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 business organisation and correspondence company management directors of the company introduction, meaning and definition of director joint stock company 5 - direction and management
Representative of shareholders are ____________.

  1. directors

  2. servants

  3. employees

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

The representatives of the shareholders are directors of the firm. Shareholders are the owners of the firm who owns certain part of shares in a firm while the directors are the top most level or authority responsible for the determination of company policies.

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 first Director of the company are elected by the _________.

  1. share holders

  2. promoters

  3. employees

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

Generally, the first directors are named in the articles. In such a case, there is no appointment. The general practice is that the promoters of  the company select the first directors and name them in the Articles.

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 Directors take decisions at ___________.

  1. Annual General meetings

  2. Board meetings

  3. Statutory meetings

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

Board meetings are formal meetings of the board of directors of an organisation held at definite intervals to consider policy issues and major problems. Hence the meetings at which the directors take decisions is called a board 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
Body of the Directors which looks after the management of a company _____________.

  1. Board of Directors

  2. Auditor

  3. Company's Secretary

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

A Board of directors is a group of individuals elected to represent shareholders. The Board's mandate is to establish policies for corporate management and oversight, making decisions on major company issues. Hence the body of directors which looks after the management of a company is Board of Directors.

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 ________ is a person who has not been validly appointed or who is disqualified but who in effect occupies the position of, and acts as if he were, a director.

  1. Alternate director

  2. De facto director

  3. Executive director

  4. Non-executive director
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
The de facto director is a person who has not been validly appointed or who is disqualified but who in effect occupies the position of, and acts as if he were, a director. Literally, a de facto director means 'a director by fact'.
A de facto director is not formally appointed but carries out all the duties and makes decisions as a director.
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

Write a word or a term or phrase which can substitute the following statement:

A person elected by the shareholders of a company:

  1. Director

  2. Secretary

  3. Auditor

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

Director is a person elected by the shareholders of a company. He has the responsibility for determining and implementing the company's policies.   

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

Minimum no. of Directors in case of a public company is _______.

  1. 1

  2. 2

  3. 3

  4. 4
Reveal answer Fill a bubble to check yourself
C 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’s appointment is made as per Articles and failing which, shareholders shall appoint the remaining one-third. A Minimum Number of Directors Required in a public Company are three directors. The Companies Act does not prescribe any qualifications for Directors of any company. 

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
Directors are the ____________.

  1. owners

  2. representative of shareholders

  3. creditors of the company

  4. none of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Director is an appointed elected member of the board of directors of a company who with other directors has the responsibility for determining and implementing the company's policies. Hence, directors are the representatives of shareholders.

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

Write a word or a term or phrase which can substitute the following statement:
A body of elected representatives of shareholders:

  1. Managing Directors

  2. Board of Directors

  3. Auditors

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

A board of directors is a group of individuals elected to represent shareholders. A boards mandate is to establish policies for corporate management and oversight, making on company's decision. Every public company must have a board of directors .

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

Write a word or a term or phrase which can substitute the following statement:

The shares which must be held by the director within two months of his appointment.

  1. Ordinary Share

  2. Equity Share

  3. Qualification Share

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

Qualification shares is a share of common stock that a candidature of company's board of directors is required to own within two months of his appointment. The term difference does not reflect a difference in the properties of a qualifying share to common shares held by other shareholders. Instead it refers to that a member of the board of directors must hold a vested interest in the operations of the enterprise in form of company stock.

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

Section 149(3) of Companies Act; 2013 deals with __________________.

  1. re-appointment of director

  2. appointment of director as additional director

  3. appointment of director as alternate director

  4. appointment of Resident director
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Section 149(3) of the Companies Act, 2013, mandates that every company must have at least one director who has stayed in India for a total period of not less than 182 days during the financial year.

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

Appointment of a person who is director, as a secretary of a company, required approval of the company by ___________.

  1. special resolution

  2. ordinary resolution

  3. resolution by circulation

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

Appointing a director as a company secretary often involves significant changes to their role and compensation, requiring a special resolution by the company members.

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

Which of the following is not a power of a Secretary?

  1. The acts directed to him by the Board

  2. The acts required to perform in order to discharge his duties

  3. The acts required to be performed under an Act

  4. Calling up the Board Meeting
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Calling up the Board Meeting is not a power of a Secretary though Company Secretary is appointed as a key managerial personnel. Only directors of the company can call for a board 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

A special notice is requested for a resolution when ____________________.

  1. A director is to be removed before the expiry of his period of office

  2. A statutory report has to be adopted

  3. There is alteration of share capital

  4. A company wants to convene a meeting of creditors
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A special notice is requested for a resolution when a director is to be removed before the expiry of his period of office. Special notice is issued by a company when a resolution is to be moved. It is issued when the company wants to remove a director from his/her office.

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

A director should obtain his qualification shares within ___________________.

  1. One month of his appointment

  2. Two months of his appointment

  3. Three months of his appointment

  4. Six months of his appointment
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A director should obtain his qualification shares within two months of his appointment. When a new director is appointed in a company, he/she should be given his qualification shares within two months o his appointment in the company. Certain shares of the company is alloted to the director when he/she holds the office.