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

Company law MCQs 

Multiple Choice Questions and Answers (MCQS)
Companies Act 2013 MCQs (2021 – 2022)

Given below are Company Law MCQs Multiple choice questions and answers updated for 2021 – 2022 exams. These Company Law MCQS are useful for B.Com, BBA, M.Com, MBA, UGC – NET (NTA NET), CA – IPCC, CMA Intermediate, CS Foundation CSEET Exam and all other competitive exams of commerce stream students.

Choose the Correct Alternative:

1. Companies Act 1956 was repealed by:

a) Companies Act’ 2002

b) Companies Act’ 2010

c) Companies Act’ 2013

d) Companies Act’ 2015

Ans: c) Companies Act’ 2013

2. When did the Companies Act 2013 came into force?

a) 5th August 2013

b) 10th August 2013

c) 15th August 2013

d) 20th August 2013

Ans: d) 20th August 2013

3. Companies Act’ 2013 consists of _____ sections.

a) 250

b) 270

c) 360

d) 470

Ans: d) 470

4. Which new type of company was introduced in Companies Act 2013?

a) One Person Company (OPC)

b) Associate Company

c) Small Company

d) All of the above

Ans: d) All of the above

Also you can read Company Law Chapter wise MCQs together with some additional Questions:

1. Company Law MCQs (130+ Questions)

2. Formation of Companies MCQs

3. MCQ on Memorandum and Articles of Association

4. Kinds of Companies MCQ

5. MCQs on Company Meetings

6. MCQs on Board of Directors

7. MCQ on Winding Up of A Company

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5. Which of the following is the feature of a registered company?

a) Transferability of shares

b) Perpetual succession

c) Limited liability

d) All of the above

Ans: d) All of the above

6. Registration of a company is:

a) Optional

b) Compulsory

c) Compulsory for Pvt companies only

d) Compulsory for public companies only

Ans: b) Compulsory

7. Minimum number of members in case of private company is:

a) 2 (Two)

b) 7 (Seven)

c) 50 (Fifty)

d) 200 (Two hundred)

Ans: a) 2 (Two)

8. Minimum number of members in case of public company is:

a) 2 (Two)

b) 7 (Seven)

c) 50 (Fifty)

d) 200 (Two hundred)

Ans: b) 7 (Seven)

9. Maximum number of members in case of public company is:

a) 2 (Two)

b) 7 (Seven)

c) 50 (Fifty)

d) No Limit

Ans: d) No Limit

(Hint: Limited upto number of shares of the company)

10. MOA of a company defines it:

a) Scope of operation

b) Borrowing powers

c) Capital

d) Nature of business

Ans: a) Scope of operation

11. A company incorporated by the act of the parliament is:

a) Statutory Company

b) Private Company

c) Chartered Company

d) Government Company

Ans: a) Statutory Company

12. Which of the following is not file to the registrar at the time of incorporation?

a) Memorandum of Association (MOA)

b) Articles of Association (AOA)

c) Statutory declaration of Compliance

d) Prospectus

Ans: d) Prospectus

13. East India Company was an example of:

a) Public Company

b) Private Company

c) Foreign Company

d) Chartered Company

Ans: d) Chartered Company

14. Minimum paid-up capital of a public company is:

a) 1 Lac

b) 2 Lacs

c) 3 Lacs

d) No limit

Ans: d) No limit

15. Property of the company belongs to:

a) Company

b) Shareholders

c) Promoters

d) Members

Ans: a) Company

16. Which of the following cannot be a member of a company?

a) Subscriber of MOA

b) Holder of equity shares of company

c) Every person whose name is entered in the register of member

d) Insolvent persons

Ans: d) Insolvent persons

17. The company's nationality is decided by its:

a) Shareholders

b) Its registered office

c) Place where books of accounts are kept

d) None of the above

Ans: b) Its registered office

[Hint: As per Supreme Court Judgment, the company’s nationality is decided by its place of incorporation which is its registered office]

Company law MCQs 

18. In which section of companies act board committees are formulated?

a) Sec. 10

b) Sec. 177

c) Sec. 202

d) Sec. 470

Ans: b) Sec. 177

19. Under Sec 149 of the Companies Act’ 2013, every company shall have how many woman directors?

a) 1 (One)

b) 2 (Two)

c) 3 (Three)

d) 4 (Four)

Ans: a) 1 (One)

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

a) Central Government

b) Registrar of Companies

c) Shareholders in General Meeting

d) Auditor

Ans: c) Shareholders in General Meeting

21. A person cannot hold office of a director simultaneously in more than:

a) 10 Companies

b) 15 Companies

c) 20 Companies

d) 50 companies

Ans: b) 15 Companies

22. Which of the following type of company requires only one director?

a) Public Company

b) Private Company

c) One Person Company

d) Small Companies

Ans: c) One Person Company

23. The minimum number of members necessary for a meeting is called as:

a) Quorum

b) Proxy

c) Company Secretaries

d) Board of Directors

Ans: a) Quorum

24. Class meeting is a meeting of:

a) Meeting of members

b) Meeting of directors

c) Meeting of Creditors

d) Final meeting at dissolution

Ans: a) Meeting of members

25. For increasing the number of directors of more than 15:

a) Approval of central government

b) Pass a special resolution

c) Pass an ordinary resolution

d) All of the above

Ans: b) Pass a special resolution

26. Which of the following is not a disqualification for a director u/s 165?

a) A person of unsound mind

b) A person convicted of an offence

c) An undischarged insolvent

d) None of the above

Ans: d) None of the above

27. What is the period for which books of account must be retained by the company?

a) 2 Years

b) 4 Years

c) 6 Years

d) 8 Years

Ans: d) 8 Years

28. Who among the following cannot fill a petition for winding up?

a) The Company

b) Contributory

c) Registrar

d) Promoter

Ans: d) Promoter

29. The company liquidator has to submit the reports on the progress of winding up:

a) Daily

b) Monthly

c) Quarterly

d) Half yearly

Ans: c) Quarterly

30. Official liquidators are appointed from a panel of professional firms of:

a) Chartered Accountants

b) Advocates

c) CS and CMAs

d) All of the above

Ans: d) All of the above

Company law MCQs 

State whether the following statements are 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.         Registration of joint stock company is compulsory. True

4.         In the case of private company, two members personally present may be the quorum for a meeting. True

5.         Every private company must have minimum three directors.                      False, two directors

6.         A shareholder is the agent of the company. False

7.         The power to issue shares at a premium need not be permitted by the Articles of Association. True

8.         A mortgage of land is an example of fixed charge.            True

9.         A member of company having no share capital can also appoint a proxy.       False

10.     Shareholders of a company are liable for the acts of the company.  False

11.     Private companies are not required to have any Memorandum of Association or Articles of Association. False

12.     A fixed charge becomes floating charge when a company goes into liquidation.           True

13.     Only one director can be appointed as a Managing Director.                        True

14.     Share can be converted to stock but stock cannot be reconverted to share.         False

15.     It is compulsory for every company to have its Articles and file the same with Registrar of Company for registration.     False

16.     A member of a company must be a shareholder of the company.           False

17.     Proxies are not to be included while counting the quorum of a meeting of a company.   True

18.     The Maximum number of directors in a public as well as private company is twenty.        False, it is 15

19.     In case of a private company there is no restriction to transfer of shares.            False

20.     Quorum of general meeting is maximum five members personally present for a public company.             True

21.     A director of a company may be a person, a firm or a body corporate.                     True

22.     All companies need certificate of incorporation. True

23.     A company can be a member of another company.              False

24.     The act of purchasing its own share by the company is termed as buy back of shares.            True

25.     It is compulsory for every company to have its own Articles of Association.        True

26.     A public company having share capital can start business right from the date of its incorporation.      True

27.     A private company having share capital can start business right from the date of its incorporation. True

28.     In the case of a private company, minimum ten members personally present may be the quorum for a meeting.                  False, 5 is compulsory

29.     A company is a legal person. Therefore it acquires citizenship.      False

30.     A Company Secretary cannot participate in the management of company affairs.              False

31.     In case of a public company, the minimum number of directors is five.                   False, it is 3

32.     Under Sections 5(1) and 7(1) of 2013 Act, it is not compulsory for every company to have its own articles. True

33.     A company can become a member of another company.                              True

34.     Member’s voluntary winding-up takes place only when the company is insolvent.            True

35.     Only Board of Director can convene an Extraordinary General Meeting.                 True

36.     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.

37.     Maximum numbers of directors allowed to a company are 15.          True

38.     A charge created on the stock-in-trade of a business is a fixed charge.    False, Floating

39.     The shareholders of a company can appoint an Additional Director.                         False, Board of directors

40.     The Board of Director is the proper authority to convene Annual General Meeting.          True

41.     The gap between two Annual General Meetings must not be more than fifteen months. True

42.     Minimum capital is not necessary in case of pvt and public company.            True

43.     A public company can be converted into private company by passing a special resolution.   True

44.     A private company must alter its article by passing a special resolution to convert into public company.  True

45.     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

46.     41. Pre-incorporation contracts are entered by Promoters.        True

47.     The MOA of a Company is its charter.

48.     Maximum number of members required to attend the meeting is called as quorum. False, minimum number

49.     A company is created by law.            True

50.     Section 10 of the companies act 2013 deals with the effect of MOA and AOA.            True

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.        Purpose of company is defined in object clause of MOA.

7.        A Company Secretary is merely an agent of the company.

8.        In case of members, voluntary winding-up of a company, the liquidator is appointed by the Shareholders of the company.

9.        The Company Secretary is the proper authority to convene annual general meeting.

10.    In case of public company, minimum number of directors is 3 (three).

11.    The gap between two Annual General Meetings must not be more than 15 months.

12.    Minimum number of members in a public company is 7(seven).

13.    Share warrant is a kind negotiable instrument.

14.    An article of Association of a company contains rules and regulations for the internal management of the company.

15.    In a government company, minimum 51% of the paid-up share capital is held by government.

16.    A company incorporated in India but its all members are foreigners, then it will be a Indian company.

17.    Unregistered companies are not required to have any Memorandum or Articles of Association.

18.    The Board of directors may appoint an additional director.

19.    Share warrant is a negotiable instrument.

20.    The prospectus of a company must be issued within 90 days of its registration.

21.    The gap between two annual general meetings must, not be more than 15 months.

22.    According to Section 165 of the Companies Act, no person can be a director in more than 20 companies.

23.    A person may cease to be a member of a company when share warrant are issued in exchange of the fully paid-up share.

24.    In case of private company, quorum of general meeting is minimum two members personally present.

25.    When market price of shares is more than the face value, the difference between the two is called premium.

26.    A person appointed to attend and vote on behalf of a member in a company meeting is known as a proxy.

27.    A person cannot hold office as director at simultaneously in more than 20 companies.

28.    A public company is required to have minimum Rs. Nil as paid-up capital.

29.    After registration of the company, the memorandum becomes a principal document.

30.    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)

31.    The maximum number of directors in a public company is 15 as per the provision of the Companies Act.

32.    Private companies are not required to have any Memorandum or Articles of Association.

33.    A fixed charge is usually created on tangible fixed assets.

34.    Annual return shall be filed with registrar within 60 days from the date of the holding of the Annual General Meeting.

35.    The share is a movable property.

36.    Shares and Debentures of a company are freely transferable.

37.    Common seal is not compulsory. 

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.

46.    As per the Companies Act, 2013 both private and Public companies have to obtain certificate of commencement of business.

47.    Doctrine of ultra vires means Acts done outside the Memorandum of the Company.

48.    The memorandum must be signed by 7 persons in case of a public company.

49.    A company cannot issue debenture with voting rights.

50.    Types of Company with examples

a)       Statutory Company: Created by Special Act of Parliament e.g. LICI.

b)       Company Limited by Guarantee: Liability of members is limited up to 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 up to the whole debt of the company but he can claim compensation from other members.

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