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 organisation of commerce and management government organisation meaning and features of government company government companies forms, comparison and cases of public enterprises

As per Companies Act $2013$, a company is -
A. Formed and registered under the Companies Act, $2013$
B. An existing company registered under any earlier Companies Act
Select the correct answer from the options given below.

  1. A only

  2. B only

  3. A or B

  4. A but not B
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A company, which is incorporated under the relevant legislation of a foreign country, will not qualify as a company under the 2013 Act The proviso to section 2(71) states that “a company which is a subsidiary of a company, not being a private company, shall be deemed to be a public company for the purposes.

Multiple choice organisation of commerce and management government organisation meaning and features of government company government companies forms, comparison and cases of public enterprises

Identifying marks of a public limited company are __________.

  1. Formation

  2. Number of members

  3. Directors and meetings

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

A company whose securities are traded on a stock exchange and can be bought and sold by anyone. Public companies are strictly regulated, and are required by law to publish their complete and true financial position so that investors can determine the true worth of its stock (shares). Also called publicly held company.

A company is called as private limited when all its shares are in private hands while the shares in a Public Limited company are open to everyone. 2. Pvt Ltd Company is owned by a group of promoters. In Private Limited companies, the minimum number of shareholders should be two and the maximum 50.

Multiple choice organisation of commerce and management government organisation meaning and features of government company government companies forms, comparison and cases of public enterprises

____ formed by the government to meet some governmental and political purposes.

  1. A foreign corporations

  2. A public corporation

  3. A Private corporations

  4. A professional corporations
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Public Corporation is a body corporate created by an Act of Parliament or Legislature. Its name is notified in the official gazette of the Central or State Government. It is an artificial person with the flexibility of the private sector and the powers of the government. They are set up with the objective of carrying out a specific type of commercial activity. These organizations are formed for administering nationalized industries or undertakings. Many service organizations of the government are set up in the form of corporations. It is formed and operated basically with a service motive. Profits are only a secondary consideration. For eg: FIC,  LIC,  ONGC etc.

Multiple choice organisation of commerce and management government organisation meaning and features of government company government companies forms, comparison and cases of public enterprises

The government company cannot enter into contract or acquire property in its own name.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
A government contractor is a company (privately owned or publicly traded but not a state-owned enterprise) either for-profit or non-profit – that produces goods or services under contract for the government. Ownership is the state or fact of exclusive rights and control over property, which may be an object, land/real estate or intellectual property. 
Ownership is self-propagating in that the owner of any property will also own the economic benefits of that property.
Multiple choice organisation of commerce and management government organisation meaning and features of government company government companies forms, comparison and cases of public enterprises

Government company can file a suit in court of law and can also be used.

  1. True

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

A government company is a separate legal entity from the government. It has a corporate personality, allowing it to sue and be sued in its own name.

Multiple choice organisation of commerce and management government organisation meaning and features of government company government companies forms, comparison and cases of public enterprises

Government companies are established for business purposes.

  1. True

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

Government companies are formed to operate as business enterprises, often competing with private sector firms while being owned or controlled by the government.

Multiple choice organisation of commerce and management government organisation meaning and features of government company government companies forms, comparison and cases of public enterprises

The government company has a separate legal entity apart from the government.

  1. True

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

A company is a separate legal entity as distinct from its members. A company is a separate legal entity as distinct from its members, therefore it is separate at law from its shareholders , directors , promoters etc and as such is conferred with rights and is subject to certain duties and obligations.

Multiple choice organisation of commerce and management government organisation meaning and features of government company government companies forms, comparison and cases of public enterprises

The management and administration of the government company rests in the hands of the government.

  1. True

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

The Ministry of Corporate Affairs (MCA) is an Indian government ministry.This Ministry is primarily concerned with administration of the Companies Act 2013, the Companies Act 1956, the Limited Liability Partnership Act, 2008 & other allied Acts and rules & regulations framed there-under mainly for regulating the.

Multiple choice organisation of commerce and management government organisation meaning and features of government company government companies forms, comparison and cases of public enterprises

A government company is not answerable directly to the Parliament.

  1. True

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

A Government company is free from budgetary, accounting and audit controls, applicable to Government undertakings.

Accountability to the Parliament/State Legislature.
The Annual Report of a Government company is placed before the Parliament or the State Legislature.

Multiple choice organisation of commerce and management government organisation meaning and features of government company government companies forms, comparison and cases of public enterprises

A government company can be established by fulfilling the requirements of the Companies Act.

  1. True

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

Companies Act 1956 was an Act of the Parliament of India, enacted in 1956, which enabled companies to be formed by registration, sets out the responsibilities of companies, their directors and secretaries and also provides for the procedures for its winding.

Multiple choice organisation of commerce and management government organisation meaning and features of government company government companies forms, comparison and cases of public enterprises

Government Company refers to the company in which _______  per cent or more of the paid up capital is held by the government.

  1. 50

  2. 51

  3. 60

  4. 61
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A government company is an organization where the investment goverment is more than 51% . There by the control and management lies in the hand of the government.

Multiple choice organisation of commerce and management government organisation meaning and features of government company government companies forms, comparison and cases of public enterprises

A special feature of a Government company is _____________.

  1. special provision for their audit

  2. it is a company of government

  3. an association not for profit

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

Government companies are exempted from the accounting and audit rules and procedures. The Comptroller and Auditor General of India shall appoint an auditor within a period of one hundred and eighty days from commencement of financial year to hold office till conclusion of the annual general meeting. The annual report is to be presented in the parliament or the state legislature. 

Multiple choice organisation of commerce and management government organisation meaning and features of government company government companies forms, comparison and cases of public enterprises

A company is a government company and X Company is a subsidiary of A company then X Company will be a _____________.

  1. Public Company

  2. Private company

  3. Government company

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

A “subsidiary company” or “subsidiary” of a Government Company would also be categorized as a Government Company provided the Government Company
(i) controls the composition of the Board of Directors; or
(ii) exercises or controls more than one-half of the total share capital either at its own or together with one or more of its other subsidiary companies.

Even if the control referred above is of another subsidiary company of the Government company, the company would still be categorized as a “subsidiary” and hence a government company. Thus, joint-venture companies formed by various Government companies or public sector undertakings are also considered as government companies.

Multiple choice organisation of commerce and management government organisation meaning and features of government company government companies forms, comparison and cases of public enterprises

Company can be called govt, company if % of paid up share capital is held by government company_____________.

  1. more than 30

  2. more than 40

  3. more than 50

  4. none
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

According to the Companies Act, a government company is defined as any company in which not less than 51 percent of the paid-up share capital is held by the Central Government, State Government, or partly by both.

Multiple choice organisation of commerce and management government organisation meaning and features of government company government companies forms, comparison and cases of public enterprises

The companies are governed by the Companies Act, ________.

  1. $1956$
  2. $1936$
  3. $2013$
  4. $1856$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A Government company is defined under Section 2(45) of the Companies Act, 2013 as “any company in which not less than 51% of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments.

Section 2(20) of the 2013 Act defines the term company to mean “a company incorporated under the Companies Act 2013 or any previous company law.The sub-section states that for the purposes of such definition, the expression company includes body corporate.