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 companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

A Company Secretary in practice is eligible to become a _____ of National Company Law Tribunal.

  1. Technical Member

  2. Judicial Member

  3. Ordinary Member

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

Section 409 of the Companies Act. 2013 talks about the appointment of the members of the National Company Law Tribunal. As per clause (3) of the section the qualifications of being the technical member of the tribunal includes a person  who—

  • has, for at least fifteen years been a member of the Indian Corporate Law Service or Indian Legal Service out of which at least three years shall be in the pay scale of Joint Secretary to the Government of India or equivalent or above in that service; or
  • is, or has been, in practice as a chartered accountant for at least fifteen years; or
  • is, or has been, in practice as a cost accountant for at least fifteen years; or 
  • is, or has been, in practice as a company secretary for at least fifteen years; or
  • is a person of proven ability, integrity and standing having special knowledge and experience, of not less than fifteen years, in law, industrial finance, industrial management or administration, industrial reconstruction, investment, accountancy, labour matters, or such other disciplines related to
  • management, conduct of affairs, revival, rehabilitation and winding up of companies; or
  • is, or has been, for at least five years, a presiding officer of a Labour Court, Tribunal or National Tribunal constituted under the Industrial Disputes Act, 1947.

Multiple choice business organisation and correspondence companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

A company cannot be registered with the name -
(1) Which is undesirable
(2) Which is identical to name of an existing company
(3) Which is identical to or too nearly resembles the name of an existing company
Select the correct answer from the options given below -

  1. 1

  2. 2

  3. 3

  4. All of the above are correct
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
A legal entity must have a name, which forms the identity of the enterprise. The name clause, the first of the MOA, protects the entity against future registrations of the same or closely identical name. Likewise, the name of the entity shouldn’t be similar or closely identical to any other operating entity.  The Central Government may find a name to be undesirable and misleading, in which case it may prohibit it. A company should end with the word ‘limited’ in case of a public limited enterprise, and ‘private limited’ in the case of a private limited enterprise.

Multiple choice business organisation and correspondence companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

As per Section 275 of the Companies Act, 2013, Company Secretaries have been recognized to be appointed as ______from a panel to be maintained by the Central Government.

  1. Financial Liquidator or Company Liquidator.

  2. Provisional Liquidator or Company Liquidator.

  3. Provisional Liquidator or Financial Liquidator.

  4. Both (A) and (B)
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Section 275 of the Companies Act 2013 talks about the appointment of the Company liquidators in case of winding up. As per clause (2) of the section, the provisional liquidator or the Company Liquidator, shall be appointed from a panel maintained by the Central Government consisting of the names of chartered accountants, advocates, company secretaries, cost accountants or firms or bodies corporate having such chartered accountants, advocates, company secretaries, cost accountants and such other professionals as may be notified by the Central Government or from a firm or a body corporate of persons having a combination of such professionals as may be prescribed and having at least ten years’ experience in company matters.

Multiple choice business organisation and correspondence companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

As per Rule 9 of Companies (Incorporation ) Rules, 2014, for reservation of name, application shall be made in ________

  1. From No. INC-1A

  2. From No. INC-5

  3. From No. INC-1

  4. From No. INC- 1B
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

As per rule 9 of the Companies (Incorporation ) Rules, 2014, an application for the reservation of a name shall be made in Form No. INC.1 along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014. 


Multiple choice business organisation and correspondence companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

Appointment of Company Secretary is mandatory in -
(a) Every listed company
(b) Every unlisted private company having paid-up share capital of Rs.10 Crore or more
(c) Every public company having paid-up capital of Rs.5 Crore or more
(d) Every public company having turnover of Rs. 5 Crore or more
Select the correct answer from the option given below :-

  1. (a) & (b)

  2. (a) & (c)

  3. (a) & (d)

  4. (a), (c) & (d)
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

  • As per Section 2 (24) of Companies Act, 2013, Company Secretary or Secretary means a Company Secretary as defined in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 who is appointed by a company to perform the functions of a Company Secretary under this Act. As per Company Secretaries Act, 1980 “Company Secretary” means a person who is a member of the Institute of Company Secretaries of India.
  • Following Companies need to appoint whole time company secretary :
1. All Listed Companies 
2. Every Public Company having paid-up share capital of Rs. 10 Cr. or More 
3. Every other Company having paid-up share capital of Rs. 5 Cr. or More. 

Multiple choice business organisation and correspondence companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

A public company must have atleast _______ and a private company must have at least _______.

  1. 5 Directors; 3 Directors

  2. 2 Directors; 3 Directors

  3. 3 Directors, 2 Directors

  4. 10 Directors; 4 Directors
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

According to the Companies Act, 2013, a public company must have at least 3 directors, while a private company must have at least 2 directors.

Multiple choice business organisation and correspondence companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

For ascertaining as to whether the proposed name is available for adoption, the promoters are required to make an application to the Registrar of Companies in From No. INC 1 along with fee as provided in ____

  1. Companies (Registration Office and Fees Rules, 2014)

  2. Companies (Incorporation and Fees) Rules, 2014

  3. Companies (Fees and Penalties) Rules, 2013

  4. Companies (Fees and Penalties) Rules, 2014
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

As per rule 9 of the Companies (Incorporation ) Rules, 2014, an application for the reservation of a name shall be made in Form No. INC.1 along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014. 


Multiple choice business organisation and correspondence companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

Small company as defined in Section 2(85) of the Companies Act, 2013 means which of the following company?

  1. Public Company of which turnover does not exceed Rs. 2 Crores

  2. A Company registered under section 8

  3. Public company of which paid-up share capital does not exceed Rs. 50 Lakhs

  4. Private company of which paid-up share capital does not exceed Rs. 50 Lakhs
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A small company is defined under Section 2(85) as a company other than a public company, with a paid-up share capital not exceeding Rs. 50 Lakhs (or higher prescribed limit) and a turnover not exceeding Rs. 2 Crores (or higher prescribed limit).

Multiple choice business organisation and correspondence companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

Which of the following person is NOT eligible to incorporate One Person Company (OPC) as per Companies Act, 2013?
(1) Indian citizen and resident in India
(2) Person who has already incorporated one OPC in India
(3) Artificial person
(4) Indian citizen and non-resident in India
Select the correct the answer from the options given below

  1. (1), (3) and (4)

  2. (2), (3) and (4)

  3. (1), (2) and (4)

  4. (2) and (4)
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

As per Section 2(62) of the Company’s Act 2013, a company can be formed with just 1 Director and 1 member which is known as One Person Company. It is a form of a company where the compliance requirements are lesser than that of a private company. Only a natural person who is an Indian citizen and resident in India shall be eligible to incorporate and act as a member and nominee of an OPC. For the above purpose, the term "resident in India" means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one financial year.

Multiple choice business organisation and correspondence companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

If the Registrar is satisfied that all requirements, have been complied with, he will register the company and issue the ______.

  1. Certificate of commencement of business

  2. Certificate of incorporation

  3. Compliance certificate

  4. Certificate to act as director
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

 A Certificate of Incorporation ( is a legal document that is issued by Ministry of Corporate Affairs once a company is successfully registered with them. The Certificate  Of Incorporation is a proof that the company is now registered with the Registrar of Companies. 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 companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

Which of the following section of the Companies Act, 2013 defines "Government Company"?

  1. Section 2(54)

  2. Section 2(35)

  3. Section 2(53)

  4. Section 2(45)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Section 2(54) defines "Managing Director"
Section 2(35) defines "Dividend"
Section 2(53) defines "Manager"
Section 2(45) defines "Government company" as a company in which not less than fifty-one per cent. of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company.

Multiple choice business organisation and correspondence companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

As per Section 2(69) of the Companies Act, 2013, which of the following person can be treated as "Promoter"?
(I) Who has been named as such in a  prospectus or is identified by the company in the annual return referred to in Section 92. 
(II) Who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise.
(III) In accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act
(IV) Person who is acting in a professional capacity

  1. (I) and (II) only

  2. (II) and (III) only

  3. (II), (III) and (IV) only

  4. (I), (II), (III) of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Section 2(69) defines a promoter as a person who has been named in the prospectus, has control over the affairs of the company, or on whose advice the Board is accustomed to act. Professional capacity (IV) is explicitly excluded from the definition.

Multiple choice business organisation and correspondence companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

Rule 12 of the Companies (Incorporation) Rules, 2014 states that an application for incorporation shall be filed with ROC in _______ in case of one person company or _______ in case of other companies.

  1. Form INC-2; Form INC-5

  2. Form INC-7; Form INC-5

  3. Form INC-7; Form INC-2

  4. Form INC-2; Form INC-7
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Under the Companies (Incorporation) Rules, 2014, Form INC-2 was used for One Person Company (OPC) incorporation, while Form INC-7 was used for other companies (though these forms have since been updated/replaced in practice, this reflects the historical context of the question).

Multiple choice business organisation and correspondence companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

Which of the following is not an object of the Companies Act, 2013?

  1. To encourage transparency

  2. To encourage profitability

  3. To encourage accountability

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

The Companies Act, 2013 aims to promote transparency, accountability, and good governance. While profitability is a goal of the business itself, it is not an explicit legislative object of the Act.

Multiple choice business organisation and correspondence companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

Consider the following statements :
1. Under the new Company Act, 2013, a director is treated as related party.
2.  Under the new Company Act, 2013, an 'Official Liquidator' should be appointed under subsection (1) of Section 359.
3. Life Insurance Corporation cannot be treated as a 'Public Financial Institution'.
Which of the above statement/s is/are not correct

  1. Only 3

  2. Only 2

  3. 1 and 3

  4. 1 and 2
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

LIC is one of the financial institutions to be established in India after independence. The full form of LIC is life insurance corporation and it was established in 1956. The main aim behind the establishment was to spread the message of life insurance in the country. Also, it was required to mobilize people's savings.