The Indian Companies Act

Description: This quiz assesses your knowledge of the Indian Companies Act, a comprehensive legislation governing the formation, operation, and governance of companies in India.
Number of Questions: 14
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Tags: indian companies act company law corporate governance
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What is the primary objective of the Indian Companies Act?

  1. To regulate the formation and operation of companies in India

  2. To protect the interests of shareholders and investors

  3. To promote corporate governance and transparency

  4. All of the above


Correct Option: D
Explanation:

The Indian Companies Act aims to achieve multiple objectives, including regulating company formation and operations, protecting shareholder and investor interests, and promoting corporate governance and transparency.

Which body is responsible for administering the Indian Companies Act?

  1. Ministry of Corporate Affairs

  2. Securities and Exchange Board of India (SEBI)

  3. National Company Law Tribunal (NCLT)

  4. Company Law Board (CLB)


Correct Option: A
Explanation:

The Ministry of Corporate Affairs is the nodal agency responsible for administering the Indian Companies Act and overseeing the functioning of companies in India.

What is the minimum number of shareholders required to incorporate a private limited company in India?

  1. 1

  2. 2

  3. 3

  4. 4


Correct Option: B
Explanation:

As per the Indian Companies Act, a minimum of two shareholders are required to incorporate a private limited company in India.

What is the maximum number of directors allowed in a public limited company in India?

  1. 10

  2. 12

  3. 15

  4. 20


Correct Option: C
Explanation:

According to the Indian Companies Act, a public limited company in India can have a maximum of 15 directors.

Which document serves as the primary governing document for a company incorporated under the Indian Companies Act?

  1. Memorandum of Association (MOA)

  2. Articles of Association (AOA)

  3. Shareholders' Agreement

  4. Company's Bye-Laws


Correct Option: A
Explanation:

The Memorandum of Association (MOA) is the fundamental document that outlines the company's objectives, share capital, and other essential information, serving as the foundation for its existence.

What is the minimum paid-up share capital required to incorporate a public limited company in India?

  1. ₹1 lakh

  2. ₹5 lakh

  3. ₹10 lakh

  4. ₹15 lakh


Correct Option: B
Explanation:

As per the Indian Companies Act, the minimum paid-up share capital required to incorporate a public limited company in India is ₹5 lakh.

Which body is responsible for adjudicating disputes related to companies governed by the Indian Companies Act?

  1. National Company Law Tribunal (NCLT)

  2. Company Law Board (CLB)

  3. Securities Appellate Tribunal (SAT)

  4. Supreme Court of India


Correct Option: A
Explanation:

The National Company Law Tribunal (NCLT) is the primary adjudicating body for disputes related to companies governed by the Indian Companies Act.

What is the maximum tenure for which a director can be appointed in a company incorporated under the Indian Companies Act?

  1. 3 years

  2. 5 years

  3. 7 years

  4. 10 years


Correct Option: B
Explanation:

According to the Indian Companies Act, the maximum tenure for which a director can be appointed in a company is 5 years.

Which provision of the Indian Companies Act deals with the concept of 'corporate social responsibility'?

  1. Section 135

  2. Section 180

  3. Section 217

  4. Section 380


Correct Option: A
Explanation:

Section 135 of the Indian Companies Act mandates certain corporate social responsibility (CSR) activities for companies meeting specific criteria.

What is the minimum percentage of independent directors required on the board of a public limited company in India?

  1. 25%

  2. 33%

  3. 50%

  4. 75%


Correct Option: B
Explanation:

As per the Indian Companies Act, public limited companies are required to have at least 33% of their board composition as independent directors.

Which provision of the Indian Companies Act governs the issue of shares and debentures by a company?

  1. Section 42

  2. Section 62

  3. Section 81

  4. Section 108


Correct Option: A
Explanation:

Section 42 of the Indian Companies Act regulates the issue of shares and debentures by a company, including the prospectus requirements and other formalities.

What is the minimum number of meetings that a board of directors of a public limited company must hold in a financial year?

  1. 2

  2. 4

  3. 6

  4. 8


Correct Option: B
Explanation:

According to the Indian Companies Act, the board of directors of a public limited company must hold at least 4 meetings in a financial year.

Which provision of the Indian Companies Act deals with the concept of 'minority shareholder protection'?

  1. Section 10A

  2. Section 117

  3. Section 164

  4. Section 210


Correct Option: C
Explanation:

Section 164 of the Indian Companies Act provides various safeguards and remedies for the protection of minority shareholders in a company.

What is the maximum period for which a company can be incorporated as a 'private limited company' before it is required to convert to a 'public limited company'?

  1. 10 years

  2. 15 years

  3. 20 years

  4. 25 years


Correct Option: C
Explanation:

As per the Indian Companies Act, a private limited company can operate for a maximum of 20 years before it is required to convert to a public limited company.

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