Tag: types of companies - private & public

Questions Related to 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.

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

  1. statutory

  2. private

  3. public

  4. government

Show answer
Correct Option: C
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.

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

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

  1. prospectus

  2. articles of association

  3. memorandum of association

  4. None of these

Show answer
Correct Option: A
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.
In a public company there should be at least __________ Directors.
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

  1. two

  2. three

  3. four

  4. five

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Correct Option: B
A company which has at least three Directors is a _______.
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

  1. private company

  2. public company

  3. government organisation

  4. None of these

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Correct Option: B

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

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

  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

Show answer
Correct Option: D
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.

What is the maximum number of partners involved in the non-banking organisation in India?

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

  1. 100

  2. 15

  3. 20

  4. 7

Show answer
Correct Option: A
Explanation:

The maximum number of partners as per Companies Act, 2013 can be 100.

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

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

  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

Show answer
Correct Option: B
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.

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

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

  1. 1 Lakh

  2. 3 Lakhs

  3. 5 Lakhs

  4. 7 Lakhs

Show answer
Correct Option: C
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.

Maximum no. of members in case of public company is _________.

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

  1. 0

  2. Unlimited

  3. 50

  4. 100

Show answer
Correct Option: B
Explanation:

According to the provisions of the Indian companies act, 2013, maximum no. of members in case of public company is unlimited.

The companies are governed by the Indian Companies Act _____________________.

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

  1. Indian Companies Act, $2013$

  2. Indian Companies Act, $1957$

  3. Indian Companies Act, $1958$

  4. Indian Companies Act, $1959$

Show answer
Correct Option: A