Business Environment, Entrepreneurship and Company Law

 Any balance remaining in the Share Forfeiture account after providing for any loss on re-issue is to be transferred to capital reserve account.

A crossed cheque is a cheque that has been marked to specify an instruction about the way it is to be redeemed. A common instruction is to specify that it must be deposited directly into an account with a bank and not immediately cashed by a bank over the counter.

The six segments of the environment of a business enterprise are political, economic, social, technological, environmental and legal.

In HUF form of business, all the members of a Hindu Undivided Family own the business jointly. The membership is limited up to three successive generations. There is no limit to the number of members.

51% is the minimum requirement to become a Holding/Government Company.
25% is the minimum application money paid by applicant of the issue price along with application.
100% is the total capital issued by company.

When a firm allows another firm in a foreign market to use its technical know-how and trade mark, it is known as franchising.

Advance of first call = Rs. 2500, interest rate @ 6% p.a, time duration 1 April-1 August = 4 months
Interest = Rs. 50
Advance of second call = Rs. 2500, interest rate @ 6% p.a, time duration 1 April-31 December = 9 months
Interest = Rs. 112.50
Total Interest Rs. 162.50
Option (A) is incorrect. You may take second call period 4 months, i.e. September- December.
Option (C) is incorrect. You may take interest rate @5% applicable on calls in arrears.
Option (D) is incorrect. You may take combined period of 9 months for both advances.

Scale of business determines the type of industry or size of the industry, choice of business activity, etc.

Amount payable through shares = Rs.(2,20,000-55,000) = Rs. 1,65,000
Number of shares = 1,65,000/12 = 13750 shares
Option (B) is incorrect. You may take 1,65,000/10.
Option (C) is incorrect. You may take 2,20,000/10.
Option (D) is incorrect. You may take 2,20,000/12.

M-Commerce is the ability to conduct commerce using a mobile device, such as a mobile phone, a Personal Digital Assistant (PDA), a smart phone or other emerging mobile equipment, such as dash top mobile devices.

In recent years, outsourcing the operation of IT systems has been supplemented by a move to outsourcing the whole business processes such as payroll processing, cheque processing, etc. This is known as BPO (Business Process Outsourcing).

Marketing is the management process through which goods and services move from concept to the customer. Many companies today have customer focus (market orientation). This implies that the company focuses its activities and products on consumer demands.

Planning is the primary function of management which requires determination of the action and the decision making based on purpose, knowledge, and considered estimates.

A set of policies are principles, rules and guidelines formulated or adopted by an organization to reach its long-term goals and typically published in a booklet or other form that is widely accessible.

Book keeping refers to recording an entry in the books of accounts. It is clerical in nature.
Accounting is summarising, analysing and interpreting the transactions recorded in the books. Auditing means verifying the accountancy records of an enterprise. Interpreting requires specialised skills and is not clerical in nature.

Micro environmental factors or internal factors close to a business have a direct impact on its strategy.

According to Section 2(7) of the Sale of Goods Act, the term “goods” means every kind of movable property other than actionable claims and money and includes stock and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.

Under the Natural Law School, Ulpine defined Law as “the art or science of what is equitable and good.”

The maturity of a promissory note or bill of exchange is the date at which it falls due. Days of grace— every promissory note or bill of exchange which is not expressed to be payable on demand, at sight or on presentment is at maturity on the third day after the day on which it is expressed to be payable.

In case of a private company, the minimum number of members is 2 and maximum is 200.

In all the given cases, a partnership firm gets compulsorily dissolved.

CAG stands for Comptroller and Auditor General of India, Audit of a Government Company is done by CAG. 

A company enjoys a separate legal entity with perpetual succession and common seal. It can acquire the property in its own name. It can sue and be sued and can enter into contracts in its own name.

Existence of an agreement is essential of partnership. Such an agreement between the partners may be express or implied. Further, the agreement should be valid and must be for a lawful object, purpose and between the persons competent to contract.

An injunction is an order of a Court restraining a person from doing a particular act. It is a mode of securing the specific performance of a negative term of the contract, (i.e., where he is doing something which he promises not to do), the Court may in its discretion issue an order to the defendant restraining him from doing what he promised not to do.

Indian Contract Act, 1872 came into force from September, 1872. It is applicable to all the States of India except the State of Jammu & Kashmir.

There can be an agreement to sell only in respect of future or contingent goods.

An auctioneer’s request for bids, the display of goods in a shop window with prices marked upon them or the display of priced goods in a self- service store or a shopkeepers catalogue of prices are invitations to an offer.

Any contract to be applicable at future date is executory. Sale is an executed contract.

Albert S. Humphrey was an American business and management consultant who devised the SWOT analysis technique.

There are various techniques which may be used in environment scanning namely SWOT Analysis, PEST/ PESTLE Analysis and Industry Analysis. The GE matrix is a model used to assess the strength of a strategic business unit of a corporation.

Mutual Agency is the true test of partnership.

A business plan is a document that summarizes the operational and financial objectives of a business and contains the detailed plans and budgets showing how the objectives are to be realized.

One who undertakes an endeavour is an entrepreneur and he needs access to right skill, environment and capital to undertake an enterprise. The entrepreneur is typically a visionary who spots an opportunity in the marketplace and has the passion, guile and contact base to set the wheels in motion.

Option (2) is correct: As long as a minor is a partner, he cannot sue the other partners.

Laws are the means of achieving an end, namely social control. Laws should be treated from the angle of purpose and convincingly demonstrated the inadequacy of "jurisprudence of concepts". Law is the sum of the conditions of social life in the wildest sense of the term, as secured by the power of the State through the means of external compulsion.

 In the following cases, a contract is not avoided even on account of a breach of a condition:

1. Where the buyer altogether waives the performance of the condition, a party may for his own benefit, waive a stipulation; or
2. Where the buyer elects to treat the breach of the conditions, as one of a warranty. He may claim only damages instead of repudiating the contract; or
3. Where the contract is non-severable and the buyer has accepted either the whole goods or any part thereof. Acceptance means acceptance as envisaged in Section 72 of the Indian Contract Act, 1872.
4. Where the fulfillment of any condition or warranty is excused by law by reason of impossibility or otherwise.

The development in business needs modernizing, expansion or external growth and diversification (the introduction of a new product or service to meet the need of an old market).

Reliance Ltd. is a Public Limited Company.
East India Company is an example of Chartered Company.
Rotary Club is non-profit organization.

Entrepreneurship is defined as the process of making money, earning profits and increasing the wealth, while posing characteristics such as risk taking, management, leadership and innovation. An entrepreneur is never indifferent (lack of concern) towards the business enterprise.

The marketing assessment process can be laid down into six steps namely defining the problem, analysis of the situation, obtaining data that is specific to the problem, analysis and interpreting the data, fostering ideas and problem solving, and designing a plan. It does not include feedback.

Following are the key provisions regarding the holding of an annual general meeting:

(1)        Annual general meeting should be held once every year.
(2)        First annual general meeting of the company should be held within 9 months from the closing of the first financial year.
(3)        Subsequent annual general meeting of the company should be held within 6 months from the closing of the financial year.
(4)        The gap between two annual general meetings should not exceed 15 months.

The word entrepreneur has a French origin. It is derived from the French word, entreprendre, which means “to undertake.”

Intrapreneurship is a combination of entrepreneurship and management skills. It is the practice of entrepreneurship by employees within an organization. The intrapreneurs have to face rivalry within the organization they work.

To Steve Jobs, people who buy Apple products are not “consumers.” They are people with hopes, dreams and ambitions. He builds products to help people achieve their dreams.

Passive Scanning is ongoing scanning at an almost unconscious level. 

Steve Jobs has given 7 principles largely responsible for success through innovation. These are described in his book, “The Innovation Secrets of Steve Jobs”.

Within every individual, creativity is a function which comprises of three components, i.e. expertise, creative thinking skills and motivation. Self-efficacy is defined as one's belief in one's ability to succeed in specific situations or accomplish a task and it is not directly related with creativity.

'All of the above' option is true, as all are called financial staements of a company.