Tag: private and public sector

Questions Related to private and public sector

The committee which is, set up to advise the Central Government and Company Law Board on the administration of the companies Act is the Advisory Committee.

organisation of commerce and management sectoral organisation of business classification of commercial organisations public, private and joint sector private and public sector departmental undertakings meaning and features of departmental undertaking

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

For the purpose of advising the Central Government and the Company Law Board on such matters arising out of the administration of this Act as may be referred to it by that Government or Board, the Central Government, may constitute an 'Advisory Committee' consisting of not more than five persons with suitable qualifications.

State with reasons whether the following statements are True or False:
A public company need not issue prospectus for raising capital. 

organisation of commerce and management sectoral organisation of business classification of commercial organisations public, private and joint sector private and public sector departmental undertakings meaning and features of departmental undertaking

  1. True

  2. False

Show answer
Correct Option: B
Explanation:
(i) A prospectus usually is in the form of a statement giving all material information about the company and showing its future prospects. 
(ii) It aims at inviting investors to subscribe for its shares and debentures. 
(iii) It is a must for every public company to prepare its prospectus. 
(iv) It is through the prospectus that the prospective investors know details of the shares offered by the company. 
(v) Otherwise, the investors would have no idea of the shares that a public company is selling
(vi) All detailed information about a company like its business, management, financial structure etc. are provided in the prospectus. 
(vii) The main idea to issue a prospectus is to collect capital for the company from the general public. 
(viii) Although the main aim of the prospectus is to invite or attract investors towards the company still no mis-statement or false claim shall be made in it to deceive the investors. 
(ix) It should contain true, fair and correct information. 
(x) Hence, it is very necessary fora public company to issue a prospectus, as it has to collect its capital from the general public. 

Fast growth in the private sector was after the policy reforms announced in _____________.

organisation of commerce and management sectoral organisation of business classification of commercial organisations public, private and joint sector private and public sector departmental undertakings meaning and features of departmental undertaking

  1. $1992$

  2. $1991$

  3. $1998$

  4. $2001$

Show answer
Correct Option: B
Explanation:

According to the policy of 1991 the role of public sector was limited only to four industries; rest all the industries were opened for private sector also. Privatization refers to giving greater role to private sector and reducing the role of public sector. 

To execute policy of privatization government took the following steps:(a) Disinvestment of public sector, i.e., transfer of public sector enterprise to private sector (b) Setting up of Board of Industrial and Financial Reconstruction (BIFR). 

This board was set up to revive sick units in public sector enterprises suffering loss. (c) Dilution of Stake of the Government. If in the process of disinvestment private sector acquires more than 51% shares then it results in transfer of ownership and management to the private sector.

All the appointed directors are required to submit their consent letter to Registrar. It is true for ______________.

organisation of commerce and management sectoral organisation of business classification of commercial organisations public, private and joint sector private and public sector departmental undertakings meaning and features of departmental undertaking

  1. private ltd. co.

  2. public ltd. co.

  3. all the companies

  4. not relevant

Show answer
Correct Option: C
Explanation:

In accordance with the section 152(5) of the companies act 2013, a person appointed as a director of any company shall not act as a director unless he gives his consent to hold the office as director and such consent has been filed with the Registrar within 30 days of his appointment.

Below mentioned are the features of a public enterprise except __________.

organisation of commerce and management sectoral organisation of business classification of commercial organisations public, private and joint sector private and public sector departmental undertakings meaning and features of departmental undertaking

  1. its primary objective is to serve Government departments

  2. they are not accountable to public

  3. in some specific areas, they have monopoly.

  4. both a. and b,

Show answer
Correct Option: D
Explanation:

Characteristics of public sector entities are- 
  • Public accountability.
  • Multiple objectives.
  • Rights, powers and responsibilities 
  • Lack of equity ownership.
  • Operating and financial frameworks set by legislation.
  • The importance of the budget.
  • Governance structures.
  • Nature of resources

Under section 44 of the companies Act_________________.

commercial studies classification of commercial organisations public, private and joint sector private and public sector sectoral organisation of business departmental undertakings meaning and features of departmental undertaking

  1. A private company can convert into public company

  2. A private company can wound up

  3. A public company can wound up

  4. None of the above

Show answer
Correct Option: A
Explanation:

Section 44 of the Companies Act 2013: Nature of Shares or Debentures. The shares or debentures or other interest of any member in a company shall be movable property transferable in the manner provided by the articles of the company.

Minimum paid up share capital in case of a private company is _______.

commercial studies classification of commercial organisations public, private and joint sector private and public sector sectoral organisation of business departmental undertakings meaning and features of departmental undertaking

  1. $1$ Lakh

  2. $2$ Lakhs

  3. $3$ Lakhs

  4. $4$ Lakhs

Show answer
Correct Option: A
Explanation:

The Companies Act, 2013 earlier mandated that all Private Limited Companies have a minimum paid up capital of Rs.1 lakh. 

This meant that Rs.1 lakh worth of money had to be invested in the company by purchase of the company shares by the shareholders to start business.

If you want to recommend that your company upgrade its equipment, it would be most likely that you would write a _____________.

commercial studies classification of commercial organisations public, private and joint sector private and public sector sectoral organisation of business departmental undertakings meaning and features of departmental undertaking

  1. Feasibility report

  2. Closure report

  3. Justification report

  4. Formal proposal

Show answer
Correct Option: C
Explanation:

Justification Report is a document which serves as an annexure to the notice sent to the deductor. Also, Justification Report is made available in the TRACES portal. The user has to request and download the file from the TRACES portal.

Maximum no. of members in case of private company is_________________.

commercial studies classification of commercial organisations public, private and joint sector private and public sector sectoral organisation of business departmental undertakings meaning and features of departmental undertaking

  1. $50$

  2. $100$

  3. $150$

  4. $200$

Show answer
Correct Option: D
Explanation:

464 says "Provided that the number of persons which may be prescribed under this sub-section shall not exceed one hundred." i.e. by rules limit can be prescribed, but whatever limit is prescribed it must not be greater than 100 (i.e. upto 100). And, the limit prescribed is 50 as per rules. Hence, current limit is 50 for a private company. 

To start a company, a minimum number of 2 members are required and a maximum number of 200 members as per the provisions of the Companies Act, 2013.

Board meeting can be held on _________.

organisation of commerce and management sectoral organisation of business classification of commercial organisations public, private and joint sector private and public sector departmental undertakings meaning and features of departmental undertaking

  1. public holiday

  2. outside registered office

  3. convenient time

  4. all of the above

Show answer
Correct Option: D
Explanation:

Board meetings are normally held during business hours and on a day, which is not a public holiday. However, a Board meeting may validly be held on public holiday. Department has clarified vide Letter No. 8/11(285)/63-PR, dated 2-5- 1963 that it would not raise any objection if an original Board meeting is not held on a working day for the convenience of the directors although it states that an original Board Meeting should be held on a working day.  Board meetings can be held during non-business hours also. There is no restriction that only business hours have to be used. A company’s registered office or head office or any other campus can be used to have the meeting, irrespective of the fact whether or not it is within the same city, town, village or state which houses the registered office. Meetings can also take place in another country. Participation of the directors by video conferencing or by other audio visual means shall also be valid.