Explore topic-wise InterviewSolutions in Current Affairs.

Correct option is (b) Sino-Indian

1. Congress (O) is being referred to as the ‘New Congress’. 

2. (i)  She focused on the growth of the public sector. 

    (ii)  She focused on the removal of disparities in income and opportunity. 

3. It is justified to call the ‘opposition alliance’ as the ‘Grand Alliance’ because it came into existence to make matters worse for Indira Gandhi.

(a) Lai Bahadur Shastri: Jai Jawan, Jai Kisan 

(b) Syndicate: Indira Hatao! 

(c) Indira Gandhi: Garibi Hatao!

Tarian, Panipat, Peshawar and Thanesar.

Sound pollution: Production of undesirable loud and harsh sound at the wrong place and wrong time is called sound pollution. The sound of sirens of buses or trucks seems to be normal on a highway, but near a hospital, school or in residential colony the sound of siren takes the form of noise thus causing sound pollution. Unwanted sound is called noise. 

Following are the sources of sound pollution:

1. Sources of sound in homes: 

• Radio 
• Television 
• Mixers and grinders 
• Desert cooler 
• Transistor 

Air conditioner, etc. contribute to sound pollution, because these domestic appliances produce a variety of sound and noise. 

2. Sources of sound in surroundings: 

• Loudspeakers used in religious place, on festive occasions, or public meetings 
• Exploding of crackers
• crying of hawkers in streets 
• Fairs also contribute to noise pollution. 

3. Sources of sound in factories Industries: Machines in factories produce loud roaring noise and contribute to noise pollution. 

4. Sources of sound due to traffic: 

• Noise produced by various automobiles vehicles 
• Noise produced by flying aeroplanes 
• Railway locomotives produce unwanted high-intensity sound.

Measures to control noise pollution: 

1. Noise control in homes: Proper maintenance and necessary usage of television, radio, transistor, grinders, desert coolers, etc. bring down the noise level by keeping their volume level low. 

2. Noise control on roads: Proper maintenance of the vehicles and use of low sound intensity of sirens, control the noise pollution. Law should be enforced to get rid of noisy vehicles. 

3. Control on noise produce by industries and factories: Machines should be kept well lubricated and maintained properly, to bring down the level of noise. Factories should be set away from residential areas.

4. Trees and plants are good sound absorbers. So, trees should be planted on both the sides of the road to check the movement of sound towards homes, educational institutions, offices, etc. 

5. People should be made aware of the fact that noise is injurious to health, through newspapers, television, radio, and magazines.

In remote past, when humans did not keep any written description of the events, that age is called pre-history or pre-historic times.

1. The defeat of the official candidate during presidential elections in 1969. 

2. Congress (O) i.e. Organisation led by syndicate known as old Congress, Congress (R) i.e. requisitionists led by Indira Gandhi known as new Congress. 

3. Indira Gandhi projected the split as an ideological divide between socialists and conservatives, between pro-rich and pro-poor.

(a)-(ii) 

(b)-(i) 

(c)-(iv) 

(d)-(iii).

C) The Congress Party was upset with the double standards and obstinacy of tite British

Aims of improved cropping: 

1. The main aims of crop improvement are to increase the productivity of economic product, which is possible by developing high yielding varieties. 

2. The plant crops are subjected to many biotic stresses, such as disease, insects, pests, nematode as well as abiotic stresses, such as draughts, water logging, salinity, heat, cold, etc. 

3. Better quality of crop regarding economic value, protein quality of pulses, oil quality in oil seeds and preservity of vegetables and fruits. 

4. Photo-in sensitive and thermo insensitive varieties of some crops can be cultivated in large areas, as they are not affected by light and temperature. 

5. Crop production, under different environmental conditions, can be stabilised by developing improved varieties of crops. 

6. Desired agronomic traits give higher produce, such as high tillering, tall professedly branching characters of fodder crops, and dwarf character of cereals. 

Examples of the high yielding variety of wheat are: Sonara 64, Hira, Moti, Kalyan Sona and Sharbati sonara. 

High yielding variety of paddy are: Pusa 205, IR 8, Padma and Jaya.

Fish is an important food, which is quite rich in proteins. 

The main products formed by fishery are: Oil with vitamins, proteins, fats, fins, skin and scales. 

Fishery or Pisciculture is a combination of agriculture and animal husbandry. Providing natural food to fishes, rearing in ponds comes under agriculture. The term pisciculture is the production, breeding and management of fishes on a large scale, under controlled conditions. As India has vast freshwater resources, there is a great scope of improvement in fish production. India ranks 7th among the leading fish producing countries of the world. Development and production of fish in freshwater is more than marine water (salt water).

Many people living near coastal areas depend on fishes for their food requirement. The main aim of Pisciculture is to produce fishes for food and secondly, it provides employment opportunities. 

Varieties (types) of fishes used for piscicultures. 

Selected Fresh water species: Catla, Rohu, Mrigal. 

Foreign (exotic) fishes: Silver carp, common carp, Grass carp, Hilsa, Salmon, Singhara.

Activities for Pisciculture: Construction of pond: Appropriate pond or tank is required for pisciculture. The pond should be constructed on land, containing clay soil. Sunlight should reach on the bottom of the pond. Inlet and outlet of water in the pond should be proper.

Food material for fishes: 

Two types of food are needed for the fishes: 

1. Natural food, 

2. Artificial food. 

1. Natural food consists of small aquatic plants and animals. For a continuous supply of this food, bio fertilisers and birds excreta are added. Lime (CaO) is added to water, to reduce the acidity of water. 

2. Artificial food is also needed for the rapid development of fishes. Crushed grains, powdered wheat, soyabean, yeast, rice bran, etc. are included in artificial food. 

3. Removal of fishes from a pond: Fishes are taken out, once in a year. All the fishes should not be taken out. Partial removal of fishes increases the production of fishes and it should be done early in the morning. 

4. Precautions of pisciculture: 

1. Pollution of water causes great harm to the fishes. So, the pond should be cleaned regularly and non-beneficial plants should be removed. 

2. Fishes suffer from many types of diseases, caused by bacteria and viruses, so fishes should be checked at regular interval of time and treated, accordingly. 

3. Introduction of small fishes should be done early in the morning. 

4. During thunder, lightening and raining, fishing should not be done. 

5. Fish food should be palatable.

Irrigation is the process of supplying water to crop plants in the fields, by means of canals, reservoirs, wells, tube-wells, etc. 

It depends on the following two factors: 

1. Crop-based irrigation, i.e., on the nature of crop plants. 

2. Soil-based irrigation, i.e., on the nature of soil of the crop fields. 

The various irrigation systems in India are as follows: 

The common method of irrigation in India is well, tube wells, pumps, canals, tanks, river-valley system and river-lift systems. Irrigation is essential at various levels of crop production, such as sowing, tilting, flowering and fruiting. 

(a) Wells: Wells are bored at such places, where groundwater is enough. 

These are of two types: 

1. Dug wells: Dug wells have their bottom surface below the ground water table. Water accumulates here from surroundings. Water is lifted for irrigation by mechanical means, e.g., Persian wheels operated by bullocks, horses and camels 

2. Tube wells: Tube wells are dug very deep. Water is lifted from these wells by diesel or electric run pumps.

(b) Tanks: These are small storage reservoirs. They store run-off water from the surrounding catchment areas. Small dams are constructed below the catchment areas, to regulate the flow of water for agriculture. 

(c) Canal system: Canals mostly get water from large rivers. Doors are .fitted at the mouth of canal joining the river to regulate the flow of water. A canal is distributed into branch canals, distributaries or field channels. These field channels irrigate the fields. For irrigation, the fields of various farmers, a rotation system is followed, so that each and every farmer may irrigate his field. 

(d) River valley system: In the western ghat mountains for South India, are present many steep and narrow riverine valleys. In this region, rainfall is very heavy during June to September and again in November and December. On the slopes and in the valleys, perennial crops, like supari are cultivated. Rice crop is also grown in the bottomlands of the valley. 

(e) River lift system: Water is lifted directly from the river for irrigation of nearby fields. It is done due to inadequate flow of water in canal or due to insufficient release of water from the river reservoir. 

(f) Sprinkler irrigation system: It is introduced in canal irrigated areas of Haiyana, Rajasthan and Madhya Pradesh. Drip irrigation system is in use in Maharashtra, Karnataka, Andhra Pradesh, Orisa and Tamil Nadu. It is in practice with the help of Isral technical, known Indian Agricultural Research Institute, New Delhi. They are also providing training to the people of various states. Here, they are cultivating different varieties of roses, tomatoes, capsicum of yellow and red colour, gourd, etc.

Correct option is (b) legal status

Correct option is (c) continuous

Correct Answer is: a. Imperial Oil. 

Correct option is (b) an artificial

Correct Answer is: b. general partner. 

There can be only one member in a Person Company.

Where no provision is made in the contract between the partners for the duration of their partnership or for the termination of their partnership. The partnership is called “partnership at will”.

(i) A partner by holding out means a person who is not a member of firm but allows himself/herself to be represented as a partner. Such person is responsible to person who has given loan to firm on his representation because loan has been given by assuming that he/she is member.

(ii) Such a partner can be held liable for the repayment of debt extended to the firm due to such representation. In order to avoid this liability, such a person should immediately clarify his position to the third party, stating the fact that he/she is not a partner. Failure in clarifying the same would make him liable to the third party for repayment of any debts taken by the partnership firm.

(iii) Such a partner does not contribute any capital.

(iv) Such a partner does not take part in the management and its decisions.

Correct Answer is: c. nominal partner. 

Features of World Bank: 

(i) Organization and Structure : The organization of bank consists of the Board of Governors, the Board of Executive Directors and the Advisory Committee, the Loan Committee and the President and other staff members. All the powers of the bank are vested in the Board of Governors which is the supreme policy making body of the bank. The board consists of one Governor and an Alternative Governor appointed for five years by each member country. The Board of Executive Directors consists of 21 members, 6 of them are appointed by the six largest shareholders, namely USA, UK, Germany, France, Japan and India. The rest of the 15 members are elected by the remaining countries.

(ii) Goals : The World Bank Group has two goals to be achieved by 2030.

• To end extreme poverty by decreasing the percentage of people living on less than 1.90 dollars a day to no more than 3%. 
• To promote shared prosperity by fostering the income growth of the bottom 40% for every country.

(iii) Innovative Knowledge Sharing : World Bank offers support to developing countries through policy, advice, research and analysis and technical assistance. Analytical works of World Bank often helps developing countries. It also helps in capacity development of the developing countries. World Bank also sponsors, host or participates in many conferences and forums on issues of development.

(iv) Social Development : Social Development focuses on the need to “put people first” in development process. The World Bank work with governments, communities, civil societies, the private sector and the marginalized for the cause of social development. Social Development promotes economic growth and leads to higher quality of life.

Features of SIDBI: 

(i) Financial Institute for Promotion of MSMEs : SIDBI is established to provide short term and long term finance to the MSMEs. It is principal financial institution for micro, small and medium sector units. It also co-ordinate the functions of institutions engaged in financing MSME’s. It provides refinance to Banking and Non-Banking Financial Companies to increase supply of credit to MSMEs.

(ii) Advisory Function : SIDBI also works as advisor and mentor of MSMEs. It helps MSMEs in expanding marketing channels for the products both in domestic as well as international markets. It also initiates steps for modernization and technological upgradation of current units.

A company incorporated outside India, but conducting business in India, called a foreign company.

Merits of Joint Hindu Family are as follows: 

1. Easy Formation : Joint Hindu Family Firm can be easily formed. The formation is simple. Registration is also not compulsory. There is no limit on minimum or maximum members in the business. Family members become co-parceners by birth in the family. 

2. Quick Decision : Only the Karta is involved in the decision making process. This helps to take quick decisions in business. If decisions are taken quickly there can be prompt actions. 

3. Business Secrecy : Complete business secrecy can be maintained. All decisions are taken by Karta only. Co-parceners cannot even inspect books of accounts. There is no compulsion to publish books of accounts. 

4. Co-parceners Liability : The liability of coparceners is limited. It is to the extent of their share in Joint Family Business. Private property of co-parceners cannot be attached to business property.

A partner by holding our is a person who is held liable as a partner of the firm to any outsider to whom he has been represented as a partner and who has granted credit to the firm on the faith of that representation. Such a partner is a partner by holding out.

Features of Self Help Groups: 

(i) Democratic Set up : SHG is group of the members, for the members and by the members. Every member of the group actively participates in the functioning of SHGs. Members are responsible for their own future by organizing themselves into SHGs. They elect or select leader for proper functioning of the group. Leader is responsible for holding regular meetings and maintaining records and accounts of the group.

(ii) Collateral Free Loan : SHGs provide small loans to the poor individuals for undertaking self-employment projects. Loans are given on the principle of mutual trust and either minimum or no documentation. Generally the rate of interest are higher than the interest charged by banks. It saves the poor individuals from the clutches of local money lenders. The repayment of loans is ensured timely as all members of group are responsible for collecting repayment amount from the members who borrowed the loan.

1. Statutory corporation is formed or created by passing a Special Act in Parliament or State legislature.

2. The Act or Special Statute which is passed in the Parliament defines it powers, objectives, aims, duties, functions, rules and regulations governing its employees and its relationship with the Government department. 

3. Statutory Corporation prepare its own budgets and recruits employees on the terms and conditions determined by its Board of Directors. 

4. As Statutory Corporation is regulated as per the provisions made in Special Act of Parliament or State Legislature, it need not follow the provisions and directives given as per the Indian Companies Act, 2013. They need not have a Memorandum of Association or Articles as they have to strictly follow the Special statute. 

5. Thus, Statutory corporation need not follow the Companies Act.

The demerits of Partnership firm are as follows: 

(i) Non-transferability of Interest: In a partnership firm no one partner can transfer his share of interest to another outsider without the consent of all the partners.

(ii) Limited Capital: There is a limitation in raising additional capital for business. The business resources are limited to personal funds of the partners. Borrowing capacity of partners is limited. The maximum number of partners is fifty only. So financial capacity is less.

(iii) Absence of Legal Status : The Indian Partnership Act, 1932 does not give a legal status to a partnership firm. There is no independent legal status. The firm and its partners are one and the same.

(iv) Problem of Continuity : The partnership firm is not a separate legal entity. The firm is dependent oh mutual trust between partners. If a partner dies, becomes insolvent or insane, the firm has to be dissolved compulsorily whether the partners wish or not.

(v) Risk of Implied Authority : A partner works in two capacities. He has a dual role – Principal and Agent. He acts as an agent of the business. He can enter into contract with third party. However, a wrong decision can result in heavy losses, which has to be borne by all partners.

(vi) Limitations on Number of Partners : No partnership can go beyond maximum number prescribed (i.e. 50 members) by Indian Partnership Act. This restriction effects the raising of capital for further expansion.

(vii) Disputes : It is difficult to maintain harmony among partners. They may have different opinions and may not agree on certain matters. Partners may have conflicts if some partners work for self interest. This reduces team spirit and may finally lead to dissolution of the firm.

(viii) Difficulty in Admission of Partner : As consent of all partners is required to take any decision in the partnership firm, it becomes difficult to admit a new partner. This is a disadvantage to the firm as it cannot bring in new talent if the other partners are not agreeing to it.

(ix) Unlimited Liability : The liability of partners is unlimited. There is no difference between business property and personal property of partners. If business assets are not enough to meet business expenses, personal property can be used. 

(x) Problem of Secrecy : Partnership firms lack complete business secrecy as some secrets may be disclosed by some partner to the competitor for personal benefit.

(i) Companies

(ii) economical

Sole proprietorship:

• A form of business in which the business firm is owned, managed and controlled by only one person is called a sole proprietorship and the person is called proprietorship or sole proprietor.
• According to Louis and Henry, sole proprietorship is such a form of business in which there is only one person at the top who is responsible, who directs business activities and who bears the risk of failure himself.
• From the above definition one can conclude that a lone trader or a sole proprietor is only and wholly responsible for the entire business and that the entire business is carried out under his direction. He alone enjoys the profit and is responsible for loss in business or insolvency.
• The proprietor alone invests capital to start and develop it and looks after all the activities like sale and purchase, marketing, inventory management, etc. He alone reaps the profit and bears the loss.

Example:
Generally, grocery stores, sweet shops, food joints, small trading firm, etc. run as sole proprietorship firms.

The three advantages of partnership are:

1. The unlimited, Joint and several liabilities of the partners make them carry on the business of the firm and enable it to obtain credit from third parties easily. 

2. As there are two or more persons in partnership, there is scope for the application of division of labour. 

3. A partnership is an association of two or more persons. Therefore, it can secure greater managerial ability than a sole trading concern.

1. Mumbai

2. Khadi and Village Industries Commission (KVIC)

1. Active partner is also called a working partner. He brings in capital and also takes active part in the business of the firm. 

2. He has unlimited liability and shares the profits and losses of the firm. He is also called a managing partner. 

3. Thus, active partners take active part in day to day management of partnership firm.

Advantages of sole proprietorship:
1. Easy establishment process:

• One can easily start a sole proprietorship without any documents or passing from any complex laws and procedures.
• Any person, educated or illiterate but having general capabilities can start a proprietorship with minimal capital.

2. Less capital:

Since the proprietorship can be set up even with very less capital it is a very important characteristic and special advantage. Moreover, in case the business needs more capital, the proprietor can even borrow it.

3. Maintenance of secrets:

It is extremely important for a business to maintain its trade secrets. Since the proprietorship is entirely owned and managed by a single person the business secrets can be very well maintained. This again is a special advantage which is difficult to obtain in other forms of business.

4. Quick decisions:

Since the entire business is owned by a single person quick decisions can be made as per the changes in market, demands consumer preference, etc. Such quick decisions helps to save business and even grow faster.

5. Personal contact:

• The reach of a sole proprietorship is generally not very far. Hence, the proprietor is able to maintain personal contact with customers, vendors, etc. This helps him
  to understand the customers, employees, creditors, etc. better, serve them as per their taste, fashion and demand, etc. and keep them satisfied.
• Based on the opinions of customers and employees he gathers through personal contact he can even change the product or production method or distribution system, etc. and keep the business safe and sound.

6. Flexibility:

The proprietor can easily bring whatever change he wishes to in his business. Authority to decide solely, quick decision making and constant personal contact makes proprietorship highly flexible to change as required,

7. Less burden of tax:

• The income of sole proprietorship can be considered as the income of the owner. Hence, the proprietor falls into the bracket of personal rate of income tax which is lower than other business forms.
• Moreover, generally the sole proprietorship is not very large and so the burden of income tax is also less.

8. Less legal restrictions:

Compared to other business forms there are lesser regulatory and legal controls on the proprietorship firm. The proprietor does not need to take approval from anyone for making changes in his business methods increase or decrease capital etc. Moreover, since the business is small, regulatory controls are also less.

(i) Suitable for some Special Business : Sole trading concern is suitable for business where personal attention and individual skill is needed e.g., Beauty parlour, groceries, fashion designing, sweet shops, tailoring, restaurants etc.

(ii) Unlimited Liability : Liability of the sole trader is unlimited. In case business assets are not sufficient to meet business expenses, private property of the sole trader will be used. There is no difference made between private property and business property of sole trader. 

(iii) No Sharing of Profits and Risks : A sole trader enjoys all the profits of business. As he is the single owner of business he assumes full responsibility in business. He alone bears all the losses or risks involved in business. 

(iv) Business Secrecy : Maximum business secrecy can be maintained in a sole trading concern. A sole trader is responsible only to himself. He need not discuss any matter of business with outsiders. Moreover, there is no legal compulsion for sole trader to publish books of accounts of business.

Advantages of a partnership firm:
1. Easy and less expensive process of establishment:

• The process of establishing a partnership firm is quite easy and cheap. One also need not pass through lengthy and complex legal procedures.
• In fact as per the Partnership Act, one can even run a partnership without registering it however it is always advisable to register.

2. Efficient management:
Unlike proprietorship, there are more than one owners of the partnership firm. Due to this there exists sharing of intelligence, knowledge, skills and experience among partners. The partners take personal interest and care in managing and controlling the business and so the efficiency of partnership firm is higher.

3. Increase in goodwill/credit worthiness:
In partnership firm, all the partners have unlimited liability to pay-off business debts. This creates a positive impact on creditors or vendor’s mind. They do not ‘ hesitate to sell goods on credit or lend money knowing that if one of the partner fails to pay back the other will have to pay anyhow. This increases the goodwill or credit of the firm compared to sole proprietorship.

4. More capital:
A partnership consists of more than one owner and so more capital can be raised collectively. Moreover, when the business expands and one needs more capital than it can be done by adding a new partner.

5. Advantage of division of labour:
Partners can divide the works among themselves based on their skills and experience and obtain the benefit of division of labour.

6. Systematic decisions:
At the time of taking an important decision the partners gather and discuss it thoroughly. They share their experience, knowledge and opinions with respect to the decision. When everyone agrees and come to a common conclusion a decision is made. Thus, in partnership firms there are quite less chances of wrong decisions.

7. Flexibility:
A partnership firm is formed by the voluntary agreement of each partner. So, it is easy to make changes in the business as per the situation. For example, as per the changing market environment the partners can change their products or processes after thoughtful discussions among themselves.

8. Protection to the interests of minority:
Generally in a partnership firm all the works are done with mutual consent of all the partners. So, even if one partner disagrees the firm may not be able to execute a desired work or a decision. Moreover, a partner who does not wish to continue with the firm can ask for dissolving the partnership.
In these senses we can say that in a partnership firm the interests of minority also get protection and are taken care of.

9. Direct relations with customers:
Just like sole proprietorship, the partners of the partnership firm remains in contact with their customers, employees, vendors, etc. Hence, they can take good care of their needs and expectations.

10. Decentralization of economic power:
In a partnership firm the power to control the funds of the company lies with all the partners. This helps to mobilize the funds better and to stop a partner from making wrong monetary decision. This safeguards the firm against financial crises.

11. Less burden of income tax:
The profit of the firm gets divided among the partners as decided in the deed. So, the income tax liability also gets divided among partners and they are less burdened.

In partnership firm, all the partners have unlimited liability to pay-off business debts. This creates a positive impact on creditors or vendor’s mind. They do not hesitate to sell goods on credit or lend money knowing that if one of the partners fails to pay back the other will have to pay anyhow.

Types of Co-operative Society are as follows: 

(i) Consumer Co-operative Societies : A consumer co-operative is a business owned by its customers. They purchase in large quantities from wholesalers and supply in small quantities to customers. Goods are provided to buyers at reasonable prices and also provide services to them. Members get a share in the profit. The consumer society is formed to eliminate middlemen from distribution process e.g.-Apana Bazar, Sahakari Bhandar.

(ii) Credit Co-operative Societies : Members pool their savings together with the aim of obtaining loans from their pooled resources for productive purposes and non-productive purposes. They may be established in rural areas by agriculturist or artisans called as a Rural Credit Society. They may be established by salary earners or industrial areas called as Urban Banks, Salary Earners Society or Workers Society. 

(iii) Producer’s Co-operatives : Producer’s Cooperatives are voluntary associations of small producers and artisans who come together to face competition and increase production. These societies are of two types: 

(a) Industrial Service Co-operatives : This society supply raw materials, tools and machinery to the members. The producers work independently and sell their industrial output to the co-operative society. The output of members is marketed by the society

(b) Manufacturing Co-operatives : In this type, producer members are treated as employees of the society and are paid wages for their work. The society provides raw material and equipment to every member. The members produce goods at a common place or in their houses. The society sells the output in the market and its profits is distributed among the members. 

(iv) Marketing Co-operatives Societies : These cooperatives find better markets for members produce. They also provide credit and other inputs to increase members production levels. They perform marketing functions such as standardising, grading, branding, packing, advertising etc. The proceeds are then distributed among members depending on the quantities sold. 

(v) Co-operative Farming Societies: Farmers voluntarily come together and pool their land. The agricultural operations are carried out jointly. They make use of scientific method of cultivation. 

(vi) Housing Co-operative Societies : Housing Cooperatives are owned by residents. The society purchases land and develops it. Houses are constructed for residential purpose on ownership basis. They aim at establishing houses at fair and reasonable rents to members. For construction purposes loans are made available from Governmental or Non-Governmental sources. The society also looks after the maintenance of its buildings.

(i) Limited Liability : The liability of members is limited. It depends upon the value of shares purchased by members. Therefore, their personal property is not used for payment of society’s debt. 

(ii) Management : Elected representatives of members form the Managing Committee. The Managing Committee works according to byelaws. Collective decisions are taken after conducting meetings. The organisation is managed on democratic principles. 

(iii) Service Motive : The main motive of cooperative organisation is to give service to the people. It is not profit oriented. Utmost importance is given to the welfare of the people. In that sense, a co-operative society differs from other forms of organisation.

(iv) Surplus Profit: Profits are made in the course of business after payment of dividend to shareholders. A percentage of profit is always used for welfare of the people. Bonus is given to employees and as bonus on purchase made by members.

(v) Separate Legal Status : A Co-operative Society is formed according to Co-operative Societies Act, 1912, which gives it independent legal status. It is distinct from its members. Therefore it can enter into contract purchase property, etc. in its name. 

(vi) Equal Voting Rights : All the members in a Cooperative Societies have equal voting rights irrespective of number of shares held by them. 

(vii) Number of Members : Minimum 10 members are required for the formation of Co-operative Society. There is no limit on maximum number of members. 

(viii) Democratic Principle : Democracy is followed in the working of co-operatives. Equality of voting rights is the main principle of the organisation. The principle of ‘One member One vote’ is followed. All members are equal in society.

(ix) Voluntary Association and Open Membership : Co-operative organisation is a voluntary association of individuals. Membership is voluntary. Any person can become a member of the organisation. No difference is made on the basis of language, religion, caste, etc. There is open membership. A person can become a member on his own free will and terminate membership whenever he wants. 

(x) Registration : Registration of a Co-operative organisation is compulsory under Co-operative Society’s Act, 1912. Registration is done according to the Act of every state. In Maharashtra, Societies are registered under Maharashtra State Cooperative Societies Act, 1960. 

(xi) State Support : Co-operatives receive support from the government. They are under the control and supervision of the State. All of them are registered under the Co-operative Societies Act, 1912. They get a corporate status. They get concessions from government in purchase of land, payment of tax etc. They get legal and financial assistance also.

Increase in goodwill/credit worthiness:

In partnership firm, all the partners have unlimited liability to pay-off business debts. This creates a positive impact on creditors or vendor’s mind. They do not ‘ hesitate to sell goods on credit or lend money knowing that if one of the partner fails to pay back the other will have to pay anyhow. This increases the goodwill or credit of the firm compared to sole proprietorship.

Types of Co-operative Society are as follows: 

(i) Consumer Co-operative Societies : A consumer co-operative is a business owned by its customers. They purchase in large quantities from wholesalers and supply in small quantities to customers. Goods are provided to buyers at reasonable prices and also provide services to them. Members get a share in the profit. The consumer society is formed to eliminate middlemen from distribution process e.g.-Apana Bazar, Sahakari Bhandar.

(ii) Credit Co-operative Societies : Members pool their savings together with the aim of obtaining loans from their pooled resources for productive purposes and non-productive purposes. They may be established in rural areas by agriculturist or artisans called as a Rural Credit Society. They may be established by salary earners or industrial areas called as Urban Banks, Salary Earners Society or Workers Society. 

(iii) Marketing Co-operatives Societies : These cooperatives find better markets for members produce. They also provide credit and other inputs to increase members production levels. They perform marketing functions such as standardising, grading, branding, packing, advertising etc. The proceeds are then distributed among members depending on the quantities sold.

(iv) Co-operative Farming Societies: Farmers voluntarily come together and pool their land. The agricultural operations are carried out jointly. They make use of scientific method of cultivation.

i. True

ii. True

iii. False

iv. False

v. False

Systematic decisions:

• At the time of taking an important decision the partners gather and discuss it thoroughly. They share their experience, knowledge and opinions with respect to the decision. When everyone agrees and come to a common conclusion a decision is made.
• Thus, in partnership firms there are quite less chances of wrong decisions

1. Collateral free loan are SHGs small loans provided to the poor individuals for undertaking self-employment projects. 

2. Loans are given on the principle of mutual trust and either minimum or no documentation.

3. The rate of interest generally charged are higher than the interest charged by banks. 

4. It saves the poor individuals from the clutches of local money lenders.

Sole proprietorship:

• A form of business in which the business firm is owned, managed and controlled by only one person is called a sole proprietorship and the person is called proprietor or sole proprietor.
• From the above definition one can conclude that a lone trader or a sole proprietor is only and wholly responsible for the entire business and that the entire business is carried out under his direction. He alone enjoys the profit and is responsible for loss in business or insolvency.

Characteristics of proprietorship:
1. Easy to establish:
One can easily set-up a proprietorship business firm without any legal hassles. A proprietor can start his firm from any place he seems proper.

2. Capital:
The proprietor raises his own capital. He can borrow money if he wish but it becomes his sole responsibility to return it.

3. Power of administration:

• The sole proprietor himself looks after the administration. He himself sees purchase, sales, collection, accounting and other business activities.
• However, he may take help from family members, relatives or even hire someone.

4. Freedom of work and quick decisions:
The proprietor enjoys complete freedom as how he wants to run his business. He runs his business based on his intelligence and experience. Since he has all the freedom and no one to interfere he can make quick decisions.

5. Unlimited liability:
The proprietor has unlimited liability. This means that if he is unable to repay his debts, the creditors can claim even for his personal properties and assets in the court of law to recover their money.
In other words if the business incurs loss and the proprietor is unable to pay his debts then he may have to mortgage or even sell his personal assets to repay.

6. Maintenance of secrets:
The proprietor manages everything himself and so his trade secrets do not get leaked.

7. Personal contact:
The reach of a sole proprietorship is generally not very far. Hence, the proprietor is able to maintain personal contact with customer’s vendors, etc. This helps him to understand customers, employees, creditors, etc. better, serve them as per their taste, fashion and demand, etc. and keep them satisfied.

8. Centralization of ownership and management:
In sole proprietorship the proprietor is the owner as well as manager. Hence, unlike other business forms there remains unity or say centralization between ownership i.e. owner and management i.e. manager of the business.

Advantages of soie proprietorship:
1. Easy establishment process:

• One can easily start a sole proprietorship without any documents or passing from any complex laws and procedures.
• Any person, educated or illiterate but having general capabilities can start a proprietorship with minimal capital.

2. Less capital:

Since the proprietorship can be set up even with very less capital it is a very important characteristic and special advantage. Moreover, in case the business needs more capital, the proprietor can even borrow it.

3. Maintenance of secrets:

It is extremely important for a business to maintain its trade secrets. Since the proprietorship is entirely owned and managed by a single person the business secrets can be very well maintained. This again is a special advantage which is difficult to obtain in other forms of business.

4. Quick decisions:

Since the entire business is owned by a single person quick decisions can be made as per the changes in market, demands consumer preference, etc. Such quick decisions helps to save business and even grow faster.

5. Personal contact:

• The reach of a sole proprietorship is generally not very far. Hence, the proprietor is able to maintain personal contact with customers, vendors, etc. This helps him to understand the customers, employees, creditors, etc. better, serve them as per their taste, fashion and demand, etc. and keep them satisfied.
• Based on the opinions of customers and employees he gathers through personal contact he can even change the product or production method or distribution system, etc. and keep the business safe and sound.

6. Flexibility:

The proprietor can easily bring whatever change he wishes to in his business. Authority to decide solely, quick decision making and constant personal contact makes proprietorship highly flexible to change as required,

7. Less burden of tax:

• The income of sole proprietorship can be considered as the income of the owner. Hence, the proprietor falls into the bracket of personal rate of income tax which is lower than other business forms.
• Moreover, generally the sole proprietorship is not very large and so the burden of income tax is also less.

8. Less legal restrictions:

Compared to other business forms there are lesser regulatory and legal controls on the proprietorship firm. The proprietor does not need to take approval from anyone for making changes in his business methods increase or decrease capital etc. Moreover, since the business is small, regulatory controls are also less.

Limitations of sole proprietorship:
1. Limited capital:

• Generally, it is difficult for a sole proprietorship to raise large capital.
• After industrial revolution and with advent of e-commerce the size of businesses have grown and is growing. In such cases it becomes almost impossible for the owners to raise large capital, large space or purchase machinery, raw materials, etc. in larger quantity. As a result, business may not grow much.

2. Unlimited liability:

Sole proprietors cannot free themselves from business liabilities. If their borrowings exceeds their business profits and the proprietors are unable to pay, they will even have to sell their personal assets to repay business debts. In this sense the proprietors have unlimited liability.

3. Short duration:

If the proprietor becomes insolvent or dies or faces some unforeseen event like loss of mental balance or gets involved in some crime, the existence of business comes in danger. In such situations if there are no inheritors of the proprietors or if they do not possess the knowledge to run the business, the business may become weak or even shut down.

4. Limited capacity to work:

• In proprietorship the owner does everything. He formulates policies, he manages funds, he sells and he markets.
• It is a known fact that an individual has got only 24 hours per day to work and a limited set of skills and preferences towards works. Even if the proprietor is highly efficient he will have limited time and knowledge.
• The sole proprietor may lose out the benefit of skills possessed by other persons, opinions and suggestions, etc. and so the growth of business may be limited.

5. Possibility of wrong decisions:

• All the decisions are taken by the proprietor himself. Hence, he does not have the advantage to take help of rich experience and specialized knowledge possessed by others in their own fields.
• This may result in mistakes in business decisions.

6. Lack of advantages of large scale business:

The proprietorship firm generally works on a smaller scale with limited capital and skills. Under such circumstances the businessman cannot get the advantage of large volume or large scale business to earn large profits.

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