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Monday, September 14, 2020

Company Law Multiple Choice Questions and Answers | Corporate Laws MCQs | Companies Act 2013


Company law / Corporate Laws Multiple Choice Questions and Answers (MCQS)

COMPANIES ACT' 2013


A. Write True or False:                                                                                              
1.       Alternation of Memorandum of Association of a company is impossible.                               False
2.       The terms floating security and floating charges are synonymous.                                            False
3.       In the case of private company, two members personally present may be the quorum for a meeting. True

4.       Every private company must have minimum three directors.                      False, two directors
5.       A shareholder is an agent of the company.                                          False
6.       The power to issue shares at a premium need not be permitted by the Articles of Association. True
7.       A mortgage of land is an example of fixed charge.            True
8.       A member of company having no share capital can also appoint a proxy.                               False
9.       Private companies are not required to have any Memorandum of Association or Articles of Association. False
10.   A fixed charge becomes floating charge when a company goes into liquidation.                                 True
11.   Only one director can be appointed as a Managing Director.                        True
12.   Share can be converted to stock but stock cannot be reconverted to share.         False
13.   It is compulsory for every company to have its Articles and file the same with Registrar of Company for registration.                 False
14.   A member of a company must be a shareholder of the company.                             False
15.   Proxies are not to be included while counting the quorum of a meeting of a company.   True
16.   The Maximum number of directors in a public as well as private company is twenty.        False, it is 15
17.   In case of a private company there is no restriction to transfer of shares.                              False
18.   Quorum of general meeting is maximum five members personally present for a public company.             True
19.   A director of a company may be a person, a firm or a body corporate.                     True
20.   A company can be a member of another company.                         False
21.   It is compulsory for every company to have its own Articles of Association.                          True
22.   A public company having share capital can start business right from the date of its incorporation.              True
23.   A private company having share capital can start business right from the date of its incorporation. True
24.   In the case of a private company, minimum ten members personally present may be the quorum for a meeting.                  False, 5 is compulsory
25.   A company is a legal person. Therefore it acquires citizenship.                    False
26.   A Company Secretary cannot participate in the management of company affairs.              False
27.   In case of a public company, the minimum number of directors is five.                   False, it is 3
28.   Under Sections 5(1) and 7(1) of 2013 Act, it is not compulsory for every company to have its own articles. True
29.   A company can become a member of another company.                              True
30.   Member’s voluntary winding-up takes place only when the company is insolvent.            True
31.   Only Board of Director can convene an Extraordinary General Meeting.                 True
32.   A public company is required to have minimum of paid-up capital of Rs. 5,00,000.              False, No paid up capital is necessary for any company.
33.   A charge created on the stock-in-trade of a business is a fixed charge.    False, Floating
34.   The shareholders of a company can appoint an Additional Director.                         False, Board of directors
35.   The Board of Director is the proper authority to convene Annual General Meeting.          True
36.   The gap between two Annual General Meetings must not be more than fifteen months. True
37. Minimum capitalis not necessary in case of pvt and public company.            True
38. A public company can be converted into private company by passing a special resolution.   True
39. A private company must alter its artilce by passing a special resolution to convert into public company.  True
40. If number of members reduce below above stipulation and the company carries on business for more than six months, every member severally shall be liable to pay debts of the company.  True

B. Fill in the blanks with correct answer:                

1.       Articles of association contain the rules and regulations of management of INTERNAL affairs of a company.
2.       In case of a public company, minimum number of directors is 3.
3.       A limited company must not hold STATUTORY meeting within one month from the commencement of business.
4.       No person can hold office as director, at the same time, in more than 20 companies.
5.       The maximum number of members of a private company is 200.
6.       A Company Secretary is merely an agent of the company.
7.       In case of members, voluntary winding-up of a company, the liquidator is appointed by the Shareholders of the company.
8.       The Company Secretary is the proper authority to convene annual general meeting.
9.       In case of public company, minimum number of directors is 3 (three).
10.   The gap between two Annual General Meetings must not be more than 15 months.
11.   Minimum number of members in a public company is 7(seven).
12.   Share warrant is a kind negotiable instrument.
13.   An article of Association of a company contains rules and regulations for the internal management of the company.
14.   In a government company, minimum 51% of the paid-up share capital is held by government.
15.   A company incorporated in India but its all members are foreigners, then it will be a Indian company.
16.   Unregistered companies are not required to have any Memorandum or Articles of Association.
17.   The Board of directors may appoint an additional director.
18.   Share warrant is a negotiable instrument.
19.   The prospectus of a company must be issued within 90 days of its registration.
20.   The gap between two annual general meetings must, not be more than 15 months.
21.   According to Section 165 of the Companies Act, no person can be a director in more than 20 companies.
22.   A person may cease to be a member of a company when share warrant are issued in exchange of the fully paid-up share.
23.   In case of private company, quorum of general meeting is minimum two members personally present.
24.   When market price of shares is more than the face value, the difference between the two is called premium.
25.   A person appointed to attend and vote on behalf of a member in a company meeting is known as a proxy.
26.   A person cannot hold office as director at simultaneously in more than 20 companies.
27.   A public company is required to have minimum Rs. Nil as paid-up capital.
28.   After registration of the company, the memorandum becomes a principal document.
29.   Quorum, for General Meeting for a public company is 30 members personally present, if the total numbers of members as on the date of meeting is more than 5000.                 (15 quorum if less than 5000)
30.   The maximum number of directors in a public company is 15 as per the provision of the Companies Act.
31.   Private companies are not required to have any Memorandum or Articles of Association.
32.   A fixed charge is usually created on tangible fixed assets.
33.   Annual return shall be filed with registrar within 60 days from the date of the holding of the Annual General Meeting.
34.   The share is a movable property.
35. Shares and Debetures of a company are freely transferable.
36. Common seal is not compulsory. 
37. Types of Company
a) Statutory Company:Created by Special Act of Partliament e.g. LICI.
b) Company Limited by Gurantee: Liability of members is limited upto the amount they agreed to contribute in the case of winding up of a company which is clearly stated in MOA.
c) Unlimited Company: The liability of member is limited upto the whole debt of the company but he can claim compensation from other members.
38. Shares of Private companies are not transferable.
39. Maximum members in private company: 200.
40. Private company cannot issue Prospectus.
41. Maximum paid-up share capital of small companies: 10 Crores.
42. Foreign companies are those which are registered outside India.They can have place of business in India.
43. Associate Company are those in which other company has at least 20% stake in share capital.
44. Dormat companies are formed for a Future project or to hold an intellectual property.
45. Change in the name of the company can be effected only with the written approval of the Central Government in writing.

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