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

Write a word, term or a phrase which can substitute the following statement:
An authority that issues a Certificate of Incorporation.

  1. Official Liquidator

  2. Registrar of Company

  3. Central government

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

According to Rule 36(13) of the Companies Incorporation Rules, 2014, the Certificate of Incorporation shall be issued by the Registrar in Form No. INC-11

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 _____ is the representative of the Company Law Board.

  1. Registrar of Companies

  2. Official Liquidator

  3. Advisory Committee

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

The Registrar of Companies is an office under the Indian Ministry of Corporate Affairs that deals with administration of the Companies Act 1956 and Companies Act, 2013. There are currently 22 Registrars of Companies operating from offices in all major states of India

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

Select the correct option given below :

The first auditors of the company are appointed by the _________.

  1. Secretary

  2. Promoters

  3. Manager

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

The first directors of the company are usually appointed by the promoters in the manner laid down by the company's articles. The first directors can hold office only till the first annual general meeting of the company when they will be replaced by directors appointed by the company at this 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
The appointment of bankers of a company is made by the _________.

  1. Board of directors

  2. Promoters

  3. Shareholders

  4. All of above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Board of Directors is responsible for the appointment of key personnel, including bankers, to manage the company's financial operations. Shareholders generally vote on major corporate actions, but day-to-day operational appointments are handled by the Board.

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

Registration is compulsory for ________.

  1. club

  2. company

  3. HUF

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

Mandatory Company Registration. Hence, a business with any amount of turnover or capital can be operated as a Proprietorship or Partnership or Limited Liability Partnership or Private Limited Company. However, the Companies Act 2013, does require mandatory company 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

The companies are governed by the Companies Act _________.

  1. 1956

  2. 1936

  3. 2013

  4. 1856
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Companies Act 2013. An Act to consolidate and amend the law relating to companies. The Companies Act 2013  is an Act of the Parliament of India on Indian Company Law which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a 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

E-form no. 2 can be signed by___________________.

  1. Attorney entitled to appear before high count

  2. Company secretary in whole time practice

  3. Chartered Accountant in work time practice

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
E-form no. 2 can be signed by :
Attorney entitled to appear before high count
Company secretary in whole time practice
Chartered Accountant in work time practice.
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

E-form no. 32 is filled for________________.

  1. Appointment of director

  2. Appointment of manager

  3. Appointment of secretary

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

E- form 32 is generally filled with registrar for conforming appointment of director, manager, or secretary of 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

An act is said to be ultra vires Company when it is beyond the powers___________.

  1. of the Company,

  2. of the Directors,

  3. of the Directors but not the Company,

  4. Conferred on the Company by the Articles.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

 In corporate law, ultra vires describes acts attempted by a corporation that are beyond the scope of powers granted by the corporation's objects clause, articles of incorporation or in a clause in its Bylaws, in the laws authorizing a corporation's formation, or similar founding documents.

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

Which of the following is benefit from Incorporation of a Company?

  1. Loss of Privacy

  2. Possibility of Frauds

  3. Greater Public Accountability

  4. Independent Legal Entity
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Separate Legal Entity:
Under Company law, a company becomes a separate legal entity as compared to its members. The company is distinct and different from its members in law. It has its own seal and its own name, its assets and liabilities are separate and distinct from those of its members. It is capable of owning property, incurring debt, and borrowing money, employing people, having a bank account, entering into contracts and suing and being sued separately.
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

Contracts which entered into, by Agents or trustees on behalf of a prospective Company before it has come into existence are called _______________.

  1. Provisional Contracts

  2. Pre-Incorporation Contracts

  3. Both Provisional and Pre-Incorporation Contracts

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
As the name stands, these contracts are made before the formation of a company. For the formation of the company, the promoters are required to enter into various contracts with third parties e.g. purchasing some property or hiring the services of professions like lawyers, technicians, etc.

After the incorporation of the company such contracts are not attached to the company, as the company obtains legal entity status only after its incorporation.
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

Under the Companies Act, which of the following powers can be exercised by the Board of Directors ____________________.

  1. Power to sell any of the companies undertakings

  2. Power to make calls

  3. Power to borrow in excess of paid up capital

  4. Power to appoint an auditor
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
The Board of Directors of a company can exercise the following powers on behalf of the company only by means of resolutions passed at meetings of the Board:

To make calls on shareholders in respect of money unpaid on their shares;
To authorize buy-back of securities under section 68;
To issue securities, including debentures, whether in or outside India;
To borrow monies;
To invest the funds of the company;
To grant loans or give guarantee or provide security in respect of loans;
To approve financial statement and the Board’s report;
To diversify the business of the company;
To approve amalgamation, merger or reconstruction.
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 is a _________ on the other hand a club is a ____________.

  1. Trading association, non trading association

  2. Non trading association, trading association

  3. Trading association, trading association

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

Generally company used to indulge in activities of trading of goods and services whereas club indulge in non trading activities.

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

Secretarial Compliance Report is ___________________.

  1. optional for a company

  2. required when a company does not have a whole-time secretary

  3. required if a company is not required to employ a whole time secretary and has a paid-up share capital of Rs. 10 lakh or more

  4. required for companies as are notified by the Central Government
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Under the Companies Act, the Secretarial Compliance Report is a mandatory requirement for specific companies that do not employ a whole-time company secretary and meet certain financial thresholds, such as having a paid-up share capital of Rs. 10 lakh or more.