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 elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

Every business organization needs a secretary having a knowledge of recording ____________ transactions.

  1. financial

  2. private

  3. illegal

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

Every business organisation needs a secretary having a knowledge of recording financial transaction as financial transaction are the main part of any organisation.

Multiple choice elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

A secretary is the custodian of ______ information. 

  1. confidential

  2. government

  3. financial

  4. share holders
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A secretary is a custodian of secret, confidential and important information of his organization. Since he is closely connected with a top management, he participates in the decision making, policy framing, planning etc. All such important decisions regarding business activities are required to be maintained at top confidential. A secretary keeps all such confidential decisions and executes them at a right time

Multiple choice elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

A company secretary is the mouth piece of the Board of Directors. 

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
(i) A company secretary needs sound general education. 
(ii) He must also have knowledge of correspondence, office organisation, book-keeping and accountancy. 
(iii) He must also have knowledge of secretarial work relating to the company meetings. 
(iv) He must have legal back-ground including the knowledge of Indian Companies Act and other laws like Income Tax Act and Factories Act. 
(v) A company secretary is normally appointed by the Board of Directors. 
(vi) He executes the decisions of the Board and carries out the instructions and orders of the board. 
(vii)  He acts as a confidential clerk of the Board. 
(viii) He has to help the directors in forming policies of the company and preparing progress report and other reports. 
(ix) A company secretary acts as a line of communication between the Board and the staff. 
(x) He acts as the mouth piece of the Board, as the Directors act only through the secretary 
(xi) Even grievances of the staff are communicated to the Directors through him. 
(xii) Hence, a company secretary is the mouth piece of the Board of Directors.
Multiple choice elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

The functions of a secretary depend on ______ . 

  1. the nature of organisation

  2. the status of secretary

  3. the value of investment

  4. the number of share holders
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The function of secretary depend on the nature of the organisation, different organisations have different works and requirements which changes the functions of a secretary.

Multiple choice elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

State  the following statement is True of False:

The first auditor is appointed by the shareholders of the company.

  1. True

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

According to the Company Act , 2013 , the first auditor is appointed by the shareholders of the company at the time of commencement . 

Auditor is a person appointed by the company to execute audit. auditing is done by the auditor to check the accuracy of the accounts .  The first auditor is appointed by shareholders.

Multiple choice elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

Only special business is transacted at Annual General Meeting.

  1. True

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

False , Annual General Meeting is a mandatory yearly gathering of company's interested shareholders . At the meeting the directors of the company present an annual report containing information for the shareholders about the company's performance and strategy. Shareholders with voting rights vote on current issues such as appointment of board of directors , executive compensation, divident payment and selection of auditors.

Multiple choice elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

State the following statements is True or False:

The meeting of shareholders which is held in between two consecutive Annual General Meetings is Extra Ordinary General meeting.

  1. True

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

True, the meeting which is held between two consecutive Annual General Meetings is called Extraordinary General Meeting . It is a sort notice meeting o members and the shareholders especially to consider a particular matter. 

Multiple choice elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business
The general meeting held only once in the life of the company is the statutory meeting.

  1. True

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

true, statutory meeting is the first meeting of the shareholders of a company. It must be held within a period of less than one month not more than six months from the date at which the company is entitled to the commencement of business . it is only held once in a lifetime of a company.

Multiple choice elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business
Appointment of the Auditors is made at the Annual General Meeting.

  1. True

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

True , the appointment of the auditor is made at Annual General Meeting . Every company shall appoint an auditor at it's first annual general meeting who shall hold its first office from conclusion of that meeting to its sixth annual general meeting

Multiple choice elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business
The first general meeting of the company is the statutory meeting.

  1. True

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

Statutory meeting is the first meeting of the shareholders of the company. it must not be held only once in a lifetime of a company . Hence the first general meeting of the company is the statutory meeting. 

Multiple choice elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business
The directors are agents, trustees and managing partners of a company.

  1. True

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

True, Directors are appointed or elected member who has the responsibility for determining and implementing the company's policies . They are agents, trustees and managing partners of a company. 

Multiple choice elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

All resolutions must be registered with registrar of Companies. 

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
Section 192 of Companies Act, 1956, talks about "Registration of certain resolutions and agreements."

(1) A copy of every resolution (together with a copy of the statement of material facts annexed under section 173 to the notice of the meeting in which such resolution has been passed) or agreement to which this section applies shall, within thirty days after the passing or making thereof, be printed or typewritten and duly certified under the signature of an officer of the company and filed with the Registrar who shall record the same.

(2) Where articles have been registered, a copy of every resolution referred to in sub-section (1) which has the effect of altering the articles and a copy of every agreement referred to in that sub-section for the time being in force shall be embodied in or annexed to every copy of the articles issued after the passing of the resolution or the making of the agreement.

(3) Where articles have not been registered, a printed copy of every resolution or agreement referred to in sub-section (1) shall be forwarded to any member at his request, on payment of one rupee.

(4) This section shall apply to

(a) special resolutions ;

(b) resolutions which have been agreed to by all the members of a company, but which, if not so agreed to, would not have been effective for their purpose unless they had been passed as special resolutions ;

(c) any resolution of the Board of directors of a company or agreement executed by a company, relating to the appointment, re-appointment or renewal of the appointment, or variation of the terms of appointment, of a managing director ;

(e) resolutions or agreements which have been agreed to by all the members of any class of shareholders but which, if not so agreed to, would not have been effective for their purpose unless they had been passed by some particular majority or otherwise in some particular manner ; and all resolutions or agreements which effectively bind all the members of any class of shareholders though not agreed to by all those members ;

(ee) resolutions passed by a company

(i) according consent to the exercise by its Board of directors of any of the powers under clause (a), clause (d) and clause (e) of sub-section (1) of section 293 ;

(ii) approving the appointment of sole selling agents under section 294 or section 294AA ;

(f) resolutions requiring a company to be wound up voluntarily passed in pursuance of sub-section (1) of section 484 ; and

(g) copies of the terms and conditions of appointment of a sole selling agent appointed under section 294 or of a sole selling agent or other person appointed under section 294AA.

(5) If default is made in complying with sub-section (1), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to two hundred rupees for every day during which the default continues.

(6) If default is made in complying with sub-section (2) or (3), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to one hundred rupees for each copy in respect of which default is made.

(7) For the purposes of sub-sections (5) and (6), the liquidator of a company shall be deemed to be an officer of the company.

Multiple choice elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

State the following statement is True or False:

Under Companies Act,1956 a director need not disclose  information to the board about his directorship in other companies.

  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) Under section 275 of the Companies Act,1956 a person cannot hold offices as a directors in more than 15 companies at the same time.

(ii) If a director holds office as a directors in more than fifteen companies at the same time , he shall be punishable with a fine extending upto Rs 5,000/- for each directorship in excess of 15 companies.

(iii) Under section 159 of the Companies Act,1956,every company has to file Annual Returns to the Registrar of Companies.

(iv) All details of the directors have to be stand in the Annual Return.

(v) For this, the secretary has to collect this information from every directors of the company.

(vi) Therefore, every director is required to disclosed details of information of other companies in which they act as directors. 
However some of the provisions are amended according to Companies Act,2013.

Multiple choice elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

State the following statement is True or False:

A director must acquire qualification shares within three months from the date of being appointed as a director in a company.

  1. True

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

This statement is False, due to the following reasons:

(i) The directors occupy a very important position in the company management.
(ii) They are elected representatives of the shareholder.
(iii) Directors are responsible for decision making , policy farming  and determination of plans.
(iv) Directions exercise their powers and authorities collectively as a' Board'.
(v) Under Section 270 of the Companies Act 1956, every person  who desire to become a director of the company must purchase qualification shares within a period of 2 months from the date of his appointed.
(vi) However, the nominal value of such share should not exceed Rs.5,000/- 
(vii) The secretary has to correspond in this connection.
(ix) Whenever a Director is appointed,it is the duty of the Secretary to remind him that he has to purchase the qualification share and inform the company accordingly.
So, the Director has to purchase qualification shares within two months and not three months,from the date of his appointment.