Company LAW MCQS WITH Answers PDF

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COMPANY LAW MCQS WITH ANSWERSSET- What are the limits of number of members in a Private Company? (a) Fifty (b) Seven (c) Twenty ( d) Two hundred If XYZ is the holding company of P&R Ltd. then, which of the following statement is not true in this regard. (a) XYZ Ltd. controls the composition ...

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COMPANY LAW MCQS WITH ANSWERS SET-1

1. What are the limits of number of members in a Private Company? (a) Fifty (b) Seven (c) Twenty (d) Two hundred

2. If XYZ is the holding company of P&R Ltd. then, which of the following statement is not true in this regard. (a) XYZ Ltd. controls the composition of Board of P&R (b) XYZ Ltd. holds more than 50% of the nominal value of the equity shares (c) Both (a) & (b) (d) None of the above

3. Which of the following is not a stage of the development of company? (a) Promotion (b) Production (c) Incorporation (d) Commencement of Business

4. which of the following company/companies are registered by the Companies Act, 2013? (a) Government Company (b) Private Company (c) Public Company (d) All of the above

5. A public company must have at least————- directors whereas a private company must have at least ——————-directors. (a) 3;2 (b) 2;3 (C)2;5 (d)8;10

6. A subsidiary of a government company is also treated as a (a) Government Company (b) Public Company (c) Private Company (d) All of the above

7. The_____________ of a government company is appointed or reappointed by the Comptroller and Auditor General of India. (a) Auditor (b) Company Secretary (c) Both (a) and (b) (d) None of the above

8. Which of the following company is incorporated in a country outside India?

(a) Private Company (b) Foreign Companies (c) Government Company (d) None of the above

9. Which of the following statement is false? (a) No legal formality is required to form a company. (b) The shareholders of a company have limited liability. (c) A company can own property in its own name. (d) A company is managed by the elected representatives of shareholders.

10. A is one who performs the preliminary duties necessary to bring a company into being and float it. (a) Auditor (b) Promoter (c) Director I (d) Financer

11. The registered office clause of memorandum of association contains (a) The name of the state in which the registered office of the company is to be situated. (b) The name of the city/town only and not that of the state. (c) The name of registrar of companies (d) The complete postal address.

12. “One who undertakes to form a company with reference to a given object and set it going and who takes the necessary steps to accomplish that purpose (a) Promoter (b) Directors (c) C.E.O. (d) Board of Directors

13. Which of the following are the functions of a promoter? (a) Decides name of a company (b) Nomination of directors (c) Settles the details of memorandum and articles (d) All of these

14. A is neither an agent, nor a trustee of a company. (a) Directors (b) Company Secretary (c) Employees (d) Promoters

15. Which documents contains the constitution of a company? (a) Memorandum of Association (b) Articles of Association (c) Both (a) and (b) (d) None of these

16. Which documents contains the regulations relating to the internal management of a company? (a) Memorandum of Association (b) Articles of Association (c) Both (a) and (b) (d) None

17. For vetting the MOA and AOA, as per SPICE, eMOA and eAOA is required. (a) True (b) False (c) Partly True (d) None of the above.

18. The companies are regulated under . (a) Companies Act, 1596 (b) Companies Act, 1957A(c) Indian Partnership Act,1932 (d) Companies Act, 2013

19. The certificate of incorporation is that the company is entitled to commence business. (a) Exclusive (b) Conclusive (c) Supportive (d) Either (a) or (b)

20. The whole process of the company formation may be divided into three direct stages, the sequence is(a) Promotion, incorporation by registration, commencement of business. (b) Incorporation by registration, commencement of business, promotion. (c) Commencement of business, promotion, incorporation by registration. (d) Commencement of business, incorporation by registration, promotion.

21. Company is managed by (a) Shareholders (b) Board of Directors (c) Karta (d) Both(a)&(b)

22. H.U.F. consists of which type of members (a) Both (b) & (c) (b) Heterogeneous (c) Homogeneous (d) None of the above

23. Partnership is governed by Partnership Act (a) 1956 (b) 1948 (c) 1932 (d) 1982

24. which is not a case of lifting of corporate veil (a) Connors Bros. v. Connors (b) Jones v. Lipren (c) Pearce v. Brookes (d) CIT v. Meenakshi Mills Ltd.

25. Word Corporation’ is———— than company (a) Narrow (b) Wider (c) (a) or (b) I (d) All of the above

26. Which of the following statements is not true? (a) A company is an artificial person created by law. (b) A company can do every act like a natural person except the acts which are purely of personal nature. (c) A company can be held liable for violation of the statutory provisions of the Companies Act. (d) A company can be imprisoned for violation of such provision which attract penalty by way of imprisonment only.

27. Which of the following is not the characteristic of a public company? (a) It has a separate legal entity. (b) It has a perpetual succession. (c) It has a common seal and separate property. (d) Its shares are non transferable.

28. A and B were the only members of a company who died in a road accident. In this case, the company comes to end on the death of A and B. (a) True (b) False (c) Partly True (d) Partly False

29. A company being a legal person is also a citizen under the Constitution of India (a) True (b) False (c) Partly True (d) Partly False

30. A statutory company or corporation is one which is incorporated (a) By an Act of Parliament (b) By an Act of State Legislature (c) Under the Companies Act, 2013 (d) By either (a) or (b)

31. In case of a company limited by guarantee, the liability of the members can be enforced (a) At any time when the company so decides (b) Only at the time of winding up of the company (c) Only by an order of court (d) Only by an order of Registrar of Companies

32. A Government Company is one in which 51% or more of the paid up share capital is held by (a) Central Government alone (b) State Government alone (c) Central and State Government jointly (d) Any of the above

33. At the time of registration the filing of Articles of Association with the Registrar of Companies is compulsory for (a) Private companies, unlimited companies and companies limited by guarantee (b) Unlimited companies only

(c) Companies limited by shares only (d) All types of companies

34. If at the time of registration, a company limited by shares does not file Articles of Association with the Registrar, then (a) The company cannot be registered without this document (b) The company is deemed to be adopted Table F” (c) The company is deemed to have become a company with unlimited liability (d) The directors become liable to be punished with fine at the rate of 250 for each day during which the default continues

35. On 14th July, the Registrar of Companies issued a Certificate of Incorporation, but it was dated 10th July instead of 14th July. From which date the company will legally come into existence? (a) 10th July (b) 14th July (c) 31stJuly (d) None of these

36. A company comes into existence when (a) the memorandum of association is signed by the required number of members. (b) the memorandum of association’ is submitted for registration to the Registrar of Companies. (c) lt is registered under the Companies Act, 2013. (d) It establishes its registered office and starts functioning there form.

37. A company formed for the promotion of commerce, art, science. religion, charity etc. may not use the word limited at the end of its name, even if it is a limited company. (a) True (b) False (c) Partly True (d) Partly False

38. The Registered office clause of Memorandum of Association contains (a) The name of the state in which the registered office of the company is to be situated. (b) The name of the city/town only and not that of the state. (c) The name of Registrar of companies. (d) The complete postal address.

39. The Object clause of Memorandum of Association must be divided into two Sub Clauses, namely (i) main objects clause, and (ii) object in furtherance of main object clause. (a) True (b) False (c) Partly True (d) Partly False

40. which of the following statements is correct? (a) In limited companies, the liability of members holding fully paid-up shares is nil. (b) In companies limited by guarantee, the liability of members is limited to the amount which they have agreed to pay. (c) Both (a) and (b) are correct. (d) None of these is correct.

41. For which of the following companies it is not obligatory to have Articles of Association? (a) Public Companies Limited by Shares (b) Public Companies Limited by Guarantee (c) Private Limited Companies (d) Unlimited Companies

42. Which of the following statements is correct ? (a) The memorandum and articles’ are binding on the members in their relation to the company. (b) The memorandum and articles are binding on the company in their relation to the members. (c) None of these is true (d) Both of these are true

43. Company’s memorandum and articles are public documents. (a) True (b) False (c) Partly True (d) Partly False

44. In case ‘memorandum and ‘articles’ are inconsistent, then which shall prevail over the others ? (a) Memorandum of Association

(b) Articles of Association (c) The one approved by Registrar (d) None of these

45. A public company having a share capital can start its business on obtaining (a) Certificate of incorporation and approval of Company Law Board. (b) Certificate to commence business and approval of Company Law Board. (c) ‘Certificate of Incorporation (d) Approval of High Court.

46. Company has ————–succession. (a) Longer (b) Continued (c) Perpetual (d) Limited

47. If company do not follow the principle of separate legal entity——————can be done. (a) Lifting of corporate veil (c) Principle of natural justice

(b) Principle of equity (d) All of above

48. Total managerial remuneration in a public company cannot be ———of net profit. (a) 10% (b) 11%(c) 18% (d) 11.5%

49. Audit of Government Company is done by C & AG. This statement is: (a) True (b) False (c) Partly True I (d) Partly False

50. Any Corporate Body/Association of Firm can be appointed as director of the company. This statement is: (a) True (b) False (c) Partly True (d) Partly False

51. How many members should sign the MOA in case of public company?

(a) 1

(b) 5

(c) 3

(d) 7

52. —————-conceives the idea of the business. (a) Promoters (b) Auditors (c) Directors (d) Shareholders

53. Shares of company are freely transferable. (a) Private company (b) Public company (c) Both (a) & (b) (d) None of the above

54. Life Insurance Corporation Ltd. is formed under; (a) Companies Act, 2018 (b) Special Act of Parliament (c) Both (a) and (b) (d) None of the above

55. Company’s corporate personality was brought forward in the case of: (a) Macaura V. Northern Assurance Co. Ltd. (b) Jons V. Lip ran. (c) CIT V. Meenakshi Mills Ltd. (d) Salomon V Salomon and Co. Ltd.

56. Which of the following is a non trading association ? (a) Company (b) Partnership firm (c) Club (d) HUF

57. Promoter is both an agent and trustee of the proposed company. (a) True (b) False (c) Partly True I (d) Partly False

58. Liability clause in MOA is required by: (a) Company limited by shares (b) Company limited by guarantee (c) Company limited by both shares and guarantee (d) All of the above

59. Articles of unlimited company having share capital is included in: (a) Table I (b) Table G (C) Table H (d) Table F

60. Which one of the following is not a main clause of memorandum of association? (a) Name clause (b) Capital clause (c) Object clause (d) Profit clause

61. ————–is to be executed on a non judicial stamp paper. (a) Share warrant (b) Power of attorney (b) Incorporation certificate (d) None of the above

62. The word company is derived from ————word Com Panis”. (a) French (b) Latin (c) German (d) Indian

63. Which of the following are the characteristics of a company? (a) Corporate Personality

(b) Limited Liability

(c) Perpetual Succession

(d) All of the above

64. The company has a capacity to sue and be——– (a) Incorporated

(b) Sued

(c) Both (a) and (b)

(d) None of the above

65. A company may be an (a) Incorporated company (b) Unincorporated company (c) Both (a) and (b) (d) None of the above

66. A word corporation is derived from latin term “corpus” which means:(a) Body (b) Legal Person (c) Artificial Person (d) None of the above

67. The liability of the member of the company is limited to the extent of the of the shares held by them. (a) Unpaid value

(b) Paid value

(c) Nominal value

(d) All of the above

68. Which of the following statement is correct? (a) Partners are the agents of the firm but member of company are not its agents (b) Partner cannot contract with his firm but a member of a company can

(c) Both (a) and (b) (d) None of these is correct

69. In public company, the members of the company is not less than . (a) Two (b) Seven (c) Ten (d) Twenty

70. In Private Company, member of the company is not less than (a Seven (b) Ten (c) Two (d) Eight

71. A company is a __________on the other hand a club is a___________ (a) Trading association, non trading association. (b) Non trading association, trading association. (c) Trading association, trading association. (d) None of these.

72. Which of the following are not the advantages of incorporation? (a) Separate property (b) Unlimited liability (c) Capacity to sue (d) Flexibility & autonomy

73. Which of the following are not the disadvantage of incorporation? (a) Formalities and expenses (b) Corporate disclosure (c) Limited liability (d) Both (a) and (b)

74. Which of the following are kinds of companies? (a) Private companies (b) Producer companies (c) Both (a) and (b) (d) None of the above

75. Provisions related to accounts, winding up, calls on shares, forfeiture, etc. are contained in (a) Articles of Association (b) Memorandum of Association (c) Prospectus (d) Statement in lieu of prospectus

76. Advantage of incorporated company is (a) Corporate disclosures (b) Common seal (c) Capacity to sue (d) Windier up procedure

77. Find the odd one out:(a) Private Company (b) Public Company (c) Consumer Company (d) Producer Company

78. Joint shareholders are counted as (a) Two (b) No limit (c) 50 (d) One

79. Example of company limited by guarantee (a) Clubs (b) Both (a) & (c) (c) Societies (d) None of the above

80. Which is not a registered company (a) Company limited by share (b) Company limited by guarantee (c) Both (a) & (b) (d) None of the above

81. Public company shares are dealt in (a) Stock exchange (b) Public (c) Market (d) All of the above

82. Is there any limit on borrowings to a Private Company (a) Limit up to RS 50,000 (b) Limit up to 1 lakh (C) No limit (d) None

83. Unlimited company may be subsequently converted into limited company (a) True (b) Partly true (c) False (d) None of the above

84. Non Profit companies are also called (a) Holding companies (b) Licensed companies (c) Subsidiary companies (d) Government companies

85. Government company comes under section (a) 2(46) (b) 2(44) (c) 2(43) (d) 2(45)

86. Foreign company must issue prospectus (a) True (b) Partly true (c) False (d) None of these

87. Company’s memorandum & articles are public documents (a) True (b) False (c) Partly True (d) Partly False

88. For incorporation or registration (a) MOA must be subscribed (b) AOA must be subscribed (c) Only MOA (d) Both (a)&(b)

89. MOA contains of company (a) Constitutions (b) Regulations (c) Declaration (d) None of these

90. MOA has clauses (a) 9 (b) 7 (c) 6 (d) 10

91. AOA is also called as of the company (a) Regulations (b) Bye Laws (c) Provisions (d) Both (a) or (b)

92. Tables I includes articles of (a) Unlimited company having share capital (b) Company limited by guarantee (c) Company limited by shares (d) Public company

93. which amongst the following documents is not required to be filed by a foreign company with the Registrar? (a) Address of the registered office of the company

(b) Address of the principles place of business in India (c) Declaration of Solvency (d) Articles of Association

94. Lifting of corporate veil is permitted (a) By statue (b) Voluntary (c) Any time (d) None of these

95. which one of the following is NOT an essential feature of a company? (a) Perpetual Succession (b) Unlimited Liability (c) Separate Property (d) Transferability of shares

96. which one of the following statement is not true regarding a company? (a) The shares of a company can be transferred (b) lt is very simple and easy to form a company (c) It is a separate legal entity (d) It has independence to form its policies

97. Which one of the following is NOT a disadvantage of a company? (a) It does not have a capacity to sue (b) It has more social responsibility (c) Greater tax burden (d) More disclosures

98. Which of the following statement is NOT true regarding a private company? (a) It cannot invite public to subscribe to shares or debentures (b) Restricts the right to transfer its share (c) At least five members are required to form a company (d) It should have at least two directors

99. The auditor of a Government company is appointed by (a) Central Government

(b) Comptroller and Auditor General of India (c) Directors of the Company (d) Shareholders of the Company

100. The maximum managerial remuneration which can be paid by a private company is (a) 11% of net profit (b) 11% of turnover (c) 5% of share capital (d) None of the above

101. In case of a company limited by shares, the members are liable to the extent of (a) Nominal value of share (b) Called up value of shares (c) They are personally liable (d) None of the above

102. Which one of the following is not true with reference to an unlimited company? (a) The liability is extended to their personal property (b) The members are not liable directly to the creditors of the company (c) It cannot convert itself into a public company (d) All of the above

103. A “not for profit” company is permitted as per which section of the Companies Act, 2013? (a) Sec. 2(i) (iv) (b) Sec. 5 (c) Sec. 8 (d) Sec. 12.

104. The licence to form a company not for profit” is granted by (a) State Government (b) Registrar (c) High Court (d) Central Government

105. Government company is defined under which section of the Companies Act, 2013? (a) Sec. 2(45) (b) Sec. 2(44) (c) Sec. 2(43) (d) None of the above

106. Private Company need not issue prospectus (a) True (b) Partly true (c) False (d) None of these

107. Prospectus is required to be issued when rights issue is made (a) True (b) Partly true (c) False (d) None of these

108. Prospectus is not required to be issued when sweat equity shares are issued to directors and employees (a) True (b) Partly true (c) False (d) None of these

109. Prospectus is required to be issued when issue is for Employees under Employee stock option...