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 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.

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

State  the following statement is True of False:

The secretary of a public limited company is elected by shareholders.

  1. True

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

This statements is False because of the following reasons:


(i) The companies Act,1956 defines a joint stock company as" a company having a permanent paid up or normal share capital of fixed amount divided into share also of fixed amount, as held and transferable as stock , of divided and held partly in the other , and formed on the principle of having for its members the holder of those share or that stock and no other persons."


(ii)  Since, the management of the company is entrusted to the Board of Directors, only the Board of Directors can appoint a qualified company secretary.

(iii) A company secretary is appointed by the Board of Directors after its incorporation , to assist them in carrying out the administration of the company.

(iv) The shareholder have a voting right to elect a person from among themselves.

(v)  A secretary need not be a shareholder.

(vi) He is an outsider not belonging to the constituency of shareholders.

(vii) Hence, the secretary of a public limited company is elected by the Board of Directors.

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

State the following statement is True or False:
Internal rules and regulations of a company are the articles of association.

  1. True

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

Articles of Association is a document which prescribes the rules and bye-laws for the general management of the company and for the attainment of its object as given in the memorandum .It is a document of paramount significance in the life of a company as it contains the regulations for the internal administration of the company’s affairs.

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

Fill in the blank:
Regulation in the Scheduled -1 of the Companies Act, 1956 is the _____.

  1. memorandum of association

  2. articles of association

  3. Table A

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

Regulation in the schedule 1 of the companies act 1956 is the table A. These are the regulations for the management of a company limited by shares. There is full information of the company in the 99 models of table A about the shares, meetings, board of directors, profit, dividend, capitalization, reserve, winding up, indemnity etc.

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

State-owned enterprises differ from privately funded companies because _______.

  1. public companies can never belong to individual shareholders

  2. public ownership involves workers in the running of the company then in the private sector.

  3. they are funded out by government, funded from taxation.

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

In a private funded companies the shareholders of the company are individuals. They can own the shares individually. But in a public limited company the shares of the company are owned by the government of that state and not individually. Hence, state-owned enterprises differ from privately funded companies because public companies can never belong to individual shareholders.

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

Gas authority of India Limited is an example of ______.

  1. limited liability partnership

  2. private limited company

  3. public enterprise

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

Public enterprise  are the enterprise where the share of the government is 51% or more. It works basically for the welfare of the people. Gas authority of India Ltd. is owned by the government and works for the welfare of the people. Hence, it is a public enterprise.

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

Public enterprise is an autonomous or semiautonomous organisation.

  1. True

  2. False

  3. Partly true

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

Public enterprises are autonomous organisations. They frame their own policies and procedures within the powers assigned to them by the act. The Act may however provide few issues which require prior approval of a particular ministry which makes it semiautonomous organisations also.

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

XYZ company prohibits the acceptance of deposits from persons except directors, members or relatives is an ___________.

  1. public limited company

  2. private Ltd. co.

  3. government co.

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

A company whose securities are traded on a stock exchange and can be bought and sold by anyone. Public companies are strictly regulated, and are required by law to publish their complete and true financial position so that investors can determine the true worth of its stock (shares). Also called publicly held company.

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

A public limited company may in the general meeting, resolve to capitalize any part of the amount standing to the credit of any of its reserve accounts, up to the recommendation of the ___________.

  1. managing director

  2. board of directors.

  3. financial advisors

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

A board of directors is a recognized group of people who jointly oversee the activities of an organization, which can be either a for-profit business, nonprofit organization, or a government agency.