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

In case of a firm carrying on the business of banking

  1. there should be at least seven members and maximum number of members should not exceed fifty

  2. there should be at least two members and maximum number of members should not exceed ten

  3. there should be at least ten members and maximum number of members should not exceed twenty

  4. there should be at least two members and maximum number of members should not exceed fifty
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Under the Indian Partnership Act, 1932, for firms carrying on banking business, the number of partners must be between 2 and 10. This special restriction exists because banking involves public trust and depositors' money. Option B correctly states this 2-10 limit. Option A incorrectly sets a minimum of 7 - any partnership needs at least 2. Option C's 10-20 range is wrong for banking. Option D's 2-50 limit applies to non-banking businesses, not banking firms which have stricter requirements.

Multiple choice

Which of the following statements, about the registration of firm, is not true?

  1. It must be done at the time of its formation.

  2. It may be done at the time of formation.

  3. It may be done before filing a suit against third party.

  4. It may be done at any time after its formation.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Partnership firm registration is optional, not mandatory - it can be done at the time of formation or any time afterward. It can also be done before filing a suit against a third party. The statement claiming it must be done at formation is false because registration is voluntary and can be completed at various times.

Multiple choice

Registration of a firm is

  1. compulsory

  2. optional

  3. occasional

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

Registration of a partnership firm is optional under the Indian Partnership Act, 1932. Unregistered firms can operate legally but face limitations - they cannot enforce contract claims in court. Registration provides legal benefits but is not compulsory for operation. 'Occasional' is not a recognized category in this context.

Multiple choice

The articles of association establish the relationship between

  1. the company and its members

  2. the company and outsiders

  3. the company and its members and also between the members themselves

  4. the company and other companies

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The articles of association is a contract between a company and its members and also between the members themselves that they shall abide by the rules and regulations of internal management of the company specified in the AA.

Multiple choice

The objects clause of the memorandum of association can be altered by a/an

  1. ordinary resolution

  2. special resolution

  3. special resolution and confirmation by the registrar of companies

  4. special resolution and confirmation by the company law board
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The objects clause of the memorandum of association can be altered by a special resolution and confirmation by the company law board.

Multiple choice

________ defines the scope of a company’s activities.

  1. Prospectus

  2. Statutory declaration

  3. Memorandum of Association

  4. Articles of Association
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Memorandum of Association defines the scope of a company’s activities. The main purpose of the memorandum is to limit the scope of activities and powers of the company. Thus, any act outside the memorandum is ultra vires the company.

Multiple choice

What is known as a charter of a company?

  1. Memorandum of Association

  2. Bye-laws

  3. Articles of Association

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

Memorandum of Association is known as a charter of a company and is a very important document as it contains the basic conditions on which the company is incorporated.

Multiple choice

_________ companies must have their own articles.

  1. Government companies

  2. Unlimited companies

  3. Companies limited by shares

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

Unlimited companies must have their own articles. The articles shall be signed by the subscribers of the memorandum and registered along with the memorandum.

Multiple choice

The name of a company can be changed by

  1. an ordinary resolution

  2. a special resolution

  3. the approval of the union government

  4. a special resolution and with the approval of the central government
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The name of a company can be changed by a special resolution and with the approval of the central government.