Tag: meaning and objectives of public sector enterprises

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Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Select the option from the option choices given in below and re-write the completed sentences:
A _________ company must issue prospectus to the public for capital subscription.

  1. statutory

  2. private

  3. public

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

Prospectus is a detailed statement that must be issued by a company that goes public. It is an invitation to the member of the public. It includes any notice, circular, advertisement inviting deposits from the public. Hence, a public company must issue prospectus to the public for capital subscription.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Fill in the blanks:
A public company must publish ________ for raising capital.

  1. prospectus

  2. articles of association

  3. memorandum of association

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
Sec. 2(36) of the Companies Act describes a prospectus as “any document issued as a prospectus and includes any notice, circular, advertisement or other document inviting deposits from the public or inviting offers from the public for the subscription or purchase of any share in, or debentures of a body corporate.”

In other words, it is a document which invites deposits from the public or invites offers from the public for the subscription of shares in, or debentures of, a company. The words “inviting deposits from the public” were added by the Companies (Amendment) Act, 1974.
Thus a public company must publish prospectus for raising capital.
Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Many private limited companies convert into public limited companies because _____.

  1. they do not want to change their business

  2. they want to gain the benefits of limited liability

  3. they want to get guarantee from its members

  4. they want to raise additional capital to expand the business
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Private limited company is a type of company that offers limited liability, or legal protection to its share holders. Many private limited companies who want to expand their business convert themselves into public limited companies. As the public limited companies are widely spread they can expand the business easily.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Which of the following statement about most public limited companies is true?

  1. They are owned and controlled by the employees

  2. They are owned by the directors but controlled by the shareholders

  3. They are owned by shareholders but controlled by directors

  4. They are owned and controlled by the promoters
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Public limited companies are the companies which are owned by the state government. They work for the society at large. They are owned by the directors of the company. The directors appoints shareholders who manages all the operations of the company.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

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

  1. 1 Lakh

  2. 3 Lakhs

  3. 5 Lakhs

  4. 7 Lakhs
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

According to the provisions of the Indian Companies Act, 2013, minimum paid up share capital in case of a public company is Rs. 5 lakhs.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

The companies are governed by the Indian Companies Act _____________________.

  1. Indian Companies Act, $2013$

  2. Indian Companies Act, $1957$

  3. Indian Companies Act, $1958$

  4. Indian Companies Act, $1959$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The current primary legislation governing companies in India is the Companies Act, 2013.