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 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

State the following statement is True or False:

The private company need not hold the statutory meeting.

  1. True

  2. False
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 correct option given below:

The quorum for general meeting of a private company according to the Companies Act, 1956 is _______.

  1. 2

  2. 3

  3. 7

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

For a private company, the Companies Act specifies that the quorum for a general meeting is two members personally present.

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 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

Private limited company is a type of company that offers limited liability, or legal protection to its share holders. It has the following features:

  1. Raising capital for the business is easier.
  2. Subscribers of the business have limited liability.
  3. The business continues after the death of shareholders.

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 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 is a type of company which has limited liability and offers legal protection to its share holders. The accounts of this company are kept private between the members themselves and also it receives little coverage in the 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

A Company which is employing _______ number of employees are required to have a PPF account.

  1. 30

  2. 25

  3. 20

  4. 35
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Under the Employees' Provident Funds and Miscellaneous Provisions Act, establishments employing 20 or more persons are generally required to provide PF benefits.

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 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 director but public companies need two

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

Minimum number of three directors is required in case of public company while two are required in case of public company and one director in case of One person 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 amongst these is NOT A disadvantage of incorporating a company _____________.

  1. separate identify

  2. formation do expensive

  3. detailed winding up procedures

  4. co operate disclosures
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Separate legal identity is actually an ADVANTAGE of incorporation, not a disadvantage. A company's separate existence allows it to own property, sue and be sued in its own name, and continue regardless of member changes. The other options - expensive formation, detailed winding up procedures, and corporate disclosures - are genuine disadvantages. Note the question has garbled text.

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

For constituting a company meeting what will be true, ____________________.

  1. One person can never constitute a meeting.

  2. One person may constitute a meeting in exceptional circumstances

  3. Neither a nor b

  4. Both a and b.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Generally, a meeting requires multiple people, but the Companies Act allows for a single person to constitute a meeting in specific circumstances, such as a meeting of a One Person Company or when ordered by a court.

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, when registered with limited liability under the Companies act. 1956 shall be deemed to be a company ________.

  1. limited by shares

  2. limited by money

  3. limited by directors

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

Under the Companies Act, a company can be limited by shares or by guarantee. Limited by shares is the most common form where liability is restricted to the unpaid amount on the shares held.

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

The position of a company secretary is like that of a hub in a bicycle wheel this statements shows the ___________________.

  1. Importance of company secretary

  2. Rights of company secretary

  3. Duties of company secretary

  4. Liabilities of company secretary
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Comparing a company secretary to a hub in a bicycle wheel emphasizes their central role in coordinating administrative and legal functions, which highlights their importance to the organization.

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 new company was formed. All the directors appointed in the new company were appointed by XYZ Ltd. Thus the new company is __________ of XYZ Ltd.

  1. Holding

  2. Subsidiary

  3. An independent company which has not established business in India.

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

If one company has the power to appoint the majority of the directors of another company, the latter is considered a subsidiary of the former.

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

Within _________ months the company formation should be done after the name approval has been received by the company.

  1. 3 months

  2. 3 days

  3. 3 years

  4. No limitation of time
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Once a company name is approved by the Registrar of Companies, the company must be incorporated within a specified timeframe, which is 3 months under current regulations.