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

Salomon v. Salomon and Company proved that ____________.

  1. Company, is independent person.

  2. A person can be a member as well as creditor.

  3. Shareholder is not liable for the debt of co.

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

The Salomon v. Salomon case established the principle of separate legal entity, limited liability of shareholders, and the fact that a member can also be a creditor of the 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

A co. was incorporated outside India before April 1, 1956 and is still having its business in India. It is a ______________________.

  1. foreign company

  2. indian company

  3. government Co

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

A company incorporated outside India that establishes a place of business within India is defined as a foreign 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

The companies which are formed under Companies Act. 1956 they will be called as _________________.

  1. Chartered companies

  2. Statutory companies

  3. Registered companies

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A Company which is formed and registered under the Companies Act, 2013, including the companies which are earlier registered under any of the previous companies act, are called as the Incorporated or Registered 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

For public company is should start business only after getting certificate of _______________.

  1. Incorporation

  2. Certificate of Commencement of business

  3. Both

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Certificate of incorporation is a legal document required at the time of company formation. It is said to be a license to form a company, issued by the state government or, in some jurisdictions, by non-governmental entity. A public limited company having share capital, can not start its business unless it obtains the certificate of commencement of business from the Registrar of Companies. So a public company required both the certificates to start it's 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 limited by guarantee means_________________.

  1. To the extent of guarantee given

  2. Unpaid Value of shares

  3. Unlimited

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

In a company limited by guarantee, the liability of members is limited to the amount they have undertaken to contribute to the assets of the company in the event of its winding up.

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 is exempted to add Ltd or Pvt Ltd at the end of their name it is a ______________.

  1. Private Company

  2. Govt. Company

  3. Defunct Company

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

The name of the company is the indicator of its legal status. When you're starting a small business, deciding its legal structure is one of the first steps. Legal structure is usually determined by the business type, the number of owners or investors it has, and how tax and liability issues are best managed. You'll likely use an abbreviation, such as Inc., Ltd., Co., or LLC, after your business's name to indicate its structure. 

Company, which is registered under section 8 of the companies act,  2013 (earlier section 25 of the companies act, 1956), can take the exemption of omitting the word ‘limited’ or ‘private limited’ in their name.  
A Company which is listed in any stock exchange doesn’t have to additionally add any words in its name extra.

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

Minimum no of members to be present for a Public Ltd. company meeting is ___________.

  1. 5

  2. 2

  3. 7

  4. 3
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In case of a public company five members should be personally present if the number of members as on the date of meeting is not more than one thousand. 

If the quorum is not present within half-an-hour from the time appointed for holding a meeting of the company, the meeting shall stand adjourned to the same day in the next week at the same time and place, or to such other date and such other time and place as the Board may determine; or the meeting, if called by requisitionists under section 100, shall stand cancelled. 

If at the adjourned meeting also, a quorum is not present within half-an-hour from the time appointed for holding meeting, the members present shall be the quorum.

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

The term Public Ltd. Company is defined in section _________ of the Companies Act, $2013$.

  1. $2(71)$
  2. $3(1)(iv)$
  3. $3(2)$
  4. $4$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

As per section 2(71) of the companies Act 2013 a public limited company is a company which is not a private company and has a minimum paid up share capital of Rs-5,00,000. The minimum number of members in a public limited company are seven and maximum are unlimited. 

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 term private company is defined in section ________ of the New Companies Act, $2013$.

  1. $2(68)$
  2. $3(1)(iii)$
  3. $3(2)$
  4. $4$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
As per Section 2(68) of the companies Act 2013, a Private company is a company which has a minimum 2 directors and minimum paid up share capital of rupees 1 lakh  or any higher amount as may be prescribed and which through its articles -
1) Restricts the right to transfer shares 
2) Limits the number of members to 200 (except in case of one person company).
Multiple choice organisation of commerce and management public sector, private sector and global enterprises meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

In a private Ltd. co. at the time of incorporation there were 48 members. After than 1 employee joined having 15 debentures and having 2 shares. Did the company Crossed the maximum limit.

  1. Yes

  2. No

  3. Nothing written in law about it

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

A private company is the one which has a minimum paid up share capital of Rs. 100000 or such higher capital as prescribed by the Companies Act. Its Article of association mentions that the company restricts the right to transfer its shares; limits the number of its members from 2 to 50.

Thus it is clear that the company did not crossed its maximum limit as there will be 49 members only.

Multiple choice organisation of commerce and management public sector, private sector and global enterprises meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Minimum number of directors in case of private company is _________.

  1. $1$
  2. $2$
  3. $3$
  4. $4$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Companies Act prescribed minimum 2 directors for a private and 3 for a public company respectively to constitute a Board.

Multiple choice commercial applications public sector enterprises meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public forms of business organisation - 2

PSE's are organisations owned by _____________.

  1. Joint Hindu Family

  2. Government

  3. Foreign Companies

  4. Private Entrepreneurs
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Public sector enterprise ( PSE ) is the enterprise owned by the union government of India or one of the many state or territorial governments or both. These are the enterprises where the holding power of the government is 51% or more. Hence, PSE's are organisations owned by the central government.

Multiple choice commercial applications public sector enterprises meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public forms of business organisation - 2

Centralised control in MNC's implies control exercised by _____________.

  1. Branches

  2. Subsidiaries

  3. Headquarters

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

Multinational corporation ( MNC ) is an organisation who have branches in many different countries but managed wholly from one country i.e. home country. Hence, centralised control in MNC's implies control exercised by the headquarters.

Multiple choice commercial applications public sector enterprises meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public forms of business organisation - 2
The Act that governs the activities of a company is the Companies Act, 1956.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Companies Act 1956 is administered by the Government of India through the Ministry of Corporate Affairs and the Offices of Registrar of Companies, Official Liquidators, Public Trustee, Company Law Board, Director of Inspection, etc. The Act is 658 sections long. The Act contains provisions about Companies, directors of the companies, memorandum and articles of associations, etc. This act states and discusses every single provision requires or may need to govern a company. However, some of the provisions are now amended as per the Companies Act, 2013.