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 business organisation and correspondence company secretary managers of the company secretary joint stock company 5 - direction and management

Key Managerial person in relation to company means ___________.

  1. Chief Financial Officer

  2. Company Secretary

  3. Chief Chartered Accountant

  4. both a and b
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Under the Companies Act, Key Managerial Personnel (KMP) include the CEO, MD, Manager, Company Secretary, and CFO. Therefore, both CFO and Company Secretary are correct.

Multiple choice organisation of commerce and management sectoral organisation of business classification of commercial organisations public, private and joint sector private and public sector departmental undertakings meaning and features of departmental undertaking

The committee which is, set up to advise the Central Government and Company Law Board on the administration of the companies Act is the Advisory Committee.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

For the purpose of advising the Central Government and the Company Law Board on such matters arising out of the administration of this Act as may be referred to it by that Government or Board, the Central Government, may constitute an 'Advisory Committee' consisting of not more than five persons with suitable qualifications.

Multiple choice organisation of commerce and management sectoral organisation of business classification of commercial organisations public, private and joint sector private and public sector departmental undertakings meaning and features of departmental undertaking

State with reasons whether the following statements are True or False:
A public company need not issue prospectus for raising capital. 

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
(i) A prospectus usually is in the form of a statement giving all material information about the company and showing its future prospects. 
(ii) It aims at inviting investors to subscribe for its shares and debentures. 
(iii) It is a must for every public company to prepare its prospectus. 
(iv) It is through the prospectus that the prospective investors know details of the shares offered by the company. 
(v) Otherwise, the investors would have no idea of the shares that a public company is selling
(vi) All detailed information about a company like its business, management, financial structure etc. are provided in the prospectus. 
(vii) The main idea to issue a prospectus is to collect capital for the company from the general public. 
(viii) Although the main aim of the prospectus is to invite or attract investors towards the company still no mis-statement or false claim shall be made in it to deceive the investors. 
(ix) It should contain true, fair and correct information. 
(x) Hence, it is very necessary fora public company to issue a prospectus, as it has to collect its capital from the general public. 
Multiple choice organisation of commerce and management sectoral organisation of business classification of commercial organisations public, private and joint sector private and public sector departmental undertakings meaning and features of departmental undertaking

All the appointed directors are required to submit their consent letter to Registrar. It is true for ______________.

  1. private ltd. co.

  2. public ltd. co.

  3. all the companies

  4. not relevant
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In accordance with the section 152(5) of the companies act 2013, a person appointed as a director of any company shall not act as a director unless he gives his consent to hold the office as director and such consent has been filed with the Registrar within 30 days of his appointment.

Multiple choice organisation of commerce and management sectoral organisation of business classification of commercial organisations public, private and joint sector private and public sector departmental undertakings meaning and features of departmental undertaking

Below mentioned are the features of a public enterprise except __________.

  1. its primary objective is to serve Government departments

  2. they are not accountable to public

  3. in some specific areas, they have monopoly.

  4. both a. and b,
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Characteristics of public sector entities are- 
  • Public accountability.
  • Multiple objectives.
  • Rights, powers and responsibilities 
  • Lack of equity ownership.
  • Operating and financial frameworks set by legislation.
  • The importance of the budget.
  • Governance structures.
  • Nature of resources
Multiple choice commercial studies classification of commercial organisations public, private and joint sector private and public sector sectoral organisation of business departmental undertakings meaning and features of departmental undertaking

Under section 44 of the companies Act_________________.

  1. A private company can convert into public company

  2. A private company can wound up

  3. A public company can wound up

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

Section 44 of the Companies Act 2013: Nature of Shares or Debentures. The shares or debentures or other interest of any member in a company shall be movable property transferable in the manner provided by the articles of the company.

Multiple choice commercial studies classification of commercial organisations public, private and joint sector private and public sector sectoral organisation of business departmental undertakings meaning and features of departmental undertaking

Private limited company may appoint ________ number of directors.

  1. 12

  2. 3

  3. 18

  4. 15
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

According to section 149(1) of companies act 2013, a private company can appoint minimum 2 directors and maximum 15 directors.

Multiple choice commercial applications single entry system introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records meaning of incomplete records, reasons for incompleteness and its limitations ascertaining profit or loss from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs double entry system

Generally incomplete records are maintained by ____________.

  1. Trader

  2. Company

  3. Society

  4. Government
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

As Profit or loss under single entry system is ascertained by the difference between Closing and Opening Capitals it make convenient for small traders to follow single entry system due to following features:
a) Hassle free
b) no need for maintaining books of accounts
c) special knowledge of double entry system is not required.

Multiple choice commercial applications single entry system introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records meaning of incomplete records, reasons for incompleteness and its limitations ascertaining profit or loss from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs double entry system

In _____ forms of business the owners are directly responsible for the debts of the business.

  1. Sole proprietor

  2. Corporate body

  3. Both

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

Sole proprietorship is type of enterprise that is owned and run by one natural person and in which there is no legal distinction between the owner and business entity. The owner is in direct control of all elements and is legally accountable for the finances of such business and this may include debt, loans, loss, etc.

Multiple choice commerce sources of business finance - 2 public deposits non-institutional sources - medium-term financing lease financing

Public deposit obtained by a company means _______________.

  1. Deposits received from Government

  2. Deposits received from public at large

  3. Deposits received from stockists and agents

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

Public deposits obtained by a company means the deposits received by the company from public at large. Public deposits are unsecured, long term debt instrument. They have a slightly higher rate of interest when compared to that of interest rates of banks. They are usually issued to meet the working capital needs of the company.

Multiple choice commercial studies finance and accounts meaning and functions of finance and accounts department nature, need and significance of business finance introduction to business capital/finance

As per section 2(51) of the Companies Act, 2013, "Key Managerial Personnel", in relation to a company, means _______.
(i) Chief Executive officer or managing director or manager
(ii) Company Secretary
(iii) General Manager
(iv) Whole Time Director
(v) Chief Legal Officer 
(vi) Chief Financial Officer
The correct answer is -

  1. (i), (ii), (iv) & (vi)

  2. (i), (iii), (iv), (v) & (vi)

  3. (i), (ii), (v) & (vi)

  4. (i), (iv), (v) & (vi)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

According to Section 2(51) of the Companies Act, 2013, Key Managerial Personnel includes the CEO/MD/Manager, Company Secretary, Whole-time Director, and CFO.

Multiple choice commercial studies finance and accounts meaning and functions of finance and accounts department nature, need and significance of business finance introduction to business capital/finance

Every business enterprise must undertake such business which is_________________.

  1. Unlawful

  2. Lawful

  3. Illegal

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

Every business enterprise must undertake such business which is lawful. All business organization should adhere to the law of the country to ensure peace and order. Illegal and unlawful business organizations should not be undertaken.

Multiple choice organisation of commerce and management government organisation departmental undertakings meaning and features of departmental undertaking forms, comparison and cases of public enterprises classification of commercial organisations

The public corporation is suitable for undertakings requiring monopoly powers, eg public utilities.

  1. True

  2. False

  3. Partly true

  4. None of above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
The term public sector undertaking enterprise refers to a Government Company. The government company gets incorporated under the companies act, 1956. All the provisions of companies act are applicable to a government company. Ownership: The government company is wholly or partly owned by the government.