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190+ Regulatory Framework for Companies Solved MCQs

These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce (B Com) .

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51.

The remuneration payable to a whole time director of the company should not exceed.

A. 5% of the net profits.
B. 6 % of the net profits.
C. 7 % of the net profits.
D. 10% of the net profits.
Answer» A. 5% of the net profits.
discuss
52.

The first directors of a public company are appointed by the.

A. public.
B. shareholders.
C. promoters.
D. government.
Answer» C. promoters.
discuss
53.

According to the companies Act, 1956 a Private limited company must have at least ………… directors.

A. seven.
B. three.
C. two.
D. one.
Answer» C. two.
discuss
54.

Maximum managerial remuneration permissible under the Companies Act, 1956 for public limited companies is.

A. 10% of the net profits.
B. 5% of net profit.
C. 11% of net profit.
D. 8% of net profit.
Answer» C. 11% of net profit.
discuss
55.

Under the companies Act, which one of the following powers can be exercised by the Board of Directors?

A. power to sell the company’s undertakings.
B. power to make call.
C. power to borrow money in excess of the paid up capital.
D. power to reappoint an auditor.
Answer» B. power to make call.
discuss
56.

Who may be appointed as a director of a company?

A. an individual.
B. a body corporate.
C. a firm.
D. an association.
Answer» A. an individual.
discuss (1)
57.

The nominal value of the qualification shares of a director must not exceed.

A. rs. 1000
B. rs.2000.
C. rs.4000.
D. rs. 5000 or the nominal value of one share where it exceeds rs.5000.
Answer» D. rs. 5000 or the nominal value of one share where it exceeds rs.5000.
discuss
58.

According to section 255 of the companies Act, the Directors must be appointed by the.

A. central government.
B. company law tribunal.
C. company in general meeting.
D. board of directors.
Answer» C. company in general meeting.
discuss
59.

The Board of Directors can exercise the power to appoint directors in the case of.

A. additional directors.
B. filling up the casual vacancy.
C. alternate directors.
D. all the above.
Answer» D. all the above.
discuss
60.

Where a director acts dishonestly to the interest of the company, he will be held liable for.

A. ultra vires acts.
B. negligence.
C. breach of fiduciary duty.
D. mala fide acts.
Answer» C. breach of fiduciary duty.
discuss
61.

Except with the approval of the central Government, remuneration of a whole time director or a managing director shall not exceed …………… of the net profits for one such director.

A. 3%.
B. 5%.
C. 10%.
D. 11%.
Answer» C. 10%.
discuss
62.

Under section 269, every public company and a private company which is a subsidiary of a public company must have a managing director or a whole time director if its paid-up share capital is.

A. rs.1 crore or more.
B. rs.2 crore or more.
C. rs.5 crore or more.
D. rs.10 crore or more.
Answer» C. rs.5 crore or more.
discuss
63.

Sec.291 of the Company Act 1956, has clarified that.

A. the directors are subordinate to the overall majority of the shareholders.
B. the board of directors shall exercise all such powers and do all such acts as the company is authorized to exercise or to do subject to the restrictions contained in the act, memorandum and articles.
C. the shareholders cannot interfere with the conduct of management in any way.
D. all the above.
Answer» B. the board of directors shall exercise all such powers and do all such acts as the company is authorized to exercise or to do subject to the restrictions contained in the act, memorandum and articles.
discuss
64.

When the Directors have acted mala fide and are themselves the wrong doers, the only option left with the shareholders is.

A. to go to the court.
B. approach the company law tribunal.
C. to interfere in management by a majority in the general meeting.
D. to approach the central government.
Answer» C. to interfere in management by a majority in the general meeting.
discuss
65.

When there is a deadlock between the directors.

A. the central government can intervene and ask the directors to co-operate with each other.
B. the company law tribunal has necessarily to intervene.
C. shareholders may intervene to take necessary steps to ensure the working of the company.
D. directors must forget about personnel issues and work for greater good.
Answer» C. shareholders may intervene to take necessary steps to ensure the working of the company.
discuss
66.

What is the amount of contribution that a company can make for political purposes?

A. 10% of net profits of the preceding financial year on which the tax has been paid.
B. 5% of gross profit of the current assessment year.
C. amount not exceeding 5% of the net profits of three immediately preceding financial years.
D. none of these.
Answer» C. amount not exceeding 5% of the net profits of three immediately preceding financial years.
discuss
67.

Any information or knowledge generated by the company.

A. is the property of the company and known as intellectual property.
B. cannot be used by any director for personal gains.
C. if used for personal gains by any director must be accounted for to the company.
D. all the above.
Answer» D. all the above.
discuss
68.

According to section 283 (1) (g) if a director absents himself from 3 consecutive board meetings or from all meetings consecutively for a period of 3 months without obtaining leave of absence.

A. he shall be fined with rs.500.
B. he shall be held accountable to the registrar.
C. his office shall become vacant.
D. all the above.
Answer» C. his office shall become vacant.
discuss
69.

The maxim “delegates nonpotest delegare” states the.

A. duty to delegate to a director.
B. duty not to delegate their duties.
C. duty of a subordinate not to protest when duty has been delegated to him.
D. none of above.
Answer» B. duty not to delegate their duties.
discuss
70.

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.
Answer» D. by all the above methods.
discuss
71.

Compulsory winding up means winding up.

A. by the tribunal.
B. by the members.
C. by the creditors.
D. all of them.
Answer» A. by the tribunal.
discuss
72.

A company may be wound up by the Tribunal if.

A. the company passes an ordinary resolution to this effect.
B. the company does not commence its business within 6 months of its incorporation.
C. number of members reduced below 7 in the case of a private company.
D. company is unable to pay its debts.
Answer» D. company is unable to pay its debts.
discuss
73.

As per Sec 439, who can file a petition to the tribunal for winding up?

A. the registrar.
B. company.
C. contributory.
D. any one of these.
Answer» D. any one of these.
discuss
74.

As per Sec.444 when the Tribunal makes an order for the winding up it should be communicated within two weeks to.

A. official liquidator.
B. company.
C. central government.
D. national company law board.
Answer» A. official liquidator.
discuss
75.

Official liquidators are appointed from a panel of.

A. professional firms of chartered accountants.
B. advocates.
C. company secretaries.
D. all.
Answer» D. all.
discuss
76.

Tribunal may appoint the official liquidator to be the liquidator provisionally at any time.

A. after the presentation of petition for winding up.
B. after making the winding up order.
C. after dissolution.
D. before the statutory meeting.
Answer» A. after the presentation of petition for winding up.
discuss
77.

The official liquidator after receipt of statement of affairs of the company must submit a preliminary report to the Tribunal not later than ……………. of the order.

A. 6 month.
B. one year.
C. two weeks.
D. one month.
Answer» A. 6 month.
discuss
78.

On a winding up order being made, the company’s property comes under the custody of.

A. liquidator.
B. tribunal.
C. central government.
D. share holders.
Answer» A. liquidator.
discuss
79.

As per Sec.457, the statutory powers of the liquidator can be exercised.

A. with the sanction of tribunal.
B. without the sanction of the tribunal.
C. some with and some without such sanction.
D. with the sanction of the central government.
Answer» C. some with and some without such sanction.
discuss
80.

In the event of Company being wound up the Tribunal shall prepare list of contributories into.

A. list a.
B. list b.
C. list a and list b.
D. list a or list b.
Answer» C. list a and list b.
discuss
81.

One of the following is the instance where the just and equitable clause for winding up can be adopted by the Tribunal.

A. oppression of minority by the majority.
B. inability to pay debts.
C. commercial insolvency.
D. reduction of members below minimum.
Answer» A. oppression of minority by the majority.
discuss
82.

As per Sec.488, Declaration of Solvency of company by the Directors in the case of voluntary winding up may be made within.

A. 5 weeks of passing resolution.
B. one month.
C. 6 months.
D. none of these.
Answer» A. 5 weeks of passing resolution.
discuss
83.

The object of winding up of a company by the Tribunal is.

A. to facilitate the protection of its assets.
B. to convert the company into private company if it is a public company.
C. to convert the company into public company if it is a private company.
D. to change the memorandum and articles.
Answer» A. to facilitate the protection of its assets.
discuss
84.

A voluntary winding up means winding up by.

A. members or creditors.
B. members or contributors.
C. contributories or creditors.
D. share holders or tribunal.
Answer» A. members or creditors.
discuss
85.

Statutory meeting of the company must be held within.

A. one month of obtaining the certificate to commence business.
B. 3 months of obtaining the certificate to commence business.
C. 6 months of obtaining the certificate of incorporation.
D. 6 months of obtaining the certificate to commence business.
Answer» D. 6 months of obtaining the certificate to commence business.
discuss
86.

Notice of the statutory meeting to all the members of the company is required to be sent at least.

A. 14 days before the date of meeting.
B. 21 days before the date of the meeting.
C. 25 days before the date of the meeting.
D. 30 days before the date of the meeting.
Answer» B. 21 days before the date of the meeting.
discuss
87.

Statutory meeting of the company is held.

A. every year.
B. after every two years.
C. once in the life time of the company.
D. every year at the discretion of the board of directors.
Answer» C. once in the life time of the company.
discuss
88.

Statutory meeting is not to be held if a new company is a .

A. public limited company.
B. government company.
C. private company (limit)
D. fera company.
Answer» C. private company (limit)
discuss
89.

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

A. 12 months from the date of incorporation.
B. 12 months from the date of commencement of business.
C. 18 months from the date of its incorporation.
D. 18 months from the date of commencement of business.
Answer» C. 18 months from the date of its incorporation.
discuss
90.

The interval between two annual general meetings should not be more than.

A. 12 months.
B. 15 months.
C. 18 months.
D. 20 months.
Answer» B. 15 months.
discuss
91.

Statutory meeting need to be held by.

A. a public company limited by guarantee and having a share capital.
B. a public company having liability of its members unlimited.
C. a government company.
D. a public company not having share capital.
Answer» A. a public company limited by guarantee and having a share capital.
discuss
92.

A meeting of the Board of Directors must be held at least once in.

A. each month.
B. every two months.
C. every three months.
D. every four months.
Answer» C. every three months.
discuss
93.

When can an annual General Meeting be called giving shorter notice than that specified?

A. if consent is accorded to by all the members entitled to vote.
B. if consent is accorded to by 30% of the members entitled to vote.
C. if board of directors takes a majority decision in this rega
Answer» A. if consent is accorded to by all the members entitled to vote.
discuss
94.

For general meeting of any kind (statutory, Annual or Extraordinary) at least ………….. Notice must be given to members.

A. 21 days.
B. 22 days.
C. 23 days.
D. 25 days.
Answer» A. 21 days.
discuss
95.

Quorum for general meeting for private and public companies.

A. 2 and 5.
B. 3 and 6.
C. 5 and 7.
D. none of these.
Answer» A. 2 and 5.
discuss
96.

Quorum for a Board meeting is.

A. 1/3 of total number of directors or 2 directors, whichever is higher.
B. ½ of total number of directors or 3 directors whichever is higher.
C. ½ of total number of director or 3 directors whichever is lower.
D. none of the above.
Answer» A. 1/3 of total number of directors or 2 directors, whichever is higher.
discuss
97.

The minutes book can be inspected by the.

A. shareholders free of charge.
B. debenture holders on payment.
C. any one on payment.
D. none of the above.
Answer» A. shareholders free of charge.
discuss
98.

Minutes of company meeting should be prepared within.

A. 21 days of the meeting.
B. 30 days of the meeting.
C. 40 days of the meeting.
D. 45 days of the meeting.
Answer» B. 30 days of the meeting.
discuss
99.

A special resolution is passed by.

A. simple majority.
B. 2/3 majority.
C. 3/4 majority.
D. none of these.
Answer» C. 3/4 majority.
discuss
100.

An ordinary resolution at a general meeting of the shareholders is sufficient for.

A. reduction of share capital.
B. issue of shares at a discount.
C. creation of reserve capital.
D. all the above.
Answer» B. issue of shares at a discount.
discuss (1)

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