Daily Current Affairs for CA Foundation — 26 May 2026

Exam-ready economy and business knowledge for CA Foundation Paper 4. Today we revise the forms of business organisation — a foundational Business & Commercial Knowledge topic. Each item ends with a practice MCQ.

---

1. Forms of Business Organisation

The main forms of business organisation in India are:

• Sole Proprietorship — owned and run by one person; unlimited liability.
• Partnership — governed by the Indian Partnership Act, 1932; partners share profits and have unlimited liability.
• Limited Liability Partnership (LLP) — governed by the LLP Act, 2008; combines partnership flexibility with limited liability.
• Company — a separate legal entity governed by the Companies Act, 2013; shareholders have limited liability.

MCQ: Q1. A Limited Liability Partnership (LLP) in India is governed by:

• (a) The Indian Partnership Act, 1932
• (b) The LLP Act, 2008
• (c) The Companies Act, 2013
• (d) The Sale of Goods Act, 1930

Answer: (b) The LLP Act, 2008

---

2. Why "Separate Legal Entity" Matters

A company is a separate legal person distinct from its members — it can own property, sue and be sued in its own name, and enjoys perpetual succession (it continues to exist regardless of changes in membership). This is a key advantage over a sole proprietorship or a traditional partnership.

MCQ: Q2. "Perpetual succession" means that a company:

• (a) Pays tax forever
• (b) Continues to exist despite changes in its members
• (c) Cannot be wound up
• (d) Must distribute all profits

Answer: (b) Continues to exist despite changes in its members

---

One-Liner Revision Section

1. Sole proprietorship / partnership: unlimited liability.
2. Partnership: Indian Partnership Act, 1932; LLP: LLP Act, 2008.
3. Company: Companies Act, 2013 — separate legal entity, limited liability, perpetual succession.

---

Part of CA Saarthi's daily current affairs for CA Foundation. Practice 3,000+ chapter-wise MCQs free at casaarthi.in.