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Directors of the company - class-XII

Description: directors of the company
Number of Questions: 22
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Tags: company management joint stock company 5 - direction and management commerce business organisation and correspondence
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According to the provisions of new Company Act, 2013, the 'SFIO' (Serious Fraud Investigation Office) shall be headed by _______________.

  1. A manager

  2. An auditor

  3. A director

  4. Any of the above


Correct Option: C
Explanation:

The Central Government shall appoint a Director in the Serious Fraud Investigation Office, who shall be an officer not below the rank of a Joint Secretary to the Government of India having knowledge and experience in dealing with matters relating to corporate affairs.The SFIO is headed by a director not below the rank of a Joint Secretary to the Government of India having knowledge and experience in dealing with the matters relating to corporate affairs.

State the following statement is True or False:

The share qualification of the directors of a joint stock company is prescribed in Articles of Association.

  1. True

  2. False


Correct Option: A
Explanation:

Generally, in a public company or a private company subsidiary of a public company, two-thirds of the total numbers of Directors are appointed by the shareholders and the remaining one-third is appointed in accordance with the manner prescribed in Articles failing which, the remaining one-third of the Directors must be appointed by the shareholders. The Articles of a public company or a private company subsidiary of a public company may provide for the retirement of all the Directors at every annual general meeting.

The Managing Directors can be appointed for the period of __________ years.

  1. one

  2. two

  3. tree

  4. five


Correct Option: D
Explanation:

As per the provisions of Companies Act 2013, no company shall appoint or re-appoint any person as its managing director, whole-time director or manager for a term exceeding five years at a time.

Representative of shareholders are ____________.
  1. directors

  2. servants

  3. employees

  4. none of these


Correct Option: A
Explanation:

The representatives of the shareholders are directors of the firm. Shareholders are the owners of the firm who owns certain part of shares in a firm while the directors are the top most level or authority responsible for the determination of company policies.

The first Director of the company are elected by the _________.

  1. share holders

  2. promoters

  3. employees

  4. None of these


Correct Option: B
Explanation:

Generally, the first directors are named in the articles. In such a case, there is no appointment. The general practice is that the promoters of  the company select the first directors and name them in the Articles.

The Directors take decisions at ___________.
  1. Annual General meetings

  2. Board meetings

  3. Statutory meetings

  4. Daily meetings


Correct Option: B
Explanation:

Board meetings are formal meetings of the board of directors of an organisation held at definite intervals to consider policy issues and major problems. Hence the meetings at which the directors take decisions is called a board meeting.

Body of the Directors which looks after the management of a company _____________.
  1. Board of Directors

  2. Auditor

  3. Company's Secretary

  4. All of above


Correct Option: A
Explanation:

A Board of directors is a group of individuals elected to represent shareholders. The Board's mandate is to establish policies for corporate management and oversight, making decisions on major company issues. Hence the body of directors which looks after the management of a company is Board of Directors.

The ________ is a person who has not been validly appointed or who is disqualified but who in effect occupies the position of, and acts as if he were, a director.

  1. Alternate director

  2. De facto director

  3. Executive director

  4. Non-executive director


Correct Option: B
Explanation:
The de facto director is a person who has not been validly appointed or who is disqualified but who in effect occupies the position of, and acts as if he were, a director. Literally, a de facto director means 'a director by fact'.
A de facto director is not formally appointed but carries out all the duties and makes decisions as a director.

Write a word or a term or phrase which can substitute the following statement:

A person elected by the shareholders of a company:

  1. Director

  2. Secretary

  3. Auditor

  4. None of these


Correct Option: A
Explanation:

Director is a person elected by the shareholders of a company. He has the responsibility for determining and implementing the company's policies.   

Minimum no. of Directors in case of a public company is _______.

  1. 1

  2. 2

  3. 3

  4. 4


Correct Option: C
Explanation:

Generally, in a public company or a private company subsidiary of a public company, two-thirds of the total numbers of Directors are appointed by the shareholders and the remaining one-third’s appointment is made as per Articles and failing which, shareholders shall appoint the remaining one-third. A Minimum Number of Directors Required in a public Company are three directors. The Companies Act does not prescribe any qualifications for Directors of any company. 

Directors are the ____________.
  1. owners

  2. representative of shareholders

  3. creditors of the company

  4. none of these


Correct Option: B
Explanation:

Director is an appointed elected member of the board of directors of a company who with other directors has the responsibility for determining and implementing the company's policies. Hence, directors are the representatives of shareholders.

A director retiring by rotation  _________.

  1. cannot be appointed again.

  2. can be re-appointed

  3. should be re-appointed

  4. nothing relevant


Correct Option: B

Which of the following is essential of the directing function of management?

  1. Identifying the activities and grouping them into convenient classes

  2. Motivating the subordinates to direct their behaviour in a desired pattern.

  3. Revise the structure of the basis of assessment of personnel and other resources

  4. None of above


Correct Option: B

Write a word or a term or phrase which can substitute the following statement:
A body of elected representatives of shareholders:
  1. Managing Directors

  2. Board of Directors

  3. Auditors

  4. All of above


Correct Option: B
Explanation:

A board of directors is a group of individuals elected to represent shareholders. A boards mandate is to establish policies for corporate management and oversight, making on company's decision. Every public company must have a board of directors .

Write a word or a term or phrase which can substitute the following statement:

The shares which must be held by the director within two months of his appointment.

  1. Ordinary Share

  2. Equity Share

  3. Qualification Share

  4. None of these


Correct Option: C
Explanation:

Qualification shares is a share of common stock that a candidature of company's board of directors is required to own within two months of his appointment. The term difference does not reflect a difference in the properties of a qualifying share to common shares held by other shareholders. Instead it refers to that a member of the board of directors must hold a vested interest in the operations of the enterprise in form of company stock.

Essential of the directing function ____________________.

  1. Delegation of authority to the executive of the departments

  2. Identifying and diagnosing the real problem

  3. Analysis and evaluation of avaolable alternatives

  4. Maintaining descipline and rewarding effective performance


Correct Option: D

Section 149(3) of Companies Act; 2013 deals with __________________.

  1. re-appointment of director

  2. appointment of director as additional director

  3. appointment of director as alternate director

  4. appointment of Resident director


Correct Option: D

Appointment of a person who is director, as a secretary of a company, required approval of the company by ___________.

  1. special resolution

  2. ordinary resolution

  3. resolution by circulation

  4. none of the above.


Correct Option: A

Which of the following is not a power of a Secretary?

  1. The acts directed to him by the Board

  2. The acts required to perform in order to discharge his duties

  3. The acts required to be performed under an Act

  4. Calling up the Board Meeting


Correct Option: D
Explanation:

Calling up the Board Meeting is not a power of a Secretary though Company Secretary is appointed as a key managerial personnel. Only directors of the company can call for a board meeting.

A special notice is requested for a resolution when ____________________.

  1. A director is to be removed before the expiry of his period of office

  2. A statutory report has to be adopted

  3. There is alteration of share capital

  4. A company wants to convene a meeting of creditors


Correct Option: A
Explanation:

A special notice is requested for a resolution when a director is to be removed before the expiry of his period of office. Special notice is issued by a company when a resolution is to be moved. It is issued when the company wants to remove a director from his/her office.

A director should obtain his qualification shares within ___________________.

  1. One month of his appointment

  2. Two months of his appointment

  3. Three months of his appointment

  4. Six months of his appointment


Correct Option: B
Explanation:

A director should obtain his qualification shares within two months of his appointment. When a new director is appointed in a company, he/she should be given his qualification shares within two months o his appointment in the company. Certain shares of the company is alloted to the director when he/she holds the office.

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