McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce (B Com) .
| 1. |
A company is called an artificial person because |
| A. | it does not have the shape of a normal man. |
| B. | it cannot be sued in the court of law. |
| C. | it is invisible and intangible. |
| D. | it exists only in contemplation of law. |
| Answer» D. it exists only in contemplation of law. | |
| 2. |
The ‘common seal’ of the company should have |
| A. | the company’s name. |
| B. | the words ‘corporate seal’. |
| C. | the place of the company. |
| D. | all the above. |
| Answer» D. all the above. | |
| 3. |
Power to use official seal of the company outside India is to be authorized by. |
| A. | article of association. |
| B. | memorandum of association |
| C. | both memorandum and article of association. |
| D. | central government. |
| Answer» A. article of association. | |
| 4. |
A company comes into legal existence as a person on. |
| A. | approval by company law tribunal to commence business. |
| B. | approval by central government as being a bonafide company. |
| C. | acceptance of legal documents by the registrar for its incorporation. |
| D. | issue of certificate of incorporation by the registrar of companies. |
| Answer» D. issue of certificate of incorporation by the registrar of companies. | |
| 5. |
The word ‘Limited’ can be dropped from a company’s name only when. |
| A. | the company is formed for promotion of commerce, art, science, religion, charity or any other useful object. |
| B. | the company prohibits the payment of dividends. |
| C. | both (a) and (b). |
| D. | the central government deems it fit. |
| Answer» C. both (a) and (b). | |
| 6. |
A public company can be called as a body corporate after it. |
| A. | receives certificate of commencement of business. |
| B. | issues prospectus. |
| C. | receives certificate of incorporation. |
| D. | receives approval from the registrar for the proposed name of the |
| Answer» C. receives certificate of incorporation. | |
| 7. |
A registered company is the company which is incorporated. |
| A. | under the companies act, 1956. |
| B. | by a special notification of the central government. |
| C. | under the indian registration act. |
| D. | by a special act of parliament or state. |
| Answer» A. under the companies act, 1956. | |
| 8. |
The minimum number of members required to form a ‘public Company’ is. |
| A. | 2. |
| B. | 7 |
| C. | 10 |
| D. | 50 |
| Answer» B. 7 | |
| 9. |
The minimum and maximum number of members in a private company are. |
| A. | 7 and 50. |
| B. | 2 and 50. |
| C. | 3 and 100. |
| D. | 2 and unlimited. |
| Answer» B. 2 and 50. | |
| 10. |
Converting a public company into a private company requires a special resolution. |
| A. | passed by the members and with sanction of the central government. |
| B. | passed by the members and approved by the registrar of companies. |
| C. | passed by the members and approved by the company law tribunal. |
| D. | passed by the members and approved by the auditors. |
| Answer» A. passed by the members and with sanction of the central government. | |
| 11. |
In which of the following conditions, a company will be reckoned a foreign company? |
| A. | if the company is established outside india and has a place- of business in india. |
| B. | a company incorporated outside india having shareholders who are all indian citizens and having its business outside india. |
| C. | a company incorporated in india but having all foreign shareholders. |
| D. | both (a) and (b). |
| Answer» A. if the company is established outside india and has a place- of business in india. | |
| 12. |
Legal position of a promoter of a company is. |
| A. | that of an agent. |
| B. | that of a trustee. |
| C. | that of a solicitor. |
| D. | in a fiduciary capacity. |
| Answer» D. in a fiduciary capacity. | |
| 13. |
A company is said to have been registered when? |
| A. | it files memorandum of association and articles of association. |
| B. | it gets incorporation certificate with the registrar of companies. |
| C. | it gets certificate for commencement of business. |
| D. | it actually starts its business. |
| Answer» B. it gets incorporation certificate with the registrar of companies. | |
| 14. |
A private Limited company commences business. |
| A. | at any time. |
| B. | after obtaining the certificate of incorporation. |
| C. | after obtaining the certificate to commence business. |
| D. | none of the above. |
| Answer» B. after obtaining the certificate of incorporation. | |
| 15. |
Certificate of commencement of business is not required by. |
| A. | a public company. |
| B. | a private company. |
| C. | both public and private companies. |
| D. | private company subsidiary to a public company. |
| Answer» B. a private company. | |
| 16. |
The companies (Amendment) Act , 2000 provides new section 292 A for constitution of audit committees by every public company having a paid- up capital of. |
| A. | rs.10 lakh or more. |
| B. | rs. 50 lakh or more. |
| C. | rs.1 crore or more. |
| D. | rs.50 million or more. |
| Answer» D. rs.50 million or more. | |
| 17. |
An Audit Committee may include. |
| A. | auditors. |
| B. | company secretary. |
| C. | non- executive directors. |
| D. | all. |
| Answer» D. all. | |
| 18. |
Which of the following reports included clause 49 in the listing agreement. |
| A. | sabhanayagam report. |
| B. | kumaramangalam birla report. |
| C. | narasimham report. |
| D. | l.c. gupta report. |
| Answer» B. kumaramangalam birla report. | |
| 19. |
Audit committee shall act in accordance with the terms of reference to be specified by. |
| A. | statutory auditors. |
| B. | sebi. |
| C. | board of directors. |
| D. | central government. |
| Answer» C. board of directors. | |
| 20. |
The Statutory Auditors of the company are appointed by. |
| A. | share holders in annual general meeting. |
| B. | board of directors. |
| C. | company law boa |
| Answer» A. share holders in annual general meeting. | |
| 21. |
Remuneration Committee is made up of. |
| A. | independent directors. |
| B. | executive directors. |
| C. | auditors. |
| D. | investors. |
| Answer» A. independent directors. | |
| 22. |
Executive Directors are those directors who. |
| A. | are men from outside the board. |
| B. | occupy management position. |
| C. | are independent directors. |
| D. | elect the board committee. |
| Answer» B. occupy management position. | |
| 23. |
The company agrees that the remuneration of non- executive directors shall be decided by. |
| A. | board of directors. |
| B. | company. |
| C. | share holders. |
| D. | central government. |
| Answer» A. board of directors. | |
| 24. |
An Article constitutes a contract between. |
| A. | the company and its members. |
| B. | the members and outsiders. |
| C. | the company and the outsider. |
| D. | all the above. |
| Answer» A. the company and its members. | |
| 25. |
Name of a company can be changed by. |
| A. | an ordinary resolution. |
| B. | a special resolution. |
| C. | an approval of the central government. |
| D. | a special resolution and with approval of the central government. |
| Answer» D. a special resolution and with approval of the central government. | |
| 26. |
Change of registered office of a company from one place to another in the same city requires. |
| A. | board resolution. |
| B. | special resolution. |
| C. | ordinary resolution. |
| D. | special resolution with central government approval. |
| Answer» A. board resolution. | |
| 27. |
Article of Association can be altered by. |
| A. | a resolution of board of directors. |
| B. | an ordinary resolution in annual general meeting by the shareholders. |
| C. | a special resolution. |
| D. | obtaining permission of the company law tribunal. |
| Answer» C. a special resolution. | |
| 28. |
A change in the registered office of the company from one state to another can be effected by. |
| A. | a resolution of the board of directors. |
| B. | a resolution passed in the general meeting of the company. |
| C. | a special resolution of the company and approval of the central government. |
| D. | a special resolution and confirmation of the company law tribunal. |
| Answer» D. a special resolution and confirmation of the company law tribunal. | |
| 29. |
The charter of a company is its. |
| A. | prospectus. |
| B. | memorandum of association. |
| C. | certificate of incorporation. |
| D. | articles of association. |
| Answer» B. memorandum of association. | |
| 30. |
A document which lays down the fundamental conditions upon which the company is allowed to form is called. |
| A. | memorandum of association. |
| B. | article of association. |
| C. | prospects. |
| D. | certificate of incorporation. |
| Answer» A. memorandum of association. | |
| 31. |
The alteration of the Memorandum has to be certified by the Registrar. |
| A. | within 45 days. |
| B. | within 15 days. |
| C. | at his own time provided the company satisfies his queries in this respect. |
| D. | within 30 days. |
| Answer» D. within 30 days. | |
| 32. |
Memorandum of Association does not include. |
| A. | subscription clause. |
| B. | capital clause. |
| C. | liability clause. |
| D. | assets clause. |
| Answer» D. assets clause. | |
| 33. |
‘Shelf prospectus’ means a prospectus issued by. |
| A. | any trading company. |
| B. | any industrial company. |
| C. | any financial institution or banks. |
| D. | any existing company whose shares are listed on a recognized stock exchange. |
| Answer» C. any financial institution or banks. | |
| 34. |
The ‘Golden Rule’ for framing of a prospectus was laid down in the case of. |
| A. | royal british bank. |
| B. | rex vs kylsant. |
| C. | new brunswick & canada rly. & land co. vs muggeridge. |
| D. | derry vs peek. |
| Answer» C. new brunswick & canada rly. & land co. vs muggeridge. | |
| 35. |
The document which invites the public for subscribing capital in the form of shares and debenture is called. |
| A. | memorandum of association. |
| B. | article of association. |
| C. | prospectus. |
| D. | legal announcement. |
| Answer» C. prospectus. | |
| 36. |
Which of the documents is not filed to the registrar at the time of incorporation? |
| A. | memorandum. |
| B. | article of association. |
| C. | consent of the director. |
| D. | prospectus. |
| Answer» D. prospectus. | |
| 37. |
A prospectus may contain a statement purporting to be made by an expert. The term “expert” includes. |
| A. | an engineer. |
| B. | a valuer. |
| C. | an accountant and any other person whose profession gives authority to a statement made by him. |
| D. | all the above. |
| Answer» D. all the above. | |
| 38. |
The most important clause in the Memorandum of Association of a company is. |
| A. | name clause. |
| B. | registered office clause. |
| C. | objects clause. |
| D. | liability clause. |
| Answer» C. objects clause. | |
| 39. |
Who has certain remedies for misstatement in the prospectus against the company and the persons issuing the Prospectus? |
| A. | a person who has applied for shares in the company and who has been allotted shares. |
| B. | a buyer of shares in the open market. |
| C. | a subscriber to the memorandum. |
| D. | all the above. |
| Answer» A. a person who has applied for shares in the company and who has been allotted shares. | |
| 40. |
The prospectus must be issued within ………………… after the date on which a copy thereof has been delivered for registration. |
| A. | 30 days. |
| B. | 60 days. |
| C. | 90 days. |
| D. | 120 days |
| Answer» C. 90 days. | |
| 41. |
Every prospectus |
| A. | has to be dated. |
| B. | need not be dated as per the provisions of law. |
| C. | can be dated depending upon the requirements of the boa |
| Answer» A. has to be dated. | |
| 42. |
The exception to the doctrine of constructive notice is provided in |
| A. | lifting the corporate veil. |
| B. | doctrine of ultra vires. |
| C. | doctrine of indoor management. |
| D. | none of the above. |
| Answer» C. doctrine of indoor management. | |
| 43. |
Any document filed with the registrar will be deemed to have been read and understood by all those who deal with the company. It is as per the doctrine of. |
| A. | constructive notice. |
| B. | indoor management. |
| C. | public notice. |
| D. | ultra vires. |
| Answer» A. constructive notice. | |
| 44. |
The Doctrine of indoor management provides protection to. |
| A. | the board of directors. |
| B. | the shareholders. |
| C. | the managing directors. |
| D. | outsiders. |
| Answer» D. outsiders. | |
| 45. |
The doctrine of constructive notice protects the interest of. |
| A. | the company. |
| B. | the shareholders. |
| C. | the creditors. |
| D. | the debtors. |
| Answer» A. the company. | |
| 46. |
When an act is performed or a transaction is carried out, which though legal in itself, is not authorized by the objects clause in the Memorandum or by Statute, it is said to be. |
| A. | ultra vires the powers of the company. |
| B. | intra vires the powers of the company. |
| C. | ultra vires the powers of the company. |
| D. | ultra vires the implied authority. |
| Answer» A. ultra vires the powers of the company. | |
| 47. |
An act of a director which is intra vires the Memorandum and ultra vires the Articles of Association. |
| A. | cannot be ratified by the company. |
| B. | must necessarily be ratified by the company. |
| C. | may be ratified by the company. |
| D. | is void ab inito. |
| Answer» C. may be ratified by the company. | |
| 48. |
Doctrine of constructive notice is related to. |
| A. | memorandum of association. |
| B. | articles of association. |
| C. | memorandum of association and articles of association both. |
| D. | neither memorandum of association nor articles of association. |
| Answer» C. memorandum of association and articles of association both. | |
| 49. |
A person is disqualified from being appointed as a director of a company if. |
| A. | he has applied to be adjudged insolvent. |
| B. | he is of unsound mind. |
| C. | he is an undischarged insolvent. |
| D. | all the above. |
| Answer» D. all the above. | |
| 50. |
A person cannot be a director of more than …………… as per the Companies (Amendment) Act, 2000. |
| A. | 5 companies. |
| B. | 10 companies. |
| C. | 15 companies. |
| D. | 20 companies. |
| Answer» C. 15 companies. | |
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