Set VII of our CSE332 Industry Ethics and Legal Issues MCQs covers the entrepreneurship part of the course: who an entrepreneur is, how a new venture grows, and what goes into a business plan.
It also covers the main forms of business organisation in India, break-even analysis with a worked example, and the usual sources of finance for a startup, from bootstrapping and angel investors to venture capital and bank loans.
How to use this set: pick an option for each question. You will see straight away whether it is right, with a short note on why. There are 15 questions.
What this set covers
- Entrepreneur vs intrapreneur
- Stages of a new venture and the MVP
- Sections of a business plan
- Sole proprietorship, partnership, LLP and company
- Break-even analysis
- Sources of finance: equity, debt, angel and venture capital
Industry Ethics and Legal Issues MCQs with answers and explanations
Q1. An intrapreneur is best described as:
a) A person who lends money to businesses
b) A government officer who regulates startups
c) A person who starts a business with their own money
d) An employee who develops new ideas or products inside an existing organisation
Q2. Which feature most clearly separates an entrepreneur from a salaried manager?
a) Having a degree
b) Bearing the risk of the venture in return for possible profit
c) Using computers
d) Working in an office
Q3. A startup releases a simple version of its app with only the core feature to test whether people actually want it. This version is called a:
a) Feasibility report
b) Patent prototype
c) Final release
d) Minimum viable product
Q4. In which order does a typical new venture move through its life?
a) Launch, idea, maturity, growth
b) Maturity, launch, idea, growth
c) Growth, idea, launch, maturity
d) Idea and validation, launch, growth, maturity
Q5. Which section of a business plan appears first but is usually written last?
a) Executive summary
b) Appendix
c) Financial plan
d) Marketing plan
Q6. The part of a business plan that studies customers, competitors and market size is the:
a) Operations plan
b) Organisation chart
c) Market analysis
d) Appendix
Q7. A SWOT analysis looks at a business's:
a) Shares, Warrants, Options, Treasury
b) Strengths, Weaknesses, Opportunities, Threats
c) Suppliers, Workers, Owners, Tenants
d) Sales, Wages, Orders, Taxes
Q8. In a sole proprietorship, the owner's liability is:
a) Zero
b) Limited to the capital invested
c) Unlimited, so personal assets can be used to pay business debts
d) Shared with the government
Q9. Which law governs ordinary partnership firms in India?
a) LLP Act, 2008
b) Companies Act, 2013
c) Indian Contract Act, 1872 only
d) Indian Partnership Act, 1932
Q10. A Limited Liability Partnership (LLP) differs from an ordinary partnership because:
a) It cannot do business
b) It has no partners
c) It must have at least 7 partners
d) It is a separate legal entity and partners' liability is generally limited
Q11. A business has fixed costs of ₹50,000 a month, sells each unit for ₹100 and has a variable cost of ₹60 per unit. Its break-even point is:
a) 833 units
b) 1,250 units
c) 500 units
d) 5,000 units
Q12. At the break-even point, a business makes:
a) Maximum profit
b) A profit equal to variable costs
c) Neither profit nor loss
d) A loss equal to fixed costs
Q13. An individual who invests their own money in a very early-stage startup, often in return for equity, is called:
a) An auditor
b) An angel investor
c) A banker
d) A debenture holder
Q14. Venture capital is best described as:
a) A short-term bank loan with fixed interest
b) Money borrowed from friends
c) Equity finance from professional funds for high-growth startups, in return for a share of ownership
d) A government grant that never needs to be repaid
Q15. Compared with equity finance, the main feature of debt finance is that:
a) It must be repaid with interest, but the owner does not give up ownership
b) The lender becomes a part owner
c) It never has to be repaid
d) It is available only to listed companies
Quick revision notes
- Entrepreneur: starts a venture and bears its risk. Intrapreneur: innovates inside an existing company.
- Venture stages: idea and validation, launch, growth, maturity. MVP tests demand with minimum effort.
- Business plan: executive summary (written last), business description, market analysis, marketing plan, operations, management team, financial plan.
- Sole proprietor and ordinary partners have unlimited liability. LLP (2008 Act) and companies are separate legal entities with limited liability.
- Break-even units = fixed cost / (price − variable cost). Equity = ownership, no repayment. Debt = repayment with interest, no dilution.
Frequently asked questions
What is the difference between an angel investor and a venture capitalist?
An angel invests their own personal money, usually at a very early stage and in smaller amounts. A venture capital firm invests money pooled from many investors, usually at a later stage, in larger amounts and with more formal terms.
Why is the executive summary written last?
Because it summarises the whole plan. You can only write a clear one-page summary once you know the market, the strategy and the numbers.
Which business form is best for a student startup?
It depends on the plan. A sole proprietorship is the simplest to start, an LLP suits a few co-founders who want limited liability, and a private limited company is usually preferred if you plan to raise money from investors.
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Frequently asked questions
What does CSE332 Industry Ethics and Legal Issues cover?
It covers professional and business ethics, codes of conduct, intellectual property rights (patents, copyright, trademarks), cyber law in India including the IT Act 2000, and ethical issues such as privacy, data security and plagiarism in the IT industry.
How should I use these MCQ sets?
Attempt every question before checking the answer, note the ones you get wrong, and revise those topics from your course notes. Then move to the next set in the series.
Are these questions from the actual exam?
No. They are practice questions written to match the course syllabus. Use them alongside your class material and previous papers.
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