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 applications public sector enterprises role of government and development policies government companies government and taxes

The Company Law Board deals only with the legal matters of companies.

  1. True

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

This statements is False because of the following reasons :

(i) According to the Companies (Amendment ) Act,1988 the Company Law Board is to exercise and discharge such power and function as may be given to it by or under the Companies Act or any other law.
(ii) Almost all the powers and function of the Central Government  under the provision of the Companies Act, have been delegated to the Board.
(iii) The Company Law Board is the executive arm of the department of  company affairs.
(iv) Most of the powers, which were so long exercised by the court or the Central Government  are now transferred to the Company Law Board.
(v) These powers are mainly judicial in nature.
(vi) The board also has power of civil court (Section 4C).
(vii) It also has the power of punishment for contempt of any order passed by it.
(viii) The Company Law Board shall be guided by the principles of nature justice and shall act independently in its discretion.
(ix) Hence, the Company Law Board only deals with the legal matters of companies , but also other matters.         

Multiple choice commercial applications public sector enterprises role of government and development policies government companies government and taxes

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

  1. True

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

This statement is True because of the following reasons:

(i) Section (411-415) of the Companies Act states "For the purpose of advising the Central and the Company Law Board on such matters arising cut of the administration of this companies Act as may be referred to it by that the Government  or Board.
(ii) The Central Government  may constitute an Advisory  Committee consisting not more than five person with suitable qualifications.
(iii) The committee is mainly set up to guide and advise the Central Government and Company Law Board on matter arising out of the administration of the Companies Act.
(iv) The advisory committee has power only to give advice.
(v) It has no power to investigate the matter or to make an inquiry.
(vi) Thus, the Advisory Committee is set up to advise the Central Government and Company Law Board on the administration of the Companies Act.

Multiple choice commercial applications public sector enterprises role of government and development policies government companies government and taxes

The Registrar of Companies is recognised as a statutory authority under the Indian Companies Act, 1956.

  1. True

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

This statements is True because of the following reasons:

(i) The Registrar  of Companies is a full time government officer working at the lower level in  regard to regulation and control of joint stock companies operating   within his jurisdiction. 
(ii)  The act has given wide powers to the Registrar.
(iii) He is an important constituent of the monitoring mechanism created for effective supervision  and control on joint stock companies.
(iv) The Registrar is responsible for the administration of the Companies Act in the state in which he is appointed.
(v) He has to see that registered companies operate within the legal limits of the Act.
(vi) He is even authorised to initiate disciplinary action against a company for non- compliance of the legal provisions.
(vii) The Registrar of companies is the most important constituent of the monitoring mechanism for joint stock companies in India.
(viii) For the above reasons the Registrar of companies is recognised as a statutory authority under the Companies Act,1956.

Multiple choice commercial applications public sector enterprises role of government and development policies government companies government and taxes

Company Law Board is constituted as quasi-judicial body.

  1. True

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

This statement is True , due to the following reasons:

(i) The company Law Board was established by the Companies (Amendment) Act,1963 with the aim of better and convenient administration of the companies.
(ii) The Company Law Board was constituted by the Central Government .
(iii)The Company Law Board is an independent quasi - judicial body.
(iv) It is constituted to exercise some of the judicial and quasi - judicial functions which were previously exercise by the court or the Central Government.
(v) It was constituted on 1st February,1964.
(vi) But with effect from 31st May,1991 Company Law Board was constituted by the Central Government as an independent quasi - judicial body.
(vii) The company Law Board shall consist maximum nine members.
(viii) One of the member shall be appointed by the Central Government as the Chairman.
(ix) The Company Law Board has the power to discover and inspect the documents to be used as evidence.
(x) To examine witness on oath.
(xi) Granting adjournment,etc.

Multiple choice commercial applications public sector enterprises role of government and development policies government companies government and taxes

Official liquidators have an important role to play in the winding up of a company.

  1. True

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

This statements is True because of the following reasons:

(i) The liquidator is a person who helps the court to complete the liquidation proceedings i.e. in releasing the assets of the company and distributing them among the creditors and  contributors most fairly.
(ii) It may be noted that only 'Official Liquidator' can function  as  liquidator in compulsory  winding up of a company under the order of the court and the court has no power to appoint private persons as liquidators.
(iii)The liquidator has to complete the liquidation proceeding in a just  and fair manner.
(iv) He has to see that justice is done to the creditors and other connected with the company which is closed down.
(v) The role played by liquidators is responsible and delicate and it need a fairs approach  openness and sound judgement.
(vi) Thus, official liquidations have an important role to play in the winding up of a company. 

Multiple choice income tax direct taxes commerce black money and tax evasion meaning of tax

The Previous Year in case of newly started business shall be the period between commencement of business and 31st March of the following year.

  1. True

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

The starting of an assessment year is counted from 1st April. Hence the previous year of a newly started business would be date of commencement of the business and 31st March of the following year.

Multiple choice income tax direct taxes commerce black money and tax evasion meaning of tax

Under Section 2(31), the word Person is defined to include _________.

  1. Individual

  2. Company

  3. Firm

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Under Section 2(31), the word Person is defined to include:
(i)         an Individual;
(ii)        a Hindu Undivided Family (HUF) ;
(iii)       a Company;
(iv)       a Firm
(v)        an association of persons or a body of individuals, whether incorporated or not;
(vi)       a local authority; and
(vii)      every artificial juridical person not falling within any of the preceding sub-clauses.
(viii)     Association of Persons or Body of Individuals or a Local authority or Artificial Juridical Persons shall be deemed to be a person whether or not, such persons are formed or established or       incorporated with the object of deriving profits or gains or income. 
Multiple choice organisation of commerce and management sources of business finance - 2 equity and preference shares equity shares and preference shares non-institutional sources - long-term

Assets of the company belongs to the _______________.

  1. company

  2. share holders

  3. members

  4. promoters
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
The shareholders are the owners of the company while the Board of Directors is the chief managing body elected by the shareholders. The capital of the company is divided into smaller parts called ‘shares’. Thus the assets of the company belongs to share holders.
Multiple choice organisation of commerce and management sources of business finance - 2 equity and preference shares equity shares and preference shares non-institutional sources - long-term

state the following statements are True or False:

An individual can become a part of the company if the individual purchases the companies debt. 

  1. True

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

An individual can become a part of the company if the individual purchases the companies debt- this is a false statement as debt is known as borrowed fund of the company and the person who purchases companies debt are known as the borrowers.

Multiple choice organisation of commerce and management sources of business finance - 2 equity and preference shares equity shares and preference shares non-institutional sources - long-term

Companys owners are shareholders. So the company property belongs to the share holders. Do you agree with this statement?

  1. Yes

  2. No

  3. Sometimes yes

  4. Sometimes no
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Company owners are not ordinary share holders but equity share holders, which is also known as owner's share capital. So the company property belongs to the equity share holders.

Multiple choice book keeping and accountancy company accounts part - 2 (accounting for debentures) types of issue of debentures types of debentures meaning and kinds of debentures

Which of the following is incorrect?

  1. A company can issue irredeemable debentures

  2. A company can issue debentures with voting rights

  3. A company can buy its own shares

  4. A company can buy its own debentures
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

According to the Companies Act, a company cannot issue debentures with voting rights. Debenture holders are creditors, not owners, and therefore do not have voting power in company affairs.

Multiple choice business organisation and correspondence company management directors of the company introduction, meaning and definition of director joint stock company 5 - direction and management

According to the provisions of new Company Act, 2013, the 'SFIO' (Serious Fraud Investigation Office) shall be headed by _______________.

  1. A manager

  2. An auditor

  3. A director

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

The Central Government shall appoint a Director in the Serious Fraud Investigation Office, who shall be an officer not below the rank of a Joint Secretary to the Government of India having knowledge and experience in dealing with matters relating to corporate affairs.The SFIO is headed by a director not below the rank of a Joint Secretary to the Government of India having knowledge and experience in dealing with the matters relating to corporate affairs.

Multiple choice business organisation and correspondence company management directors of the company introduction, meaning and definition of director joint stock company 5 - direction and management

State the following statement is True or False:

The share qualification of the directors of a joint stock company is prescribed in Articles of Association.

  1. True

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

Generally, in a public company or a private company subsidiary of a public company, two-thirds of the total numbers of Directors are appointed by the shareholders and the remaining one-third is appointed in accordance with the manner prescribed in Articles failing which, the remaining one-third of the Directors must be appointed by the shareholders. The Articles of a public company or a private company subsidiary of a public company may provide for the retirement of all the Directors at every annual general meeting.

Multiple choice business organisation and correspondence company management directors of the company introduction, meaning and definition of director joint stock company 5 - direction and management

The Managing Directors can be appointed for the period of __________ years.

  1. one

  2. two

  3. tree

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

As per the provisions of Companies Act 2013, no company shall appoint or re-appoint any person as its managing director, whole-time director or manager for a term exceeding five years at a time.