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 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
C Correct answer
Explanation

In a public limited company, ownership is distributed among numerous shareholders who hold shares of stock, while day-to-day management and control are delegated to a board of directors. Employees or promoters do not inherently own or control the entire company structure.

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.

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

Out of these which statement is true?

  1. Both private and public companies need one director

  2. Private companies need two directors but public companies need 3

  3. Private companies need one directors but public companies need two

  4. Both private and public companies need two directors
Reveal answer Fill a bubble to check yourself
A Correct answer
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

In the words of " _______ "a public Corporation is an organization that is clothed with the power  of the government, but is possessed with the flexibility and initiative of private enterprise."

  1. Roosevelt

  2. Schumpeter

  3. Prof. Robson

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

This specific definition of a public corporation, emphasizing the balance between government power and private flexibility, is attributed to Franklin D. Roosevelt.

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

Every listed public company shall have at least  __________ of the total number of directors as independent directors.

  1. One-fourth

  2. Two-third

  3. One-third

  4. Three-fourth
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

According to the Companies Act and SEBI regulations, listed public companies are required to have at least one-third of their total directors as independent directors.

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 companies must appoint woman director ?
(I) Listed Company
(II) Every  public company having paid up share capital of Rs.100 Crores or more as on the last date of latest audited financial statements.
(III) Every public company having borrowing of Rs.500 Crores or more as on the last date of latest audited financial statements.
(IV) Every other public company having net capital employed of Rs.500 Crores or more as on the last date of latest audited financial statements.
(V) Every public company having turnover of Rs.300 crore or more as on the last date of latest audited financial statements.
Select the correct answer from the options given below -

  1. (I), (II), & (V) of the above

  2. (II), (III), & (IV) of the above

  3. (I) & (III) of the above

  4. (I), (II), (III) & (IV) of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Under the Companies Act, specific criteria regarding paid-up capital, turnover, or borrowing thresholds trigger the requirement to appoint at least one woman director for public companies.

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
A company which can start a business after getting the certificate of incorporation is a ____________.

  1. private company

  2. public company

  3. joint stock company

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

After certificate of incorporation, a private company can start its business. Incorporation of a Joint stock company is compulsory. Without incorporation, all the contracts would be considered void in the eyes of law and operations of business cannot be carried out.

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
Private company need not hold the __________ .

  1. Statutory meeting

  2. Annual general meeting

  3. Extra-ordinary general meeting

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

A private limited company and a company limited by guarantee not having share capital need not hold a statutory meeting. Statutory meeting must be held within a period of not less than one month and not more than six months after the date on which it is authorized to commence its business.

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

Select the term or a phrase which can substitute the following statement:
Name the type of company which can start it's business after getting 'Certificate of Incorporation'?

  1. Public company

  2. Private company

  3. Co-operative society

  4. Joint stock company
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

After receiving certificate of incorporation, a private company can start its business. Incorporation of a Joint stock company is compulsory. Without incorporation, all the contracts would be considered void in the eyes of law and operations of business cannot be carried out.