CHAPTER 6: BUSINESS ORGANIZATION

Question 1

Sole Proprietorship Act

Answer 1

Registration of Businesses Act 1956

Question 2

The owner and business itself are one

Answer 2

Sole proprietorship

Question 3

His liability to the business’ creditors is also unlimited

Answer 3

Sole proprietorship

Question 4

He may use the assets for personal purposes and use personal assets to meet businesses obligations

Answer 4

Sole proprietorship

Question 5

______ may transfer his business to someone else, if he wishes so

Answer 5

Sole proprietorship

Question 6

advantages of proprietorship

Answer 6

1. easiest and least expensive
2. owner is in complete control
3. receives all income generated
4. easy to dissolve
5. not subjected to many rules and regulations

Question 7

disadvantages of sole proprietorship

Answer 7

1. capital is limited
2. unlimited liability
3. both personal and business assets are at risk
4. business will dissolve if owner passed away. if someone want to continue, they’ve to re-registered

Question 8

two persons get together to carry on business with a view of profit

Answer 8

Partnership

Question 9

maximum number of partners is 20 excepts professional has no limits

Answer 9

partnership

Question 10

must registered under the (Registration of Business Act 1956) and (Partnership Act 1961)

Answer 10

Partnership

Question 11

may be formed by an oral or a written agreement

Answer 11

partnership

Question 12

each partner is an agent and principal

Answer 12

partnership

Question 13

all ______ generally allowed to take part in the management of the business

Answer 13

partnership

Question 14

all assets brought into ______ are _______ property

Answer 14

partnership

Question 15

All _______ are liable for the debts and obligations. If the firm assets are not enough, ______ must contribute to pay off the debts

Answer 15

partnership

Question 16

A _________ is not an independent legal entity

Answer 16

partnership

Question 17

______ may withdraw the capital that they contribute to the partnership

Answer 17

partnership

Question 18

a ______ who wishes to transfer his status to another need other’s consent

Answer 18

partnership

Question 19

elements of partnership (6)

Answer 19

1. two person and more
2. there must be an agreement, expressed orally/ writing/ impliedly
3. business must exist
4. must be carried on in common
5. carried out with intention of making profits
6. each partner is an agent & principal

Question 20

sharing of gross return does not of itself create a ______

Answer 20

partnership

Question 21

a person who actively participates in the management of the business

Answer 21

active partner

Question 22

a person who takes no active part in the management

Answer 22

sleeping/ dormant partner

Question 23

not a partner but will be liable for debt of the partner as consequence of the principles of ‘holding out’ (for causing people to believe he is a partner)

Answer 23

quasi partner

Question 24

a _____ may be formed with or without a written agreement

Answer 24

partnership

Question 25

general rule to enter into an agreement

Answer 25

1) 18+ 2) sound mind 3) has not been disqualified from contracting under any law to which he is subject

Question 26

general rule to enter into an agreement

Answer 26

1) 18+ 2) sound mind 3) has not been disqualified from contracting under any law to which he is subject

Question 27

Relationship between partners: all partners are bound to render true accounts and full information of all things

Answer 27

section 30

Question 28

Relationship between partners: partner must not make a profit for himself by making use of his position as a partner

Answer 28

section 31

Question 29

Relationship between partners: if a partner without consent of the other partner, he must take account

Answer 29

section 32

Question 30

dissolution of partnership (7)

Answer 30

1) dissolution by agreement 2) dissolution by operation of law 3) dissolution by notice 4) dissolution by supervening illegality 5) dissolution by death 6) dissolution by charging on shares 7) dissolution by the court

Question 31

dissolution by court (6)

Answer 31

1) mental incapacity 2) permanent incapacity 3) prejudicial conduct 4) willful or persistent 5) can only be carried at a loss 6) complete communication breakdown

Question 32

company act

Answer 32

companies act 2016

Question 33

types of company

Answer 33

1) company limited by shares 2) company limited by guarantee 3) unlimited company

Question 34

tan teck hee v cheng tian peng: 25 members partnership

Answer 34

two persons constitute a partnership not exceeded 20 people

Question 35

ratna ammal & anor. v tan chow soo

Answer 35

agreement between persons, expressed orally/ in writing/ or implied from the action

Question 36

ratna ammal & anor. v tan chow soo

Answer 36

agreement between persons, expressed orally/ in writing/ or implied from the action

Question 37

keith spicer ltd v mansell

Answer 37

partnership exist

Question 38

chooi siew cheong v lucky height development

Answer 38

business must be carried in common

Question 39

soo hood beng v khoo chye neo

Answer 39

business for profit

Question 40

section 4 partnership act: what is not considered as partnership? (3)

Answer 40

1) joint tenancy and tenancy in common 2) sharing of gross returns 3) receipt of share net profits

Question 41

section 4(c) receipt of share net profits (5)

Answer 41

1) repayment of loan out of profits 2) payment or remuneration to servant out of profit 3) payment of annuity to widow or child 4) repayment of interest on a loan out of profits 5) sale of goodwill