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 business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

 Experts who help promoters in the promotion of a company are also called promoters.

  1. True

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

Expert do not become promoter, because they are assisting the promoters in various works or studies for which they charge fees. Hence experts who assists promoters in promotion of the company will not be called as promoters.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

Minimum number of members to form a public company is ________.

  1. 5

  2. 7

  3. 12

  4. 21
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Public company is the company who has a minimum paid up share capital of Rs. 5 Lac. Hence, as prescribed by the Companies Act the minimum members to form a public company is 7.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

Minimum number of members to form a private company is  _______.

  1. 2

  2. 3

  3. 5

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

The minimum number of members needed to form a private company is at least 2 members. The minimum number of members needed to form a Public Company is at least 7 members. The Maximum number of members in a Private Company is restricted to 200. The Public Company have no restriction on a maximum number of members.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

Memorandum of association of a firm contains ____________.

  1. rules regarding the internal management of the company

  2. rules regarding the constitution and activities of the company

  3. rules regarding the external management

  4. rules regarding the constitution
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Memorandum of Association (MOA) is the fundamental document of a company that defines its constitution, scope of activities, and relationship with the outside world.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

The duties of Company Secretary s regarding company meetings are restricted upto _______________.

  1. Before company meeting

  2. During company meeting

  3. After company meeting

  4. ln all the above situations
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A Company Secretary has extensive responsibilities regarding meetings, including preparation before, facilitation during, and documentation after the meeting.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

A company has separate legal status.

  1. True

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

the principle of the separate legal personality of a company has become a vital part of company law.while the company legal relationships until that time had been principally based on transactions and activities between ‘natural’ or ‘real’ persons, namely human beings, from that time forward these legal relationships have been increasingly extended also to relations with company, as ‘legal’ personality. Thus, the principle of separate legal personality of a company has conjured up many practical as well as theoretical considerations about its application and correlated consequences

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

The Registration of a Joint Stock Company is _______.

  1. Voluntary

  2. Compulsory

  3. optional

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

Registration of the company is optional not compulsory. One can start the business with other ways also rather than registering like acquiring tax license, service tax registration.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

State the following statement is True or False:
Company promoters play significant role in the formation of a company.

  1. True

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

True

Promoters play significant role in the formation of a company.Promoters are the persons who conceive the idea of business.
A corporate promoter is a firm or person who does the preliminary work incidental to the formation of a company, including its promotion, incorporation, and flotation, and solicits people to invest money in the company, usually when it is being formed.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company
Those who initiate formation of a company are called ___________.

  1. underwriters

  2. directors

  3. promoters

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

When an individual has an idea for a new business venture, he or she may set about interesting others in the venture and persuade them to contribute capital to a company to be incorporate for the purpose of carrying on the venture. The individual will then be described as ‘promoter’ of the company.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company
A company must start it's business within ___________ of incorporation of company.

  1. one year

  2. nine months

  3. six months

  4. two years
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

After the documents for incorporation are filed, the ROC calls the attorney on a specific date for scrutiny and making the corrections in the MOA and AOA filed. 

On complying with the same, the certificate of incorporation is granted to the attorney. After receiving incorporation letter company must start its business within one year from the date of A functional of incorporation letter.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company
The second stage in the formation of a company is _________.

  1. promotion

  2. capital raising

  3. incorporation

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

Incorporation or registration is the second stage in the formation of a company. It is the registration that brings a company into existence. A company is properly constituted only when it is duly registered under the Act and a Certificate of Incorporation has been obtained from the Registrar of Companies.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

State the following statement is True or False:
The certificate issued by the registrar of a companies for registration of a company is the certificate of incorporation.

  1. True

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

True

A certificate of incorporation is a legal document relating to the formation of a company or corporation. This is issued by the registrar of companies after registering the company. When the registrars fully satisfied with the documents of the company, the registrars of company and issues a certificate of incorporation signifying the birth of the company.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

State the following statement is True or False:
The last stage in the formation of company is commencement of business.

  1. True

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

True

The last stage in the formation of company is commencement of business.
After getting the Certificate of Incorporation, a private company can start its business. A public company can start its business only after getting a’ Certificate of Commencement of Business’.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

Write a word or a term or a phrase which can substitute the following statement.
The person who initiates scheme of formation of company.

  1. Investor

  2. Promoter

  3. Shareholder

  4. Proprietor
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A  promoter is a  person who does the preliminary work incidental to the formation of a company, including its promotion, incorporation, and flotation, and solicits people to invest money in the company, usually when it is being formed.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company
Company can be registered without Memorandum of Association. 

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
(i) The Memorandum of Association is a basic or fundamental or primary document of a company. 

(ii) The Memorandum of Association lays down the ranges of its activities. 

(iii) It is a public document and can be inspected by those who deal with the company. 

(iv) It states the nature of the business activities to be conducted by the company. 

(v) It defines the relationship between the company and the outsiders.

(v) All companies have to prepare their own Memorandum of Association. 

(vii) It is a charter on the Constitution of company. 

(viii) It defines the limitation and powers of the company. 

(ix) No company can be formed without Memorandum of Association. 

(x) Memorandum of Association is submitted to the Registrar of Companies for registration i.e. for getting Certificate of Incorporation. 
So, a company cannot be registered without Memorandum of Association.