Company Law mcq with answer

Company Law mcq with answer

Q1. —- is codified in the Companies Act, 1956.
Answer: Company law

Q2. Companies formed and registered under the —-.
Answer: Companies Act, 1956

Q3. Companies registered but not formed under any previous company laws to the extent and in the manner declared in —-.
Answer: Part IX

Q4. Companies Act, 1956 is not applicable to —-
Answer: Partnership firms which are governed by the Indian Partnership Act, 1932.

Q5. The Central Government is the supreme authority responsible for the administration of —-.
Answer: Company law

Q6. What is the correct sequence of the following assignments?
(i) Internal control
(ii) Test check
(iii) Internal check
(iv) Statutory audit
Select the correct answer using the codes given below:
(a) (i), (ii), (iii), (iv)
(b) (iii), (i), (iv), (ii)
(c) (iii), (i), (ii), (iv)
(d) (iv), (iii), (ii), (i)
Answer: (c) (iii), (i), (ii), (iv)

Q7. Which of the following conditions must be satisfied in a claim for loss by fire?
(i) There must be actual fire.
(ii) Fire must be accidental.
(iii) Cause of fire must be ascertainable.
(iv) The goods must have been destroyed, not damaged by fire.
Select the correct answer using the codes given below:
(a) (i) and (ii)
(b) (i) and (iii)
(c) (ii) and (iii)
(d) (iii) and (iv)
Answer: (a) (i) and (ii)

Q8. The provisions of the Act relating to the formation of a company are discussed in parts —- of the act.
(i) II to IV
(ii) III to IV
(iii) Parts I to II
(iv) Parts IV to V
Answer: (i)Parts II to IV

Q9. Property of the company belongs to —-
(i) Company
(ii) Shareholders
(iii) Members
(iv) Promoters
Answer: (i) Company

Q10. In the case of company, audit is —-
(i) Compulsory
(ii) Optional
(iii) Situational
(iv) None of the above
Answer: (ii) Optional

Q11. The companies which are formed under special Act are called as —-.
(i) Chartered Companies
(ii) Statutory Companies
(iii) Registered Companies
(iv) None of these
Answer: (ii) Statutory Companies

Q12. SEBI is a regulatory body to regulate the functioning of stock exchanges.
(a) True
(b) False
Answer: (a) True

Q13. Courts have been replaced by Company Law Board under the Companies Act, 1956.
(a) True
(b) False
Answer: (b) False

Q14. The administration of the Companies Act, 1956 is vested in the Company Law Board.
(a) True
(b) False
Answer: (a) True

Q15. Any person aggrieved by the decision or order of the Company Law Board may file an appeal in the Supreme Court.
(a) True
(b) False
Answer: (b) False

Q16. No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Company Law Board is empowered to determine.
(a) True
(b) False
Answer: (a) True

Q17. An existing company formed and registered under any of the previous company laws —-.
Answer: (s.3)

Q18. The persons who contribute to it, or to whom it belongs, are —-.
Answer: members

Q19. Members may come and members may go, the company continues until it is —-
Answer: dissolved

Q20. —- gives the effect of registration of a company by identifying the features it acquires as a consequence thereof.
Answer: Section 34(2).

Q21. Consider the following statements:
A statutory auditor of a public limited company claims that he has the following legal rights in relation to his duties:
(i) Right to refuse to make a report
(ii) Right of access to books of accounts and registers
(iii) Right to seek explanation from directors and officers
(iv) Right to make statement in the general meeting
(a) (i), (ii) and (iii) are correct
(b) (i), (ii) and (iv) are correct
(c) (i), (iii) and (iv) are correct
(d) (ii), (iii) and (iv) are correct
Answer: (d) (ii), (iii) and (iv) are correct

Q22. Match List-I with List-II and select the correct answer using the codes given below in the lists:
List-I(Company Issue)—-List-II(Company Document)
A. Affirmation of compliance with the registration formalities—-1. Certificate of incorporation
B. Classes of shares into which shake capital is divided—-2. Statutory declaration
C. Rules for forfeiture of shares—-3. Memorandum of Association
D. Name and address of the company auditor—-4. Articles of association
5. Prospectus
(a) A—–1
B—–4
B—–3
D—–5
(b) A—–5
B—–4
B—–3
D—–1
(c) A—–2
B—–3
B—–4
D—–5
(d) A—–4
B—–1
B—–5
D—–2
Answer: (c) A—–4
B—–5
B—–1
D—–3

Q23. The term ‘company’ is defined under which section of the Act?
(a) Sec 3 (1)
(b) Sec 4 (2)
(c) Sec 2 (4)
(d) Sec 1 (3)
Answer: (a) Sec 3 (1)

Q24. Which company shares can be freely transferable
(a) Private Company
(b) Public Company
(c) Both a and b
(d) None of the above
Answer: (a) Private Company

Q25. The liability of members if company is limited by guarantee.
(a) Unpaid value of shares
(b) Guarantee amount
(c) Unlimited liability
(d) None of the above
Answer: (b) Guarantee amount

Q26. The liability of members if company is limited by shares
(a) Unpaid value of shares
(b) Guarantee amount
(c) Unlimited liability
(d) None of the above
Answer: (a) Unpaid value of shares

Q27. The corporate veil can be lifted where the main object of forming a company is tax evasion.
(a) True
(b) False
Answer: (a) True

Q28. The corporate veil can be lifted where it has been formed by the promoters to avoid their contractual obligation.
(a) True
(b) False
Answer: (a) True

Q29. An illegal association means a company formed to pursue illegal objects.
(a) True
(b) False
Answer: (b) False

Q30. The corporate veil can be lifted where the company is formed against public policy.
(a) True
(b) False
Answer: (a) True

Q31. A holding company and its subsidiary company are not separate legal entities.
(a) True
(b) False
Answer: (b) False

Q32. If a company is incorporated by a charter granted by the monarch, it is called a —-.
Answer: Chartered Company

Q33. The State Bank of India and the Industrial Finance Corporation of India are two examples of —- companies.
Answer: Statutory

Q34. A company limited by guarantee is known as —-
Answer: Guarantee Company

Q35. A pure ‘guarantee company’ does not have a —-
Answer: Share Capital

Q36. Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I—-List-II
A. Duties of auditors—-1. Access to Books of company
B. Rights of auditors—-2. Penalty for non-compliance with sections 227 to 229
C. Liabilities of auditors—-3. Company in general meeting
D. Removal of auditors—-4. To make a report
(a) A—–4
B—–1
B—–2
D—–3
(b) A—–2
B—–3
B—–1
D—–4
(c) A—–1
B—–4
B—–3
D—–2
(d) A—–3
B—–2
B—–4
D—–1
Answer: (a) A—–4
B—–1
B—–2
D—–3

Q37. Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I—-List-II
A. A pure ‘guarantee company’—-1. A company limited by shares
B. Share company—-2. A company limited by guarantee
C. Hybrid companies—-3. Company limited by share or guarantee
D. Wrong statement—-4. Company limited by share and guarantee
(a) A—–4
B—–1
B—–2
D—–3
(b) A—–2
B—–1
B—–4
D—–3
(c) A—–1
B—–4
B—–3
D—–2
(d) A—–3
B—–2
B—–4
D—–1
Answer: (b) A—–2
B—–1
B—–4
D—–3

Q38. Minimum number of members in case of public company is
(a) 1
(b) 2
(c) 5
(d) 7
Answer: (d) 7

Q39. Minimum number of members in case of private company is
(a) 1
(b) 2
(c) 3
(d) 4
Answer: (b) 2

Q40. Maximum number of members in case of private company is
(a) 50
(b) 100
(c) 150
(d) 200
Answer: (a) 50

Q41. Maximum number of members in case of public company is
(a) 0
(b) Unlimited
(c) 50
(d) 100
Answer: (b) Unlimited

Q42. A subsidiary company does not control the composition of the board of directors of its holding company.
(a) True
(b) False
Answer: (a) True

Q43. A subsidiary company does not hold any shares in its holding company.
(a) True
(b) False
Answer: (a) True

Q44. A one-mean company is one in which a single person holds virtually all shares of the company.
(a) True
(b) False
Answer: (b) False

Q45. An association of persons may be incorporated having its objects of promoting commerce, arts, science, religion or charity.
(a) True
(b) False
Answer: (a) True

Q46. A partnership firm can be a member of s.25 company.
(a) True
(b) False
Answer: (a) True

Q47. —- is a term of wide import denoting the preliminary steps taken for the purpose of registration and floatation of the company.
Answer: Promotion

Q48. Promoters have been described to be in —- with the company. Notes
Answer: fiduciary relationship

Q49. A —- is not forbidden to make profit but to make secret profit.
Answer: promoter

Q50. Promoter is liable to the original —- of shares for the mis-statements contained in the prospectus.
Answer: allottee

Q51. The companies which are formed under special charter granted by the king or queen of England are called.
(a) Statutory companies
(b) Registered companies
(c) Chartered companies
(d) None of these
Answer: (c) Chartered companies

Q52. The companies which are formed under special Act. Those companies are called as
(a) Chartered companies
(b) Statutory companies
(c) Registered companies
(d) None of these
Answer: (b) Statutory companies

Q53. The companies which are formed under companies Act. 1956. They will be called as
(a) Chartered companies
(b) Statutory companies
(c) Registered companies
(d) None of these
Answer: (c) Registered companies

Q54. If the guarantee Co. is having no share capital, the liability of shareholders will be
(a) To the extent of guarantee
(b) Unpaid value of shares
(c) Unlimited
(d) None of the above
Answer: (a) To the extent of guarantee

Q55. A promoter stands in a fiduciary relationship with the company he promotes.
(a) True
(b) False
Answer: (a) True

Q56. The validity of a certificate of incorporation cannot be disputed on any grounds whatsoever.
(a) True
(b) False
Answer: (a) True

Q57. After the grant of certificate of incorporation, if all the subscribers to the memorandum die, the certificate of incorporation automatically gets cancelled.
(a) True
(b) False
Answer: (b) False

Q58. Unlike a private company, a public company cannot commence business immediately after incorporation.
(a) True
(b) False
Answer: (a) True

Q59. A certificate of incorporation is conclusive evidence that all the requirements of the Companies Act, as regards registration have been complied with.
(a) True
(b) False
Answer: (a) True

Q60. The memorandum serves a —- purpose.
Answer: two-fold

Q61. —- requires that the memorandum of a company shall be in such one of the Forms in Tables B, C, D and E in Schedule I to the Act.
Answer: Section 14

Q62. As in the case of publication of the company’s name, —- also makes similar provisions regarding publication of the Registered Office of the company.
Answer: s.147

Q63. —- states the nature of liability of the members.
Answer: Liability clause

Q64. In the case of an —-, liability clause need not be given in the memorandum.
Answer: unlimited company

Q65. Match List-I with List-II and select the correct answer using the codes given below in the lists:
List-I (Company Issue)—-List-II (Company Documents)
A. Affirmation of compliance with the registration formalities—-1. Certificate of incorporation
B. Classes of shares into which shake capital is divided—-2. Statutory declaration
C. Rules for forfeiture of shares—-3. Memorandum of Association
D. Name and address of the company auditor—-4. Articles of association
5. Prospectus
(a) A—–1
B—–4
B—–3
D—–5
(b) A—–5
B—–4
B—–3
D—–1
(c) A—–2
B—–3
B—–4
D—–5
(d) A—–4
B—–1
B—–5
D—–2
Answer: (c) A—–2
B—–3
B—–4
D—–5

Q66. Which of the following statements are correct?
(i) Minutes are not required to be read at a sub general meeting.
(ii) Confirmation of Minutes is not an item of agenda in general meeting.
(iii) The chairman may disallow any matter which in his opinion is detrimental to the interests of the company from being included in the minutes.
(iv) Members cannot obtain copies of minutes through they can inspect them during business hours.
Select the correct answer using the codes given below:
(a) (ii) and (iii)
(b) (i), (ii) and (iii)
(c) (i), (iii) and (iv)
(d) (ii) and (iv)
Answer: (b) (i), (ii) and (iii)

Q67. Which of the following need not have MOA
(a) Public company
(b) Private company
(c) Government company
(d) Statutory Corporation
Answer: (d) Statutory Corporation

Q68. A company can change its name by passing
(a) Ordinary resolution
(b) Special resolution
(c) Either by special resolution or by ordinary resolution
(d) None of the above
Answer: (c) Either by special resolution or by ordinary resolution

Q69. Ultra vires means
(a) Beyond the power
(b) with in the power
(c) Both
(d) None of the above
Answer: (a) Beyond the power

Q70. Ultra vires loans granted by the company are
(a) Void
(b) Voidable
(c) Valid
(d) None of the above
Answer: (a) Void

Q71. The doctrine of ultra vires is an illusory protection to the shareholders and a pitfall to the outsiders.
(a) True
(b) False
Answer: (a) True

Q72. An ultra vires act, even if endorsed by all the members of the company, is void.
(a) True
(b) False
Answer: (a) True

Q73. A company cannot alter the conditions contained in its memorandum except in cases, in the mode and to the extent for which express provision is made in the Act.
(a) True
(b) False
Answer: (a) True

Q74. The intention of the legislature is to prevent too easy an alteration of the conditions contained in MOA.
(a) True
(b) False
Answer: (a) True

Q75. A company can shift its registered office to another state by passing an ordinary resolution and with the permission of CLB.
(a) True
(b) False
Answer: (b) False

Q76. The articles of association of a company limited by shares may adopt all or any of the regulations contained in Table A in —-.
Answer: Schedule I

Q77. The —- of a company have a contractual force between company and its members as also between the members inter se in relation to their rights as such members.
Answer: Articles of Association

Q78. Articles cannot supersede the objects as set out in the —-
Answer: Memorandum of Association

Q79. —- states that a public company limited by shares may register articles of association signed by the subscribers to the memorandum.
Answer: Section 26

Q80. Signature of memorandum and articles should be done by how many number of persons in case of public company.
(a) 7
(b) 5
(c) 4
(d) None of the above
Answer: (a) 7

Q81. Signature of memorandum and articles should be done by how many number of persons in case of private company.
(a) 3
(b) 4
(c) 2
(d) None of the above
Answer: (c) 2

Q82. Address of the registered office is situated in
(a) MOA
(b) AOA
(c) Prospectus
(d) None of these
Answer: (b) AOA

Q83. Alteration of articles must be done only by passing
(a) Special resolution
(b) Ordinary resolution
(c) Both
(d) None of the above
Answer: (a) Special resolution

Q84. Every member is bound to the company by whatever is contained in the memorandum and articles.
(a) True
(b) False
Answer: (a) True

Q85. The members of a company can restrain a company from spending money on ultra vires transactions.
(a) True
(b) False
Answer: (a) True

Q86. The company is not bound to the individual members as to their non-corporate or individual rights.
(a) True
(b) False
Answer: (b) False

Q87. The members of a company are bound to each other in relation to their rights as such members.
(a) True
(b) False
Answer: (a) True

Q88. The memorandum or articles do not confer any contractual rights to an outsider against the company, even though his name is mentioned in the articles.
(a) True
(b) False
Answer: (a) True

Q89. A prospectus, as per —-, means any document described or issued as prospectus and includes any notice, circular, advertisement.
Answer: s.2 (36)

Q90. The process involves —- to an Issue House who, in turn, will issue advertisement offering shares for sale.
Answer: allotment of shares

Q91. In case a document is deemed as prospectus, then it must contain the following information in addition to the information required to be stated in prospectus —-.
Answer: under s.56

Q92. The word —- includes any section of the public (s.67).
Answer: ‘public’

Q93. —- are required to file prior to making second and subsequent issue of securities in case shelf prospectus are filed:
(a) Information memorandum
(b) Information articles
(c) Form 13
(d) None of the above
Answer: (a) Information memorandum

Q94. Information memorandum + shelf prospectus together constitutes —-
(a) Memorandum
(b) Articles
(c) Prospectus
(d) None of the above
Answer: (c) Prospectus

Q95. Validity period of information memorandum is —-
(a) 1 year
(b) 2 years
(c) 3 years
(d) 4 years
Answer: (a) 1 year

Q96. —- prospectus were issued in order to test the market before finalizing issue size/ price.
(a) Deemed
(b) Shelf
(c) Red herring
(d) None of the above
Answer: (c) Red herring

Q97. If there is any variation in case of R.H.P —- days should be given for withdrawal of application
(a) 1
(b) 3
(c) 5
(d) 7
Answer: (d) 7

Q98. In case of redherring prospectus, the refund is made with an interest @ ________
(a) 12
(b) 13
(c) 15
(d) 1
Answer: (c) 15

Q99. When there is a untrue statement in a prospectus who can sue
(a) Subscribed in primary market
(b) Subscribed in secondary market
(c) Rights issue
(d) None of the above
Answer: (a) Subscribed in primary market

Q100. Definition of prospectus was given under which sec. Notes
(a) 2 (30)
(b) 2 (32)
(c) 2 (34)
(d) 2 (36)
Answer: (d) 2 (36)

Q101. Which of the following are not required to issue prospectus?
(a) Private company
(b) Incase of right issue
(c) Sweat equity issue
(d) All the above
Answer: (d) All the above

Q102. Which one of the following has a right to claim compensation for any loss due to misstatement in prospectus
(a) Purchasing shares in Primary Market
(b) Secondary Market
(c) Subscribers to memo.
(d) All the above
Answer: (a) Purchasing shares in Primary Market

Q103. A person can avoid the contract to purchase shares in the company even if he has purchased shares in the open market and has not gone through the prospectus containing untrue statements.
(a) True
(b) False
Answer: (b) False

Q104. An allottee of shares can retain the shares and can sue the company for damages in case he finds that the prospectus contained untrue statements.
(a) True
(b) False
Answer: (b) False

Q105. A director can avoid liability for misstatements in the prospectus if he proves that he has reasonable ground to believe that the statement alleged to be untrue is true.
(a) True
(b) False
Answer: (b) False

Q106. An expert is not criminally liable in respect of misstatements in the prospectus.
(a) True
(b) False
Answer: (a) True

Q107. Where a prospectus contains untrue statements, the persons who authorized its issue are punishable with fine up to 5,000.
(a) True
(b) False
Answer: (b) False

Q108. A —-may also become a member of a company through the depository system.
Answer: person

Q109. A person can agree to take shares of a company either as the —- at the initial stage of its formation.
Answer: subscriber

Q110. In the case of a company limited by shares, the persons whose names are put on the register of members, are —-
Answer: the members of the company

Q111. Sometimes a distinction is maintained between a member and a —- in the case of a company having a share capital.
Answer: shareholder

Q112. Which of the given below members are not shareholders
(a) Minors
(b) Insolvent
(c) Share warrant holders
(d) All of the above
Answer: (d) All of the above

Q113. Which of the following is a right of the members of a company
(a) Right to have share
(b) Right to Appoint Auditor
(c) Right to Appoint Director
(d) All of the above
Answer: (d) All of the above

Q114. Which of the following is not a member of a company?
(a) Partnership firm
(b) Foreigner
(c) Government
(d) HUF
Answer: (a) Partnership firm

Q115. For quorum, the Joint holders will be collectively counted as how many members.
(a) 1
(b) 2
(c) 3
(d) 4
Answer: (a) 1

Q116. It is not mandatory for a company to maintain a register of members.
(a) True
(b) False
Answer: (b) False

Q117. A register of members remain open for inspection by its members for at least two hours every day except when the register is closed.
(a) True
(b) False
Answer: (a) True

Q118. A company cannot close its register of members for more than 45 days in a year.
(a) True
(b) False
Answer: (a) True

Q119. At any one time, the company cannot close its register of members for more than 30 days.
(a) True
(b) False
Answer: (a) True

Q120. A company cannot transfer shares during the period when the register of members is closed.
(a) True
(b) False
Answer: (a) True

Q121. Share is define in section —-
Answer: 2(46)

Q122. Section 83 requires that each share in a company having a share capital must be distinguished by its —-
Answer: distinctive number

Q123. A common man uses ‘share’ and ‘share certificate’ to mean the —-
Answer: same

Q124. The share capital of a company is divided into a number of indivisible units of specified amount. Each of such unit is called a —-
Answer: ‘share’

Q125. The term —- may be defined as the aggregate of fully paid-up shares of a member merged into one fund of equal value.
Answer: ‘stock’

Q126. Consider the following functions of a stock exchange:
(i) Providing a ready market for securities
(ii) Helping capital formation
(iii) Regulating the capital structure of a company
(iv) Regulating the public deposits with companies
Of the above functions:
(a) (i), (ii), (iii) and (iv) are correct
(b) (i), (ii), and (iii) are correct
(c) (i) and (ii) are correct
(d) none is correct
Answer: (c) (i) and (ii) are correct

Q127. Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I—-List-II
A. Minimum issued capital for being listed on a stock exchange—-1. One crore
B. Exemption from the consent of controller of capital issues for issue of shares—-2. Three crores
C. Amount payable on shares to be called only in installments and not in one stroke—-3. Issued capital of less than 3 crores
D. Listing in OTC exchange—-4. Issued capital of 50 crores and above
(a) A—–2
B—–1
B—–4
D—–3
(b) A—–1
B—–3
B—–4
D—–2
(c) A—–2
B—–1
B—–3
D—–4
(d) A—–4
B—–3
B—–1
D—–2
Answer: (a) A—–2
B—–1
B—–4
D—–3

Q128. A company must inform the registrar about redemption of preference shares within
(a) 21 days
(b) 15 days
(c) 30 days
(d) None of the above
Answer: (c) 30 days

Q129. The capital which is part of the uncalled capital of the company which can be called up only in the event of its winding up is called
(a) Issued capital
(b) Nominal capital
(c) Authorised Capital
(d) Reserve capital
Answer: (d) Reserve capital

Q130. XYZ Co. is a holding of XZ Pvt. Company. XZ Co. issued deferred shares. The issue is valid or void
(a) Valid
(b) Void
(c) Situation does not arise
(d) None of the above
Answer: (b) Void

Q131. What is the maximum period for redemption in case of preference shares issued by the company
(a) 10 years
(b) 15 years
(c) 20 years
(d) None of these
Answer: (c) 20 years

Q132. A company can issue shares at a discount within six months of the date on which it became entitled to commence business.
(a) True
(b) False
Answer: (b) False

Q133. Share premium amount can be treated as free reserves.
(a) True
(b) False
Answer: (b) False

Q134. Share premium amount can be utilised for issuing fully paid bonus shares to members.
(a) True
(b) False
Answer: (a) True

Q135. The maximum rate of discount on shares must not exceed 10 percent or such higher rate as the central government may permit in any special case.
(a) True
(b) False
Answer: (a) True

Q136. The Companies Act 1956, does not prescribe the maximum rate of premium on shares.
(a) True
(b) False
Answer: (a) True

Q137. —- defines a Director as including “any person occupying the position of director, by whatever name called.”
Answer: Section 2 (13)

Q138. A —- need not necessarily be an individual.
Answer: deemed director

Q139. A ‘deemed director’ is called as ‘shadow director’ under —-
Answer: English Law

Q140. The directors act as agents of the company and the ordinary rules of —- apply.
Answer: agency

Q141. In partnership firm, the directors are also sometimes described as —-
Answer: managing partners

Q142. The agenda of the first Board Meeting of a limited company generally consists of the following items:
(i) Election of chairman
(ii) Approval of draft prospectus
(iii) Appointment of officers, viz., The secretary, the manager and the accountant
(iv) Incorporation of the company and the legal advisor to report on the same
The correct order in which the above items of the agenda usually appear is:
(a) (i), (ii), (iii), (iv)
(b) (iv), (iii), (ii), (i)
(c) (iii), (iv), (i), (ii)
(d) (iv), (i), (iii), (ii)
Answer: (d) (iv), (i), (iii), (ii)

Q143. Which one the following statements relating to a company secretary are not correct?
(a) He is not likely to perform duties towards shareholders
(b) He is the mouthpiece of the Board of directors
(c) He may be considered to be the head of the administrative section of a company
(d) He is to arrange for Board meetings.
Answer: (a) He is not likely to perform duties towards shareholders

Q144. Minimum no. of Directors in case of a public company is
(a) 1
(b) 2
(c) 3
(d) 4
Answer: (c) 3

Q145. Minimum no. of Directors in case of private company is
(a) 1
(b) 2
(c) 3
(d) 4
Answer: (b) 2

Q146. Age limit of Directors in case of public company is
(a) 65
(b) 70
(c) 60
(d) 55
Answer: (a) 65

Q147. Age limit of Directors in case of private company is
(a) 65
(b) 70
(c) 75
(d) No limit
Answer: (d) No limit

Q148. The board of directors can make political contribution by passing a resolution at its meeting only.
(a) True
(b) False
Answer: (a) True

Q149. The board of directors can fill a casual vacancy in the office of a director by passing a resolution by circulation.
(a) True
(b) False
Answer: (b) False

Q150. The board of directors can appoint an additional director by passing a resolution either at a meeting or by circulation.
(a) True
(b) False
Answer: (a) True

Q151. The board of directors can enter into a joint venture agreement by passing a resolution either at a meeting or by circulation.
(a) True
(b) False
Answer: (a) True

Q152. The board of directors can invest in another body corporate by passing a resolution at its meeting.
(a) True
(b) False
Answer: (a) True

Q153. Corporate governance includes the relationships among the many players involved and the —-.
Answer: corporate goals

Q154. —- is used to monitor whether outcomes are in accordance with plans; and to motivate the organization to be more fully informed in order to maintain or alter organizational activity.
Answer: Corporate governance

Q155. A McKinsey study found that —- are even prepared to pay large premiums for investments in firms with high governance standards.
Answer: professional investors

Q156. —- are different in every enterprise.
Answer: Desirable behaviors

Q157. Society is dependent upon corporations for the supply of goods and services but they cannot ignore the social consequences of their overall activities.
(a) True
(b) False
Answer: (a) True

Q158. Business corporations can be regarded as a purely profit making organization.
(a) True
(b) False
Answer: (b) False

Q159. Social consciousness and duty to the society must become an integral part of the norm of manager’s responsibilities.
(a) True
(b) False
Answer: (a) True

Q160. The Indian government is committed to remove poverty and bring about a socialist society in which private interest will be subordinated to the national considerations.
(a) True
(b) False
Answer: (a) True

Q161. The financial institutions and banks are not contributing a great part of the financial needs of the corporate sector
(a) True
(b) False
Answer: (b) False

Q162. —- is required to be held only by a public company having a share capital.
Answer: statutory meeting

Q163. In statutory meeting the Board of directors should also get a report, called the —-
Answer: statutory report

Q164. The statutory report is required to be certified as correct by at least two directors, one of whom shall be the managing director, and other —-
Answer: the auditors of the company

Q165. —- meeting must be held in each calendar year and not more than fifteen months shall elapse between two meetings.
Answer: AGM

Q166. Which of the following are included in the ‘Statutory Books’ for the purpose of company audit?
(i) Register of charges
(ii) Minutes Books for the Board meetings
(iii) Articles of Association
(iv) Minutes Book for the shareholder’s meeting
(v) Register of members
(vi) Memorandum of Association
Select the correct answer using the codes given below:
(a) (i), (ii), (iv) and (v)
(b) (ii), (iii), (iv) and (vi)
(c) (i), (iii), (v) and (vi)
(d) (ii), (iii), (v) and (vi)
Answer: (b) (ii), (iii), (iv) and (vi)

Q167. Consider the following statements: A statutory auditor of a public limited company claims that he has the following legal rights in relation to his duties:
(i) Right to refuse to make a report
(ii) Right of access to books of accounts and registers
(iii) Right to seek explanation from directors and officers
(iv) Right to make statement in the general meeting.
Of the above statements:
(a) (i), (ii) and (iii) are correct
(b) (i), (ii) and (iv) are correct
(c) (i), (iii) and (iv) are correct
(d) (ii), (iii) and (iv) are correc
Answer: (d) (ii), (iii) and (iv) are correc

Q168. Can a Company hold an AGM on public holiday?
(a) Yes
(b) No
(c) (a) and (b) both are correct
(d) None
Answer: (b) No

Q169. Audit of a public company will be counted for the limit of audits
(a) Yes
(b) No
Answer: (a) Yes

Q170. Statutory meeting must be held in case of a public company
(a) Yes
(b) No
Answer: (a) Yes

Q171. Statutory meeting must be held in case of a private company
(a) Yes
(b) No
Answer: (b) No

Q172. Every Public Limited Company having a share capital must hold a statutory meeting.
(a) True
(b) False
Answer: (a) True

Q173. A company required to hold a statutory meeting must hold the meeting within one month of obtaining the certificate to commence business.
(a) True
(b) False
Answer: (b) False

Q174. The first AGM of a company must be held within 18 months of the date of incorporation.
(a) True
(b) False
Answer: (a) True

Q175. If a company fails to call or hold an AGM within the prescribed time, the central government may direct the calling and holding of the meeting on a petition of any member.
(a) True
(b) False
Answer: (a) True

Q176. The statutory report is required to be certified as correct by at least two directors, one of whom shall be the managing director, if any.
(a) True
(b) False
Answer: (a) True

Q177. —- includes any property or right in which money is put.
Answer: Investment

Q178. All investments made by a company on its own behalf shall be made and held by it in its —-
Answer: own name

Q179. A company may deposit, or transfer to, or hold in the name of, the State Bank of India or a Scheduled Bank, being the bankers of the company, —-, in order to facilitate the transfer thereof.
Answer: shares or securities

Q180. Securities include —- and debentures.
Answer: stock

Q181. Debenture which are repayable only on the happening of an event of winding up is called
(a) Redeemable
(b) Irredeemable
(c) Perpetual
(d) Both (b) and (c)
Answer: (d) Both (b) and (c)

Q182. For the purpose of debt equity ratio Fully Convertible Debentures are classified as
(a) Debt
(b) Equity
(c) Both (a) and (b)
(d) None of the above
Answer: (b) Equity

Q183. In case of Partly Convertible Debentures nonconvertible portion is classified as
(a) Debt
(b) Equity
(c) Both (a) and (b)
(d) None of the above
Answer: (a) Debt

Q184. Amount due on redemption including interest should be claimed with in how much time.
(a) 10 year
(b) 9 year
(c) 8 year
(d) 7 year
Answer: (d) 7 year

Q185. A resolution passed by the shareholders empowering the directors to borrow beyond the aggregate of paid-up capital and free reserves is void.
(a) True
(b) False
Answer: (a) True

Q186. An entry has to be made in the register of investments within seven days of making the inter-corporate investment.
(a) True
(b) False
Answer: (a) True

Q187. A public company has paid up capital and free reserves of 250 crores and 50 crores respectively. For making the inter-corporate investment, it must pass a special resolution and obtain approval of the central government.
(a) True
(b) False
Answer: (a) True

Q188. Investments made by a company on its own behalf must be held by it in its own name.
(a) True
(b) False
Answer: (a) True

Q189. An investment company need not hold its investments in its own name.
(a) True
(b) False
Answer: (a) True

Q190. —- of a company is the process whereby its life is ended and its property administered for the benefit of its creditors and members.
Answer: Winding up

Q191. The statutory process by which this is achieved is called —-
Answer: ‘liquidation’

Q192. If a company does not commence business —- from incorporation or suspends business for a whole year, it may be ordered to be wound up.
Answer: within a year

Q193. The Court may order a company to be wound up if it is unable to pay its —-
Answer: debts

Q194. —- or salary which is due by the company to an employee is not a debt.
Answer: Wages

Q195. Match list-I and list-II.
List-I—-List-II
A.Special resolution—-1. If a company does not commence business within a year from incorporation or suspends business for a whole year, it may be ordered to be wound up
B. Default in holding statutory meeting—-2. The company may, by special resolution, resolve that it be wound up by the court.
C. Failure to commence business—-3. If default is made in delivering the statutory report to the Registrar or in holding the statutory meeting, the company may be ordered to be wound up.
D. Reduction in membership—-4. If the number of members is reduced below the statutory minimum of 7 in a public company or 2 in a private company, the company may be ordered to be wound up.
(a) A—–2
B—–4
B—–3
D—–1
(b) A—–2
B—–3
B—–1
D—–4
(c) A—–3
B—–4
B—–1
D—–2
(d) A—–4
B—–1
B—–3
D—–2
Answer: (b) A—–2
B—–3
B—–1
D—–4

Q196. Match list-I and list-II.
List-I—-List-II
A.The powers of the provisional liquidator are the same as those of a liquidator unless limited by the court—-1. s 443(2)
B. In all matters relating to the winding up of a company, the court may have regard to the wishes of creditors or contributories of the company as proved to it by any sufficient evidence and for the purpose may direct that their meetings may be held or conducted as directed by the Court—-2. (s.444).
C. Where the petition is presented on the ground that, it is just and equitable that the company should be wound up, the court may refuse to make an order of winding up if it is of the opinion that, some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy—-3. (s.450)
D. The court must, as soon as the winding up order is made, cause intimation thereof to be sent to the official liquidator and the Registrar—-4. (s. 557)
(a) A—–2
B—–4
B—–3
D—–1
(b) A—–2
B—–3
B—–1
D—–4
(c) A—–3
B—–4
B—–1
D—–2
(d) A—–4
B—–1
B—–3
D—–2
Answer: (c) A—–3
B—–4
B—–1
D—–2

Q197. Under which sec. if company fails to commence its main object the court may order winding up
(a) 403 (f)
(b) 413 (f)
(c) 423 (f)
(d) 433 (f)
Answer: (d) 433 (f)

Q198. Deposit holder can file winding up petition under which sec.
(a) 433 (a)
(b) 433 (c)
(c) 433 (e)
(d) 433 (f)
Answer: (c) 433 (e)

Q199. The capital which is part of the uncalled capital of the company which can be called up only in the event of its winding up it is called
(a) Issued capital
(b) Nominal capital
(c) Authorised Capital
(d) Reserve capital
Answer: (d) Reserve capital

Q200. Commencement of winding up of a company does not affect the nature of
(a) A fixed charge
(b) A floating charge
(c) Both a and b
(d) None of the above
Answer: (c) Both a and b

Q201. In the case of compulsory winding up, the official liquidator, by virtue of his office, becomes the liquidator of the company.
(a) True
(b) False
Answer: (a) True

Q202. The terms ‘liquidation’ and ‘dissolution’ can be used interchangeably.
(a) True
(b) False
Answer: (b) False

Q203. An unregistered company can be wound up either voluntarily or by court.
(a) True
(b) False
Answer: (b) False

Q204. Any transfer of property, movable or immovable, or any delivery of goods made by a company within a period of one year before the commencement of its winding up is void as against the liquidator.
(a) True
(b) False
Answer: (a) True

Q205. The liquidator has an absolute power to disclaim onerous property of a company
(a) True
(b) False
Answer: (b) False

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