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Companies Act 1956 was repealed by: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
7. MCQ on Winding Up of A Company
*****
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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