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 memorandum of understanding and articles of association company business studies

As per section 2(41) of the Companies Act, 2013 financial year of the Company is ________.

  1. from April to March

  2. from January to December

  3. to be decided on individual basis

  4. based on the incorporation date of Company
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Section 2(41) of the Companies Act, 2013, mandates that the financial year for every company incorporated in India shall be the period ending on the 31st day of March every year.

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

The corporate veil can be lifted___.

  1. For determining the true status of the company

  2. In order to determine whether it was an enemy company

  3. Where the company fails to pay taxes and duties

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

The doctrine of lifting the corporate veil allows courts to look behind the company as a separate legal entity in various situations, including determining if it is an enemy company, investigating tax evasion, or identifying the true status of the company.

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

If company does not follow the principle of separate legal entity, _______ can be done.

  1. Principle of natural justice

  2. Principle of equity

  3. Lifting of corporate veil

  4. Principle of unjust enrichment
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The principle of separate legal entity treats a company as distinct from its members. When this principle is misused to commit fraud or evade obligations, the court disregards the entity and lifts the corporate veil to hold the individuals behind it liable.

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

The corporate veil can be lifted__.

  1. Where the corporate veil has been used for proper & legal purpose

  2. Where the corporation is really an agency or trust for someone else and the corporate facade is used to cover up that agency or trust

  3. Where the company is incurring continuous losses

  4. When company restricts the right to transfer its shares
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Courts may lift the corporate veil when the company is used as a mere facade, agency, or trust to cover up the activities of the persons behind it, preventing the misuse of the corporate form.

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

The corporate veil can be lifted____.

  1. Where it was found that the sole purpose for which the company was formed was to evade taxes

  2. Where the purpose of company formation was to evade labour welfare & other legislation

  3. To punish for contempt of court

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

Courts lift the corporate veil in various instances, including tax evasion, avoidance of welfare legislation, and to prevent the abuse of the corporate structure for illegal purposes.

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

Practicing Company Secretary has been authorized to appear as authorized representative before  the Securities Appellate Tribunal (SAT) under _____.

  1. SEBI Act, 1991

  2. Depositories Act, 1996

  3. Either (A) or (B)

  4. Both (A) and (B)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Practicing Company Secretaries are authorized to appear before the Securities Appellate Tribunal under both the SEBI Act, 1991, and the Depositories Act, 1996.

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.