Commerce Accountancy · Law Legal Studies

Business Organizations and Corporate Governance

1,376 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

Which of the following is not considered to be a legal status for a registered union?

  1. No power to acquire and hold both movable and immovable property

  2. Power to contract with other entities

  3. Perpetual succession and common seal

  4. A body corporate by the name under which it is registered
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Every registered Trade Union shall be a body corporate by the name under which it is registered, and shall have perpetual succession and a common seal with power to acquire and hold both movable and immovable property and to contract, and shall by the said name sue and be sued.

Multiple choice

A corporate social responsibility committee of the board has to be constituted for every company having

  1. net worth of rupees five hundred crore or more during any financial year

  2. turnover of rupees one thousand crore during any financial year

  3. net profit of rupees five crore or more during any financial year

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Section 135 of the Companies Act, 2013 states that every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or net profit of rupees five crore or more during any financial year shall constitute a corporate social responsibility committee of the board consisting of three or more directors, out of which at least one director shall be an independent director.

Multiple choice

The board of a company may decide to undertake its CSR activities approved by the CSR committee through

  1. a registered trust

  2. a registered society

  3. a company established by the company

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The board may decide to undertake the CSR activities as recommended by the CSR committee through a registered trust or a registered society or a company established by the company or its holding or subsidiary or associate company under Section 8 of the act or otherwise.

Multiple choice

Which of the following statements is not correct?

  1. The board of every company shall, after taking into account the recommendations made by the corporate social responsibility committee, approve the corporate social responsibility policy for the company and disclose contents of such policy in its report and also place it on the company’s website, if any, in such manner as may be prescribed.

  2. The board of every company shall ensure that the activities that are included in the corporate social responsibility policy of the company are undertaken by the company.

  3. The board of every company shall ensure that the company spends, in every financial year, at least two percent of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its corporate social responsibility policy.

  4. None of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Section 135 of the Companies Act, 2013 states that the board of every company referred to in subsection (1) shall

  1. after taking into account the recommendations made by the corporate social responsibility committee, approve the corporate social responsibility policy for the company and disclose contents of such policy in its report and also place it on the company’s website, if any, in such manner as may be prescribed
  2. ensure that the activities that are included in the corporate social responsibility policy of the company are undertaken by the company
  3. ensure that the company spends, in every financial year, at least two percent of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its corporate social responsibility policy
Multiple choice

Which of the following statement(s) is/are correct in connection with the appointment of first secretary? (i) The first Secretary has been appointed by Promoter. (j) His name should be mentioned in Articles of Association. (k) His appointment should be confirmed by Board of Directors.

  1. (i) and (j)

  2. (i) and (k)

  3. (j) and (k)

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

First Secretary is appointed by the promoters and then by board resolutions. His name and stamp is required in the Articles of Association. Confirmation of Board of Directors is mandatory while appointing a Company Secretary.

Multiple choice

Directions: Choose the correct option for the given question.

Which of the following certificates is/are required for a private company?

  1. Certificate of Incorporation

  2. Certificate of Commencement of Business

  3. Both (1) and (2)

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

Business can be started by a company without obtaining certificate from Ministry of corporate affairs. But Certificate of Incorporation is required to make a company in existence. So option(1) is correct.  

Multiple choice

Directions: Choose the correct option for the given question.

Which of the following is an alteration of Memorandum of Association?

  1. Change of one premises or building to another premises or building within the city.

  2. Change of headquarters from one place to another within the same state.

  3. Change of headquarters from one state to another state.

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

Option (3) is correct: For changing the Registered office from one state to another, the company needs to alter the MOA. Option (1) and (2) are incorrect: No alteration of MOA required in both cases.