Business Regulatory Frame Works MCQs

Multiple Choice Questions 32 Pages

Mahatma Gandhi University

Bachelor of Commerce

Contributed by

Baber Garde

Business Regulatory Frame Works
Bcom 1
st
year(1
st
semester)
Multiple choice question

1) ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is a voluntary association of persons formed to carry on some business for profit or
to promote art, science, education or some charitable purpose.
(a) Incorporation
(b) Private company
(c) Company
(d) Public company

2) ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is a legal person which capable of perpetual succession and common seal
Company
Firm
Voluntary Association
Partnership.
3) See ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ of the companies Act, 1956 states that a company means “ a company
formed and registered under this Act, or an existing company”
3(2)(ii)
3(1)(ii)
3(3)(i)
3(1)(i)
4) A company is a ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ of a person who have come together for a common object
which generally is to earn profit
Artificial person
Voluntary Association
Incorporate Association
All of these.
5) Anything done under an agreement between the company and third party requires
recognition of the company in the form of ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Contract
Agreement
Partnership
Official seal
6) A company is a ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ person
Distinct person
Group
Legal
Association
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7) A company is the creation of ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

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Common seal
Law
Share capital
Members
8) Minimum ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ and maximum ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ constitute a private limited company
2 of 10
7 of unlimited
2 of 15
2 of 50
9) Mean any premises including precincts thereof
Industry
Factory
Company
Workmen
10) Minimum ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ persons to constitute a public limited company.
7
10
2
5
11) Accounts of a company must be audited by an ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Chartered Accountant
Auditor
Board of Directors
All of these.
12) The winding up of the company can only be done by the process of ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Dissolution of partnership
General meeting
Law
Management
13) ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ company are those which are incorporated by a Royal Charter.
Chartered
Registered
Statutory
None of these.
14) Statutory companies are those incorporated under a special act passed by ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Companies Act
Parliament
Special resolution
Law
15) ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Company may be companies limited by shares companies limited guarantee,
unlimited companies.
Number of members

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Liability of members
Registered
Incorporation
16) Companies limited by ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ are not formed for the purpose of profit but for the
promotion of art, science, culture, charity, sports, commerce etc.
Members
Shares
Liability
Guarantee
17) Private company means a company which has a minimum paid up capital of ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Rs.2,00,000
Rs.5,00,000
Rs.1,00,000
Rs.1,50,000
18) A public company has been defined in sec.‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
3(1)(iv)
3(1)(i)
3(1)(iii)
3(1)(ii)
19) Public company means a company which has a minimum paid up capital of Rs.‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
2,00,000
3,00,000
5,00,000
1,00,000
20) Shares can be freely transferable in ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Public company
Private company
Registered company
Government company
21) The common seal of the company is the ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Official signature of the company
Rights of the company
General view of the company
None of the above.
22) During which of the following circumstances can the veil be lifted by the court?
Where the Co acts as an agent
Where a fund is noticed
When the company tries to avoid certain legal obligation
All of the above.
23) The memorandum of Association is a ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ of the company.
Certificate
Schedule

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Document
None of the above
24) If the Articles of a company conflict with the memorandum.
The articles shall prevail
The memorandum shall prevail
The directors will resolve the conflict
The court will resolve the conflict.
25) The shorter versions of a prospectus is also known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Deemed prospectus
Incomplete prospectus
Abridged prospectus
Red Herring Prospectus
26) On a share of Rs.200 of a company a shares holder has already paid Rs.150 . His L9iability is
now limited to:‐
200
50
150
0
27) ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ refers to a voluntary association of individuals formed for the purpose of
obtaining a particular social or economical goal.
Illegal Association
Partnership
Incorporation
Company
28) A ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is a document but invites the public to subscribe for share and
debentures
Memorandum
Articles
Prospectus
Certificate
29) The ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ issues the certificate of incorporation
Register
Director
Court
All of the above
30) Corporate veil ensures ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ of the company
Protection
Legal Immunity
Both A and B
None of the above.
31) The articles of Association and the memorandum of Association are drafted by ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Auditor
Director

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Secretary
Register
32) Doctrine of Ultra virus has reference to ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ clause
Object
Subscription
Liability
None of these.
33) Which doctrine protects the out of the outsiders from the company?
The doctrine of Ultra virus
The doctrine of indoor management
Both A and B
None of the above
34) Which Doctrine seeks to promote the company from the outsiders?
The doctrine of indoor management
The doctrine of Ultra virus
The doctrine of constructive notice
None of these.
35) Sec. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ of the companies Act deals with the meaning and provisions related to
the shelf prospectus.
50
4(1)
2(2)
60
36) Sec. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ of the companies act states that, a public company making an issue
of securities shall circulate information memorandum to the public before filling of a prospectus.
60(B)
60(a)
16(B)
16(a)
37) The person of group who being a company into existence are called‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
A firm
Incorporation
Promoters
Promotion
38) The board of directors delegate the power to ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Issue debentures
Issue of shares
Invest the fund
Make loans
39) ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ are subordinate to and controlled by the memorandum.
Articles of Association
Prospectus

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Statement in law
All of the above.
40) A copy special resolution has to be filed with the register within ‐‐‐‐‐‐‐‐‐‐‐‐‐‐ days
90 days
30 days
60 days
120 days.
41) A printed copy articles as altered shall be filed by the company with the register within
‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ of order of approval from central
3 months
6 months
One month
2 month
42) Sec. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ of the companied Act defines foreign company
4(4)
3(1)(i)
3(1)(ii)
591
43) Sec.25 related to ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ companies
Holding
Licensed
Subsidiary
Existing
44) Holding company is defined in section ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ of the companies Act.
4(4)
2(2)
3(4)
3(1)
45) ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is the first stage in the formation of a company
Promotion
Raising of Capital
Incorporation
Commencement of business
46) The idea of carrying on a business is conceived by a person by a group of persons called
‐‐‐‐‐‐‐‐‐‐
Exploits
Promoters
Directors
None of these
47) A company is said to be incorporated when it is registered with registrar of the ‐‐‐‐‐‐‐‐‐‐‐‐
company
Licensing
Government
Existing

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Joint stock

48. When one company controls the management of another company, the format is called a
‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ company
Existing
Holding
Subsidiary
Licensed

49. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is issued by any financial constitution or bank for on e or more of issues of securities
or class of securities specified in the prospectus.
A bridged prospectus
Shelf Prospectus
Deemed Prospectus
Red Herring Prospectus

50. The other name of indoor management is called ‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Golden rule
Constructive notice
Indoor rule
Tarquand rule

51. A company may change its name by passing ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ with the approval of central govt.
Special resolution
Ordinary resolution
Both A & B
None of the above

52. The company shall give notice of alteration to the Register within ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ of passing the
resolution
3 months
6 months
30 days
60 days

53. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ consists of a series of regulations framed by the legislature for the conduct of the
affair of company.
Table B
Table A
Table C

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Table D

54. If a public company limited by shares does not register its own articles ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐apply
Table C
Table B
Table A
Table D

55. Prospectus must therefore make full and honest declaration of materials facts without concealing or
omitting any relevant fact. This is known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Twiquant rule
Golden rule
General rule
Special rule

56.A Public company May issue a prospectus called ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Red herring Prospectus
Shelf prospectus
A bridged prospectus
Deemed prospectus

57. The statement in lieu of prospectus is drafted in accordance with the particulars set in part I of the
‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ the Act
Schedule I
Schedule IV
Schedule III
Schedule II

58. Golden rule was laid down by ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
KINDERSELY VC in new Brun Wick Co. V Marreride
Edington V Fitzmaurice
Treeman V Buckhcats
Royal British Bank V Turquand

59. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is a shorter version of the prospectus and contains all the salient features of a
prospectus that forms a part of the memorandum.
Deemed prospectus
A bridged prospectus
Red herring prospectus
Shelf prospectus

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60. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Acts as the official signature of the company.
Registration
Special resolution
Legal entity
Common seal

61. The association that are not registered under sec. II of the companies act is ‐‐‐‐‐‐‐‐‐‐‐‐‐
Incorporated Association
Illegal Association
]Non Licensed Association
Unregistered Association

62. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is a person who has signed company’s memorandum of association
Individual
Corporate body
Member
Legal person

63. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is a person who holds the shares for the benefit persons
Trustee
Member
Shareholder
Company

64.The right given to a particular class of shareholders are called the ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Special rights
General rights
Class right
None of the above

65. The power to order rectification of register of members vests in the ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Court
Tribunal
Central Government
Board of directors

66. On which of the following dates the companies Act,1956 come in to force?
31st March 1956
1st April 1956

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Business Regulatory Frame Works MCQs

Business Regulatory Frame Works MCQs

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