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

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
A Correct answer
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.

Multiple choice book keeping and accountancy sub-division of journal - 2 (subsidiary books) introduction, meaning, types and advantages of subsidiary books journal proper or general journal meaning and types of subsidiary books

A person shall not be appointed as Director if he is found to be of unsound mind by _____________.

  1. the company

  2. the company court

  3. a court of competent jurisdiction and the finding is in force

  4. the shareholder
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Legal requirements for director disqualification specify that a person must be declared of unsound mind by a court of competent jurisdiction for the disqualification to be legally binding.

Multiple choice elements of business joint stock company - formation meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public
A private company does not issue prospectus.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
(i) Prospectus is a document which invites offers from public to purchase shares or debentures of a company. 
(ii) It gives all essential information about every aspect of the company. 
(iii) Prospectus of a company is a written request to the investors to purchase (subscribe) its shares and debentures of a public limited company by shares.
(iv) A copy of prospectus must be filed with the Registrar of Companies. 
(v) Prospectus must be issued to the public within 90 days from the date of filing it with Registrar of Company. 
(vi) The main purposes of a prospectus is to raise the requited capital for business of a compy
(vii) Prospectus is issued by 'Public Limited' company by shares only. 
(viii) 'Private Ltd' company cannot issue prospectus since it cannot invite general public to purchase its shares. 
(ix) In case, no prospectus is issued a statement-in-lieu of prospectus must be filed with Registrar of Companies. 
Multiple choice elements of business joint stock company - formation meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public
A private company can adopt Table 'A' in place of its Articles.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
(i) A company is a private company, which by its articles 
    (a) limits the maximum membership to 50, excluding present and past employees. 
    (b) prohibits public (subscription) investment to its shares and debentures. 
    (c) restricts the transfer of its shares. 
(ii) The Articles of Association is a document regulating the right of members of the company among themselves and the manner in which the business of the company shall be conducted
(iii) Table 'A' is a model set of articles given by the Companies Act, 1956 in its schedule I.I. contains in all 99 articles. 
(iv) Normally, all private companies prepare their own articles and file the same with the Registrant 
(v) If a private company has prepared its own articles, there is no need for it to adopt Table 'A'. 
(vi) Generally, all these (99) articles are applicable to a public company. 
(vii) That is why, a public company may adopt Table 'A' fully or partially and in addition ma adopt its own articles. 
(viii) In case, no Articles of Association is filed at the time of incorporation by a public company limited by shares, Table 'A' automatically becomes applicable to such a company. 
(ix) Hence, a private company does not adopt Table `A' as it prepares its own Articles.
Multiple choice elements of business joint stock company - formation meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Rajeev is a member (a type of owner) of a marine supply business with many shareholders.
Rajeevs business is __________.

  1. a sole proprietorship.

  2. a limited liability partnership.

  3. a limited liability company.

  4. a general partnership.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A business with many shareholders and limited liability for its owners is typically structured as a limited liability company (LLC) or a corporation.

Multiple choice elements of business joint stock company - formation meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Select out the feature which is NOT found in a private limited company?

  1. Raising capital for the business is easier

  2. Shares can be bought and sold on the Stock Exchange

  3. Subscribers of the business have limited liability

  4. The business continues after the death of shareholders
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A key feature of a private limited company is that its shares cannot be traded on a public stock exchange, unlike those of a public limited company.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Which of the following statements about most public limited companies is true?

  1. They are owned and controlled by the employees

  2. They are owned by the directors but controlled by the shareholders

  3. The are owned by shareholders but controlled by directors

  4. They are owned and controlled by the promoters
Reveal answer Fill a bubble to check yourself
B Correct answer
Multiple choice elements of business joint stock company - formation meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Which of the following statements suits best to private limited company?

  1. It is owned by the government

  2. It is owned by shareholders who can sell their shares in the Stock Exchange

  3. It is formed for the benefit of society at large

  4. Its accounts can be kept private and it receives little coverage in the business
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Private limited companies have fewer disclosure requirements than public companies, allowing them to keep their financial accounts private and receive less public scrutiny.