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 organisation of commerce and management public sector undertakings & global enterprises characteristics, objectives and growth of public sector enterprises public, private and joint sector cooperatives

State-owned enterprises differ from privately funded companies because ___________________________________________.

  1. Public companies can never belong to individual shareholders

  2. Public ownership involves workers in the running of the company then in the private sector

  3. They are funded out by government, funded from taxation

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

A company limited by shares must have at least one shareholder, who can be a director.There's no maximum number of shareholders. The price of an individual share can be any value. Shareholders will need to pay for their shares in full if the company has to shut down.

Multiple choice organisation of commerce and management public sector undertakings & global enterprises characteristics, objectives and growth of public sector enterprises public, private and joint sector cooperatives

A company is having 10% share capital held by another public company and 35% held by Central Government and 55% held by people then that company is ___________________.

  1. Government Company

  2. Private company

  3. Public company

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

A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a corporation whose ownership is dispersed among the general public in many shares of stock which are freely traded on a stock exchange or in over the counter markets.

Multiple choice organisation of commerce and management public sector undertakings & global enterprises characteristics, objectives and growth of public sector enterprises public, private and joint sector cooperatives

A company can be created in several ways. Which ONE of the following is NOT a valid method of creating a company?

  1. The division of the High Court can create a company.

  2. A company can be created by registering certain documents with Registrar

  3. A company can be created by an act of parliament

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

The High Court consists of three divisions: the Queen's Bench Division, the Chancery Division, and the Family Division. Their jurisdictions overlap in some cases, and cases started in one division may be transferred by court order to another where appropriate.

Multiple choice organisation of commerce and management public sector undertakings & global enterprises characteristics, objectives and growth of public sector enterprises public, private and joint sector cooperatives

A Public Company can commence business after receiving _________________.

  1. Certificate of Incorporation

  2. ROC Clearance Certificate

  3. Both (a) and (b)

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

A certificate of incorporation is a legal document relating to the formation of a company or corporation. It is a license to form a corporation issued by state government or, in some jurisdictions, by non-governmental entity. Its precise meaning depends upon the legal system in which it is used.

Multiple choice organisation of commerce and management public sector undertakings & global enterprises characteristics, objectives and growth of public sector enterprises public, private and joint sector cooperatives

Feature(s) of a public corporation is/are _______________________.

  1. It is generally not exempt from the rigid rules applicable to the expenditure of public funds.

  2. A public Corporation is managed by board of directors who are appointed by public financial institutions.

  3. The primary motive of the corporation is public service rather than private profits.

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

The primary motive of the corporation is public service rather than private profits- it is a feature of public corporation. A public corporation is a combination of public ownership, public accountability and business management for public end. 


A public corporation can also be defined as an organization that is clothed with the power of government but is possessed with the flexibility and initiative of private enterprise.

Multiple choice organisation of commerce and management public sector undertakings & global enterprises characteristics, objectives and growth of public sector enterprises public, private and joint sector cooperatives

Feature(s) of a public corporation is/are ____________________.

  1. It can sue and be sued and can enter into contracts in its own name.

  2. The public corporation is wholly owned by the Central and/or State Government(s).

  3. It enjoys financial autonomy.

  4. All of above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
A public corporation is a combination of public ownership, public accountability and business management for public end. A public corporation can also be defined as an organization that is clothed with the power of government but is possessed with the flexibility and initiative of private enterprise. Features of public corporation are:
a) It can sue and be sued and can enter into contracts in its own name.
b) The public corporation is wholly owned by the Central and/or State Government
c) It enjoys financial autonomy.
Multiple choice organisation of commerce and management public sector undertakings & global enterprises characteristics, objectives and growth of public sector enterprises public, private and joint sector cooperatives

A public company must have atleast _______ directors whereas a private company must have atleast ________ directors.

  1. 3 ; 2

  2. 2 ; 3

  3. 2 ; 5

  4. 8 ; 10
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A company can have a maximum of fifteen Directors it can be increased further by passing a special resolution. Minimum Number of Director in Company are as follows: Private Limited Company Minimum two Directors in case of Private Limited Company. Limited Company Minimum three Directors in case of Limited Company.

Multiple choice commercial applications meaning and fundamentals of double entry book-keeping double entry system meaning, definition, and advantages of double entry book-keeping meaning, definition, need, objectives and limitations of double entry system introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

As per the provisions of the Companies Act, 2013, companies must maintain their accounts under __________________.

  1. Double account system

  2. Single entry system

  3. Double entry system

  4. Duplicate account system
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Companies Act, 2013 requires every company to keep and maintain at its registered head office books of accounts and relevant documents and the financial statements for each FY (financial year) that provides a true and fair picture of the company's state of affairs which includes its branch offices and other offices.

Multiple choice business organisation and correspondence joint stock company 2 - memorandum and articles of association documents used in company formation memorandum and articles of association documents required for company formation

State the following statement is True or False:
The document which determine the scope of the business operations of a company is the Memorandum of Association.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
Memorandum of Association is a legal document which is prepared in the formation and registration process of a limited liability company. It is called the charter of the company.
Memorandum of Association defines the company’s relationship with its shareholders. It is the most important document of a company as it states the objects of the company for which it is formed. It also contains the powers of the company within which it can act.
Multiple choice business organisation and correspondence joint stock company 2 - memorandum and articles of association documents used in company formation memorandum and articles of association documents required for company formation

State the following statement is True or False:
The document which is a charter or constitution of a company is the Memorandum of Association.

  1. True

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

True

An important step in the formation of a company is to prepare a document called Memorandum of Association. It is the charter of the company and is very important document as it contains the basic conditions on which the company is incorporated.
The Memorandum contains the name, registered office, main and other objects of the company, liability of the members and the authorized capital of the company. The main purpose of the memorandum is to limit the scope of activities and powers of the company. Thus, any act outside the Memorandum is ultra-vires the company. Such an act is not enforceable and directors involve personal liability for it.

Multiple choice business organisation and correspondence joint stock company 2 - memorandum and articles of association documents used in company formation memorandum and articles of association documents required for company formation

State the following statement is True or False:
Prospectus is the document, through which a company invites public to invest in the shares or debentures.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
A Prospectus is a formal legal document that is required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering for sale to the public. The preliminary prospectus is the first offering document provided by a security issuer and includes most of the details of the business and transaction in question; the final prospectus, containing finalized background information including such details as the exact number of shares/certificates issued and the precise offering price, is printed after the deal has been made effective. In the case of mutual funds, a fund prospectus contains details on its objectives, investment strategies, risks, performance, distribution policy, fees and expenses, and fund management.
Multiple choice organization of commerce and management ownership structures - sole proprietorship and joint hindu family business hindu undivided family business introduction to huf joint hindu family business

The Hindu Undivided Family business governed by ______________.

  1. Contract law

  2. Hindu law

  3. Muslim law

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

The Hindi Undivided Family business governed by Hindu Law. In a Hindu Undivided Family business only the male members get a share in the business by virtue of their being part of the family. A Hindu Undivided Family is an extended family arrangement prevalent among Hindus of the Indian subcontinent. It came into existence as per Hindu Inheritance Laws of India.

Multiple choice organization of commerce and management ownership structures - sole proprietorship and joint hindu family business hindu undivided family business introduction to huf joint hindu family business

A HUF should be registered with ___________.

  1. Not required at all

  2. Registrar of societies

  3. Registrar of firms

  4. Registrar of companies
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A HUF need not be registered. To begin a Hindu Undivided family business there must be minimum of 2 related family members, there must be ancestral property that they have inherited. 


There is no need for registration and documentation and admission of new member is by birth.

Multiple choice organization of commerce and management ownership structures - sole proprietorship and joint hindu family business hindu undivided family business introduction to huf joint hindu family business

Members of HUF are known as ______.

  1. partners

  2. shareholders

  3. members

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

Joint hindu family business is regulated by the Hindu succession act. According to it the business is owned and managed by the karta, the head of the family and a;; the members of the family are its co parceners. Hence, the head of the family business is  called as karta.