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 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.
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

Departmental undertakings are subject to accounting and audit that apply to other government activities.

  1. True

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

The departmental undertaking is the oldest and traditional form of an organization of the public sector enterprise.It is organized, financed and controlled in such a manner that any other government organization. The undertaking is under the control of a minister who is responsible to the parliament.

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

Departmental undertakings is a part of the private sector group of companies.

  1. True

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

The departmental undertaking is the oldest and traditional form of an organization of the public sector enterprise.It is organized, financed and controlled in such a manner that any other government organization. 

The undertaking is under the control of a minister who is responsible to the parliament.

Multiple choice commercial applications 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, e.g., 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

A company whose shares are publicly traded and are usually held by a large number (hundreds or thousands) of shareholders. 

The usual British term is public limited company. A government owned company such as an airline or public transit company. See also corporation sole.

Multiple choice organisation of commerce and management public sector undertakings & global enterprises departmental undertakings meaning and features of departmental undertaking government organisation classification of commercial organisations

The company which is incorporated outside India but has a place of business in India through its branches or agencies is known as _______.

  1. Indian Company

  2. Foreign Company

  3. Domestic Company

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

Foreign company means any company or body corporate incorporated outside India which : Has a place of business in India whether by itself or through an agent, physically or through electronic mode and. Conducts any business activity in India in any other manner.

Multiple choice organisation of commerce and management public sector undertakings & global enterprises departmental undertakings meaning and features of departmental undertaking government organisation classification of commercial organisations

Which of the following statement is false?

  1. No legal formality is required to form a company

  2. The shareholders of a company have limited company

  3. A company can own property in its own name.

  4. A company is managed by the elected representatives of shareholders.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Formality also means the conditions which must be observed in making contracts, and the words which the law gives to be used in order to render them valid. It also signifies the conditions which the law requires to make regular proceedings.

Multiple choice commerce sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

The articles of association contains the _________.

  1. rules

  2. regulations

  3. by-laws

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Articles of Association are the rules regarding internal management of a company.These rules are subsidiary to the Memorandum of Association and hence, should not contradict or exceed anything stated in the Memorandum of Association. The Article of Association contains rules, regulations, by-laws, etc.
Multiple choice business organisation and correspondence classification of busniess activities concept and types of commerce and industry nature of industries and commerce operative activities in business business as an activity meaning and types of trade trade and aids to trade
State the following statement is True or False:
Articles of Association acts as the charter of the company. 

  1. True

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

The Memorandum of Association is the charter of the company, while the Articles of Association contain the rules and regulations for internal management.

Multiple choice business organisation and correspondence classification of busniess activities concept and types of commerce and industry nature of industries and commerce operative activities in business business as an activity meaning and types of trade trade and aids to trade

Limited liability company posses not more than $2$ of the following character
$1$. Limited liability
$2$. Raise funds from public
$3$. No separation of management from owners
$4$. Restriction on number of partners

  1. $2 \& 4$
  2. $1 \& 2$
  3. $1 \& 3$
  4. $1 \& 4$
Reveal answer Fill a bubble to check yourself
A Correct answer
Multiple choice elements of business operative activities in business concept and types of commerce and industry nature of industries and commerce role, branches and types of industry and commerce business as an activity meaning and types of trade trade and aids to trade

State with reasons whether the following statement is True or False:
Prospectus is a charter of the company.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
(i) Prospectus is an invitation to public to purchase its shares and debentures. 
(ii) It is issued after the formation of company. 
(iii) The Memorandum of Association on the other hand is a basic or fundamental or prim' document of a company. 
(iv) It lays down the ranges of its activities.
(v) It is a public document and can be inspected by those who deals with the company. 
(vi) It states the nature of business activities: to:be conducted by the company.
(vii) It defines the relationship between the company and the outsiders.
(viii) All companies have to prepare their own Memorandum of Association. 
(ix) It is submitted to the Registrar of Companies for registration.
(x) It is a charter or constitution of a company. 
(xi) No company can be incorporated without Memorandum of Association. 
So it is clear, that prospectus is not the charter of the company. The Memorandum of Association is the charter of the-company.
Multiple choice elements of business operative activities in business concept and types of commerce and industry nature of industries and commerce role, branches and types of industry and commerce business as an activity meaning and types of trade trade and aids to trade

Common examples for non-profit corporations are ________________.

  1. Educational corporations

  2. Charitable corporations

  3. Religious corporations

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

Non-profit corporations are all such organisations that do not operate for profit earning purpose and usually possess some social motive for the business. Common examples- educational corporations, charitable corporations and religious corporations.

Multiple choice commercial studies stakeholders in commercial organisation internal & external stakeholders and distinction between shareholders, stakeholders and customers stakeholders final accounts of companies

In a company person making investment are called _____.

  1. partners

  2. members

  3. shareholders

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

In a company person making investment are called as shareholders. Shareholders are the owners of the company. They buy shares of the company there by investing money in the business. The shareholders of the company do not wholly manage the business but they do have voting rights in the decision making of the company.

Multiple choice commercial studies stakeholders in commercial organisation internal & external stakeholders and distinction between shareholders, stakeholders and customers stakeholders final accounts of companies

As a stakeholder, Government expects ________.

  1. Quality goods at reasonable prices

  2. More and more non-monetary benefits

  3. The company to pay taxes promptly and is environment friendly

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

Stakeholders refer to any individual or organization whose interest or concern lies with the business.As a stakeholder, Government expects the company to pay taxes promptly and is environment friendly.