KSLU Solved Question Papers
Business Environment
Previous Year Question Paper with Solution
B.B.A. LL.B. (Five Years) · Sem 1
2013 Dec Examination
munotes.in
Mumbai
B.B.A. LL.B. (Five Years) Sem 1 Business Environment 2013 Dec Question Paper with Solutions
First published on munotes.in on 21 October 2026.
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The question paper reproduced here is the paper as set by Karnataka State Law University at the 2013 Dec examination.
Contents
The questions below are the paper as Karnataka State Law University set it at the 2013 Dec examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2013 Dec examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 100 · 20 questions answered
Instructions printed on the paper
- N.B. (1) Answer all 5 Questions. (2) One essay type and one short note question or problem from each unit have to be attempted, which is referred as part (a) and (b) in all the units. (3) Figures to the right indicate marks. (4) Answers should be written either in English or Kannada completely.
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1
Unit I
(a)Explain the classification of business.[15]
Answer
For full marks, cover: a short meaning of business; its classification on each main basis: by nature of activity (industry and commerce, with their branches), by sector of the economy (with official shares), by ownership, by form of organisation, by size (the current MSME limits), by area of operation, by formality, by motive, by the buyers served, by mode of selling, by legal status and by source of capital; why classification matters; a chart; an example of one business classified on every basis; and a conclusion.
Meaning
Business is any regular economic activity of producing, buying and selling goods and services for profit. Business activities are of many kinds, so they are classified on different bases. Each basis answers a different question: what the business does, who owns it, how it is organised, how large it is and where it operates.
1. By nature of activity
A. Industry covers activities that produce goods or change their form.
- Primary industry draws on nature.
- Extractive: mining, fishing, quarrying and forestry.
- Genetic: breeding plants and animals, as in nurseries, dairies, poultry and fish farms.
- Secondary industry works on materials.
- Manufacturing: analytical (oil refining), synthetic (cement), processing (sugar) and assembling (cars, computers).
- Construction: roads, buildings, bridges and dams.
B. Commerce covers activities that move goods from producers to consumers.
- Trade: internal trade (wholesale and retail) and external trade (import, export and entrepot).
- Aids to trade: transport, warehousing, banking, insurance, advertising and communication.
2. By sector of the economy
- Primary sector: agriculture, forestry, fishing, mining.
- Secondary sector: manufacturing, construction, electricity, gas and water supply.
- Tertiary (service) sector: trade, transport, finance, real estate, public administration and other services.
In 2025-26, at current prices, the tertiary sector formed about 54 per cent of India's gross value added. The secondary sector formed about 26 per cent and the primary sector about 20 per cent, according to the Ministry of Statistics.
3. By ownership
- Private sector: owned and run by individuals or private companies.
- Public sector: owned and run by the government. Its forms are departmental undertakings, statutory corporations and Government companies. In a Government company, governments hold at least 51 per cent of the paid-up capital (section 2(45) of the Companies Act, 2013).
- Joint sector: owned jointly by the government and private investors.
- Co-operative sector: owned by members who use its services.
The public sector's place has narrowed since 1991. The New Public Sector Enterprise Policy was approved in January 2021. Under it, the government is to keep only a bare minimum presence in four broad strategic sectors. Elsewhere, public enterprises are to be privatised where feasible.
4. By form of organisation
- Sole proprietorship: one owner, unlimited liability.
- Joint Hindu family business: run by the family under Hindu law, managed by the karta.
- Partnership: two or more partners under the Indian Partnership Act, 1932.
- Limited liability partnership: a body corporate under the Limited Liability Partnership Act, 2008.
- Joint stock company: private, public or One Person Company under the Companies Act, 2013.
- Co-operative society: under State co-operative laws or the Multi-State Co-operative Societies Act, 2002.
5. By size
From 1 April 2025, enterprises are classified by investment and turnover.
| Class | Investment up to | Turnover up to |
|---|---|---|
| Micro | Rs 2.5 crore | Rs 10 crore |
| Small | Rs 25 crore | Rs 100 crore |
| Medium | Rs 125 crore | Rs 500 crore |
Enterprises above these limits are large enterprises.
6. By area of operation
- Local: serving one town or locality, such as a neighbourhood shop.
- Regional: serving a State or region.
- National: serving the whole country.
- Multinational: operating in several countries.
7. By formality
- Organised (formal): registered, follows labour and tax laws, keeps regular accounts.
- Unorganised (informal): small, often unregistered units, such as street vendors and home workshops.
The line between the two is moving. Free online registration has brought many small units into the formal record: by August 2026, 9.16 crore MSMEs were registered on the Udyam portal.
8. By motive
- Profit-making businesses, which aim to earn a surplus for their owners.
- Not-for-profit enterprises, which run on business lines but use any surplus for their objects. A company formed for charity, education, science or similar objects under section 8 of the Companies Act, 2013 may not pay dividends to its members. Trusts and registered societies that run hospitals or schools are other examples.
9. By the buyers served
- Business to consumer (B2C): selling to households, such as a grocery store.
- Business to business (B2B): selling to other firms, such as a maker of machine parts.
- Business to government (B2G): supplying government departments, for example through public tenders.
10. By mode of selling
- Offline: physical shops, dealers and showrooms.
- Online: e-commerce platforms and the firm's own website or app. Online sellers in India must follow the Consumer Protection (E-Commerce) Rules, 2020.
- Omni-channel: both together, as many retailers now do.
11. By legal status
- Unincorporated: sole proprietorships, Hindu undivided family businesses and ordinary partnership firms. The business has no legal personality apart from its owners.
- Incorporated: companies, limited liability partnerships and co-operative societies. The business is a separate legal person, which can own property and be sued in its own name.
12. By source of capital
- Domestic businesses, owned by Indian residents.
- Foreign-owned or joint ventures, in which foreign investors hold shares. Most sectors in India allow up to 100 per cent foreign direct investment under the automatic route.
Why classification matters
- Policy: the government gives different support to different classes, for example credit and incentives to micro and small enterprises.
- Law: the form of organisation decides the law that applies and the liability of the owners.
- Statistics: national income is measured sector by sector.
- Planning: a firm that knows its class can compare itself with similar firms and plan its growth.
- Finance: banks and investors judge risk partly by the class of a business, such as its size, form and sector.
Chart of classification
| Basis | Classes |
|---|---|
| Nature of activity | Industry (primary, secondary); commerce (trade, aids to trade) |
| Sector | Primary, secondary, tertiary |
| Ownership | Private, public, joint, co-operative |
| Form | Sole proprietorship, HUF, partnership, LLP, company, co-operative |
| Size | Micro, small, medium, large |
| Area | Local, regional, national, multinational |
| Formality | Organised, unorganised |
| Motive | Profit-making, not-for-profit |
| Buyers served | B2C, B2B, B2G |
| Mode of selling | Offline, online, omni-channel |
| Basis | Classes |
|---|---|
| Legal status | Unincorporated, incorporated |
| Source of capital | Domestic, foreign-owned or joint venture |
Example
A dairy co-operative in Hassan collects milk from farmers and makes curd and ghee. By activity it is genetic and processing industry, and its selling is trade. By sector it spans the primary and secondary sectors. By ownership and form it is a co-operative society. By size it may be a small or medium enterprise. By area it is regional, and as a registered body it is organised. It is incorporated and domestic, and it sells both to households (B2C) and to hotels (B2B).
A second case: a young graduate in Mysuru sells handmade soaps on an online platform. The business is a sole proprietorship, micro, private, unincorporated, B2C and online. Its area is national, because buyers order from across India. Two businesses can thus sit in very different classes on each basis.
Conclusion. Business can be classified in many ways. By activity it divides into industry and commerce, and by sector into primary, secondary and tertiary. By ownership it is private, public, joint or co-operative, and by form a sole proprietorship, family business, partnership, LLP, company or co-operative. By size it is micro, small, medium or large; by area local to multinational; and by formality organised or unorganised. It may also be classed by motive, by the buyers it serves and by how it sells. Each basis helps in studying a different side of business and in making policy for it.
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