CBSE Class 11 Business Studies

1. Nature and Purpose of Business

History of trade and commerce in India · Business, profession and employment · Business activities

• History of Trade and Commerce in India – For more than two thousand years India was a busy trading land. Merchants moved money with paper notes called hundis, worked through agents, used roads, rivers and ships, joined strong guilds, and sold cotton cloth and spices to the world. For centuries India made a big share of all the world's goods.
• Business, Profession and Employment – Human activities are economic (done to earn money) or non-economic (done out of love, duty or faith). Economic activities come in three forms: business (earn profit by making or selling goods and services), profession (earn a fee for expert service) and employment (earn a salary by working for someone). Business has many objectives, and profit is needed to survive and grow.
• Classification of Business Activities – Business activities are of two kinds. Industry produces or processes goods. Commerce brings those goods to the people who need them. Commerce has two parts: trade (buying and selling) and auxiliaries to trade (banking, insurance, transport, warehousing, communication and advertising), which remove hindrances. Every business faces risk, the chance of loss.

2. Forms of Business Organisations

Sole proprietorship, partnership and HUF · Cooperative societies · Company

• Sole Proprietorship, Partnership and Hindu Undivided Family Business – A sole proprietorship is owned and run by one person who takes all profit and bears unlimited liability. A partnership is run by two or more people who share profit under an agreement; its partners are of many kinds and a written deed and registration protect them. A Hindu Undivided Family business is run by the eldest member, the karta, for all family members, who become members by birth.
• Cooperative Societies – A cooperative society is a voluntary group of people, usually of small means, who join together to protect their common interest. It must be registered, members have limited liability, each member has one vote, and the main aim is service, not profit. There are six main kinds: consumer, producer, marketing, farmers, credit and housing.
• Joint Stock Company: Types, Formation and Choosing a Form – A company is an artificial person created by law. It is separate from its owners (shareholders), who have limited liability, and it never dies when members change. It can be private, public or a one person company. It is born through promotion, incorporation, capital subscription and commencement of business, using key documents like the Memorandum and Articles of Association. The right form of business depends on cost, liability, continuity, capital, control and the nature of business.

3. Public, Private and Global Enterprises

Public and private sector enterprises · Global enterprises, joint ventures, PPP

• Public and Private Sector Enterprises – India has a mixed economy. The private sector is owned by individuals and companies; the public sector is owned by the government. Public enterprises take three forms: departmental undertakings (run like a government department), statutory corporations (created by a special Act) and government companies (at least 51% of paid-up capital held by government). As we go from the first to the last, freedom to act rises while direct control by the ministry falls.
• Global Enterprises, Joint Ventures and Public Private Partnership – Global enterprises (multinational companies) are huge firms with a head office in one country and units in many others, controlled centrally. A joint venture is a new business formed when two or more firms pool resources for a common goal and share control, profit and risk. A public private partnership (PPP) is a deal where government and a private firm share the work, money and risk of a public project, like a toll road.

4. Business Services

Banking · Insurance · Postal and courier services

• Banking: Deposits, Loans and E-banking – A bank accepts deposits from savers and lends money to borrowers. It offers five main deposit accounts (savings, current, recurring, fixed and multiple option), moves money safely through bank drafts, lends through overdraft and cash credit, and now serves customers online through e-banking and digital payments such as UPI, NEFT, RTGS and IMPS.
• Insurance: Principles and Types – Insurance spreads the loss of a few over many people who each pay a small premium into a common pool. It works on six principles: utmost good faith, insurable interest, indemnity, contribution, subrogation and causa proxima (plus mitigation of loss). The main types are life, health, fire and marine insurance.
• Postal and Courier Services – Businesses need to send letters, papers and goods. India Post offers mail (letters, postcards, inland letters), registered post (with receipt and proof), parcel post (goods by weight) and Speed Post (fast and tracked). Private courier firms give door-to-door, tracked delivery at a higher price.

5. Emerging Modes of Business

E-business

• E-business: Meaning, Scope and Benefits – E-business means doing all business activities (buying, selling, production, finance, HR, supply) through computer networks and the internet. E-commerce, online buying and selling, is only one part of it. Its scope covers B2B, B2C, C2C and intra-B links. It is cheaper to start, open 24 × 7, fast and global, but it lacks the personal touch and has security risks.

6. Social Responsibility of Business and Business Ethics

Social responsibility · Business ethics

• Social Responsibility of Business – Social responsibility means a business should make decisions that are good for society, not only for its own profit, and go beyond what the law demands. There are strong reasons for it, such as long-term self-interest and public image. A business has duties towards owners, investors, consumers, employees, government and the community, and it must protect the environment from pollution.
• Business Ethics: Concept and Elements – Business ethics are the moral rules of right and wrong that guide how a business behaves. They ask for more than the law: honesty, fairness and care for people. A firm builds ethics through five elements: top management commitment, a published code of conduct, a compliance mechanism, involving employees at all levels, and measuring results.

7. Sources of Business Finance

Sources of business finance

• Sources of Business Finance – Every business needs money for long-term assets (fixed capital) and daily running (working capital). This money comes from two big pools: owners' funds (equity shares, preference shares, retained earnings) that need not be paid back, and borrowed funds (debentures, bonds, bank and institution loans, public deposits, trade credit, inter-corporate deposits) that must be repaid with interest.

8. Small Business and Enterprises

Entrepreneurship development · Small business and MSMEs

• Entrepreneurship Development – Entrepreneurship is starting a new business by spotting a need, putting resources together and taking the risk. India needs entrepreneurs for jobs, new ideas and balanced growth. The process runs from knowing yourself to launching and growing. Start-up India (2016) supports new firms, funding comes from savings, angels, venture capital, banks and crowdfunding, and intellectual property rights protect new ideas, brands and creative work.
• Small Business and MSMEs – Small businesses are units run with little money, a few workers and close owner control. The MSMED Act, 2006 sorts them into micro, small and medium enterprises by investment (and, since 2020, turnover). They give huge employment, a big share of output and exports, and keep rural people working near home. They face money, technology and marketing problems, so the government helps through schemes, NSIC at the national level and DIC in every district.

9. Internal Trade

Internal trade

• Internal Trade – Internal trade is buying and selling within one country. Goods flow from producers to wholesalers (bulk buyers who resell) to retailers (who sell small amounts to final users). Both give useful services up and down the chain. Retailers may be small (itinerant traders and small fixed shops) or large (department stores, chain stores, mail order houses). GST is one tax on goods and services, split into CGST and SGST inside a state and IGST between states.

10. International Trade

International trade

• International Trade – International trade is buying and selling goods and services across the boundaries of countries. Selling abroad is export; buying from abroad is import. It helps nations (foreign exchange, growth, jobs) and firms (profit, new markets). Exports and imports follow fixed steps and need many documents, such as the letter of credit and bill of lading. The WTO (1995) makes trade rules and works to cut trade barriers.

11. Project Work

Project (one)

Coming soon