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 ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Many private limited companies convert into public limited companies because _____.

  1. they do not want to change their business

  2. they want to gain the benefits of limited liability

  3. they want to get guarantee from its members

  4. they want to raise additional capital to expand the business
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Private limited company is a type of company that offers limited liability, or legal protection to its share holders. Many private limited companies who want to expand their business convert themselves into public limited companies. As the public limited companies are widely spread they can expand the business easily.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Which of the following statement about most public limited companies is true?

  1. They are owned and controlled by the employees

  2. They are owned by the directors but controlled by the shareholders

  3. They are owned by shareholders but controlled by directors

  4. They are owned and controlled by the promoters
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Public limited companies are the companies which are owned by the state government. They work for the society at large. They are owned by the directors of the company. The directors appoints shareholders who manages all the operations of the company.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

The companies are governed by the Indian Companies Act _____________________.

  1. Indian Companies Act, $2013$
  2. Indian Companies Act, $1957$
  3. Indian Companies Act, $1958$
  4. Indian Companies Act, $1959$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The current primary legislation governing companies in India is the Companies Act, 2013.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Which option is NOT suitable for winding up of a company?

  1. Dissolving or winding up by agreement.

  2. Dissolving or winding up by law.

  3. Dissolving or winding up by creditors with the help of law.

  4. Dissolving or winding up by members with the help of law.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Winding up is a legal process governed by law; 'winding up by agreement' is not a standard legal term for the formal dissolution process of a company.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Which is NOT a feature of an incorporated company?

  1. Transferability of shares.

  2. Limited liability

  3. Common seal

  4. It is an agent
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

An incorporated company is a separate legal entity and not an agent of its members; it acts on its own behalf.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Which one of the following statements in respect of a public limited company is correct?

  1. There can be less than 7 members.

  2. The convent of directors and their contract to purchase qualificationshares, if any, required must be filed.

  3. Remuneration of directors is not controlled by any provision of companies Act

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

Public companies must file the consent of directors and their contract to purchase qualification shares if required by the Articles of Association.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Number of months the company can continue its business u/s 45__________________.

  1. 1

  2. 2

  3. 5

  4. 6
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Section 45 of the Companies Act (in the context of the 1956 Act) provided a 6-month period for a company to rectify membership issues if it fell below the minimum requirement.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

According to N.N. Malaya, "________ are autonomous or semi - autonomous corporation and companies established, owned and controlled by the state and engaged in industrial and commercial undertakings."

  1. Private enterprises

  2. Public enterprises

  3. Semi private enterprises

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

According to N.N. Malaya, "public enterprises" are autonomous or semi - autonomous corporation and companies established, owned and controlled by the state and engaged in industrial and commercial undertakings." Public enterprise can be defined as a business organization wholly or partly owned by the state and controlled through a public authority. 

Multiple choice organization of commerce and management business services 1 importance, types and documentation in warehousing meaning of warehousing and warehousing warehousing

State the following statement is True or False:

The persons who are trustees, agents and managing partners of the company are the directors.

  1. True

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

Since the company is an artificial person, Director acts an agent of the company. Director acts as a trustee by safeguarding the financial and other resources of the company. He/She acts as a managing partner by managing the company's affairs under the guidance of the Board of Directors.

Multiple choice organization of commerce and management business services 1 importance, types and documentation in warehousing meaning of warehousing and warehousing warehousing

State the following statement is True or False:

The authority which directs and manages the affairs of a company is the Board of directors.

  1. True

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

Subject to the provisions of the Companies Act 2013, the Board of Directors of a company shall be entitled to exercise all such powers, and to do all such acts and things, as the company is authorized to exercise and do.

Multiple choice organization of commerce and management business services 1 importance, types and documentation in warehousing meaning of warehousing and warehousing warehousing
The body of the elected representatives of the shareholders is the Board of Directors.

  1. True

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

The Board of Directors is a team of people elected by a corporation's shareholders to represent the shareholders' interests and ensure that the company's management acts on their behalf. The head of the board of directors is the chairman or chairperson of the board.

Multiple choice book keeping and accountancy principles of double entry system objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

 If a company is registered on the basis of fictitious names, its incorporation is invalid.

  1. True

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

The certificate of incorporation once issued, is a conclusive evidence of the existence of the company even if there were deficiencies in the formalities.

Even when company get registered with illegal object with any fictitious name, the birth of the company cannot be questioned only remedy is to wind off.