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 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.

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 __.
$(1)$ Autonomous or semi-autonomous organization
$(2)$ Financed, owned & managed by the government
$(3)$ Primary objective of the establishment of public enterprises is to serve the public at lot of profit.

  1. $(3)$ & $(2)$
  2. $(2)$ & $(1)$
  3. $(1), (2)$ & $(3)$
  4. $(1)$ & $(2)$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Public enterprises are autonomous and semi autonomous corporations and companies established, owned and controlled by the state and engaged in industrial and commercial activities.

The chief characteristics of public enterprises include autonomous or semi-autonomous organisation and they are financed, owned & managed by the 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

Which of the following cannot be termed as "Public Sector Enterprise"?

  1. Various departments in Government Company registered under the Companies Act, 2013

  2. Government Company registered under the Companies Act, 2013 in which all the shares are held by President of India and only one share is held by nominee of president.

  3. Statutory corporations owned and controlled by Central or State Government.

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

A state-owned enterprise in India is called a public sector undertaking (PSU) or a public sector enterprise. These companies are owned by the union government of India, or one of the many state or territorial governments, or both. The company stock needs to be majority-owned by the government to be a PSU.

Public enterprise, a business organization wholly or partly owned by the state and controlled through a public authority. Some public enterprises are placed under public ownership because, for social reasons, it is thought the service or product should be provided by a state monopoly.

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

Feature(s) of a public corporation is/ are ________________________.

  1. It is generally not exempt from the rigid rules applicable to the expenditure of public funds

  2. A public Corporation is managed by board of directors who are appointed by the public financial institutions

  3. The primary motive of the corporation is public service rather than private profits

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

Public sector refers to government-owned organizations and government provided services. Private sector refers to organizations that are not government owned and the goods and services provided by organizations outside of the government. For example, companies owned by individuals are part of the private sector.

Service Motive The primary motive of Public corporations is to provide services to the people and not to make profits. These organizations are expected to provide goods and services at a cheaper rate. Public Accountability A Public Corporation is accountable in the Parliament or the State Legislature.

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

Which of the following is example of a public corporation?
I. Life Insurance Corporation of India (LIC)
II. Employees State Insurance Corporation (ESIC)
III. Industrial Development Bank of India (IDBI)
Select the correct answer from the options given below.

  1. $I - \checkmark, II - x, III - \checkmark$
  2. $I - x, II - \checkmark, III - x$
  3. $I - \checkmark, II - \checkmark, III - x$
  4. $I - \checkmark, II - \checkmark, III - \checkmark$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A company whose shares are publicly traded and are usually held by a large number (hundreds or thousands) of shareholders. The usual British term is a public limited company. A government-owned company such as an airline or public transit company. See also corporation sole. 

examples - LIC, Food Corporation of India (FCI), ONGC, Air India, Indian Airlines, State Bank of India, Reserve Bank of India, Employees State Insurance Corporation, Central Warehousing Corporation, Damodhar Valley Corporation, National Textile Corporation, Industrial Finance Corporation of India (IFCI), Unit Trust of India(UTI). Employees State Insurance Corporation (ESIC), Industrial Development Bank of India (IDBI).

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

Which of the following is example of a public corporation?

  1. Life Insurance Corporation of India

  2. Employees State Insurance Corporation

  3. Industrial Development Bank of India

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

 company whose shares are publicly traded and are usually held by a large number (hundreds or thousands) of shareholders. The usual British term is a public limited company. A government owned company such as an airline or publictransit company. See also corporation sole.

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

_________ is a corporation enterprise that manages production or delivers services in more than one country.

  1. A multinational Corporation

  2. Multinational Enterprise

  3. (a) or (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A multinational corporation or multinational enterprise is a corporation enterprise that manages production or delivers services in more than one country. It can have unlimited scope for raising finance. Shares of multinational enterprise are freely transferable. It has facilities and other assets in more than one country.

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

Which of the following statement is NOT true?

  1. The power to make calls can only be exercised at the Board Meeting

  2. The company can have both managing directors and manager

  3. The directors cannot be removed by the State Government

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

The company can have both managing directors and manager- this statement is not true. Managing director and manager of the company is referred to the same person. Managing director is a person who is responsible for the daily operations in the 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

Which of the following statement is NOT correct with respect to a Board Meeting?

  1. No time limit for serving the notice is prescribed by the Act.

  2. The Board meeting should be held only at registered office of the company

  3. The Board meeting can also be held on a public holiday

  4. The BM can be held even after the normal business hours
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Board meeting should be held only at registered office of the company- this statement is not correct with respect to a Board meeting. The board meeting can be held at any place.. Board meeting is generally held by the directors of the 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

Shares of _________ company are freely transferable.

  1. Private Company

  2. Public Company

  3. Both (a) & (b)

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

Private company'is a company, which restricts the right to transfer its shares. In the case of a public company, the Act provides that the shares or debentures and any interest of the company are freely transferable. 

Free transferability of shares in public.  restricts the right to transfer its shares, if any; While public company is a company which is not a private company and moreover, the shares of a public company are freely transferable.