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 memorandum of understanding and articles of association company business studies

Which of the following shall be eligible for appointment as an auditor of a company as per Section 141(3) of the Companies Act, 2013?

  1. An officer or employee of the company

  2. A person who, or his relative or partner is indebted to the company, or its subsidiary, or its holding or associate company or a subsidiary of such holding company, in excess of Rs. 5 Lakhs

  3. A person whose relative hold security or interest in the company of face value not exceeding Rs. one lakh

  4. None of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Multiple choice memorandum of understanding and articles of association company business studies

As per Section 141(1) of the Companies Act, 2013, a person shall be eligible for appointment as an auditor of a company only if he is a -

  1. Chartered Accountant

  2. Company Accountant

  3. Statuary Auditor

  4. Chartered Accountant & Company Secretary
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Section 141(1) of the Companies Act, 2013, specifies that only a Chartered Accountant (or a firm where the majority of partners are Chartered Accountants) is eligible for appointment as an auditor.

Multiple choice memorandum of understanding and articles of association company business studies

Which of the following shall NOT be eligible for appointment as an auditor of a company as per Section 141(3) of the Companies Act, 2013?
(I) A body corporate
(II) Limited liability partnership
(III) An officer of the company
(IV) An employee of the company
(V) A person who is a partner of an officer or employee of the company
(VI) A person who is in the employment of an officer or employee of the company
(VII) A person who is indebted to the company in excess of Rs. 2 Lakhs but below Rs. 5 Lakhs
The correct answer is -

  1. (I), (II), (III), (IV), (V) & (VI)

  2. (I), (II), (III), (IV) & (VII)

  3. (II), (III) & (VII)

  4. (I), (III), (IV), (V) & (VI)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Section 141(3) lists various categories of persons disqualified from being appointed as an auditor, including bodies corporate, officers, employees, and their partners or employees.

Multiple choice memorandum of understanding and articles of association company business studies

Which of the following section of the Companies Act, 2013 contains provisions as regards to qualification of auditors?

  1. Section 131

  2. Section 124

  3. Section 224

  4. Section 141
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Section 141 of the Companies Act, 2013 explicitly contains the provisions regarding the qualifications and eligibility of company auditors.

Multiple choice memorandum of understanding and articles of association company business studies

Company .............. to send any intimation of appointment of first auditor to the Registrar of companies (ROC).

  1. is required

  2. is not required

  3. shall

  4. must
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Companies are required to file a notice of appointment of an auditor with the Registrar of Companies (ROC) in the prescribed form.

Multiple choice memorandum of understanding and articles of association company business studies

Section 139(1) of the Companies Act 2013 provides that____________must appoint an auditor.

  1. Only public company

  2. Only private company

  3. Every one man company

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

Section 139(1) of the Companies Act, 2013, mandates that every company, whether public or private, must appoint an auditor at its first annual general meeting.

Multiple choice memorandum of understanding and articles of association company business studies

Section 139(1) of the Companies Act, 2013 provides that every company must appoint ............... as an auditor.
(I) An Individual
(II) A firm
(III) A firm having at least three partners
(IV) Body corporate
The correct answer is -

  1. (I) & (III) only

  2. (II) & (IV) only

  3. (I) & (II) only

  4. (I), (III) & (IV) only
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Section 139(1) of the Companies Act, 2013 allows for the appointment of an individual or a firm (including a limited liability partnership) as an auditor of a company. Bodies corporate are generally disqualified.

Multiple choice memorandum of understanding and articles of association company business studies

Section 139(1) of the Companies Act, 2013 provides that every company must appoint an individual or a firm as an auditor who shall hold office from the conclusion of that meeting till the conclusion of its _______ and thereafter till the conclusion of every _______ and the manner and procedure of selection of auditors by the members of the company at such meeting shall be such as may be prescribed however the company shall place the matter relating to such appointment for ratification by _______ at every ________

  1. sixth annual general meeting; fifth meeting; members; fifth annual general meeting

  2. sixth annual general meeting; sixth meeting; board of directors; board meeting

  3. fifth annual general meeting; fifth meeting; members; extraordinary general meeting

  4. sixth annual meeting; sixth meeting; members; annual general meeting
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Section 139(1) of the Companies Act, 2013 mandates that an auditor holds office from the conclusion of the meeting until the conclusion of the sixth annual general meeting. Thereafter, they hold office until the conclusion of every sixth annual general meeting, subject to ratification by members at every annual general meeting.

Multiple choice memorandum of understanding and articles of association company business studies

As per section 141(4) of the Companies Act, 2013 where person appointed as an auditor of a company incurs any of the disqualifications mentioned in section 141(3) after his appointment, he_________his office has such auditor and such vacation shall be deemed to be a _________in the office.

  1. may vacate; casual vacancy

  2. may vacate;ordinary vacancy

  3. shall vacate;casual vacancy

  4. shall vacate;special vacancy
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Under Section 141(4) of the Companies Act, 2013, if an auditor incurs a disqualification after appointment, they are legally required to vacate their office. This resulting vacancy is legally defined as a casual vacancy.

Multiple choice memorandum of understanding and articles of association company business studies

An auditor may function as___________
      (I) An employee
      (II) an independent professional
The correct answer is-

  1. (I) only

  2. (II) only

  3. (I) or (II)

  4. Neither (I) nor (II)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

An auditor can be an employee of a company (internal auditor) or an independent professional (statutory auditor). Both roles are recognized in different capacities within business structures.