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Company Law

Description: Company Law
Number of Questions: 25
Created by:
Tags: Company Law Memorandum and Articles of Association Company Secretary and Company Secretary in Practice Kinds/ Formation of Companies Share Capital Prospectus Shares Membership in a Company Meetings and Proceedings
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Directions: Choose the correct option for the given question.

Native Clause is also known as

  1. registered office clause

  2. situation clause

  3. both 1 and 2

  4. none of these

Show answer
Correct Option: C
Explanation:

 Both 1 and 2

Directions: Choose the correct option for the given question.

The term ‘Illegal Association’ is defined by

  1. Partnership Act

  2. Companies Act

  3. Sale of Goods Act

  4. None of these

Show answer
Correct Option: B
Explanation:

The term "Illegal Association" is defined only in Companies Act. So option(2) is correct.

What are the remunerations that can be availed to the Promoter?

  1. Commission on the purchase price

  2. A lump sum either in cash or in the form of shares

  3. Both (1) and (2)

  4. None of these

Show answer
Correct Option: C
Explanation:

 Both  1 and 2

Directions: Choose the correct option for the given question.

Doctrine of constructive notice is exception to

  1. Doctrine of indoor management

  2. Doctrine of ultra vires

  3. Both (1) and (2)

  4. None of these

Show answer
Correct Option: A
Explanation:

Option (1) is correct: Doctrine of Constructive Notice seeks to protect the company against outsiders and Doctrine of indoor management operates to protect outsiders against the company. Option (2) is incorrect: Ultra Vires means beyond the power. 

Which of the following statement(s) is/are correct in connection with the appointment of first secretary? (i) The first Secretary has been appointed by Promoter. (j) His name should be mentioned in Articles of Association. (k) His appointment should be confirmed by Board of Directors.

  1. (i) and (j)

  2. (i) and (k)

  3. (j) and (k)

  4. all of the above

Show answer
Correct Option: D
Explanation:

First Secretary is appointed by the promoters and then by board resolutions. His name and stamp is required in the Articles of Association. Confirmation of Board of Directors is mandatory while appointing a Company Secretary.

Directions: Choose the correct option for the given question.

Section 43A Company means

  1. Public Co. converted as private company

  2. Private Co. converted as public company

  3. Conversion by default

  4. None of these

Show answer
Correct Option: B
Explanation:

Private Co. converted as public company

Directions: Choose the correct option for the given question.

State Bank of India is an example of a

  1. Registered Co.

  2. Guarantee Co.

  3. Unlimited Co.

  4. None of these

Show answer
Correct Option: D
Explanation:

Stae Bank of India is a government owned corporation.

Directions: Choose the correct option for the given question.

Table E means

  1. Memorandum of Association of Co. of limited by shares

  2. Memorandum of Association of Co. of limited by guarantee and having share capital

  3. Memorandum of Association of Co. of unlimited company

  4. None of these

Show answer
Correct Option: C
Explanation:

Memorandum of Association of Co. of unlimited company

Directions: Choose the correct option for the given question.

Nominal Capital is also known as

  1. registered capital

  2. authorised capital

  3. both (1) and (2)

  4. none of these

Show answer
Correct Option: C
Explanation:

Registered and Authorised capital are terminologies used in Public Company.

Directions: Choose the correct option for the given question.

Which of the following certificates is/are required for a private company?

  1. Certificate of Incorporation

  2. Certificate of Commencement of Business

  3. Both (1) and (2)

  4. None of these

Show answer
Correct Option: A
Explanation:

Business can be started by a company without obtaining certificate from Ministry of corporate affairs. But Certificate of Incorporation is required to make a company in existence. So option(1) is correct.  

Directions: Choose the correct option for the given question.

Capital clause is not required in Memorandum of Association of ______ Co.

  1. unlimited

  2. registered

  3. guarantee

  4. none of these

Show answer
Correct Option: A
Explanation:

 Option 1 is correct.

Directions: Choose the correct option for the given question.

Shelf prospectus means

  1. prospectus issued by Issue House

  2. prospectus issued by Financial Co.

  3. prospectus issued by Issuing Co.

  4. none of these

Show answer
Correct Option: B
Explanation:

Prospectus issued by Financial Co.

Which of the following statement(s) is/ are not correct in connection with ‘deferred shares’? (i) It is also known as Founders' shares. (j) This type of shares are offered only to promoters. (k) Prohibited to issue deferred shares by Public Co.

  1. (i) and (j)

  2. (i) and (k)

  3. (j) and (k)

  4. none of these

Show answer
Correct Option: D
Explanation:

 None of these

Directions: Choose the correct option for the given question.

Which of the following is an alteration of Memorandum of Association?

  1. Change of one premises or building to another premises or building within the city.

  2. Change of headquarters from one place to another within the same state.

  3. Change of headquarters from one state to another state.

  4. None of these

Show answer
Correct Option: C
Explanation:

Option (3) is correct: For changing the Registered office from one state to another, the company needs to alter the MOA. Option (1) and (2) are incorrect: No alteration of MOA required in both cases. 

What are the legal positions of the company secretary?

(i) As a servant of the company (j) As an agent of the company (k) As an officer of the company

  1. (i) and (j)

  2. (i) and (k)

  3. (j) and (k)

  4. all of the above

Show answer
Correct Option: D
Explanation:

Company Secretary ensures that an organisation complies with relevant legislation and regulation, and keeps board members informed of their legal responsibilities. So option (4) is correct.

Directions: Choose the correct option for the given question.

The first directors of the company are appointed by

  1. promoter

  2. registrar of company

  3. signatories of Memorandum of Association

  4. none of these

Show answer
Correct Option: A
Explanation:

The first directors of the company are appointed by promoters....................

Directions: Choose the correct option for the given question.

_______ is a transfer in which the columns of the name and signature of the transferee are left blank.

  1. Forged transfer

  2. Blank transfer

  3. Both (1) and (2)

  4. None of these

Show answer
Correct Option: B
Explanation:

Blank transfer is the correct answer.

Directions: Choose the correct option for the given question.

Class meeting is a meeting of

  1. directors

  2. creditors

  3. shareholders

  4. none of these

Show answer
Correct Option: C
Explanation:

Class meeting is a meeting of shareholders. 

Directions: Choose the correct option for the given question.

Formal motion is also known as

  1. dilatory motion

  2. procedural motion

  3. either (1) or (2)

  4. none of these

Show answer
Correct Option: C
Explanation:

Formal motion is also known as dilatory or procedural motion.

Directions: Choose the correct option for the given question.

Adjournment motion is also known as

  1. procedural motion

  2. postponement motion

  3. either (1) or (2)

  4. none of these

Show answer
Correct Option: B
Explanation:

Adjournment motion is also known as postponement motion.

Directions: Choose the correct option for the given question.

From the following entities, who cannot become the member of a company?

  1. Entrepreneur

  2. HUF

  3. Partnership firm

  4. None of these

Show answer
Correct Option: C
Explanation:

Partnership firm

Directions: Choose the correct option for the given question.

_______ is the aggregate of fully paid up shares legally consolidated.

  1. Stock

  2. Share certificate

  3. Share warrant

  4. None of these

Show answer
Correct Option: A
Explanation:

Stock is the aggregate of fully paid up shares legally consolidated.

Directions: Choose the correct option for the given question.

The part of the uncalled capital, which is set aside to meet the crises in winding up is

  1. capital reserve

  2. reserve capital

  3. both (1) and (2)

  4. none of these

Show answer
Correct Option: B
Explanation:

It is called as reserve capital.

Directions: Choose the correct option for the given question.

Called-up capital-Calls in arrear

  1. paid-up capital

  2. calls in advance

  3. capital reserve

  4. none of these

Show answer
Correct Option: A
Explanation:

Paid - up capital is the correct answer.

Find out the correct statement(s) in connection with ‘Underwriting of shares’. (i) The payment of commission must be authorised by Articles of Association. (ii) The rate of commission shall not exceed 2.5%. (iii) The appointment of underwriters must be done in consultation with the AGB.

  1. (i) and (ii)

  2. (i) and (iii)

  3. (ii) and (iii)

  4. all of the above

Show answer
Correct Option: A
Explanation:

Both (i) and (ii) are the correct statements.

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