Allowing the employees to form a union as their democratic right.

The employee should receive a decent wage from the management.

QUESTION 9

Explain why social responsibility is highlighted?

Answer: It is important to highlight and emphasize social responsibility to maintain the balance between
the economy and the ecosystem.

QUESTION 10

Mention one need for social responsibility.

Answer: For every business social responsibility is important to create the company’s brand name and
value.

QUESTION 11

Mentioned two value that a business should follow.

Answer: The two value that a business should follow are.

Social Value- A company gains maximum profit when the company’s main aim is to serve the society. An
image of a company improves when they support social goals.
Professional Value- A company with business ethics provides a satisfying environment for the employee
to work and conduct the business. Lack of professionalism can create problems and confusion in the
workplace.

QUESTION 12

Mentioned two value that a business should follow.

Answer: The two value that a business should follow is.

Social Value- A company gains maximum profit when the company’s main aim is to serve the society. An
image of a company improves when they support social goals.

Professional Value- A company with business ethics provides a satisfying environment for the employee
to work and conduct the business. Lack of professionalism can create problems and confusion in the
workplace.

INSURANCE

Insurance is a contract, represented by a policy, in which an individual or entity receives financial

protection or reimbursement against losses from an insurance company. The company pools clients' risks
to make payments more affordable for the insured.Jul 29, 2020

What is the basic definition of insurance?

Insurance is a means of protection from financial loss. ... The insurance transaction involves the insured
assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange
for the insurer's promise to compensate the insured in the event of a covered loss.

What is insurance policy in simple words?

Insurance is a term in law and economics. It is something people buy to protect themselves from losing
money. ... In exchange for this, if something bad happens to the person or thing that is insured, the
company that sold the insurance will pay money back.

2. What is insurance and its type?

Insurance is a legal agreement between two parties i.e. the insurance company (insurer) and the
individual (insured). In this, the insurance company promises to make good the losses of the insured on
happening of the insured contingency. The contingency is the event which causes a loss.Sep 23, 2020

What is insurance and how it works?

Insurance is a contract that transfers the risk of financial loss from an individual or business to an
insurance company. The company collects small amounts of money from its clients and pools that money
together to pay for losses. Insurance is divided into two major categories: Property and Casualty
insurance (P&C)
Which is the best definition of insurance?

Insurance is a contract, represented by a policy, in which an individual or entity receives financial

protection or reimbursement against losses from an insurance company. The company pools clients' risks
to make payments more affordable for the insured.Jul 29, 2020

What is the importance of insurance?

1. Protection for you and your family. Your family depend on your financial support to enjoy a decent
standard of living, which is why insurance is especially important once you start a family. It means the
people who matter most in your life may be protected from financial hardship if the unexpected
happens.