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 book keeping and accountancy company accounts part - 2 (accounting for debentures) introduction to debentures meaning and features of debentures meaning of debentures

State, with reasons,whether the following statements are true or False.
Debenture holder are the owners of the company.

  1. True

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

This statement is False.
 Reasons: According to Webster's Dictionary, a Debenture is an interest-bearing certificate issued by a government or business, promising to pay to the holder specified sum at a specified date. In fact, there is no difference between Debentures and bonds. 
(1) Debenture is a loan taken by company for medium to long period. Debenture holder therefore is the creditor of the company. 
(2) Debenture capital is returnable and therefore has no permanency. Debenture holder earns interest as return. 
(3) Debenture holder cannot participate in management of company. They cannot take any decision on matters of the company. 
(4) Debenture holder has no voting rights on matters related to company like he cannot appoint Directors / Auditors of the company. 
(5) The real owner of the company is the equity shareholder. Equity shareholders are risk bearers of the company and they are having the voting rights and taking participation in management of the company. Hence Debenture holders are not the owners of the company. 

Multiple choice book keeping and accountancy company accounts part - 2 (accounting for debentures) introduction to debentures meaning and features of debentures meaning of debentures

Which of the following is false?

  1. A company can issue redeemable debentures

  2. A company can issue debentures with voting rights

  3. A company can buy its own shares

  4. A company can buy its own debentures
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Debentures are debt instruments and do not carry voting rights, which are reserved for equity shareholders. The other options describe legal actions a company can perform.

Multiple choice book keeping and accountancy company accounts part - 2 (accounting for debentures) introduction to debentures meaning and features of debentures meaning of debentures

Debenture holders are like ___________ of the company.

  1. owners

  2. debtors

  3. creditors

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

Debenture holders lend money to the company, making them creditors. They are entitled to interest payments, unlike shareholders who are owners and entitled to dividends.

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

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

  1. The primary motive of the corporation is to earn private profits

  2. It cannot sue and cannot be sued and cannot enter into contracts in its own name

  3. Both (A) and (B)

  4. Neither (A) nor (B)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a corporation whose ownership is dispersed among the general public in many shares of stock which are freely traded on a stock exchange or in over the counter markets.


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 public limited company. A government owned company such as an airline or publictransit company. See also corporation sole.

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

A company is known as the holding company of another company if it has control over the other company.

  1. True

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

A holding company is a company that owns other companies' outstanding stock. A holding company usually does not produce goods or services itself; rather, its purpose is to own shares of other companies to form a corporate group.

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

Rights issue refer to the shares issued to ____________.

  1. Employees

  2. Public

  3. Exsiting directors

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

Rights issues are share offerings made to existing shareholders in proportion to their current holdings, allowing them to maintain their ownership percentage. They are not issued to employees (that would be ESOPs), not to the general public (that's a public issue), and not exclusively to existing directors. Therefore, 'None of these' is correct as none of the listed options accurately describe rights issues.

Multiple choice elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

The Structure in which there is separation of ownership and management is called ______________.

  1. Sole proprietorship

  2. Partnership

  3. Company

  4. All business organisations
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Company is the form of business organisation in which there is a separation of ownership and management. Company has a separate legal entity from its members. Management professionals of the firm are not considered as the owners of the firm.

Multiple choice elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

Joint Stock Company is board of directors company.

  1. True

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

A Joint Stock Company is a legal entity managed by a board of directors, who are elected by the shareholders to oversee the company's operations.

Multiple choice elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

A company comes into existence only after its ____________.

  1. Promotion

  2. Formation

  3. Registration

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

Registered or Incorporated Companies
These companies are formed/incorporated under the companies act passed by the government. These companies come into existence only after these are registered under the act and the certificate of incorporation is passed by the Registrar of companies.


Multiple choice elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

A Joint Stock Company is superior form of business organisation. 

  1. True

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

A joint stock company can be considered as a superior form of business organisation in which people come together to pursue a business activity and it also provides employment to the youth and helps in increasing the GDP of a nation.

Multiple choice elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

A Joint Stock Company is an artificial person created by law.

  1. True

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

It is true that joint stock company is an artificial person created by law. Company has a separate legal entity and have an existence in the eyes of law. It can purchase and sell property or rights in its own name and have a perpetual succession.

Multiple choice elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

Registration of Joint Stock Company is optional.

  1. True

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

It is true that registering the company is optional. One can start the business with other ways also rather than registering like acquiring tax license, service tax registration.

Multiple choice elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

The liability of members of a Joint Stock Company is unlimited.

  1. True

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

The liability of the members of Joint stock company is unlimited i.e. assets of members cannot be used to pay the debts of company as company has a separate legal entity from its members and is termed as an artificial person in terms of law.

Multiple choice elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

A Joint Stock Company has ___________life.

  1. short

  2. limited

  3. continuous

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

A joint stock company has a continuous life. It implies death, insanity, insolvency or retirement of any of its shareholders, owners, board of directors or employees cannot lead to the closure of company. Company can run for a longer period of time.

Multiple choice elements of business joint stock company 1 - definition, classification, advantages and disadvantages meaning and features of joint stock company concept, features, advantages and disadvantages of joint stock company ownership structures - joint stock company

A Joint Stock Company is _______ person.

  1. natural

  2. an artificial

  3. imaginary

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

A joint stock company has an independent status i.e. it has a separate legal entity from its members. It has an independent existence in the eyes of law and can also purchase and sell property in its own name.