Formation of Company MCQs

MCQ on Incorporation of Company
Multiple Choice Questions and Answers (MCQS)
Companies Act 2013 MCQs (2021 – 2022)

Given below are Formation of Company MCQs multiple choice questions and answers updated for 2021 – 2022 exams. These MCQ on Incorporation of Company 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. An incorporated company may be a company:

a) Limited by shares

b) Limited by guarantee

c) An unlimited company

d) All of the above

Ans: d) All of the above

2. Pre-incorporation contracts are entered into by:

a) Members

b) Directors

c) Promoters

d) Shareholders

Ans: c) Promoters

3. The process of incorporation of a company is carried out by:

a) Members

b) Directors

c) Promoters

d) Shareholders

Ans: c) Promoters

4. Which of the following is true about pre-incorporation contract?

a) Company is not bound by the preliminary contract after registration.

b) A company cannot enforce the preliminary agreement.

c) A registered company cannot ratify the pre-incorporation contract.

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. What is known as charter of a company?

a) MOA

b) AOA

c) Prospectus

d) Certificate of incorporation

Ans: a) MOA

6. Which one of the following statement is false?

a) A private as well public company without a share capital can start its business immediately after getting the certificate of incorporation.

b) All private and public companies having a share capital is required to obtain certificate of commencement of business to start its business.

c) A company can be created without incorporation.

d) One person company can be formed by only one person.

Ans: c) A company can be created without incorporation.

7. The certificate of incorporation is conclusive evidence that:

a) All the requirements for registration have been duly complied with.

b) The company is duly registered.

c) The company came into existence from the date mentioned in the certificate.

d) All of the above

Ans: d) All of the above

8. Which documents to be filed with the registrar of company for incorporation?

a) Memorandum of association

b) Articles of association

c) Declaration

d) All of the above

Ans: d) All of the above

9. The minimum number of members that required while you are registering a public company is:

a) 2

b) 7

c) 50

d) 100

Ans: b) 7.

10. Which of the following documents is compulsory for incorporation of a company?

a) Memorandum of association

b) Articles of association

c) Declaration

d) All of the above

Ans: a) Memorandum of association

11. How many proposed names of a company have to be submitted by ROC at the time of incorporation?

a) 2

b) 4

c) 6

d) 8

Ans: c) 6

12. On registration, the ROC will issue a certificate of incorporation in Form:

a) INC – 10

b) INC – 11

c) INC – 12

d) INC -13

Ans: b) INC – 11

13. After registration what status company acquires?

a) Firm

b) Association of Person

c) Body of Individuals

d) Artificial judicial person

Ans: d) Artificial judicial person

14. The certificate of incorporation is that the company is entitled to commence business. False

15. A company is said to have been registered when:

a) When it files the MOA with the ROC.

b) When the certificate of incorporation has been issued.

c) After getting certificate of commencement of business

d) After starting business

Ans: b) When the certificate of incorporation has been issued.

16. 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

(Hint: A statutory company is one which is incorporated under a special Act of parliament or state legislature)

17. Application for approval of name of a company is to be made to:

a) Registrar of Companies

b) SEBI

c) Government of India

d) RBI

Ans: a) Registrar of Companies

18. Which of the following is probably the most important reason for incorporating?

a) Limited liability of shareholders

b) More money for investment

c) Increased flexibility

d) Shared management.

Ans: a) Limited liability of shareholders

19. 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

20. The promoters have to submit how many, proposed names to ROC for selecting a name for a company?

a) 1

b) 2

c) 3

d) 6

Ans: d) 6

21. Pre-incorporation contract is also known as:

a) Statutory Contract

b) Preliminary Contract

c) Bilateral Contract

d) Uni-lateral contract

Ans: b) Preliminary Contract

22. Promoter is a person who:

a) Takes part in the incorporation of a company.

b) Enters into preliminary contracts.

c) Takes necessary steps to accomplish the object for which company is started.

d) All of the above

Ans: d) All of the above

23. Legal position of a promoter of a company is:

a) That of an agent

b) That of a trustee

c) Fiduciary position

d) That of solicitor

Ans: c) Fiduciary position

24. A company can be created without incorporation. False

25. Registration of a company is compulsory.

26. 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.

Ans: d) All the above.

27. 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) Power of attorney

Ans: a) Article of Association

28. As per the Companies Act’ 2013 both private and public companies having share capital have to obtain ___ to start business.

a) Certificate of Incorporation

b) Certificate of Commencement

Ans: b) Certificate of Commencement

29. In case of private companies, MOA must be signed by:

a) 1 (One) subscribers

b) 2 (Two) subscribers

b) 3 (Three) subscribers

d) 7 (seven) subscribers

Ans: b) 2 (Two) subscribers

30. In case of public companies, MOA must be signed by:

a) 1 (One) subscribers

b) 2 (Two) subscribers

b) 3 (Three) subscribers

d) 7 (seven) subscribers

Ans: d) 7 (seven) subscribers

Formation of Company MCQs | MCQ on Incorporation of Company | 2021 - 2022 Exam