Commerce Accountancy · Law Legal Studies

Business Organizations and Corporate Governance

1,402 Questions

Business organizations and corporate governance explore company structures, stakeholder responsibilities, and regulatory frameworks under the Companies Act. These commerce topics are essential for Chartered Accountancy, company secretary exams, and banking probationary officer assessments. Practice these questions to master corporate formation, director roles, and business ownership types.

Companies Act 2013 provisionsCorporate stakeholder rolesPrivate limited company rulesDebenture holder rightsCompany incorporation rulesState-owned enterprises

Business Organizations and Corporate Governance Questions

Multiple choice

Company has __________ succession

  1. longer

  2. continued

  3. perpetual

  4. limited
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A company enjoys a separate legal entity with perpetual succession and common seal. It can acquire the property in its own name. It can sue and be sued and can enter into contracts in its own name.

Multiple choice

Injunction order is issued by

  1. Court

  2. Company

  3. Company Law Board

  4. None of above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

An injunction is an order of a Court restraining a person from doing a particular act. It is a mode of securing the specific performance of a negative term of the contract, (i.e., where he is doing something which he promises not to do), the Court may in its discretion issue an order to the defendant restraining him from doing what he promised not to do.

Multiple choice

Which of the following statements are true with regard to statutory corporation?

(i) Generally financed by the central or state government (ii) Can not recruit and appoint their employee with their service condition (iii) Have a separate legal entity (iv) A lot of government interference in matters of the corporation

  1. (i) and (ii)

  2. (i) and (iii)

  3. (i), (ii) and (iii)

  4. (i), (ii), (iii) and (iv)
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Some of the features are:

  1. Generally financed by the central or state government
  2. Can borrow funds from the public and government organisation through statutory sources
  3. Have separate legal entity
  4. Have to frame their own policies and procedures within the scope of state legislature
  5. Providing better services to public and make adequate profit.
  6. Autonomous in their functioning thus they enjoy operation flexibility.
  7. Can recruit & appoint their employee with their service condition, since they are corporate body.
  8. Have to follow the special statute strictly.
  9. Less government interference in matters of the corporation
  10. Limited liability of the members of the corporation

Thus, only (i) and (iii) are true. 

Multiple choice

A Chairman who is appointed on a whole-time basis as a Managing Director of a banking company should not have ____________ in any other company.

  1. beneficial interest

  2. any interest

  3. substantial interest

  4. majority interest
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A person shall be disqualified for being Chairman who is appointed on a whole-time basis as a Managing Director, if he––

(a) is a director of any company other, than a company referred to in the proviso to sub-section 

(b) is a partner of any firm which carries on any trade, business or industry

(c) has substantial interest in any other company or firm

(d) is a director, manager, managing agent, partner or proprietor of any trading, commercial or industrial concern

(e) is engaged in any other business or vocation.

Multiple choice

A Public Limited Company shares are:

  1. Not transferable

  2. Transferable

  3. The Act is silent

  4. All the above are correct
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

As stipulated under Section 58(2) of the CA13, the shares of a public company are freely transferrable.

Multiple choice

Private trusts are governed by

  1. Companies Act

  2. Partner ship Act

  3. Indian Trusts Act

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Private trusts are governed by the Indian Trusts Act, 1882. This Act is applicable to the whole of India, except the State of Jammu and Kashmir and the Andaman and Nicobar Islands.

Multiple choice

A voluntary winding up may take place by passing an ordinary resolution in the general meeting if

  1. the period fixed for the duration of the company by the articles has expired

  2. the duration of the company has not expired and will not expire for another two months

  3. some event, on the happening of which company is to be dissolved, has not happened

  4. no permission but concurrence of High Court is required
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When a company is wound up by the members or the creditors without the intervention of the tribunal, it is called as voluntary winding up. It may take place by the passing of an ordinary resolution in the general meeting if 

  1. the period fixed for the duration of the company by the articles has expired 
  2. some event, on the happening of which the company is to be dissolved, has happened
Multiple choice

Which of the following is not a feature of a company?

  1. Incorporated entity

  2. Separate legal identity

  3. Artificial personality

  4. Unlimited liability

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Unlike the partnership firm, a company does not have unlimited liability on its members. The liability of members is limited. 

Multiple choice

To wind up the affairs of a company, the person appointed by the Court is called

  1. executor

  2. liquidator

  3. administrator

  4. assignee
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In law, a liquidator is the officer who is appointed when a company goes into winding-up or liquidation and who has responsibility for collecting in all of the assets of the company and settling all claims against the company, before putting the company into dissolution.

Multiple choice

Which of the following is true with regard to the liability of a director of the company, in case of dishonour of a cheque that was issued by the company?

  1. All the directors are liable

  2. Nominated directors also liable

  3. Directors responsible for conduct of the business of the company, including managing director

  4. Only those directors who are responsible for accounts maintenance of the company

  5. All of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Section 141 of the NI Act makes the directors, manager, secretary and other officers of the companies liable if the offence is committed because of negligence on their part. The director must be, at the time of commission of offence, in-charge and responsible for the conduct of the business of the company. Section 141 does not make all the directors liable for the offence.