Tag: elements of business

Questions Related to elements of business

The Memorandum of Association is an unalterable document.
elements of business operative activities in business concept and types of commerce and industry nature of industries and commerce role, branches and types of industry and commerce business as an activity meaning and types of trade trade and aids to trade

  1. True

  2. False

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Correct Option: A
Explanation:

True, section 16 of the act provides that a company shall not alter the conditions contained in its memorandum except in the case in the manner and to the extend provided by the act.

According to Lord Salborne, “The memorandum of association is an important and unalterable (excluding a few conditions) charter. The company is incorporated only for such objects which are given in the Memorandum.”

State with reasons whether the following statements are True or False:
Nobody is liable for mis-statement in the prospectus. 

elements of business operative activities in business concept and types of commerce and industry nature of industries and commerce role, branches and types of industry and commerce business as an activity meaning and types of trade trade and aids to trade

  1. True

  2. False

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Correct Option: B
Explanation:
(i) Prospectus is a written document giving an invitation to the public to purchase shares or debentures of the company. 
(ii) It provides all the necessary information about a company, its business, the management, financial structure, etc. of a company. 
(iii) A prospectus must be prepared very carefully and accurately. 
(iv) It should contain true and correct information and honest disclosure of facts. 
(v) A company and all those persons (directors, promoters and others) can be held responsible for any mis-statement in the prospectus. 
(vi) These people have to face severe consequences. 
(vii) The shareholder can cancel the contract i.e. they can refuse to take shares and pay for it and can sue the claim for damage or losses. 
(viii) Persons authorising the issue of prospectus containing mis-statement are punishable with imprisonment of two years and a fine upto 5000/-. 
'Table A' acts as a silent salesman of the company. 
elements of business operative activities in business concept and types of commerce and industry nature of industries and commerce role, branches and types of industry and commerce business as an activity meaning and types of trade trade and aids to trade

  1. True

  2. False

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Correct Option: B
Explanation:
(i) Table 'A' is a model set of articles given by the Companies Act, 1956. 
(ii) If a public limited company does not prepare its own Memorandum of Association at the time of incorporation, it can adopt 'Table A' of the Companies Act. 
(iii) Prospectus, on the other hand is a written invitation to the public to subscribe to the share capital of the company. 
(iv) It gives all material information about.the company. 
(v) It aims at inviting investors towards company for investment in company's securities i.e. shares and debentures. 
(vi) It is must for every public company to prepare its prospectus. 
(vii) It is through the prospectus that the prospective investors know details of shares, offere by the company.
 (iii) All detailed information about company like business, management, financial structure, etc. are provided in the prospectus. 
(ix) It does all the activities like general salesman, so it is the prospectus who act as a silent salesman and not 'Table A'.

State with reasons whether the following statement is True or False:
Prospectus is a charter of the company.

elements of business operative activities in business concept and types of commerce and industry nature of industries and commerce role, branches and types of industry and commerce business as an activity meaning and types of trade trade and aids to trade

  1. True

  2. False

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Correct Option: B
Explanation:
(i) Prospectus is an invitation to public to purchase its shares and debentures. 
(ii) It is issued after the formation of company. 
(iii) The Memorandum of Association on the other hand is a basic or fundamental or prim' document of a company. 
(iv) It lays down the ranges of its activities.
(v) It is a public document and can be inspected by those who deals with the company. 
(vi) It states the nature of business activities: to:be conducted by the company.
(vii) It defines the relationship between the company and the outsiders.
(viii) All companies have to prepare their own Memorandum of Association. 
(ix) It is submitted to the Registrar of Companies for registration.
(x) It is a charter or constitution of a company. 
(xi) No company can be incorporated without Memorandum of Association. 
So it is clear, that prospectus is not the charter of the company. The Memorandum of Association is the charter of the-company.

State with reasons whether the following statements are True or False:
Prospectus is prepared only for filing with the Registrar. 

elements of business operative activities in business concept and types of commerce and industry nature of industries and commerce role, branches and types of industry and commerce business as an activity meaning and types of trade trade and aids to trade

  1. True

  2. False

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Correct Option: B
Explanation:

(i) Prospectus aims at inviting investors to subscribe for its shares and debentures. 

(ii) It is through prospectus that the investors know details of the shares offered by the company. 
(iii) The main idea to issue a prospectus is to collect capital for the company. 

(iv) It is must, for every public company to prepare its prospectus. 
(v) Sometimes a public company may not raise its capital by issuing shares to the public, but a company can raise capital through private sources. 
(vi) In such cases, a company need not draft and issue a prospectus. 
(vii) That is why, a company files a 'statement' instead of prospectus to the Registrar. 
(viii) Such a statement is called a statement-in-lieu of prospectus.
(ix) So, it is a statement-in-lieu of prospectus which is drafted for filing purpose only and not the prospectus.

State with reasons whether the following statements are True or False:
Any clause of memorandum can be altered easily. 

elements of business operative activities in business concept and types of commerce and industry nature of industries and commerce role, branches and types of industry and commerce business as an activity meaning and types of trade trade and aids to trade

  1. True

  2. False

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Correct Option: B
Explanation:

(i) The Memorandum of Association is the basic, primary and supreme document of the company.

(ii) It is to be filed with the Registrar of Company for the purpose of incorporation of company. 
(iii) It is therefore called charter or constitution of the company. 
(iv) The Memorandum of Association contain six clauses. 
(v) For alteration of any dame in the Memorandum of Association, specific procedure is required to be followed as per the provision laid down in the Companies Act, 1956. 
(vi) Such procedure of alteration is quite complicated and lengthy. 
(vii) For alteration in Domicile and Object clause, a special resolution is passed at the general meeting and a sanction is obtained from the 'Company Law Board.' 
(viii) For alteration of Liability clause a special resolution must be passed at the general meeting and a sanction for that is obtained from the court. 
Thus, any clause of memorandum cannot be altered easily.

Motion can be amended.

elements of business operative activities in business concept and types of commerce and industry nature of industries and commerce role, branches and types of industry and commerce business as an activity meaning and types of trade trade and aids to trade

  1. True

  2. False

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Correct Option: A

What is true for Branch office?

elements of business operative activities in business concept and types of commerce and industry nature of industries and commerce role, branches and types of industry and commerce business as an activity meaning and types of trade trade and aids to trade

  1. It is not allowed to carry on manufacturing activity on its own.

  2. It is allowed to carry on manufacturing on its own.

  3. It is allowed to carry on business without the permission of RBI.

  4. None of the above.

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Correct Option: A
Explanation:

Branch, bough, limb refer to divisions of a tree. Branch is general, meaning either a large or a small division. Bough refers only to the larger branches: a bough loaded with apples. A limb is a large primary division of a tree trunk or of a bough: to climb out on a limb.

A “branch”, by contrast, will be a part of a company, organised so as to conduct business on behalf of that company. ... A branch is not a separate corporate entity, but is typically run along lines that are similar in concept to those of a subsidiary company.

The principles of right and wrong that are accepted by an individual or organization are the  ____________.

elements of business operative activities in business concept and types of commerce and industry nature of industries and commerce role, branches and types of industry and commerce business as an activity meaning and types of trade trade and aids to trade

  1. Research and Development

  2. Company Image and Brand Equity

  3. Value System

  4. All of above

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Correct Option: C
Explanation:

A hierarchy of values that all moral agents possess, demonstrated by their choices. Most people's value systems differ, making the imposition of a singular value system by the state a source of constant social warfare. This is an individualistic concept. One's value system is molded by one's virtues or vices.

Consider the following statements:
1. Through the Hawthorne Studies, Elton Mayo could support Mary Parker Follett's theory that the lack of attention to human relationships was a major flaw in other management theories.
2. The book - The Human Problems of an industrialised Civilisation, was written by Mary Parker Follett.
Which of the statements given above is/are correct?

elements of business operative activities in business concept and types of commerce and industry nature of industries and commerce role, branches and types of industry and commerce business as an activity meaning and types of trade trade and aids to trade

  1. Only 1

  2. Only 2

  3. Both 1 and 2

  4. Neither 1 nor 2

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Correct Option: A