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

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 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.

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.