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 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

The key elements of public enterprises are ______________.

  1. recruitment & state control

  2. recruitment & useful to various sectors

  3. public accountability & state control

  4. recruitment & public accountability
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Public enterprises are autonomous or semi-autonomous corporations and companies established, owned and controlled by the state and engaged in industrial and commercial activities. The key elements of public enterprises are state control and Public accountability. These are managed by the government. In some cases government has started enterprises under its own departments. In other cases, government nominates persons to manage the undertakings. Even autonomous bodies are directly and indirectly controlled by the government departments. The primary aim of state enterprises is to provide service to the society. These enterprises are started with a service motive. A private entrepreneur will start a concern only if possibilities of earning profits exist but this is not the purpose of public enterprises.

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.

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

__________ includes the rules and regulations on which the company's internal affairs are to be done.

  1. Articles of association

  2. Memorandum of association

  3. Prospectus

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

The Articles of Association (AoA) or the Articles, contain rules for the internal management of a company. It is a legal document prepared by a company to explicitly state the purpose of a company, the procedure to conduct its internal affairs and most importantly the responsibility and authority of the directors, members and other stakeholder. The Articles have to be submitted to the Registrar of Companies during formation of a company in Form INC-34 along with the Memorandum of Association in Form INC-33.

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 term company is defined under which sec of the Act?

  1. Sec 3(1)

  2. Sec 4 (2)

  3. Sec 5 (4)

  4. Sec 1(3)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

As per the section 3(1) of the companies act:

(1) In this Act, unless the context otherwise requires, the expressions" company"," existing company"," private company" and" public company" shall, subject to the provisions of sub- section (2), have the meanings specified below:-
(i) " company" means a company formed and registered under this Act or an existing company as defined in clause (ii);

(ii) " existing company" means a company formed and register- ed under any of the previous companies laws.


Now these provisions are dealt by 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

When there is a conversion of a private company into a public company____ must be issued.

  1. deemed prospectus

  2. shelf prospectus

  3. statement in lieu of prospectus

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

When a private company is converting into a public company it has to file with concerned ROC the Statement in Lieu of Prospectus. A statement in lieu of prospectus is defined as ‘a public document prepared in the second schedule of companies ordinance by every such public company which does not issue a prospectus on its formation by filing with the registrar before allotment or shares of debentures, and signed by every person who is named therein’. A statement in lieu of prospectus gives practically the same information as a prospectus and is signed by all the directors or proposed directors. In case the company has not filed a statement in lieu of prospectus with the registrar, it is then not allowed to allot any of its shares or debentures.

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

Can a public ltd. company hold an AGM on a public holiday?

  1. Yes

  2. No

  3. Both a and b

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

Annual General Meeting of a public company cannot be held on a public holiday. Section 166(2) inter alia states that every annual general meeting shall be called on a day, which is not a public holiday. It has been clarified by the Department (MCA) vide Circular F. No. 8/23/(166 /69-CL-V that section 166 of the Companies Act deals with the actual period during which the annual general meeting is to be held. Sub-section (2) states that every annual general meeting shall be held on a day that is not a public holiday and this provision is mandatory.

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 chief characteristic(s) of public enterprises is/are.

  1. In some specific cases the public enterprises enjoy monopoly in operation like Railways, Post and Telegraph and Energy production.

  2. The state enterprises are liable to the general public for their performances.

  3. The public enterprises run as per the whims of the government and as such the economic policies and plans of the government are implemented through public enterprises.

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

The chief characteristics of public enterprises are:

1. In some specific cases the public enterprises enjoy monopoly in operation like railways, post and telegraph and energy production.
2. The state enterprises are liable to the general public for their performance.
3. The public enterprises runs per the whims of the government and as such the economic policies and plans of the government are implemented through public enteprises.

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 organization form of public sector enterprise does not include______________.

  1. Departmental Undertaking

  2. Statutory Corporation

  3. Government Company

  4. Subsidiary to Public Company
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Subsidiaries remain private. They are private subsidiaries of a public company. Think about it: if a subsidiary went public, that would mean that its shares were being offered to the public, instead of all being owned by the parent company, and so it would no longer be a subsidiary.