T.Y B.COM
SEMESTER - 6
BUSINESS LAW - II
MCQS - UNIT 3
COMPANY LAW
1. What are the limits of number of members in a Private Company ?
A. Fifty
B. Seven
C. Twenty
D. Two hundred
2. If XYZ is the holding company of P&R Ltd. then, which of the following statement is not true in this regard.
A. XYZ Ltd. controls the composition of Board of P&R
B. XYZ Ltd. holds more than 50% of the nominal value of the equity shares
C. Both (a) & (b)
D. None of the above
3. Which of the following is not a stage of the development of company?
A. Promotion
B. Incorporation
C. Commencement of Business
D. Production
4. Which of the following company / companies are registered by the Companies Act, 2013?
A. Government Company
B. Private Company
C. Public Company
D. All of the above
5. A public company must have at least _______ directors where as a private company must have at least ________ directors.
A. 3:2
B. 2:3
C. 2:5
D. 8
6. A subsidiary of a government company is also treated as a
A. Government Company
B. Public Company
C. Private Company
D. All of the above
7. The ______ of a government company is appointed or reappointed by the comptroller and auditor general of India.
A. Auditor
B. Company secretary
C. Both (a) and (b)
D. None of the above
8. Which of the following Company is incorporated in a country outside India?
A. Private Company
B. Foreign companies
C. Government Company
D. None of the above
9. Which of the following statement is false?
A. No legel formality is required to form a company.
B. The shareholders of a company have limited liability.
C. A company can own property in its own name.
D. A company is managed by the elected representatives of shareholders.
10. A is one who performs the preliminary duties necessary to bring a company into being and float it.
A. Auditor
B. Promoter
C. Director
D. Financer
11. The registered office clause of memorandum of association contains
A. The name of the state in which the registered office of the company is to be situated.
B. The name of the city/town only and not that of the state.
C. The name of registrar of companies
D. The complete postal address.
12. “One who undertakes to form a company with reference to a given object and set it going and who takes the necessary steps to accomplish that purpose.
A. Promoter
B. Directors
C. C.E.O.
D. Board of Directors
13. Which of the following are the functions of a promoter?
A. Decides name of a company
B. Nomination of directors
C. Settles the details of memorandum and articles
D. All of these
14. A is neither an agent, nor a trustee of a company.
A. Directors
B. Company Secretary
C. Employees
D. Promoters
15. Company is managed by
A. Shareholders
B. Board of Directors
C. Karta
D. Both (a) & (b)
16. H.U.F. consists of which type of members
A. Both (b) & (c)
B. Heterogeneous
C. Homogeneous
D. None of the above
17. Partnership is governed by Partnership Act
A. 1956
B. 1948
C. 1932
D. 1982
18. which is not a case of lifting of corporate veil
A. Connors Bros. v. Connors
B. Jones v. Lipren
C. Pearce v. Brookes
D. CIT v. Meenakshi Mills Ltd.
19. Word Corporation’ is ______ than company.
A. Narrow
B. Wider
C. (a) or (b)
D. All of the above
20. Which of the following statements is not true?
A. A company is an artificial person created by law.
B. A company can do every act like a natural person except the acts which are purely of personal nature.
C. A company can be held liable for violation of the statutory provisions of the Companies Act.
D. A company can be imprisoned for violation of such provision which attract penalty by way of imprisonment only.
21. Which of the following is not the characteristic of a public company?
A. It has a separate legal entity
B. It has a perpetual succession
C. It has a common seal and separate property
D. Its shares are nontransferable
22. A and B were the only members of a company who died in a road accident. In this case, the company comes to end on the death of A and B.
A. True
B. False
C. Partly True
D. Partly False
23. A company being a legal person is also a citizen under the constitution of India
A. True
B. False
C. Partly True
D. Partly False
24. A statutory company or corporation is one which is incorporated
A. By an act of parliament
B. By an act of state legislature
C. Under the companies act, 2013
D. By either (a) or (b)
25. In case if a company limited by guarantee, the liability of the members can be enforced
A. At any time when the company so decides
B. Only at the time of winding up of the company
C. Only by an order of court
D. Only by an order of registrar of companies
26. A government company is one in which 51% or more of the paid up share capital is held by
A. Central Government alone
B. State Government alone
C. Central & State Government jointly
D. Any of the above
27. At the time of registration the filling of articles of association with the registrar of companies is compulsory for
A. Private companies, unlimited companies and companies limited by guarantee
B. Unlimited companies only
C. Both
D. None
28. The object clause of memorandum of association must be divided into two sub clauses, namely (i) main objects clause and (ii) object in furtherance of main object clause.
A. True
B. False
C. Partly True
D. Partly False
29. Which of the following statements is correct?
A. In limited companies, the liability of members holding fully paid-up shares is nil.
B. In companies limited by guarantee, the liability of members is limited to the amount which they have agreed to pay.
C. Both (a) and (b) are correct.
D. None of these is correct.
30. For which of the following companies it is not obligatory to have Article of association?
A. Public Companies Limited by Shares
B. Public Companies Limited by Guarantee
C. Private Limited Companies
D. Unlimited Companies
31. Which of the following statements is correct?
A. The memorandum and articles are binding on the members in their relation to the company.
B. The memorandum and articles are binding on the company In their relation to the members
C. None of these is true
D. Both of these are true
32. Company's memorandum and articles are public documents.
A. True
B. False
C. Partly True
D. Partly false
33. In case 'memorandum and 'articles' are inconsistent, then which shall prevail over the others?
A. Articles of Association
B. Memorandum of Association
C. The one approved by registrar
D. None of the above
34. A public company having a share capital can start it's business on obtaining
A. Certificate of incorporation and approval of company law board.
B. Certificate to commence business and approval of company law board.
C. Certificate of incorporation
D. Approval of high court
35. Company has _______ succession.
A. Longer
B. Continued
C. Perpetual
D. Limited
36. If company do not follow the principal of separate legal entity _______ can be done.
A. Lifting of corporate veil
B. Principal of equity
C. Principal of natural justice
D. All of above
37. Total managerial remuneration in a public company cannot be ________ of net profit.
A. 10%
B. 11%
C. 18%
D. 11.5%
38. Audit of government Company is done by C & AG. This statement is:
A. True
B. False
C. Partly True
D. Partly False
39. Any corporate body / association of firm can be appointed as director of the company. This statement is:
A. True
B. False
C. Partly False
D. Partly True
40. Which one of the following is not a main clause of memorandum of association?
A. Name clause
B. Capital clause
C. Object clause
D. Profit clause
41. _________ is to be executed on a non-judicial stamp paper.
A. Share warrant
B. Power of attorney
C. Incorporation certificate
D. None of the above
42. The word company is derived from ________ word Com Panis”.
A. French
B. Latin
C. German
D. Indian
43. Which of the following are the characteristics of a company ?
A. Corporate Personality
B. Limited Liability
C. Perpetual Succession
D. All of the above
44. The company has a capacity to sue and be _________.
A. Incorporated
B. Sued
C. Both (a) and (b)
D. None of the above
45. A company may be an
A. Incorporated company
B. Unincorporated company
C. Both (a) and (b)
D. None oh the above
46. A word corporation is derived from Latin term “corpus” which means:-
A. Body
B. Legal Person
C. Artificial Person
D. None of the above
47. The liability of the member of the company is limited to the extent of the shares held by them.
A. Unpaid value
B. Paid value
C. Nominal value
D. All of the above
48. Which of the following statement is correct?
A. Partners are the agents of the firm but member of company are not its agents
B. Partner cannot contract with his firm but a member of a company can
C. Both (a) and (b)
D. None of these is correct
49. In public company, the members of the company is not less than.
A. Seven
B. Ten
C. Twenty
D. Two
50. In private Company, member of the company is not less than
A. Seven
B. Ten
C. Two
D. Eight
51. A company is a _______ on the other hand a club is a _________
A. Trading association, non-trading association.
B. Non trading association, trading association.
C. Trading association, trading association.
D. None of these.
52. Which of the following are not the advantages of incorporation?
A. Separate property
B. Unlimited liability
C. Capacity to sue
D. Flexibility & autonomy
53. Which of the following are not the disadvantage of incorporation?
A. Formalities and expenses
B. Corporate disclosure
C. Limited liability
D. Both (a) and (b)
54. Which of the following are kinds of companies?
A. Private companies
B. Producer companies
C. Both (a) and (b)
D. None of the above
55. Provisions related to accounts, winding up, calls on shares, forfeiture, etc. are contained in
A. Articles of Association
B. Memorandum of Association
C. Prospectus
D. Statement in lieu of prospectus
56. Government company comes under section
A. 2 (44)
B. 2 (43)
C. 2 (45)
D. 2 (46)
57. Foreign Company must issue prospectus.
A. True
B. False
C. Partly true
D. Partly False
58. Company's memorandum & articles are public documents
A. True
B. False
C. Partly True
D. Partly False
59. For incorporation or registration
A. MOA must be subscribed
B. AOA must be subscribed
C. Only MOA
D. Both (a) & (b)
60. MOA contains of company
A. Regulations
B. Declaration
C. Constitutions
D. None of these
61. MOA has clauses
A. 9
B. 7
C. 6
D. 10
62. AOA is also called as of the company
A. Regulations
B. Bye Laws
C. Provisions
D. Both (a) or (b)
63.Tables I includes articles of
A. Unlimited company having share capital
B Company limited by guarantee
C. Company limited by shares
D. Public company
64. Which amongst the following documents is not required to be filed by a foreign company with the registrar?
A. Address of the registered office of the company
B. Address of the principles place of business in India
C. Declaration of Solvency
D. Articles of Association
65. Lifting of corporate veil is permitted
A. By statue
B. Voluntary
C. Any time
D. None of these
66. Which one of the following is NOT an essential feature of a company?
A. Perpetual Succession
B. Unlimited Liability
C. Separate Property
D. Transferability of shares
67. Which one of the following statement is not true regarding a company?
A. The shares of a company can be transferred
B. lt is very simple and easy to form a company
C. It is a separate legal entity
D. It has independence to form its policies
68. Which one of the following is NOT a disadvantage of a company?
A. lt does not have a capacity to sue
B. It has more social responsibility
C. Greater tax burden
D. More disclosures
69. Which of the following statement is NOT true regarding a private company?
A. It cannot invite public to subscribe to shares or debentures
B. Restricts the right to transfer its share
C. At least five members are required to form a company
D. lt should have at least two directors
70. Government Company is defined under which section of the Companies Act, 2013?
A. Sec. 2(45)
B. Sec. 2(44)
C. Sec. 2(43)
D. None of the above
71.Private Company need not issue prospectus
A. True
B. Partly true
C. False
D. None of these
72. Prospectus is required to be issued when rights issue is made
A. True
B. Partly true
C. False
D. None of these
73. Prospectus is not required to be issued when sweat equity shares are issued to directors and employees.
A. True
B. Partly true
C. False
D. None of these
74. Prospectus is required to be issued when issue is for Employees under Employee stock option scheme.
A. True
B. Partly true
C. False
D. None of these
75. 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
76. Definition of prospectus was given under which sec.
A. 2(36)
B. 2 (30)
C. 2 (32)
D. 2 (34)
77. Which of the following are not required to issue prospectus ?
A. Private company
B. In case of right issue
C. Sweat equity issue
D. All the above
78. ________ are the prospectus issued instead of full prospectus.
A. Abridged
B. Statement in lieu
C. Shelf
D. Red herring
79. Which one of the following has a right to claim compensation for any loss due to mis statement in prospectus.
A. Purchasing shares in Primary Market
B. Secondary Market
C. Subscribers to memo
D. All the above
80. ______ years of imprisonment will be imposed in case of issue of prospectus with untrue statements.
A. 2
B. 3
C. 1
D. 4
81. _______ includes an engineer, valuation, accountant.
A. Expert
B. Promoter
C. Auditor
D. Director
82. What is the liability of an expert for misstatement ________.
A. Fine - 50,000
B. Imprisonment -2 years
C. Both a) & b)
D. None of the above
83. What is the liability not delivering that can be imposed for statement in lieu of prospectus
A. Fine - 10,000
B. Imprisonment - 2 years
C. Both (a) & (b)
D. None of the above
84. _______ are the prospectus issued by the issuing house.
A. Deemed prospectus
B. Shelf prospectus issued by the issuing house
C. Red herring
D. None of the above
85. _______ Prospectus were issued in case securities were issued in stages
A. Deemed
B. Red hearing
C. Shelf
D. None of the above
86. ________are required to file prior to making second and subsequent issue of securities in case e shelf prospectus are filed:
A. Information memorandum
B. Information articles
C. Form 13
D. None of the above
87. Information memorandum + shelf prospectus together constitutes ________.
A. Memorandum
B. Articles
C. Prospectus
D. None of the above
88. Not less than _______ Days notice for a general meeting of a company must be given.
A. 10
B. 15
C. 21
D. 30
89. The minimum number of members that must be present at a valid meeting is called ________
A. Simple majority
B. Quorum
C. Proxy
D. None of these
90. A proxy can vote in case of _________
A. Poll
B. Meeting
C. Both
D. None
91. A Special resolution is one to pass with the votes cast in favour must be _______ times the votes cast against it.
A. 2
B. 3
C. 4
D. 6
92. A Special resolution must be field with the registrar for registration within ________ days.
A. 10
B. 15
C. 21
D. 30
93. To make the liability of directors unlimited a ________ resolution is required.
A. Ordinary
B. Special
C. Both
D. None
94. For declaration of dividend no _________ resolution is required.
A. Ordinary
B. Special
C. Both
D. None
95. A company can be wound up.
A. Voluntarily by members
B. By the order of the Tribunal
C. By Voluntary winding up by creditors
D. By all the above methods
96. A person liable to contribute towards the assets of the company on the event of its being wound up is a ___________
A. Liquidator
B. Solicitor
C. Contributory
D. Tribunal
97. On a winding up order being made in respect of a company, the official liquidator shall, become the _______ of the company.
A. Liquidator
B. Solicitor
C. Contributory
D. Tribunal
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