Legal Aspects of Business MCQs PDF

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MCQ Chapter I Law of contract is— a) not the whole of agreements nor is it the whole law of obligations b) the whole law of agreements c) the whole law of obligationsd) none of the above.2)An agreement is a voidable contract when it is –a) enforceable if certain conditions are fulfilled.B) enforceab...

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MCQ Chapter I 1) Law of contract is— a) not the whole of agreements nor is it the whole law of obligations b) the whole law of agreements c) the whole law of obligations d) none of the above. 2)An agreement is a voidable contract when it is – a) enforceable if certain conditions are fulfilled. B)enforceable bylaw at the option of the aggrieved party . c)enforceable by both parties d)not enforceable at all. 3)An agreement not enforceable by law is said to be a)void , b)voidable, c)valid, d)unenforceable, e) illegal. 4)A contract is a) a legal obligation b) an agreement plus a legal obligation c) consensus ad idem, d) agreement plus a legal object. 5)A specific offer can be accepted by a)any person b)any friend of offerer c) the person to whom it is made d)any friend of offeree. 6)A letter of acceptance sufficiently stamped and duly addressed is put into course of transmission. There is a) a contract voidable at the option of acceptor b)a contract voidable at the option of offerer, c)no contract at all, d)a valid 7)Acceptance may be revoked by the acceptor a) any time b)before the letter of acceptance reaches the offerer c)after the letter of acceptance reaches the offeree d)before the death of the acceptor.

8)An offer is made to Mani in crowd It – a) can be accepted by him alone, b)may be accepted by any person who hears it. C)may be accepted by his brother d)may be accepted by his friends.

9)A makes an offer to B on 10th by a letter which reaches B on 12th B posts letter of acceptance on 14th which reaches A on 16th . The communication of acceptance is complete as against A on – a) 12th b) 14th c)16th 10)Considerationa) must be adequate to the promise made, b)need not be adequate to the promise made c)must be of reasonable value d) must be of more value than the value of promise made. 11)A promise to compensate ,wholly or in part , a person who has already voluntarily done something for the promisor is a)enforceable b)not enforceable because it is without consideration, c) void d) voidable. 12)Consideration in a contract – a) may be past ,present or future, b)may be present or future only . c)must be present only. D)must be future only. 13)An agreement made without consideration is a)valid, b)illegal , c)voidable d)void 14) An agreement with or by minor is – a)void b)voidable at the option of the minor c) voidable at the option of the other party d) valid.

15)A minor enters into a contract for the purchase of certain necessaries , in such case – a) he is not personally liable to pay b)he is liable to pay c)his estate is liable to pay d) his guardian is liable to pay. 16)The contractual capacity of a company is regulated by – a)its memorandum of association and the provisions of the companies act, 1956 b)the terms of contract entered into with a third party c)its articles of association d) its prospectus. 17)Flaw in a capacity to contract may arise from – a) want of consideration b)unsoundness of mind c)illegality of object d) uncertainty of object. 18) Where consent is caused by fraud or misrepresentation , the contract is – a) voidable at the option of the aggrieved party b) void c) unenforceable d) not affected in any manner . 19)Where both the parties to an agreement are under a mistake as a matter of fact essential to the agreement ,the agreement Is – a) void b) voidable c)illegal d) not affected at all. 20)Consent given to a contract under some misrepresentation by the other party makes the contract – a) void b) invalid c) unenforceable d) voidable 21)When a person positively asserts that a fact is true when his information does not warrant it to be so, though he believes it to be true , there is – a) misrepresentation b) fraud c) undue influence d) coercion.

. 22)When consent to an agreement is obtained by undue influence, the agreement is a – a)contract voidable at the option of the party whose consent was so obtained b) void contract. C) valid contract d)void agreement. 23)A promise made without the intention of performing it amounts to – a)innocent misrepresentation b) fraud c)negligent Misrepresentation d) wrongful misrepresentation 24) The unlawful detention of any property of a person to obtain his consent to a contract amounts to – a) misrepresentation b) fraud c) undue influence d) coercion.

25)An agreement made with an alien enemy is a)unlawful on the ground of public policy b)unlawful because it becomes difficult to be performed c) valid, d)voidable. 26) An agreement to do an impossible act is, a) void b) voidable c) illegal d) enforceable under certain circumstances. 27)A wagering agreement is . a) forbidden by law, b) immoral, c) opposed to public policy d) none of the above. 28) If a contract contains an undertaking to perform an impossibility , the contract is – a) void ab initio b)void c)voidable at the option of the plaintiff d) illegal

29)If a new contract is substituted in place of an existing contract , it is called – a)alteration b)rescission c) novation d)waiver , e)remission 30) In case of a wrongful dishonour of a cheque by a banker having funds to the credit of the customer ,the court may award---a) ordinary damages , b) nominal damages c)exemplary damages d) contemptuous damages. 31) A quasi contract – a) is a contract b) as an agreement c)creates only legal obligation d)is none of these 32)Quantum meruit means – a)a non gratuitous promise b)an implied promise c)as mush as earned d)as much as is paid. 33) A contract of indemnity is a – a) a contingent contract b) wagering contract c)quasi contract d) void contract 34)Where there are co-sureties ,a release by the creditor of one of them – a) discharges the other co-sureties b) does not discharge the other co-sureties c)makes all the co-sureties immediately liable d) makes the contract of guarantee void. 35) The right of subrogation in a contract of guarantee is available to the a) creditor b) principal debtor c) surety d)indemnified

MCQ Chapter II 1. In a sale, the property in goods – a) is transferred to the buyer , b) is yet to be transferred to the buyer c) may be transferred at a future time d) is transferred when goods are delivered to the buyer e)is transferred when the buyer pays the price 2. In a sale ,if the goods are destroyed , the loss falls on – a) the buyer b) the seller c) partly on buyer and partly on seller d)the seller if price has not been paid by the buyer. 3. The term property as used in the sale of goods act means a) possession b ) ownership c) ownership and possession both d) the subject matter of contract of sale. 4. If a price is not determined by the parties in a contract of sale , the buyer is bound to pay a)the price demanded by the seller , b) a reasonable price c) the price which the buyer thinks is reasonable d) the price to be determined by a third independent person. 5. A condition is a stipulation which is a – a) essential to the main purpose of contract of sale b) not essential to the main purpose of contract of sale , c) collateral to the main purpose of contract of sale d) none of the above. 6. In case of breach of a warranty , the buyer can – a) repudiate the contract b) claim damages only c) return the goods d) refuse to pay the price e) refuse to take delivery of the goods . 7.

Which of the following is not a remedy available to buyers?

a. Right to damages b. Right to reject the goods c. Right to specific performance d. Right to demand replacement goods

MCQ Chapter III 1. In the case of partnership firm. Audit is a) Compulsory b) Optional c) None of the above.

2. Property of the company belongs to a) Company b) Share holders c) Members d) Promoters 3. Minimum paid up share capita l in case of a private company is _______ a) 1 Lakh b) 2 Lakhs c) 3 Lakhs d) 4 Lakhs 4. Age limit of Directors in case of private company is ________ a) 65 b) 70 c) 75 d) No limit

5. The liability of members if company is limited by guarantee. a) Unpaid value of shares b) Guarantee amount c) Unlimited liability d) None of the above 6. The liability of members if company is limited by shares a) Unpaid value of shares b) Guarantee amount c) Unlimited liability d) None of the above

7. A company is named as govt. company if it is holds ______ % of paid up share capital a) more than 30 b) more than 40 c) more than 50 d) None 8. Central Government permission is required in case of _______ conversion __________ a) Private to public b) Public to private c) Both (a) or (b) d) None of the above

9. In case of Non –Profit making Companies notice of general meeting should be given with in ______days a) 14 b) 15 c) 21 d) 22 10. If the guarantee Co. having no share capital the liability of shareholders will be a) To the extent of guarantee b) Unpaid value of shares c) Unlimited d) None of the above 11. Maximum members in case of private company a) 50 b) 100 c) 75 d) None of these 12.

Maximum paid up capital in case of public company.

a) 50 Lakhs b) 100 Lakhs c) 125 Lakhs d) None of these 13. Any change in the address of the registered office must be communicated to the registrar with in: a) 15 days b) 30 days c) 1 Month d) 12 months

14. In case of forgeries acts done in the name of the company are a) Valid b) Void c) Void ab initio d) None of the above 15. Signature of memorandum and articles should be done by ___________ number of persons in case of public company a) 7 b) 5 c) 4 d) None of these

16. Address of the registered office is situated in a) MOA b) AOA c) Prospectus d) None of these 17. The date of the opening of the subscription list means the beginning of the ________from the day of the issue of prospectus. a) 5 th b) 3 rd c) 10 th d) 20 th 18. When the shares are transferred to X from Y. Y will be a __________ of the company a) Member b) Shareholder c) Partner d) None of these 19. A company can become a members of another company if it is so authorized by _________ a) MOA b) AOA c) Both (a) & (b) d) None of the above 20. A company can create ‘reserve capital’ by passing __________ a) an ordinary resolution b) a special resolution c) a board resolution d) None of the above 21. Paying back of capital is called a) Redemption b) Conversion c) Participation d) None 22. For reducing its share capital it should give notice to whom? a) Debtors b) Creditors c) Both a) & b) d) None of the above 23. With in 30 days of completion of buy back company shall file the details with whom _________ a) Registrar b) SEBI c) Both a) & b) d) None of the above

24. Forfeiture can be made only if it is authorized by ________ a) AOA b) MOA c) ROC d) C.G 25. _________ is voluntary passage of the rights and duties of member from a share holder. a) Transfer b) Transmission c) Both (a) & (b) d) None of the above 26. What is the time limit for conducting statutory meeting? a) 1 to 5 months b) 1 to 6 months c) 1 to 9 months d) None of these 27. In which one of the following cases an ordinary resolution may be passed _________ a) Commencement of a new business b) alteration of articles c) Compulsory winding up of the company d) none of the above

28. In which one or more of the following company a member does not have a right to appoint proxy: a) Public company having share capital b) Public company not having share capital c) Private company not having a share capital d) None of the above

29. Directors are __________ of the company a) Employees b) Employers c) Both a) & b) d) None of the above 30. ________ is the official recording of the proceedings of a meeting a) Quorum b) Minutes c) Both a) & b) d) None of the above

MCQ Chapter IV 1. In a promissory note, the amount of money payable (a) must be certain (b) may be certain or uncertain (c) is usually uncertain (d) none of the above.

2. The 1. The Negotiable Instruments Act, 1881 applies to (a) the whole of India (b) the whole of India except the State of Jammu and Kashmir (c) those states as notified by the Union Government from time to time in the Official Gazette (d) the whole of India except the State of Jammu and Kashmir and the North- Eastern States. Negotiable Instruments Act, 1881 came into force on (a) 9th December, 1881 (b) 19th December, 1881 (c) 1st March, 1882 (d) none of the above. 3. The undertaking contained in a promissory note, to pay a certain sum of money is (a) conditional (b) unconditional (c) may be conditional or unconditional depending upon the circumstances (d) none of the above. 4. A bill of exchange contains a/an (a) unconditional undertaking (b) unconditional order (c) conditional undertaking (d) conditional order. 5. Cheque is a (a) promissory note (b) bill of exchange (c) both (a) and (b) above (d) None of the above. 6. The term "a cheque in the electronic form" is defined in the Negotiable Instruments Act, 1881 - under (a) section 6(a) (b) section 6(l)(a) (c) explanation 1(a) of section 6 (d) section 6A. 7. The term 'Negotiable instrument' is defined in the Negotiable Instruments Act, 1881, under section (a) 12 (b) 13 (c) 13A

(d) 2(d). 8. The term 'negotiation' in section 14 of the Negotiable Instruments Act, 1881 refers to (a) the transfer of a bill of exchange, promissory note or cheque to any person, so as to constitute the person the holder thereof (b) the payment by a bank on a negotiable instrument after due verification of the instrument (c) the bargaining between the parties to a negotiable instrument (d) all of the above. 9. If an instrument may be construed either as a promissory note or bill of exchange, it is (a) a valid instrument (b) an ambiguous instrument (c) a returnable instrument (d) none of the above. 10.If in an instrument the amount undertaken or ordered to be paid is stated differently in figures and in words (a)the instrument is void due to uncertainty (b)the amount stated in figure shall be the amount undertaken or ordered to be paid (c) the amount stated in words shall be the amount undertaken or ordered to be paid (d) none of the above. 11. Under section 16 of the Negotiable Instrument Act, 'indorsement in blank' of an instrument means (a) where the indorser does not write anything on the instrument (b) where the indorser signs his name only on the instrument (c) where the indorser writes the name of the person who is directed to pay (d) none of the above. 12. 'At sight' under section 21 of the Negotiable Instrument Act, 1881, means (a) on presentation (b) on demand (c) on coming into vision (d) none of the above. 13. A promissory note or bill of exchange which is not expressed to be payable on demand, at sight or on presentment is at maturity (a) on the 30th day after the day on which it is expressed to be payable (b) on the 3rd day after the day on which it is expressed to be payable (c) on the 5th day after the day on which it is expressed to be payable (d) on the 4th day after the day on which it is expressed to be payable. 14. If a minor draws, indorses, deliver or negotiates an instrument, such instrument binds (a) all parties to the instrument including the minor (b) only the minor and not other parties to the instrument (c) all parties to the instrument except the minor (d) none of the above. 15. In a promissory note, the amount of money payable (a) must be certain (b) may be certain or uncertain (c) is usually uncertain

(d) none of the above.

16. An authority to draw bills of exchange (a) itself import an authority to indorse (b) does not itself import an authority to indorse (c) sometime import an authority to indorse (d) none of the above. 17. The term 'legal representative' in section 29 of the Negotiable Instruments Act, 1881 (a) does not include executors or administrator (Rama v. Pravin, AIR 1926 Mad 389) (b) includes executors or administrator (K. Subbanna v. K. Subbarayudu, AIR 1926 Mad 390) (c) includes executors but does not include administrators (P. Nayar v. T. Ramanna, AIR 1929 Mad 389) (d) includes only administrators but does not include executors (P.K. Pati v. Damodar Sahu, AIR 1953 Ori 179). 18. Can a drawer escape from his liability? (a) no, a drawer can never escape from his liability (b) yes, a drawer can limit or exclude his liability by inserting in the bill an express stipulation to that effect (c) in certain cases although he can escape from his liability but always he cannot so escape (d) none of the above. 19. In which of the following case the elementary law is laid down that where there is no acceptance, no cause of action can have arisen to the payee against the drawee (a) Khandas Narandas v. Dahiabhai, ILR 3 Bom 182 (183) (b) Venkayya Pantulu v. Sun/a Prakasamma, AIR 1940 Mad 879 (c) Karak Rubber Co. Ltd. v. Burden, (1972) 1 All ER 1210 (d) K.A. Lona v. D.H. Ibrahim, AIR 1981 Ker 816 (DB). 20. A bill is drawn payable to 'A' or order. 'A' indorses it to 'B', the indorsement not containing the words '"or order" or any equivalent words. Can 'B' negotiate the instrument? (a) yes (b) no (c) not always (d) none of the above. 21. Where an indorser of an instrument excludes his liability and afterwards becomes the holder of the instrument, who are liable to him? (a) no one is liable to him (b) all intermediate indorsers are liable to him (c) only the immediate prior indorser is liable to him (d) none of the above. 22. Can the legal representative of a deceased person negotiate a promissory note, bill of exchange or cheque payable to order by delivery only which was indorsed by the deceased but not delivered by him? (a) yes, the legal representative can negotiate the instrument by delivery only (b) no, the legal representative can not negotiable an instrument by delivery only. He must reindorse and deliver the instrument for negotiating it

(c) an instrument indorsed by a deceased person has no legal validity and is void (d) none of the above. 23. Can the holder of a negotiable instrument indorsed in blank convert the indorsement into an indorsement in full? (a) no, such a conversion is not possible under the Negotiable Instruments Act, 1881 (Section 49) (b) yes, the holder can, without signing his own name, and by writing above the indorser's signature a direction to pay to any other person as indorsee, convert the indorsement in blank into an indorsement in full (Section 49) (c) yes, the holder can by signing his own name and by writing above the indorser's signature a direction to pay to any other person as indorsee, convert the indorsement in blank to an indorsement in full (Section 49) (d) none of the above. 24.The indorsement of a negotiable instrument followed by delivery (a) transfers to the indorsee the property in the bill, provided the indorsement must be an indorsement in full (b) does not transfer the property in the bill to anyone (c) transfers to the indorsee the property in the bill (d) transfers to the holder the property in bill. 25. When presentment for payment is to be made under section 65 of the Act? (a) Presentment for payment can be made at any reasonable time. (b) Presentment for payment must be made during the usual hours of business and, if at a banker's, within banking hours. (c) There is no such stipulation on the time for presentment. (d) none of the above. 26. In determining reasonable time for the purpose of payment of a negotiable instrument (a) public holidays are included (b) public holidays are excluded (c) only the holidays observed by the banks are excluded (d) none of the above. 27. The question of the reasonableness of the time for presenting a bill of exchange for payment is a (a) question of law (b) question of fact (c) mixed question of law and fact (d) none of the above. 28. Under section 76(b) of the Negotiable Instruments Act, 1881, the engagement to pay must have been entered into (a) at maturity (Mehar v. Hari Gaur, AIR 1935 Lah 666) (b) after maturity (Sivaram v. Jayaram, AIR 1960 Mad 297 (DB) (c) prior to maturity (Thakur Din v. Oudh Commercial Bank Ltd., AIR 1999 Oudh 16) (d) none of the above. 29. A note under section 99 of the Negotiable Instruments Act should contain among other things (a) place of the notary (b) charges of notary

(c) both (a) and (b) (d) none of the above. 30. A notice of protest under section 102 of the Negotiable Instruments Act, 1881 (a) may be...