Business Law Online MCQ Set 11

QN01. An agreement to do an illegal act(eg: sharing the earnings of smuggling business) is

1. Valid
2. Void
3. Voidable
4. Contingent

Answer

(B)Void

QN02. LA, B and C jointly promised to pay Rs.60000 to D. A was compelled by D to pay the entire amount of Rs.60000. Here

1. A can file a suit against D for recovery of the amount exceeding his share
2. A is entitled to recover Rs.20000 each from B and C
3. On payment by A, the contract is discharged and B and C are also not liable to A.
4. D is not justified here and is liable to refund the entire amount to A

Answer

(B)A is entitled to recover Rs.20000 each from B and C

QN03. Can a person who is usually of unsound, but occasionally of sound mind, make a contract?

1. Yes, he can always make a contract
2. Yes, but only when he is sound mind
3. No, he cannot make contract
4. Can't be determined

Answer

(B)Yes, but only when he is sound mind

QN04. Which is the following is false? An acceptance:

1. Must be communicated
2. Must be absolute and unconditional
3. Must accepted by a person having authority to accept
4. May be presumed from silence of offeree

Answer

(D)May be presumed from silence of offeree

QN05. Which is the following is false? Consideration:

1. Must move at the desire of the promisor
2. May move from any person
3. Must be illusory
4. Must be some value

Answer

(C)Must be illusory

QN06. Consideration may be

1. Past
2. Present
3. Future
4. All of the above

Answer

(D)All of the above

QN07. Consent is not said to be free when it is caused by

1. Coercion
2. Undue influence
3. Fraud
4. All of these

Answer

(D)All of these

QN08. In case of illegal agreements, the collateral agreements are;

1. Void
2. Valid
3. Voidable
4. Any of these

Answer

(B)Valid

QN09. A contract is discharged by novation which means the;

1. Cancellation of the existing contract
2. Change in one or more terms of the contract
3. Substitution of existing contract for a new one
4. None of these

Answer

(C)Substitution of existing contract for a new one

QN10. Sometimes, a party is entitled to claim compensation in proportion to the work done by him. It is possible by a suit for;

1. Damages
2. Injunction
3. Quantum merit
4. None of these

Answer

(C)Quantum merit

QN11. Which of the following statement is true?

1. An agreement enforceable by law is a contract
2. An agreement is an accepted proposal
3. Both (a) and (b)
4. None of these

Answer

(C)Both (a) and (b)

QN12. As a general rule, an agreement made without consideration is;

1. Void
2. Voidable
3. Valid
4. Unlawful

Answer

(A)Void

QN13. Which of the following persons do not fall under the category of persons of unsound mind?

1. Idiot
2. Lunatics
3. Drunken
4. Alien

Answer

(D)Alien

QN14. A contract made by mistake about some foreign law, is;

1. Void
2. Valid
3. Voidable
4. Illegal

Answer

(A)Void

QN15. An agreement, which prevents a person from carrying lawful business is

1. Valid
2. Void
3. Voidable
4. Contingent

Answer

(B)Void

QN16. A contingent contract dependent on the non happening of a future uncertain event becomes void when such event

1. Happens
2. Does not become impossible
3. Does not happen
4. Both (a) and (b)

Answer

(D)Both (a) and (b)

QN17. A party entitled to rescind contract, losses the remedy where

1. He has ratified the contract
2. Third party has acquired right in good faith
3. Contract is not separable and recession is sought of a party only
4. All of these

Answer

(D)All of these

QN18. When offer is made to a definite person, it is known as

1. General offer
2. Cross offer
3. Counter offer
4. Special offer

Answer

(D)Special offer

QN19. ______________ is a voluntary association of persons formed to carry on some business for profit or to promote art, science, education or some charitable purpose.

1. Incorporation
2. Private company
3. Company
4. Public company

Answer

(C)Company

QN20. Accounts of a company must be audited by an ______________

1. Chartered Accountant
2. Auditor
3. Board of Directors
4. All of these.

Answer

(B)Auditor

QN21. A public company has been defined in sec ______________

1. 3(1)(iv)
2. 3(1)(i)
3. 3(1)(iii)
4. 3(1)(ii)

Answer

(A)3(1)(iv)

QN22. The shorter versions of a prospectus is also known as ______________

1. Deemed prospectus
2. Incomplete prospectus
3. Abridged prospectus
4. Red Herring Prospectus

Answer

(C)Abridged prospectus

QN23. The articles of Association and the memorandum of Association are drafted by ______________

1. Auditor
2. Director
3. Secretary
4. Register

Answer

(C)Secretary

QN24. The board of directors delegate the power to ______________

1. Issue debentures
2. Issue of shares
3. Invest the fund
4. Make loans

Answer

(D)Make loans

QN25. Holding company is defined in section ______________ of the companies Act.

1. 4(4)
2. 2(2)
3. 3(4)
4. 3(1)

Answer

(A)4(4)

QN26. The other name of indoor management is called ______________

1. Golden rule
2. Constructive notice
3. Indoor rule
4. Tarquand rule

Answer

(D)Tarquand rule

QN27. The statement in lieu of prospectus is drafted in accordance with the particulars set in part I of the ______________ the Act

1. Schedule I
2. Schedule IV
3. Schedule III
4. Schedule II

Answer

(D)Schedule II

QN28. The right given to a particular class of shareholders are called the ______________

1. Special rights
2. General rights
3. Class right
4. None of the above

Answer

(D)None of the above

QN29. The auditor of government company is appointed by the ______________ of India

1. High court
2. Supreme court
3. State legislative
4. Controller and Auditor General.

Answer

(D)Controller and Auditor General.

QN30. If the company’s Act go beyond the provisions of the Memorandum, its act will be ______________

1. Constructive notice
2. Circular
3. Ultra virus
4. None of the above

Answer

(C)Ultra virus

QN31. Every share holder of a company is also known as ______________

1. Member
2. Partner
3. Director
4. All of the above

Answer

(A)Member

QN32. Articles of association adopt the rules and regulations contained in ______________ of schedule I of the companies Act

1. Table C
2. Table D
3. Table A
4. Table B

Answer

(C)Table A

QN33. A ______________ may be defined as a person having aontrol over the affairs, conduct and management of a company.

1. Share holders
2. Director
3. Body Corporate
4. Member

Answer

(B)Director

QN34. The managing directors hold the ______________ shares of the company.

1. Deemed
2. Equity
3. Qualification
4. Preference

Answer

(C)Qualification

QN35. A meeting of Board of Directors shall be held at least ______________

1. One month
2. Once in every 3 months and at least 4 such meetings shall be held every year.
3. Two month
4. 4 months and at least 3 such meetings must be held in every year.

Answer

(B)Once in every 3 months and at least 4 such meetings shall be held every year.

QN36. When a director voluntarily remains absent from the three consecutive meetings of the Board of Directors, and

1. He become liable to be punished with @Rs.500 for every default
2. He is disqualified for becoming a director of any company
3. His office falls vacant
4. None of the above

Answer

(C)His office falls vacant

QN37. The first annual general meeting of the company must be held within ______________

1. 6 months of incorporation
2. 6 months from the date at which the company’s entitled to start its business
3. 18 months from the date at which the company is entitled to start its business
4. 18 months of incorporation.

Answer

(D)18 months of incorporation.

QN38. The chairman of the company has ______________ vote

1. 1
2. 3
3. 2
4. None of these.

Answer

(C)2

QN39. ______________ is the resolution which is passed, at valid called general meeting, by special majority of the meeting.

1. Ordinary resolution
2. Special resolution
3. Resolution by postal ballot
4. Resolution requiring special notice.

Answer

(B)Special resolution

QN40. ______________ is a person who has ultimate control over the affairs of factory

1. Young person
2. Adult
3. Occupier
4. Adolescent

Answer

(C)Occupier