II BCOM[ ] SEMESTER IV CORE:COMPANY LAW AND SECRETARIAL PRACTICE-402B Multiple Choice Questions.

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1 1 of , 15:57 Dr.G.R.Damodaran College of Science (Autonomous, affiliated to the Bharathiar University, recognized by the UGC)Re-accredited at the 'A' Grade Level by the NAAC and ISO 9001:2008 Certified CRISL rated 'A' (TN) for MBA and MIB Programmes II BCOM[ ] SEMESTER IV CORE:COMPANY LAW AND SECRETARIAL PRACTICE-402B Multiple Choice Questions. 1. What is known as a charter of a Company? A. Memorandum of Association B. Bye laws C. Articles of Association D. Prospectus. 2. The dividend on preference capital is paid A. whenever there are profits B. when there is loss C. even if there are no profits D. after dividend is paid to equity shares 3. minimum paid up capital for a public company A B C D The minimum number of persons required to form a private company is. A. 7 B. 2 C. 3 D The name of a company can be changed by. A. an ordinary resolution B. a special resolution C.. the approval of the union government D. a special resolution and with the approval of the central government 6. A change in a companys registered office from one state to another may be effected by. A. an ordinary resolution B. a resolution of the board of directors C. a special resolution D. a special resolution and confirmation from the company law board

2 2 of , 15:57 7. When is a company said to have been registered? A. When it files the memorandum of association with the registrar of companies. B. When it gets the certificate of incorporation C. When it gets the certificate of commencement of business D. When it actually starts its business 8. The defines the scope of a companys activities. A. prospectus B. statutory declaration C. memorandum of association D. articles of association 9. The defines a companys relations with the outside world. A. prospectus. B. memorandum of association. C. articles of association. D. statement in lieu of prospectus. 10. The maximum number of members in the private companies is A B. 100 C. 50 D Mark out the type of alteration that is permitted in the articles of association. A. that may not be in the companys interest. B. that is contrary to the provisions of the companies act. C. that increases a members liability without his written consent. D. that is consistent with the memorandum of association companies must have their own Articles. A. Government companies. B. Unlimited companies. C. Companies limited by shares. D. Registered companies. 13. Which of the following companies must file a statement in lieu of prospectus? A. A private limited company. B. A cooperative society. C. A company that has issued a prospectus. D. A public company that has not issued a prospectus. 14. The most important document of a company is its. A. prospectus. B. annual report.

3 3 of , 15:57 C. memorandum of association. D. articles of association. 15. The rules and regulations for the internal management of a company are contained in its. A. prospectus. B. annual report. C. memorandum of association. D. articles of association Mark out the document that need not be prepared and registered with the registrar of companies in public limited companies. A. statutory declaration B. memorandum of association. C. articles of association. D. d. directors undertakings to take up and pay for qualification shares. 17. Which of the following documents may be changed with retrospective effect? A. Memorandum of association B. prospectus. C. Articles of association. D. Statement in lieu of prospectus 18. The share capital of a company may be reduced by. A. an ordinary resolution B. a special resolution. C. a resolution of the board of directors. D. obtaining permission from the company law board 19. The articles of association can be altered by. A. a resolution of the board of directors. B. an ordinary resolution in general meeting. C. a special resolution in general meeting. D. obtaining permission from the company law board The principle that so far as the companys internal working is concerned, strangers dealing with the company are entitled to assume that everything has been regularly done has been laid down in the. A. doctrine of indoor management. B. principle of constructive notice. C. principle of management by exception. D. management by objectives. 21. A change of registered office of a company from one place to another within the same city may be effected by -. A. ordinary resolution. B. confirmation from the regional director of the zone. C. special resolution.

4 4 of , 15:57 D. special resolution with union government approval 22. The on equity shares is not cumulative. A. dividend. B. profit. C. loss. D. reserve. 23. A/an may become a director of a company. A. partnership firm. B. person of unsound mind. C. individual. D. body corporate. 24..How many directors of a public company, unless the articles provide otherwise, must be appointed by the company in general meeting A. All the directors. B. One half of the directors. C. Two-thirds of the directors. D. Three-fourths of the directors. 25. The constitute the top administrative organ of the company.. A. general manager. B. shareholders. C. board of directors. D. advisory panel. 26. Who/what appoints the first directors of a company? A. The shareholders in general meeting. B. The Registrar of companies. C. The articles of association. D. The promoters. 27. The companies Act provisions as to qualification shares do not apply to. A. independent private companies. B. directors appointed by the union government. C. directors representing special interests. D. all of the above. 28. The union government may appoint such number of directors in a company as it may deem necessary A. at its own initiative. B. on the application of least 100 members of the company. C. on the application of members holding at least 10% voting rights. D. any of the above.

5 5 of , 15: A directors election takes place in a general meeting through a separated Resolution passed by a.majority. A. single. B. two-thirds. C. three-fourths. D. five-sixths Which of the following is beyond the powers of the board of directors? A. To issue debentures. B. To make loans. C. To remit the payment of any debt due by a director. D. to issue prospectus. 31. The total managerial remuneration to the directors and the manager in respect of any financial year must not exceed percent of the net profit. A. one. B. three. C. eleven. D. ten. 32. Where a company has three directors, the maximum remuneration payable to all of them is % of the annual net profit A. 5. B. 10. C. 20. D Holding company means a company. A. which holds other company. B. a government company. C. a chartered company. D. a subsidiary company. 34. A part from the board of directors, a company can have. A. only a manager. B. only a managing director. C. both a manager and a managing director. D. either a manager or a managing director. 35. A person cannot act as managing director of more than company /companies at a time. A. one. B. two. C. four. D. five. 36. A public corporation denotes a. A. private limited company.

6 6 of , 15:57 B. public company. C. government company. D. statutory corporation. 37. The partnership entity may be regarded as. A. a legal entity. B. an accountable entity. C. both a legal and accountable entity. D. neither a legal nor an accountable entity. 38. A promoter is a person who. A. is a director. B. is a relative of the company. C. is a wellwisher of the company. D. takes part in the companys incorporation. 39. The amount of minimum subscription may be learnt from the. A. prospectus. B. memorandum of association. C. articles of association. D. records of general meetings. 40. When can a private company commence business? A. at any time. B. after applying for registration. C. after obtaining the certificate of incorporation. D. after obtaining the certificate of commencement of business. 41. The doctrine of indoor management means. A. strangers dealing with the company may assume that everything is done regularly B. strangers must enquire into the regularity of proceedings. C. strangers can afford to be negligent a s regularity is the companys responsibility. D. constructive notice 42. The doctrine of constructive notice implies that. A. every person dealing with the company is deemed to have notice of the documents field B. with the registrar of companies C. regularity of proceedings need be enquired into a notice of a weeks period is to be given for every exchange of correspondence D. indoor management 43. An exception to the doctrine of constructive notice is. A. the doctrine of ultra vires. B. the doctrine of indoor management. C. lifting the corporate veil. D. the doctrine of ultra vires in Articles of Association.

7 7 of , 15: Protection can be claimed under the doctrine of constructive notice if. A. the act is voidable. B. no inquiries are made. C. no inquiries are made. D. resolution. 45. A prospectus is to be issued within days of registration. A. 30. B. 60. C. 90. D A letter of provide must be demanded in the transmission of shares when a person. A. is declared insolvent. B. misbehaves. C. becomes of unsound mind. D. has died. 47. All monies received with the application of shares are to be deposited. A. with the controller of capital issues. B. in the companys bank account C. in a special account opened in a scheduled bank for the purpose D. with the registrar of companies 48..A company shall not proceed to allot shares until the beginning of the day from the date of issue of prospectus A. second. B. third. C. fifth. D. seventh. 49..The Return of document is to be filed with the Registrar in the case of. A. allotment of debentures B. reissue of forfeited shares C. issue of shares D. all of the above 50..The minimum subscription is to be received within days of the offer. A. 30. B. 60. C D The private company requires conversion of a public company into a. A. an ordinary resolution. B. a special resolution

8 8 of , 15:57 C. a special resolution and union governments approval D. a special resolution and company law board approval 52. A share certificate once issued by the company binds it in two ways,namely by estoppel as to title and A. by estoppel as to payment. B. by estoppel as to profit. C. by estoppel as to dividend. D. none 53. The charter of a company refers to its. A. prospectus. B. memorandum of association C. articles of association D. statement in lieu of a prospectus 54..A Person ceases to be a companys members when. A. he loses his share certificate. B. he becomes insolvent C. his share certificate is converted into a share warrant D. his shares are forfeited for nonpayment of call monies is the constitution of the company A. memorandum B. articles C. prospectus D. ownership 56. An association of 30 persons not registered under the companies Act but carrying on a business is a/an. A. illegal association B. partnership. C. private company D. public company. 57..Which of the following are characteristics of a company? A. It has unlimited liability. B. It exists only in contemplation of law C. It has not a perpetual succession D. It comes to an end on the death of all its members. 58. A company is a juristic person with a perpetual succession. A. as such it dies. B. its life depends on the life of its members. C. it is created by a process of law and can be put to an end only by a process of law D. none

9 9 of , 15: Since a company is regarded as an entity separate from its members,. A. the property of the company is the property of its shareholders B. the debts of the company are the debts of its shareholders. C. the shareholders can enter into contracts with the company. D. the shareholders have insurable interest in the property of the company 60. On a share of Rs. 100 of a company, a shareholder has already paid Rs. 30.His Liability is now limited to. A. Rs B. Rs. 30. C. Rs. 70. D. rs The Reserve Bank of India is an example of a. A. registered company. B. statutory company. C. chartered company. D. unlimited company. 62..A private company becomes a public by process of law. A. where not less than 25 percent of its paid-up share capital is held by one or more bodies corporate. B. where not less than 10 percent of it paid-up share capital is held by another single private company. C. where less 25 percent of the paid-up share capital of a public company is held by it. D. where not less than 20 percent of it paid-up share capital is held by another single private company. 63..The liability of a shareholder in a company limited by shares is. A. unlimited. B. limited by guarantee. C. limited to the unpaid value of shares subscribed by him. D. none of the above. 64. A company may change its name by passing. A. a special resolution. B. an ordinary resolution C. a special as well an ordinary resolution as the case may be. D. a unanimous resolution of the board of directors. 65..Where the registered office of a company is changed from one state to another a certified copy of the order of the company Law Board confirming the alteration must be filed by the company with. A. the Registrar of the state in which the company was originally located. B. the Registrar of the state in which the registered office is shifted. C. the Registrars of both the states D. the central Government.

10 10 of , 15: An act is said to be ultra vires a company when it is beyond the powers. A. of the company B. of the directors. C. of the directors but not the company. D. conferred on the company by the Articles. 67. The altered Memorandum must be filed with the Registrar within. A. 1 month of the company Law Boards order. B. 2 months of the company Law Boards order. C. 3 months of the company Law Boards order. D. 4 months of the company Law Boards order. 68. Which of the following companies need not have their own articles of Association? A.. unlimited companies. B. companies limited by guarantee. C. private companies limited by shares. D. public companies limited by shares. 69..If public company limited y shares does not have its own Articles, it may adopt. A. table a in schedule i to the act. B. table b in schedule i to the act. C. table c in schedule i to the act. D. table d in schedule i to the act. 70. the Articles of a company conflict with the Memorandum. A. the Articles shall prevail. B. the Memorandum shall prevail C. the directors will resolve the conflict. D. the court will resolve the conflict. 71..The memorandum and Articles of a company are open to inspection by. A. the members of the company B. the members and creditors of the company. C. everybody. D. the Registrar. 72..Any person who induces a company to allot shares in a fictitious name is punishable with. A. a fine of Rs. 5,000. B. a fine of Rs. 10,000. C. imprisonment upto 5 years D. a fine of Rs. 5,000 and imprisonment upto 5 years 73. A shareholder purchased in the open market shares of a company whose prospectus contained some misstatements. He. A. can rescind the contract only but cannot claim damages. B. can claim damages only but cannot rescind the contract.

11 11 of , 15:57 C. has no remedy against the company. D. has remedy against the directors responsible for the issue of the prospectus. 74. A statement in lieu of prospectus is required to be issued. A. by all companies which issue shares or debentures B. by public companies when shares are issued among friends and relatives. C. by private companies as they do not issue shares to the public D. by all companies 75..Underwriting means. A. selling shares at a discount. B. purchasing property at less than market price. C. agreeing to purchase shortfall of shares in a company in case of under subscription D. offering new shares to outsiders 76..The underwriting commission paid or agreed to be paid must not exceed. A. 2 percent of the issue price of the shares. B. 2.5 percent of the issue price of the shares C. 5 percent of the issue price of the shares. D. 10 percent of the issue price of the shares. 77..Share capital of a company means. A. equity share capital. B. preference share capital C. equity and preference share capital. D. equity and preference share capital and debentures. 78. A shareholder in a company. A. can be its debentureholder B. cannot be its debentureholder C. alone can become its debentureholder D. must also become its debentureholder within a year of being a shareholder. 79..The dividend on preference capital is paid. A. whenever there are profits B. only if there are profits. C. even if there are no profits. D. only when the directors recommend it. 80..The name of a company can be changed by. A. an ordinary resolution. B. a special resolution. C. the approval of the union government. D. a special resolution and with the approval of the union government. 81. When is a company said to have been registered?

12 12 of , 15:57 A. when it files the memorandum of association with the registrar if companies. B. when it gets the certificate of incorporation. C. when it gets the certificate of commencement of business D. when it actually starts its business 82. Shares can be issued. A. at par. B. at discount. C. at premium. D. all of the above. 83. doctrine of ultar vires mean A. beyond the power B. no power C. with in the power D. none 84.. The debenture holders of a company are companys. A. owners. B. creditors. C. customers. D. all of these. 85. Annual General Meeting can be called by. A. anaging director. B. shareholders. C. board of directors. D. company secretary. 86. A share certificate is required to be signed by. A. company secretary. B. two directors. C. two directors and company secretary. D. all directors and company secretary. 87. A secretary should have sound knowledge of. A. company law. B. tax laws. C. labour laws. D. all of these. 88. The duties of Company Secretary s regarding company meetings are restricted upto. A. before company meeting. B. during company meeting C. after company meeting. D. ln all the above situations.

13 13 of , 15: Transmission of shares takes place in the following case. A. sale of shares. B. theft of shares. C. operation of any law. D. all of these. 90. A shareholder in a company. A. can be its debentureholder. B. cannot be its debentureholder. C. alone can become its debentureholder. D. must also become its debentureholder within a year of being a shareholder 91. The dividend on preference capital is paid. A. whenever there are profits. B. only if there are profits. C. even if there are no profits. D. only when the directors recommend it 92. A Company at least 51% of whose share capital is held by the government, is called a. A. public enterprise. B. public company. C. public corporation. D.. government company. 93..A private company issue deferred shares with disproportionatevoting rights. A. can ony B. can. C. cannot. D. can with the prior approval of the government. 94. The name of a company can be changed by. A. an ordinary resolution. B. a special resolution C. the approval of the union government. D.. a special resolution and with the approval of the union government. 95..When is a company said to have been registered? A. when it files the memorandum of association with the registrar if companies B. when it gets the certificate of incorporation C. when it gets the certificate of commencement of business D. when it actually starts its business. 96. how many types of preference shares A. 8 B. 7 C. 6

14 14 of , 15:57 D Shares can be issued. A. at par. B. at discount. C. at premium. D. all of the above. 98. After re-issue of forfeited shares the balance of forfeited share account is transferred to. A. general reserve. B. profit & loss a/c. C. capital reserve. D. none of these The debenture holders of a company are companys. A. owners. B. creditors C. customers. D. all of these A company secretary has to be. A. firm or body corporate. B. registered with securities and exchange board of india (sebi). C. person with desired professional degree D.. part of any secretarial agency A share certificate is required to be signed by. A. company secretary. B. two directors C. two directors and company secretary. D. all directors and company secretary The duties of Company Secretary s regarding company meetings are restricted upto. A. before company meeting B. during company meeting C. after company meeting. D. ln all the above situations 103..Transmission of shares takes place in the following case A. sale of shares. B. theft of shares C. operation of any law. D. all of these 104. one of the following is NOT an advantage of the incorporation of the company? A. perpetual succession

15 15 of , 15:57 B. limited liabilities of members. C. capital contribution forming part of the joint stock f the company. D. Freedom to do any business 105. Economic oligarchy, fraudulent practices, bureaucratic management and difficulty in formation are the limitations of a. A. sole proprietary concern. B. partnership firm. C. joint stock company. D. co-operate society To enable a company to pay dividends, a special authority is. A. not needed either in the memorandum or in the articles B. needed either in the memorandum or in the articles C. needed only in the memorandum D. needed only in the articles Which of the following is not feature of a private companies act? A. Limitation of the number of the number of its members. B. Restriction on the right to transfer its shares. C. Ban on floating of debentures D. Prohibition of any invitation to the public According to the companies act, which one of the following companies can commence allotment of shares even before the minimum subscription is subscribed or paid? A. Charted company. B. Private company. C. Government company D. Public limited company 109. Which one of the following companies deal with only its shareholders for their benefit? A. Private limited company. B. Chit fund company C. Nidhi company. D. Banking company Which of the following reports is to be placed before the parliament by a government company? A. Directors report. B. Annual report. C. Income report. D. Statutory report Share premium received by issuing shares can be used for. A. payment of dividend B. issue of bonus share. C. remuneration to management. D. any business purpose

16 16 of , 15: Which of the following is the joint stock company as per companies act, 1956? A. a charitable trust B. a partnership firm with fixed capital C. a society with fixed reserve fund. D. a partnership firm Under the companies act, which of the following powers can be exercised by the board of directors? A. Power to sell any of the companies undertaking B. Power to make call. C. Power to borrow money in excess of the paid up capital. D. Power to reappoint on auditor A public limited company can offer pre-emptive rights only to the. A. directors of the company. B. existing equity share holders. C. debenture holders. D. short-term creditors of the company The liability of shareholders of a public company is limited to the. A. paid up value of shares B. nominal value of shares C. extent of their private assets D. amounts called up Under the Indian Companies Act, 1956, a person can be a Director in. A. 7 companies. B. 10 companies C. 20 companies. D. 25 companies Rights shares means the shares which are. A. issued to the directors of the company B. first offered to the debentureholders C. first offered to the existing shareholders D. issued by a newly formed company Reserve Bank of India is an example of. A. department organisation of the central government. B. government company C. public corporation D. none of these Investment in which of the following is most risky? A. equity shares.

17 17 of , 15:57 B. preference shares C. debenture. D. Land A project, which may not add to the existing profits, should be financed by. A. debentures. B. preference share capital. C. equity capital. D. public deposits Which of the following is not an ownership security? A. equity shares. B. debentures. C. preference shares. D. None of the above In which of the following, interest and dividend is payable even if the company does not earn profit? A. equity capital B. preference capital. C. debentures. D. bonds 123. A manager with a share in the profits. A. is only a servant of the firm. B. becomes a partner by the operation of law. C. becomes a partner by implied agreement. D. becomes a partner from status Debentures cannot be. A. irredemable debentures. B. participating debentures C. registered debentures D. earear debbentures 125. Control of management of the company mainly vests in. A. equity shareholders. B. preference shareholders C. debenture holders D. All of these Public deposits obtained by a company means. A. deposits received from Government B. deposits received from public at large. C. deposits received from stockists and agent as advance. D. all of these.

18 18 of , 15: A Government company is one in which. A. the entire sha re capital is held by the central and / or state government. B. 50% of capital is held by central government and the remaining 50% by one or more state governments C. at least 51% of the capital is held by central and / or state governments. D. none of these The existence of a joint stock company is interrupted by. A. the death of its members B. the death of its directors. C. the death or insolvency of its manigins; director. D. none of these The liability of members of a co-operative society is. A. limited to the amount of nominal value of capital held. B. limited to the amount of paid up value of the capital held. C. unlimited. D. limited or unlimited depending upon what the society has opted When an existing company offers its shares for sale to the existing shareholders, it is known as. A. private placing B. bonus issue. C. rights issue. D.. offer for sale The most common method used for marketing of new securities is. A. sale of existing shareholders. B. stock exchange placing. C. direct sale to public through prospectus. D. sale to biometers Reserve Bank of India is a. A. statutory corporation. B. a company limited by guarantee. C. a company limited by shares D. an unlimited company A is a combination of two companies to form a new company. A. merger. B. public. C. private. D. government Dividend on preference capital will be paid. A. only when there are profits.

19 19 of , 15:57 B. even if there are no profits. C. only when directors recommend. D. only when share holders recommend Which of the following securities is not redeemable? A. equity shares. B. preference shares. C. cumulative preference shares. D. debentures The Articles of association establishes relationship between. A. company and its members. B. company and outsiders C. company and its members and members inter se. D. general public company 137. Articles of Association can be altered by A. a resolution of the board of directors. B. an ordinary resolution in general meeting. C. a special resolution i.n general meeting D. obtaining permission from the company law board Which of the following companies must file a statement in lieu of prospectus? A. a company which has issued a prospectus. B. a public company which has not issued a prospectus C. a private limited company. D. all of these Which of the following is the top administrative organ of the company. A. shareholders. B. managing director. C. bord of director. D. general manager A public corporation means A. public company B. government company. C. statutory corporation D. deptt of union govt The partnership entity is. A. legal entity. B. legal entity and accotmtable entity. C. neither legal entiry nor accountable entity. D. Group of individuals without legal status.

20 20 of , 15: Promoter is a person who. A. takes part in the incorporation of a company. B. is a director. C. is a relative of the managing director. D. works to siva publicity to the co A company created by an act of parliament is. A. A statutory company. B. Legal company. C. Formal company. D. Govt. company Name of a company can be altered by. A. an ordinary resolution B. a special resolution. C. an approval of the central government D. a special resolution and with the approval of the central government Further issue of shares can be made to. A. public. B. financial institution. C. existing share holders. D. debenture holders The first auditor of a company are appointed by. A. board of directors B. Members. C. central govt. D. state government 147. The secretary of a company maybe. A. only an individual. B. only body corporate C. group of persons. D. Shareholders A deemed public company must have at least. A. 1director B. 2directors. C. 3 directors. D. 5 directors Dividend and interest are. A. Synonymous terms. B. different from each other. C. debited to profit and loss account. D. divisible profits.

21 21 of , 15: Auditors act as agent of. A. Shareholders. B. directors. C. promoter. D. debenture holder. Staff Name Kavitha P.