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

Consider the following statements :
1.Neither the Companies Act, 1956 not the Companies Act, 2013 defines the term 'Person' i.e. the one member of OPC
2. The one member of OPC can be either a natural person or a Juridical person.
3. An OPC cannot be converted into any other class of company.
Which of the above statement/s is/are not true?

  1. 1 and 2

  2. 2 and 3

  3. Only 2

  4. Only 3
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The conversion of a private limited into an OPC (One Person Company) is allowed as per the Companies Act, 2013, which provides a mechanism to convert one class of company into another.That the annual turnover of the company must be less than Rs. 2 crores during the past three consecutive financial years.

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

According to the Section 203 of the Companies Act, 2013 which of the following persons has been covered under term 'Whole-time KMP'?

  1. Company Secretary

  2. Chartered Accountant

  3. Civil Engineer

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

Section 203 of the Companies Act, 2013 explicitly lists the Company Secretary as a Key Managerial Personnel (KMP) for certain classes of companies.

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

Memorandum of association contains which of the following?

  1. Place of registered office of the company

  2. Objective of the company

  3. Amount of registered share capital

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

The Memorandum of Association (MOA) is the charter of the company and must contain the name, registered office, objects, liability, and capital clauses.

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

The seal of a company acts as its signature.

  1. True

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

Common Seal is the official signature of the company and each company shall have only one seal, on its incorporation.

 Common Seal is the signature of the company to any document on which it is affixed and binds the company for all obligations undertaken in the document

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

A company can be created in several ways. Which ONE of the following is NOT a valid method of creating a company?

  1. The division of the High Court can create a company.

  2. A company can be created by registering certain documents with Registrar

  3. A company can be created by an act of parliament

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

A company is a legal entity created through registration under the Companies Act or by a special Act of Parliament. The judiciary (High Court) does not have the power to create a company.

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

Register of members is to be prepared as per ____________.

  1. section 66 of Companies Act, 2013

  2. section 30 of Companies Act, 2013

  3. section 88 of Companies Act, 2013

  4. none of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Section 88 of the Companies Act, 2013 specifically mandates that every company must keep and maintain a register of members, debenture-holders, and other security holders.

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

A company was incorporated on 1st January, 2014. Its financial year will be _________.

  1. 31st March, 2014

  2. 31st March,2015

  3. 31st March,2016

  4. 31st March,2017
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
Option B is Right.
Usually, the financial year of a company consists of 12 months. However, in some cases, it may not be so. In the case of a newly incorporated company, financial statements have to be prepared from the date of incorporation of the company till the year-end date of the financial year which may not be of 12 months.
Multiple choice business organisation and correspondence companies act, 2013 - introduction and characteristics introduction to companies companies act, 2013 company

An association not for profit registered under the Companies Act, 2013 popularly known as__.

  1. Section 8 company

  2. Section 25 company

  3. Section 18 company

  4. Section 20 company
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Section 8 of the Companies Act, 2013 deals with companies formed for charitable purposes, which are commonly referred to as Section 8 companies. This replaces the old Section 25 from the 1956 Act.

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

Licence under Section 8 of the Companies Act, 2013, may be granted by Central Government if ____________.
(i) It is intended to form a company for promoting commerce, art, science, religion, charity or any other useful object
(ii) The company allows the payment of dividend to its members
(iii) Apply its profits or other income in promotion of its objects
Select the correct the answer from the options given below-

  1. (i), (ii) & (iii) of the above

  2. (ii) of the above

  3. (ii) & (iii) of the above

  4. (i) & (iii) of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A Section 8 company must apply its profits to the promotion of its objects and is strictly prohibited from paying dividends to its members. Therefore, statement (ii) is incorrect, making (i) and (iii) the correct conditions.

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

Section 2(45) of the Companies Act, 2013 defines a "Government company" as any company in which not less than ___________ 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 or partly by one or more State Governments.

  1. 31%

  2. 41%

  3. 51%

  4. 61%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

According to Section 2(45) of the Companies Act, 2013, a Government company is one in which at least 51% of the paid-up share capital is held by the Central or State Government(s).

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

Characteristic of a company ..........
(I) Transferability of profits
(II) Property of company is joint property of shareholders
(III) Compulsory Common Seal
Select the correct answer from the options given below:

  1. (I) and (II)

  2. (II) and (III)

  3. (III) and (I)

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

None of the listed items are correct characteristics of a company. Profits are not transferable in all companies (e.g., private companies), company property is not joint property of shareholders, and the common seal is now optional under the 2013 Act.

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

Which of the following case clearly established the principle that company is a legal person distinct from its members?

  1. Salman Vs Salman & Co. Ltd.

  2. Salomon Vs Salomon & Co. Ltd.

  3. Salsman Vs Salsman & Co. Ltd.

  4. Smith Vs Anderson
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The landmark case of Salomon vs. Salomon & Co. Ltd. established the principle of separate legal entity, confirming that a company is distinct from its members.