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

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.

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 statements is not true in respect of holding the Annual General Meeting?

  1. AGM should be held in every calender year

  2. AGM should be held within six months from the end of financial year

  3. The gap between two AGM's should not exceed fifteen months

  4. Private company is not required to hold an AGM
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Private company is not required to hold an AGM- this statement is not true in respect of holding the Annual General Meeting. Every private company must hold an Annual General Meeting. It is conducted by the Board of Directors in order to discuss about the plan and policies which are to be taken to run 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

How many members should sign the MOA in case of public company___________.

  1. 1

  2. 5

  3. 3

  4. 7
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Memorandum of Association helps the shareholders, creditors and any other person dealing with the company to know the basic rights and powers of the company MoA must be signed by at least 2 subscribers in case of a private limited company, and 7 members in case of a public limited company.

Certified MOA & AOA of any Public or Private Company through MCA website. You just need to log in and go to view public document tab. MOA & AOA you will get under INCORPORATION documents tab, you need to pay nominal fees and you can easily download the required document from there.

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 company prohibits any invitation to the public to subscribe for share or debentures? 

  1. Private Company

  2. Public Company

  3. Government Company

  4. Both (b) and (c)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A privately held company, private company, or close corporation is a business company owned either by non-governmental organizations or by a relatively small number of shareholders or company members.Some of the most famous companies in the world are private companies, including Facebook, Ikea, agriculture giant Cargill, and candy maker Mars. Though private companies come in all sizes, a vast majority of private companies are small businesses. If the company is publicly listed, its shares will be listed on the stock exchange and different rules apply to the sale and purchase of the shares. If the company is a private company, the rules about buying and selling shares are set out in the company's constitution and in the COMPANIES ACT 1993.

Multiple choice commercial studies marketing and sales difference between products and services product marketing

Horizontal merger is a combination of ____________ in the same business and as the production process.

  1. single firm

  2. single or two firm

  3. two or more firms

  4. all of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A horizontal merger occurs between two or more firms that operate in the same industry and at the same stage of production, typically to increase market share or reduce competition.

Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

Which of the following is not a condition for issue of shares at a discount?

  1. The Memorandum of Association must authorise the company for issue of shares at a discount

  2. The issue must be authorised by passing an ordinary resolution in the General Meeting and must be confirmed by the Company Law Board

  3. The shares should be a class of shares already issued

  4. At least one year must have elapsed since the company was entitled to commence business
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Conditions for Issue of Shares at Discount

  1. In order to issue the shares at a price less than the face value, the company has to get permission from the relevant authority. For seeking permission, they should call and upon a general meeting and discuss and authorize the matter in that meeting.
  2. There is a cap on the rate of discount. A company cannot issue any shares at more than 10% discount.
  3. The company should issue the shares within 60 days of receiving permission from the relevant authority. In certain cases, the company can extend this time frame after getting permission in the permission.
  4. The company cannot issue these shares before passing of 1 year from the date of commencement of business.
  5. The shares must belong to the same class of shares which are already available in the market. For example, if the has previously issued Equity shares then this time also, the company has to issue Equity shares only.
  6. Also, the company has to acquire the sanction by the Central Government after getting approval from the general meeting.

Multiple choice social science employment: growth, informalisation and other issues employment - trends and structure workers and employment sources of income

A multinational is ___________________.

  1. A company operating in many countries

  2. An international body to help developing countries

  3. A person who has visited many countries

  4. A company established with foreign assistance
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A multinational corporation (MNC) is a business entity that has facilities and other assets in at least one country other than its home country.