MCQ - Law 1 PDF

Chapter 1 DIRECTORS: APPOINTMENT & QUALIFICATIONS
Chapter 1 : DIRECTORS: APPOINTMENT & QUALIFICATIONS

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1. Who can be director?
a. Association of Persons b. Body Corporate c. Any person d. None of the above
2. What is the minimum number of directors required in Private Company?

a. 1 b. 3 c. 2 d. 4
3. What is the minimum number of directors required in Public Company?

a. 2 b. 7 c. 3 d. 15
4. What is the maximum number of directors mentioned under Act for a Private Company?
a. 10 b. 7 c. 15 d. No restriction
5. What is the maximum number of directors mentioned under Act for a Public Company?
a. 50 b. 7 c. 15 d. No restriction
6. Can the maximum number of Directors be increased beyond the maximum permissible limit?
a. No b. Yes, GM-OR c. Yes, GM-SR d. Yes, GM-UR
7. MTPC, a Government Company seeks to increase the maximum number of directors. Which resolution
is required to be passed?
a. GM-SR b. BM-OR c. GM-UR d. GM-OR
8. Appointment of woman Directors is mandatory for following companies:

a. Listed Companies b. Public Companies c. Public Companies with d. (a) or (c)
with PUC ≥ 10 Cr. or PUC ≥ 100 Cr. or
Turnover ≥ 300 Cr. Turnover ≥ 300 Cr.
9. Casual Vacancy of a woman director shall be filled by ……………..

a. GM-OR b. EGM c. GM-SR d. BM-OR
10. Casual Vacancy of a woman director shall be filled by BOD not later than ……………..
a. Immediate BM b. 3 months c. (a) or (b), Whichever is d. (a) or (b),
earlier Whichever is later
11. As per section 149(3), atleast 1 resident director who has stayed in India for …… on board is mandatory.
a. not less than 182 days in b. not less than 182 days c. not less than 182 d. not less than 182
previous calendar year. in current calendar year. days in current FY days in previous FY
12. AOA of a company can provide a number lower than the statutory maximum limit of number of
directors by revising AOA by passing ……..
a. GM-UR b. GM-SR c. GM-OR d. BM-OR
13. AOA of a company can provide a number lower than the statutory minimum limit of number of
directors by revising AOA by passing ……..
a. GM-SR b. GM-OR c. GM-UR d. None of the above
14. AOA of a company can provide a number lower than the ……………… and the same can be revised by
© CA Darshan D. Khare
passing GM-SR.
a. statutory b. statutory maximum limit c. Both of the above d. None of the
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minimum limit above
15. If there is a single casual vacancy at a place of woman director then casual vacancy shall be filled by …
a. a woman only b. male or female c. any person d. all of above
16. On being appointed as director, he shall file Form ……..with Company.

a. DIR-12 b. DIR-2 c. DIR-8 d. DIR-1
17. On appointment of director Company shall file which form with the ROC?
18. What is the time limit for filing DIR-12?

a. 30 days b. 1 month c. 60 days d. 180 days
19. What is the time limit for filing DIR-12 by a Specified IFSC Public Company?
a. 30 days b. 1 month c. 2 months d. 60 days
20. What is the minimum number of Independent Directors required in a Listed Public Company as per Sec
149(4)?
a. Min 2 IDs b. Min 1/3rd of total Directors c. Min 1 ID d. Min 2/3rd of total Directors
21. Who shall mandatorily appoint Independent Directors?

a. Listed b. Public Company having: c. (a) and d. None
Public PUC ≥ Rs. 10 Cr.; or (b) of the
Company Turnover ≥ Rs. 100 Cr.; or Outstanding Loans, Debentures & above
Deposits ≥ Rs. 50 Cr.
22. Every Independent Director shall declare that he meets the criteria of independence in:
a. 1st BM after b. declare in 1st BM after change in c. 1st BM of d. All of the
appointment circumstances affecting independence every year above
23. What is the term of appointment of an Independent Director?

a. 3 consecutive years b. 5 consecutive years c. Indefinite d. As decided by BOD
24. Independent Director may hold office for …..

a. 3 b. 1 term with 3 years gap c. Not more than 2 consecutive d. Not more than 2
consecutive before next terms with a gap of 3 years at consecutive
terms least before 3rd term terms at all
25. On completion of 2 terms, an Independent Director can get appointed as ID only after a gap of.......
a. 2 years b. 3 years c. 5 years d. 10 years
26. To be eligible for being reappointed, an Independent Director shall not be associated with the Company
in any manner for a period of ………..
27. Independent Director means a director other than ……..

a. Managing Director b. Whole Time Director c. Nominee Director d. All of the above
28. Who shall be eligible to be appointed as Independent Director?

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a. Not a promoter of b. Not related to c. Not related to d. All of
Company, Holding, Promoter of Company, Director of Company, above
Subsidiary or Holding, Subsidiary or Holding, Subsidiary or
Associate Company Associate Company Associate Company
29. Who shall be eligible to be appointed as Independent Director?

a. Not a promoter of b. Not related to Promoter or c. Not a promoter of d. (b) and (c)
Holding, Subsidiary or Director of Company, Holding, Company, Holding,
Associate Company Subsidiary or Associate Subsidiary or Associate
Company Company
30. Who shall NOT be eligible for being appointed as Independent Director?
a. Promoter of Company, b. Related to Promoter of c. Related to Director of d. All of
Holding, Subsidiary or Company, Holding, Company, Holding, above
Associate Company Subsidiary or Associate Subsidiary or Associate
Company Company
31. Who shall not be eligible for being appointed as Independent Director?
a. Has or had no b. Has or had no c. Has or had no d. Has or had no
pecuniary relation pecuniary relation pecuniary relation pecuniary relation
(including (other than (other than (including
remuneration or remuneration or remuneration or remuneration or
transaction > 10% of transaction > 10% transaction > 2% of transaction > 2% of
his total income) of his total income) his total income) his total income)
32. A director to be appointed as Independent Director, has or had no pecuniary relation (other than
remuneration) > 10% of his total income or amount prescribed by CG with the Company or its Holding,
Subsidiary, Associate Co., promoter or director:
a. During the 3 b. During the 2 c. During the immediately d. None of
immediately preceding immediately preceding preceding FY or during the
FYs or during Current FYs or during Current Current Financial Year (CFY). above
Financial Year (CFY). Financial Year (CFY).
33. Mr. X, son-in-law of Mr. A (Promoter of Associate Company PQR Ltd.) seeks to be appointed as
Independent Director of LMN Pvt. Ltd. Can he be so appointed?
a. Yes b. No c. Yes, GM-SR d. Yes, GM-UR
34. Mr. Rohan has a pecuniary relationship with PQR Ltd. to the tune of Rs. 2 Lacs (Including remuneration
of Rs. 1 lac). His total income is 10 Lacs. Can he be appointed as an Independent Director of XYZ Ltd.
(Subsidiary of PQR Ltd.)
35. Mr. Raman, a relative of Ms. Sadhana who is indebted to the Company, wants to be appointed as an ID.
Can he be so appointed?
36. Mr. Mahesh and Mr. Somesh are relatives. Mr. Somesh has a pecuniary relationship with PQR Ltd. to
the tune of Rs. 6 Lacs (Including remuneration of remuneration of Rs. 4 lac). His total income is 10 Lacs.
Can Mr. Mahesh be appointed as an Independent Director of XYZ Ltd. (Subsidiary of PQR Ltd.)?
37. Ms. Kajol is a relative of Mr. Ketan. PQR Ltd. is the subsidiary Company of ABC Ltd. Mr. Ketan has given
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a guarantee to the Director of ABC Ltd. Can Ms. Kajol be appointed as an Independent Director?
38. Ms. Kajol is a relative of Mr. Ketan. PQR Ltd. is the Holding Company of ABC Ltd. Mr. Ketan has given a
guarantee to the Director of ABC Ltd. Can Ms. Kajol be appointed as an Independent Director?
39. Ms. Kajol is a relative of Mr. Ketan. PQR Ltd. is the subsidiary Company of ABC Ltd. Mr. Ketan had given
a guarantee to the Director of ABC Ltd on 20th Dec 2016. Can Ms. Kajol be appointed as an Independent
Director on 21st Dec 2018?
40. Ms. Kajol is a relative of Mr. Ketan. PQR Ltd. is the subsidiary Company of ABC Ltd. Mr. Ketan had given
a guarantee to the Promoter of ABC Ltd on 20th Dec 2016. Can Ms. Kajol be appointed as an
Independent Director on 21st Dec 2018?
41. HGK Ltd. seeks to appoint Mr. Ram as Independent Director. Mr. Sham brother of Mr. Ram is a deemed
Director of a Section 8 Company which holds 6% of the voting power of HGK Ltd. Can Mr. Ram be so
appointed?
42. Casual Vacancy of an Independent director shall be filled by ……………..

a. GM-OR b. EGM c. GM-SR d. BM-OR
43. Casual Vacancy of an Independent director shall be filled by BOD not later than ……………..
a. Immediate BM b. 3 months c. Earlier of (a) or (b) d. Later of (a) or (b)
44. Shareholders of PQR Ltd. seek to appoint Small Shareholder’s Director. What is the eligibility criterion
of these shareholders’ to apply?
a. Holding shares of ≤ Rs. b. Holding shares of ≤ Rs. c. Holding shares of ≤ Rs. d. None of
20,000 Paid-up value 20,000 Market value 20,000 face value the above
45. KLM Ltd. unlisted, seek to appoint Small Shareholder’s Director. How can they do so if the small
shareholders have not applied for the same?
a. Suo-motu, BM-OR b. Suo-motu, GM-OR c. Cannot be done d. Take prior CG approval
46. HGK Ltd. appointed Mr. Ram as Small shareholder’s Director. Mr. Sham brother of Mr. Ram, Director of
a Section 8 Company receives 32% of its receipts from HGK Ltd. Can Mr. Ram continue as a Small
shareholder’s Director?
a. Yes b. No, because he loses his c. Can continue by taking approval from d. None of the
independence Company above.
47. HGK Ltd. appointed Mr. Ram as Small shareholder’s Director. Mr. Sham brother of Mr. Ram is the
Director of a Section 8 Company which receives 32% of its income from HGK Ltd. Can Mr. Ram continue
as a Small shareholder’s Director?
a. Yes b. No, because he loses his c. Can continue by taking approval from d. None of the
independence Company above.
48. PQR Ltd. to which appointment of Independent Director is applicable ceases to fulfill the conditions of
applicability for 3 consecutive years; compliance with this section is …………..
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a.not required until it again meets b. still c. is decided by the Company d. None of
any of the condition required based on the circumstances the above
49. Mr. X, ID of KKJ Ltd. was already in receipt of remuneration and reimbursement of expense. The
Company is proposing to pay profit related commission and offer stock option of shares to incentivize
him for his excellent contribution in the year. Is the proposal valid?
a. Company can only offer b. Company can only pay profit c. Both are d. None of the both
stock options linked commission allowed are allowed.
50. Acts conducted by the Company were ultra vires to the AOA and MOA of the Company. Will the ID be
held responsible?
a. Yes, held b. Held responsible only if the acts c. Held responsible based d. None of the
primarily occurred within his knowledge and on the terms of above
responsible his consent or connivance. appointment.
51. Mr. Kaushik holding position as Independent Director of PQR Ltd. contravened the provisions of Sec
149(6). What is the consequence of such contravention?
a. Needs to vacate office b. Can continue as NED c. Can be removed u/s 169 d. (b) or (c)
52. Ms. Lata was an Independent Director of XYZ Ltd. in the year ended 2014. Now, after a gap of 4 years
i.e. in the year 2018 Company seeks to reappoint her again. Will the appointment be valid? If yes, how
can the appointment be made?
a. No, Reappointment of an b. Yes, by c. Yes, by passing GM-OR as it’s not d. Not possible for
ID is possible after a passing a re-appointment but fresh appt. an indefinite
cooling period of 5 years. GM-SR GM-SR is for reappointment period
53. Mr. Soham was appointed as a small shareholder’s director of XYZ Limited, which is in the business of
Oil refining. Subsequently, A Limited and B Limited have also appointed him as small shareholder’s
director. A is engaged in the manufacture of stationeries whereas B in the business of manufacturing
bearings. Are these appointments valid?
a. Both appointments b. Both appointments are c. Appointment in only d. Appointment in only
are invalid valid one of either of them is A Ltd. is valid.
valid.
54. Mr. Soham was appointed as a small shareholder’s director of XYZ Limited, which is in the business of
Oil drilling ,refining and marketing. Subsequently, A Limited and B Limited have also appointed him as
small shareholder’s director. A is engaged in the business of Oil Refining too whereas B in the business
of manufacturing oil rig equipments. Are these appointments valid?
a. Both appointments b. Appointment in only one of c. Appointment in only B d. Appointment
are invalid either of them is valid. Ltd. is valid. in only A Ltd. is
valid.
55. A Small Shareholder’s Director needs to vacate office if he:

a. Incurs disqualification u/s 164 b. Attracts sec c. Ceases to be d. All of the e. (a) or (b)
167 independent above
56. First Directors of a Company shall be appointed in the following manner:

1. based on manner provided in AOA
2. all subscribers to the MOA who are individuals shall be deemed to be directors
3. whose name is mentioned in the AOA
Which of the following is a correct sequence to follow in appointment of First Directors?

a. 2,1,3 b. 3,1,2 c. 1,2,3 d. 3,2,1
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57. Ms. Simple appointed as First director of Company Basic Ltd. wishes to know her tenure as First
Director.
a. 5 years b. 3 years c. Until next AGM d. Until appointment of directors in GM
58. DFG Ltd. appoints its Directors in GM however they wish to know if any director can be appointed at
BOD meeting. Which of the following Director can be in BM?
a. Additional Director- b. Alternate c. Nominee d. Casual Vacancy e. All of the
161(1) Director-161(2) Director-161(3) Director-161(4) above.
59. A person cannot act as director until he files his consent with ROC in Form No. DIR-2 within 30 days of
appointment. However, exception to following is given to
a. Director of Government company b. Director of Sec 8 Company. c. First d. All of the
Director above
60. A and B were appointed as first directors on 8th April, 2018 in Sun Glass Ltd. Thereafter, C, D and E
were appointed as directors on 10th July 2018 and F, G and H were also appointed as directors on 11th
August 2018 in the company. In the next AGM of the company, A and B were proposed to be retired by
rotation and re-appointed as directors. Is the proposal for retirement by rotation and re-appointment
of A and B valid?
a. No, they can b. A and B cannot be rotated c. A and B can both retire by d. None of
retire but not be as they were First Directors of rotation and be the above
reappointed. the Company. reappointed.
61. In the situation above, if resolution for A’s retirement and re-appointment was passed. However,
before the resolution for B’s could be taken up for consideration, the meeting was adjourned. In the
adjourned meeting also, the said resolution could not be taken up and the meeting was ended without
passing the resolution for B’s retirement and reappointment. What will be the status of B as a director
in the company?
a. B shall vacate b. B need not vacate c. B will get d. B will get automatically re-
office office if he follows automatically appointed provided he didn’t
automatically certain conditions re-appointed express his unwillingness to
continue as director and also does
not fit in the other exceptions.
62. A company on the Board consisting of the following:

a. Mr. Independent, Mr. Archie as nominees from two Public Financial Institutions.
b. Mr. X, Mr. Y, Mr. Z appointed at the 2nd AGM.
c. Mr. A, Mr. B appointed at the 3rd AGM.
d. Mr. Addition was appointed as additional director subsequent to 3rd AGM.
e. Mr. Casual was appointed as director in place of Mr. Soul who died and was earlier appointed
during the 3rd AGM.
f. Mr. Excellent was appointed as Managing Director for 5 years w.e.f. 2nd AGM.
g. Mr. One More was appointed as additional Director soon after appointment of Mr. Addition.
List out in order, who shall be vacating the office at the 4th AGM of the company.
a. Mr. Addition, Mr. One b. Any 2 from c. Mr. Addition, Mr. One More, d. Any 2 from Mr. X,
More, 2 from Mr. X, Mr. Mr. X, Mr. Y & 2 from Mr. X, Mr. Y & Mr. Z Mr. Y & Mr. Z and Mr.
Y & Mr. Z and Mr. Casual. Mr. Z and Mr. and Mr. Casual on the day Casual on the day Mr.
Casual. Mr. Soul would have retired. Soul would have
retired.
63. ABC Company Ltd. in its First General Meeting appointed 6 Directors whose period of office is liable to
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be determined by rotation. Will it make any difference, if ABC Company Ltd. does not carry on business
for Profit?
a. Sec 8 companies are b. Sec 8 companies are c. Retirement shall be as per d. None of
exempted. not exempted. terms of agreement. the above.
64. Mr. PQR has been appointed as Additional Director on the Board of Meghna Ltd. on 12th January, 2016.
Mr. PQR has filed his consent to Act as a Director only with the company. Is the appointment valid?
a. Yes, as consent with b. No, Filing of consent c. Yes, as filing of consent d. None of
Company is paramount with ROC is mandatory with ROC is not mandatory the
for assuming office. to assume office. for Additional Director above
65. A company XYZ Ltd. has 8 directors including 1 Additional Director, 1 Casual Vacancy Director, 1 Small
Shareholder’s Director. Calculate number of Directors to be rotated.
a. 4 b. 6 c. 1 d. None of the above
66. Mr. Chetan, an Executive Director is rotated after 3 years of his 5 year tenure and retires & vacates
office as NED. Explain his position in the Company.
a. Can continue as ED b. Cannot continue as c. Can continue as d. None of the above
ED employee
67. In the same situation as above, if he reappointed as NED, what will be his position?.
a. May continue as NED b. May continue as ED c. May continue as ED for 2 d. None of
for 3 years for 3 years years and as NED for 1 year the
above.
68. Company seeks to appoint Mr. X, a retiring director. Under which section can the same be done?
a. Sec 160 b. Sec 152(7) c. 152(1) d. Any of the above
69. Under sec 160, any person who wants himself to be appointed or a member wants to nominate any
person shall apply at registered office of company with fees of Rs. 1 lakh or higher amount as may be
prescribed. FUD Ltd, receives an application for appointment of 1 director by members, 2
recommended by Nomination and Remuneration Committee constituted u/s 178 including 1
Independent Director. What is the total amount deposited with Company on such application?
a. INR 3 Lakhs b. INR 2 Lakhs c. INR 1 Lakh d. Nil
70. Company XYZ Ltd. seeks to appoint an Additional Director on account of increase in work load. Which
of the following ways can be opted for his appointment?
a. AOA gives power then b. If AOA is silent then GM-OR to grant c. Both a. d. Neither a.
BM-OR can be passed power and BM-OR to make the appointment and b. or b.
71. RWD Ltd. a Listed Company, in its AOA empowers the Board of Directors to appoint Additional Director.
The Board of Directors, therefore, appoints Mr. Raj as the additional director. It was noticed that the
proposal to appoint Mr. Raj as a director on the Company’s Board was rejected by the members at the
company’s AGM just before his eventual appointment by BOD as Additional Director. Whether Mr.
Raj’s appointment as additional director by the Board of Directors is valid?
a. Power to b. The appointment c. If the AOA provides d. If the AOA provides
appoint additional of Mr. Raj as Additional for authority of BOD for authority of GM
director vests with Director by the Board of for appointment of for appointment of
the BOD and Directors is not valid as Additional Directors, Additional Directors,
hence Mr. Raj can he was earlier rejected by then same cannot be then same cannot be
be appointed. the members. objected. objected.

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72. PQR Ltd appointed Ms. Smita as an Additional Director. Till when can she hold directorship?
a. Terms of appointment. b. Next AGM c. Date on which AGM d. (b) or (c) whichever is
should have been held earlier.
73. PQR Ltd appointed Ms. Smita as an Additional Director by passing a resolution by circulation. Is the
appointment valid?
a. Valid b. Valid after ratification c. Invalid d. If AOA provides for appointment by resolution
by circulation, then the same is valid.
74. AOA of XYZ Ltd. specifies a maximum of 12 directors. There are 12 directors on Board. The Company
seeks to appoint Mr. Sinha as Additional Director. Can the same be done?
a. Additional Director b. Additional c. Additional Director is counted in d. None
is not counted in Maximum Director is counted in Maximum number of directors of the
number of directors, hence Maximum number of but since Act provides a above
valid. directors, hence maximum of 15 directors, hence
invalid. appointment is valid.
75. Board of PQR Ltd. seeks to appoint Mr. L as Alternate Director of Mr. S, an Independent Director. What
is the basic requirement?
a. Shall not be b. The individual so proposed shall also be c. Board can d. All of
an Individual rejected eligible to be appointed as Independent appoint only if abov
by the Company Director. AOA gives power. e
76. Mr. Ketan, director of OIL Ltd. absents himself for a period more than 12 months with notice. Hence the
Company decides on appointing an Alternate Director. However, CS of the Company is of the opinion
that an Alternate Director cannot be appointed hence the position shall be filled in by a Casual Vacancy
Director. Is the contention of the CS correct?
a. Yes, a Casual b. No, since the director has c. Based on the circumstances d. Any
vacancy director given notice of absence an and the intention of Director to of the
needs to be Alternate Director can be return to his position, the same above
appointed.(>12 mths) appointed. can be decided on a case to case
basis.
77. LYF Ltd. appoints Mr. Naren as a Casual Vacancy Director in its Board Meeting complying and in
accordance with the provisions of the Act. The members suggest that appointment of Mr. Naren is
invalid as their approval wasn’t taken. Comment.
a. Approval of b. The members’ c. The members’ d. The members’
members is not contention is correct contention is correct contention is correct
required as Act and appointment of and appointment of and appointment of
gives right to the Casual Vacancy Casual Vacancy Casual Vacancy
Board for Director needs Director needs Director needs
appointment of ratification at the next ratification at the ratification at the
Casual Vacancy AGM by passing GM- next AGM by next GM by passing
Director. OR. passing GM-SR. GM-SR.
78. ZNMD Ltd. appointed an Alternate Director and a Casual Vacancy Director by passing resolution by
circulation. Comment.
a. Alternate Director b. Casual Vacancy c. Both Casual d. Both Casual Vacancy
cannot be appointed Director cannot be Vacancy Director Director and Alternate
by passing appointed by passing and Alternate Director cannot be
resolution by resolution by Director can be appointed by passing

circulation, circulation, however, appointed by resolution by circulation.
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however, Casual Alternate Director can passing resolution
Vacancy Director be. by circulation.
can be.
79. Mr. Sam, a Director of DCH Ltd. dies in a casualty. However, the Company in its Board meeting decides
not to fill the casual vacancy. Is it valid?
a. It is at Board’s b. BOD can decide not to fill c. BOD can decide not to fill d. It is at the
volition not to the position of casual the position of casual Company’s volition
appoint a vacancy by passing a vacancy by passing a whether or not to
Casual resolution with that resolution with that appoint a Casual
Vacancy regard. Such decision shall regard. Such decision shall Vacancy Director
Director. be approved by a GM-OR. be approved by a GM-SR. and not with the
Board.
80. Which of the following persons can be appointed as a Director of a company in 2019:
a. Mr. Amar, who has huge personal liabilities far in excess of his Assets and Properties, has applied to
the court for adjudicating him as an insolvent and such application is pending.
b. Mr. Bakshi, who was caught red-handed in a shop lifting case two years ago, was convicted by a
court and sentenced to imprisonment for a period of eight weeks.
c. Mrs. Chetana, a Former Bank Executive, was convicted by a court eight years ago for embezzlement
of funds and sentenced to imprisonment for a period of one year.
d. Mr. Dhiraj is a Director of DLT Limited, which has not filed its Annual Returns pertaining to the
Annual General Meetings held in the calendar years 2011, 2012 and 2013.
a. Mr. Amar & Mr. Dhiraj b. Mr. Bakshi & Mrs, Chetana c. Mrs. Chetana d. Mr. Dhiraj &
& Mr. Amar Mrs. Chetana
81. Mr. Suresh is a Director of ABC Ltd., XYZ Ltd. and PQR Ltd. ABC Ltd. did not file annual accounts for the
year ended 31st March, 2002 and failed to pay interest on loans taken from a public financial institution
from 1st Jan, 2002 onwards and also failed to repay the matured deposits on due date from 1st April,
2002 onwards. Mr. Suresh is proposed to be appointed as additional director of Manyata Ltd. on 1st
June, 2003. Comment.
a. Mr. Suresh can be b. Mr. Suresh can be c. Mr. Suresh cannot be d. Mr. Suresh cannot
appointed as appointed as appointed as be appointed as
Additional Director Additional Director Additional Director for Additional Director
for Manyata Ltd. for Manyata Ltd. but Manyata Ltd. and for Manyata Ltd.
but cannot continue cannot continue with cannot continue with and cannot
with ABC Ltd., XYZ XYZ and PQR Ltd. ABC Ltd., XYZ and PQR continue with XYZ
and PQR Ltd. Ltd. and PQR Ltd.
82. RML Ltd. issued shares of the nominal value of Rs. 10 per share, out of which Rs. 5 was payable on
application and balance Rs. 5 was payable on call. The call money was invited by the Board of Directors
but some shareholders, including a non–executive director, failed to pay the same within the
prescribed period. Will the Non-Executive Director be disqualified from his position and will he have to
vacate?
a. If call is not paid b. If the call is not paid within c. If the call is not paid within d. None
within 1 year from 182 days from the last date 6 months from the last date of the
the last date fixed fixed for the payment of the fixed for the payment of above
for the payment of call, he shall vacate the office the call, he shall vacate the
the call, he shall of director held by him. office of director held by
vacate the office of him.
director held by
him.
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83. LIT Ltd., having a paid up capital of Rs. 120 Cr in the financial year 2017-18 appoints Ms. Juliet as the
women director on 1st March 2018. She already holds directorship in twelve companies including 10
public companies.
a. As she was already a director in b. She can either choose between c. Can take d. (a) or
ten public companies, her the companies in which she up [(b) &
appointment in LIT Limited is not wishes to continue to hold the directorshi (c)]
valid as it will lead to her office of director and resign her p in LIT
directorship in 11 public office as director in the other Ltd.
companies. remaining companies.
84. Ms. Juliet holds directorship in eight public companies including managing directorship in 2 companies
and directorship in 6 companies. In addition, she intends to take up independent directorship in 3
subsidiary companies of LIT Limited. Is the position valid?
a. As she was b. As she was already a c. She can either choose d. [(a) or
already a director in 8 director in 8 public companies, between the companies (b)] &
public companies, her her appointment in LIT Limited in which she wishes to (c)
appointment in LIT is not valid as it will lead to her continue to hold the
Limited is not valid as it directorship in 11 public office of director and
will lead to her companies. She can however resign her office as
directorship in 14 public take directorship in any 2 of director in the other
companies. the 3 companies proposed. remaining companies.
85. XYZ Ltd. is Whole Owned Subsidiary of Government Company. The members of XYZ Ltd. applied for
inspection of Register of Directors maintained u/s 170. Company seeks your advice.
a. Sec 171 gives b. If the members ask for c. Both (a) and (b) d. Sec 171 is not
the right to Members inspection of register applicable to Whole
for inspection of in Business Hours the Owned Subsidiary of
register. same is permitted. Government Company
86. Rama Ltd appointed Mr. Rahul as an Additional Director by passing a resolution by circulation. Is the
appointment valid?
a. Valid b. Invalid c. Valid after d. If AOA provides for appointment by resolution by circulation,
ratification then the same is valid.
87. AOA of ZNMD Ltd. specifies a maximum of 18 directors. There are 18 directors on Board. The
Company seeks to appoint Mr. Adinath as Additional Director. Can the same be done?
a.Additional Director b. Additional Director c. Additional Director is counted in d. None of
is not counted in is counted in Maximum number of directors but the above
Maximum number Maximum number since Act provides a maximum of
of directors, hence of directors, hence 15 directors, hence appointment is
valid. invalid. valid.
88. PQR Ltd appointed Ms. Smita as an Additional Director by passing a resolution by circulation. Is the
appointment valid?
a. If AOA provides for appointment by resolution by b. Invalid c. Valid d. Valid after
circulation, then the same is valid. ratification
89. Mr. Kaushik holding position as Independent Director of PQR Ltd. contravened the provisions of Sec
149(6). What is the consequence of such contravention?
a. Needs to vacate office b. Can continue as NED c. Can be removed u/s 169 d. (b) or (c)
90. KHL Ltd. appointed Ms. Shruthi as Woman Director. Mr. Sham brother of Ms. Shruthi is the Director of
1.11
a Section 8 Company which receives 32% of its income from KHL Ltd. Can Ms. Shruthi continue as a
Woman Director?
a. Yes b. No, because she loses her c. Can continue by taking d. None of
independence approval from Company the above.
91. A person cannot act as director until he files his consent with ROC in Form No. DIR-2 within 30 days of
appointment. However, exception to following is given to
a. Director of Government company b. Director of Sec 8 c. First d. All of the
Company. Director above
92. Board of Karawan Ltd. seeks to appoint Mr. Karan as Alternate Director of Mr. Kiran, an Independent
Director. What is the basic requirement?
a. Shall not be an b. The individual so proposed shall c. Board can appoint d. All of above
Individual rejected also be eligible to be appointed as only if AOA gives
by the Company Independent Director. power.
93. Acts conducted by the Company were ultra vires to the AOA and MOA of the Company. Will the ID be
held responsible?
a. Held responsible b. Yes, held primarily c. Held responsible only if the acts d. None of
based on the terms responsible occurred within his knowledge the
of appointment. and his consent or connivance. above
94. Mr. Peter, director of NOCIL Ltd. absents himself for a period more than 12 months with notice. Hence
the Company decides on appointing an Alternate Director. However, CS of the Company is of the
opinion that an Alternate Director cannot be appointed hence the position shall be filled in by a Casual
Vacancy Director. Is the contention of the CS correct?
a. Yes, a Casual vacancy b. No, since the director c. Based on the circumstances d. Any of the
director needs to be has given notice of and the intention of Director above
appointed. Since its absence an Alternate to return to his position, the
over 12 mnths Director can be same can be decided on a case
appointed. to case basis.
95. First Directors of a Company shall be appointed in the following manner:

1. based on manner provided in AOA
2. whose name is mentioned in the AOA
3. all subscribers to the MOA who are individuals shall be deemed to be directors
Which of the following is a correct sequence to follow in appointment of First Directors?
a. 2,1,3 b. 3,1,2 c. 1,2,3 d. 3,2,1
96. Rahi Ltd. intends to appoint Mr. Tahir as a director. After a few days they start considering appointing
Ms. Naina as a director. The Company appoints both of them by passing a singular GM-OR. Few
members who did not vote in the favour of them questioned their appointment. Is their contention
correct?
a. Contention of the b. Contention of c. Contention of the d. Contention of the
members is not the members is members is correct members is correct as
correct as GM-OR is correct as two or as two or more two or more directors
validly passed. more directors directors should be can be appointed by
can be appointed appointed by passing one GM-OR only
by passing only a passing only a GM- after passing one GM-UR
GM-SR. UR. to that effect.
97. Rahi Ltd. intends to appoint Mr. Tahir as a director. After a few days they start considering appointing
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Ms. Naina as a director. The Company appoints both of them by passing a singular GM-OR. The
appointment of the directors or the acts conducted by them was not challenged by any member. Does
it make the appointment valid?
a. The appointment is invalid and b. The appointment is c. The d. The appointment
until the default is shown acts void and until the appointment and acts are valid
will be considered to be valid. default is shown acts is valid, as until known to
will be considered to not the Company.
be valid. challenged.
98. Rahi Ltd., is a wholly owned Government Company, intends to appoint Mr. Tahir as a director. After a
few days they start considering appointing Ms. Naina as a director. The Company appoints both of
them by passing a singular GM-OR . Few members who did not vote in the favour of them questioned
their appointment. Is their contention correct?
a. Contention of the b. Contention of the members c. Contention of the d. None of the
members is not is correct as two or more members is correct as above.
correct as GM-OR directors can be appointed by two or more directors
is validly passed. passing one GM-OR only after should be appointed
passing one GM-UR to that by passing only a GM-
effect. UR.
99. Swapna Ltd. wants to adopt the method of Proportional Representation for appointment of its
directors. Its seeks to know the minimum number of directors it shall appoint by this method. Advise.
a. 2/3rd directors b. 1/3rd directors c. Majority directors d. Minimum 2/3rd directors
100 Mr. Lucky was appointed by proportional representation in HUL Ltd in March 2015. Up till what date
. can he hold the position?
a. Feb 2020 b. Feb 2025 c. Feb 2018 d. Until next AGM
101 Mr. Unfortunate was appointed by proportional representation in HUL Ltd in March 2015. However,
. he met with an accident in Jan 2017 and there was a casual vacancy at his place. Who can fill the
casual vacancy position?
a. BOD shall appoint b. BOD shall appoint c. BOD shall appoint d. Shall be appointed by
subject to approval at subject to approval subject to approval at GM-OR.
next AGM. at next GM. next AGM by GM-OR.
102 On adoption of sec 163 on Proportional Representation, which of the following sections shall not
. apply?
a. Sec 160 b. Sec 152(6) c. Sec 152(7) d. All of the above
103 Mr. Genius has committed a crime involving moral turpitude and has been sentenced to imprisonment
. in March 2015 for 7 years and 6 months. In the month of July 2020, he seeks to be appointed as
director in Prima Ltd. Can he be so appointed?
a. Yes, since 5 b. No, since the c. No, since he is sentenced d. No, since he is sentenced
years has offence involves to an imprisonment for a to an imprisonment for a
been moral turpitude he period exceeding 7 years period exceeding 7 years
lapsed from becomes he becomes disqualified he becomes disqualified
the date of disqualified for a for a lifetime. until the end of
conviction. lifetime. imprisonment.
104 Mr. Lucky holds shares of XYZ Ltd. However, he has not paid any calls in respect of any shares of the
. company held by him and five months have passed from the last day fixed for the payment of calls.
Can he be so appointed as director?
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a. Can be appointed as 12 b. Can be appointed as 6 c. Cannot be appointed d. None of the
months have not lapsed months have not lapsed as 3 months have lapsed above
from the call date. from the call date. from the call date.
105 Mr. Hardik is Director of KP Limited, who has not filed the company annual return pertaining to the
. annual general meeting held in the calendar years 2016, 2017 and 2018. Is Mr. Hardik disqualified
from acting as director?
a. Disqualified b. Disqualified from c. Shall continue in defaulting company d. None of
from being appointed as until default is made good and the
continuing as Director in companies disqualified from being appointed as above.
Director in KP other than KP Ltd for 5 Director in companies other than KP
Ltd. years. Ltd for 5 years
106 Mr. Great has committed a crime involving moral turpitude and has been sentenced to imprisonment
. in March 2015 for 2 years and 6 months. In the month of July 2020, he seeks to be appointed as
director in Prima Ltd. Can he be so appointed?
a. Yes, since 5 years b. No, since the offence c. Yes, since d. None of the above. 5
has been lapsed involves moral turpitude imprisonment is years not elapsed
from the date of he becomes disqualified for a period less from date of expiry
conviction. for a lifetime. than 3 years. of sentence
107 As per sec 160 notice to be appointed as a Director shall be submitted to a Company with the deposit
of ………
a. Rs. 10,000 b. Rs. 25,000 c. 50,000 d. Rs. 1,00,000
108 Which of the following companies’ limit of maximum 15 directors and their increase in limit by special
resolution is not applicable?
a. Government b. Sec 8 Company c. Both of the above d. None of the above
Company
109 Within what period shall DIR-12 be filed in case of a Specified IFSC Company?
a. 90 days. b. 15 days. c. 60 days d. 30 days.
110 Which form shall be filed for application of DIN?

a. DIR-1 b. DIR-3 c. DIR – 3A d. DIR - 2
111 What is the validity of an allotted DIN?

a. Lifetime b. 15 years c. 20 years d. Until qualified otherwise
112 Mr. Sumit has been allotted a DIN. What is his responsibility on allotment of such DIN?
a. Intimate Central b. Intimate company or all c. Intimate d. All of the
Government companies wherein he is a Registrar of above
director Companies
113 Who shall submit the particulars of the DIN and to whom?
a. DIN cell of the b. Central Government c. Director to Company and d. None of the
Ministry to Registrar to Registrar by Company to Registrar above
114 Casual Vacancy Director appointed under sec 161(4) shall hold office up to
a. Next b. Period of c. Date up to which director in whose place he d. Tenure for which he
AGM 5 years is appointed would have held office if it had has been appointed.
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not been vacated
115 Mr. Ramesh committed an offence w.r.t. sec 188 on 1st Jan 2015 and was disqualified to act as a
Director. When can he be qualified to act as Director?
a. From Jan 2018 b. From Jan 2020 c. From Jan 2016 d. Disqualified for lifetime
116 Loan Ltd. did not file its Annual Return for a continuous period of 3 years from 2014-15 to 2016-17.
. Mr. D was appointed as a Director in 2017, will he be disqualified to act as a director?
a. Yes, since not filing Annual b. No, since he c. No, he will continue to be d. Yes, until
Return for a continuous was appointed qualified only for a period the default
period of 3 years is a after the of 6 months from the date is made
company level default u/s defaulting of appointment. good.
164. periods.
117 LMN Pvt. Ltd. seeks to provide additional disqualification criteria in its Articles of Association over and
. above those mentioned in Sec 164. Can it do so?
a. No, b. Yes, additional c. Yes, additional d. Yes, additional
additional disqualification disqualification criteria can disqualification
disqualifica criteria can be be mentioned in the AOA criteria can be
tion criteria mentioned in the of a Private Company on mentioned in the
can be AOA of a Company fulfilment of certain AOA of a Private
provided. conditions. Company
118 Mr. Great, director of NEXA Private Ltd. has committed a crime involving moral turpitude and has
. been sentenced to imprisonment in March 2015 for 2 years and 6 months. When shall he vacate his
office?
a. By April 2015 (30 days from conviction if b. Immediately c. By June d. None of the
no appeal made) 2015 above
119 Mr. Great, director of NEXA Private Ltd. has committed a crime involving moral turpitude and has
office if he has filed an appeal within 30 days?
a. Within a month from the b. Within 3 months from the c. Immediately d. None of
date of disposal of appeal date of disposal of appeal the above
120 Mr. Silver, director of Instruments Private Ltd. has committed a crime involving moral turpitude and
. has been sentenced to imprisonment in March 2015 for 2 years and 6 months. When shall he vacate
his office if he has filed an appeal within 30 days?
a. Within 7 days from the date b. Within 3 months c. Immediately d. None of the above
of disposal of appeal from the date of
disposal of appeal
121 Mr. Gold director of Ornaments Private Ltd. has committed a crime involving moral turpitude and has
office if he has filed a further appeal within 7 days?
a. Within 7 days from the date of b. On disposal of c. Immediately d. None of the
disposal of further appeal further appeal on conviction above
122. Loan Ltd. did not file its Annual Return for a continuous period of 2 years from 2014-15 to 2015-16.
Mr. D, was appointed as a Director on nomination of CG in 2016, will he be disqualified to act as a
director?
a. Yes, since not filing b. No, since he c. No, he will continue to d. None of the above
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Annual Return for a was appointed be qualified only for a appointed by the
continuous period of 3 after the period of 6 months CG nomination
years is a company defaulting from the date of
level default u/s 164. periods. appointment.
123. LMN Ltd. is Whole Owned Subsidiary of Government Company. The members of LMN Ltd. applied for
inspection of Register of Directors maintained u/s 170. Company seeks your advice.
a. Sec 171 gives the right b. If the members ask for c. Both (a) d. Sec 171 is not applicable
to Members for inspection of register in and (b) to Whole Owned
inspection of register. Business Hours the Subsidiary of Government
same is permitted. Company
124. Mr. Snehil, a director of LMN Ltd. assigned his office to his son when he went on a vacation abroad for
1 week. Is the act of the director valid?
a. Yes b. No c. Allowed if approval from GM is sought d. None of the above
125. Maximum no. of Public Companies in which a person can be Director:

a. 8 b. 10 c. 12 d. 20
126. Which of the following shall not be included in calculating Directorships:

a. Directorship of b. Alternate Directorships c. Casual Vacancy d. Additional
Dormant Company Directorships Directorships
127. Maximum no. of Directorships for all forms of Companies (excluding exceptions as per Act) shall be:
a. 10 b. 12 c. 18 d. 20
128. Private Company which is a Holding Company of Public Company shall be calculated as:
a. Public Company b. Private Company c. Not calculated at all d. None of these
129 Private Company which is a Subsidiary Company of Public Company shall be calculated as:
a. Public Company b. Private Company c. Not calculated at all d. None of these
130 A lesser no. of Maximum Directorships that a Director of its Company can have shall be notified by that
Company through:
a. GM-OR b. GM-SR c. BM-OR d. BM-SR
131 For every day of default, the Director holding more than the Statutory Maximum number of
Directorships shall be liable to pay:
a. 1000 b. 5000 c. 10000 d. 15000
132 Director who exceeds the maximum number of Directorships shall notify his wish to continue as
Director to:
a. Co. in which he wishes to continue b. Registrar c. Both d. Tribunal/CG
133 Director resignation from excess Directorships shall be valid w.e.f:

a. Dispatch thereof b. Receipt thereof by Co. c. On Co’s d. Latest of a. b. &
confirmation c.
134 Director who makes undue gain or involves in a situation with conflict of interest or takes action
without reasonable and due care or without exercise of proper judgement or diligence shall be
punishable with:
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a. Fine : 1-5 Lakh b. Fine : 2-5 Lakh c. Fine : 5-10 Lakh d. Fine : upto 20 Lakh
135 Will the Director who makes undue gain in the aforesaid case have other liabilities apart from fine:
a. Yes, shall be required b. Yes, shall be required c. Yes, shall be required d. None of these
to pay amount equal to to pay amount equal to to pay amount equal
gain made to Company twice the gain made to to thrice the gain
Company made to Company
136 Directorships which the Director shall leave in case the Maximum No of Directorships is exceeded shall
. be :
a. Intimated by b. He/ She himself c. Company may pass d. Intimated by CG
Registrar to him shall decide resolution telling Director
137 A Director who fails to attend all Board Meetings for a period of 12 months without leave of absence
shall be:
a. Disqualified u/s 164 b. Vacate Office u/s c. Shall not be eligible for re- d. All of these
167 appointment
138 A Director who fails to attend all Board Meetings for a period of 12 months with leave of absence shall
be:
a. Disqualified u/s 164 b. Vacate Office u/s c. Shall not be eligible for d. All of these
167 re-appointment
139 Contravention of sec 184 by Director shall result in:

a. Disqualified u/s 164 b. Vacate Office u/s 167 c. Shall not be eligible for re- d. All of
appointment these
140 A Director who is removed from office u/s 169 shall:

a. Disqualified u/s 164 b. Vacate Office u/s 167 c. Shall not be eligible for re- d. All of these
appointment
141 If the Director is holding such Directorship by virtue of his employment at certain position in the
Company or its Holding or Subsidiary etc: then if that position is lost , the Director shall :
a. Disqualified u/s 164 b. Vacate Office u/s 167 c. Shall not be eligible for re- d. All of these
appointment
142 A person who knowingly functions as a Director after vacation from the Directorship u/s 169 shall be
punishable with:
a. Imprisonment: 1 b. Imprisonment :2 c. Imprisonment: 6 d. Imprisonment: 1 year
year year mts Or Fine: 5 to 10 Lakh
Or Fine: 1 to 5 Lakh Or Fine: 5 to 10 Lakh Or Fine: upto 1 Lakh Or Both
Or Both Or Both Or Both
143 Where all Directors of a Company vacated office due to order of Tribunal /Court disqualifying them,
the Directors shall be appointed by:
a. Promoters b. CG c. First a. then b. d. First b. then a.
144 What shall be the tenure of office of the aforementioned Director(s):

a. CG b. Next AGM where new c. Next GM where new d. Upto next GM whether
determined Directors shall be Directors shall be or not appointments are

tenure appointed appointed made thereat
1.17
145 Private company may:

a. Provide additional b. Cancel grounds c. Increase the threshold of d. None
grounds for Vacation for Vacation imprisonment period attracting
other than mentioned mentioned u/s vacation from >6 months to
u/s 167 167 >12months
146 Mr. Snail, a director of LMN Ltd. assigned his office to his son when he went on a vacation abroad for 1
week. Is the act of the director valid? What repercussions will he face?
a. No, Fine Rs. 10,000 – Rs. b. Yes, valid c. No, Fine Rs. 1 Lac – Rs. d. None of
50,000. 5 Lac. the above
147 A Director can resign :

a. In Writing b. Orally c. By absenting from BM d. Only a. and b.
148 The BOD shall have following duty on receipt of resignation of Director:
a. Intimate registrar b. Fact of such resignation to be laid at immediately c. Both d. None
and post on website following GM in Directors’ Report
149 Is it incumbent upon the Director to report to Registrar on resigning from Directorship?
a. Yes, mandatorily b. No, he may do so but not c. Yes, only if the d. None of
under Companies necessarily required to Company has failed these
Act, 2013 to report the same
150 Form for intimation to be used by the Company to notify Registrar of resignation of Director:
151 Form for intimation to be used by the Director to notify Registrar of resignation of Director:
152 Period within which the Company shall inform Registrar about Directors resignation :
a. 7 days from date of b. 14 days from date of notice c. 30 days from d. 45 days from
notice of resignation of resignation date of notice date of notice of
of resignation resignation
153 Period within which the Director may inform Registrar about his/her resignation :
a. 7 days from date of b. 14 days from date of c. 30 days from d. 45 days from
resignation resignation date of date of
resignation resignation
154 Documents to be submitted to Registrar by Director when intimating of his/her resignation:

a. Copy of Resignation b. Reasons for resignation c. Form prescribed d. All of these
155 Type of resolution required to remove Director ( other than exceptional cases) :
156 Which of the following Directors shall not be removed by virtue of a GM-OR:
a. Director appointed b. Directors appointed by c. Independent Director d. All of
by Tribunal u/s 242 Proportional Representation reappointed for 2nd these
u/s 163 term u/s 149(10)

1.18
157 Which resolution shall be passed for removal of Independent Director reappointed for 2nd term u/s
149(10)
158 Tenure of office of a Director appointed to fill vacancy of a removed Director shall be:
a. Upto next GM b. Upto next AGM c. Upto the end of predecessors d. As per Registrar
tenure order
159 Which notice shall be given to convene meeting to transact business of removal of Director u/s 169:
a. Ordinary Notice b. Special Notice c. First a. then b. d. First b. then a.
160 Which notice shall be given to transact business to appoint a Director in place of a removed Director
u/s 169 :
a. Ordinary Notice b. Special Notice c. First a. then b. d. First b. then a.
161 Can a removed Directors vacancy be filled at the same meeting wherein the removal took place?
a. Yes, if Special b. Yes, in ordinary course c. Yes, but Special Notice is d. No, power rests
Notice was of business without required only for removal not with CG/Tribunal
given any special notice filling vacancy thereby made
162 Vacancy created by removal of Director, if not filled by the Company may be filled by?
a. BM as Casual Vacancy b. CG c. Registrar d. Company at a compulsorily re-
convened meeting
163 Particulars of Directors & KMP and their shareholding shall be filled with Registrar:
a. 30 days from appointment of b. 30 days of change made c. Both d. Both, but within
Director & KMP therein 60 days not 30.
164 Particulars of Directors & KMP and their shareholding shall be filled with Registrar in Form:
165 Mr. Mukesh, a director of LMN Ltd. assigned his office to his son when he went on a vacation abroad
for 1 week. Is the act of the director valid? What repercussions will he face?
a. No, Fine Rs. 10,000 – Rs. b. Yes, valid c. No, Fine Rs. 1 d. None of the
50,000. Lac – Rs. 5 Lac. above
Answers 1.19
Q. NO. OPTION NO. / REASON

1. d ( Only Individuals can be Directors, ‘Person’ does not mean individual)
2. c
3. c
4. c
5. c
6. c
7. d (Maximum limit of directors can be extended by passing GM-SR (Exemption to Government
Companies i.e. GM-OR is sufficient.)
8. d
9. d
10. d ( as question asks the latest that the appointment can be made i.e. NOT ATER THAN)
11. c (AMENDMENT: from ‘previous calendar year’ to ‘current financial year’)
12. b ( Law does not have a specific requirement, whatever provisions to modify AOA are required are
applied, Law states type of resolution to raise the Maximum lmit)
13. d
14. b
15. a
16. b
17. a
18. a
19. d
20. b
21. c
22. d
23. b
24. c
25. b
26. b
27. d
28. d
29. d
30. d
31. b
32. b
33. b
34. a
(Has or had no pecuniary relation (other than remuneration) > 10% of his total income or amount
prescribed by CG with the Company or its Holding, Subsidiary, Associate Co., promoter or director
during the 2 immediately preceding FYs or during Current Financial Year (CFY))
35. b
36. a ( exceeds 10 %)
37. b ( Guarantee given to Holding Co’s Director)
38. a ( Guarantee to subsidiary Co’s Director)
39. b (Guarantee to Holding Co’s Director within FY 16-17 i.e. within 2 IPFY of CY 18-19)
40. b (Guarantee to Promoter irrespective of Holding Co or Subsidiary, within FY 16-17 i.e. within 2
IPFY of CY 18-19)
41. b (himself or through relatives holds more than 2 % of total voting rights)
1.20
42. d
43. d
44. c
45. c (as KLM Ltd. the appointees are not Listed)
46. d. (u/s149(6)(iv))
47. d. (u/s149(6)(iv))
48. a
49. b
50. b
51. d
52. c
53. c (Max 2 such positions can be held)
54. c (Max 2 such positions can be held, also such position(SSD) cant be held in competing business)
55. d
56. b
57. d
58. e
59. d
60. c
61. d
62. c
63. b
64. b
65. a ( SSD, Additional Director not to be calculated, of the remaining 6, 2/3rd is rotational i.e.4)
66. b
67. c
68. b
69. c
70. c
71. b
72. d
73. a
74. b
75. d
76. a
77. b
78. b
79. b
80. b
81. d
82. c
83. d
84. b
85. d
86. a
87. b
88. c
89. d
90. a
1.21
91. d
92. d
93. c
94. a
95. a
96. d
97. b
98. d. Wholly owned Govt. Co is not covered
99. d
100. c
101. c
102. d
103. c
104. b
105. c
106. d
107. d
108. c
109. c
110. b
111. a
112. b
113. c
114. c
115. b
116. b
117. c
118. a
119. d
120. a
121. b
122. d
123. d
124. b (As per sec 166 any director shall not assign his office. Any such assignment shall be void.)
125. b
126. a
127. d
128. a
129. a
130. b
131. b
132. c
133. a
134. a
135. a
136. b
137. b
138. b
139. b
1.22
140. b
141. b
142. a
143. c
144. c
145. a
146. c
147. a
148. c
149. b
150. d
151. c
152. c
153. c
154. d
155. a
156. d
157. b
158. c
159. b
160. b
161. a
162. a
163. c
164. d
165. c
Chapter 2 DIRECTORS: BOARD MEETINGS & ITS POWERS
Chapter 2 : DIRECTORS: BOARD MEETINGS & ITS POWERS

2.1
1. ‘A. Ltd incorporated in 2011, held Board meetings between 1 January 2016 to 31 December 2017 on
st st
the following dates:

28th February 2016, 20th June 2016, 10th October 2016, 1st February, 2017, 31st March, 2017, 25th July,
2017, 20th November, 2017. Is there a violation of Sec 173 and if so for which year.
a. Violation in 2016 b. Violation in 2017 c. No Violation d. Both 2016 & 2017
2. ‘A. Ltd incorporated in 2011, held Board meetings between 1st January 2016 to 31st December 2017 on
28th February 2016, 20th June 2016, 10th October 2016, 1st February, 2017, 31st March, 2017, 25th July,
2017, 20th November, 2017.
Director Wiseman says that there has been no violation of Sec 173.
Director Dumbman says that there is a violation of sec 173.
Director Lostman says that if TWO Board Meetings are not held within 31st March 2018; violation will
occur.
Who is correct?
a. Wiseman b. Dumbman c. Lostman d. None
3. ‘A. Ltd incorporated in 2011, held Board meetings between 1st January 2016 to 31st December 2016 on
2nd January 2016, 28th April 2016, 1st August 2016, 1st October, 2016, 1st December 2016
Many of the Directors refrained from attending the Meeting on 1st December claiming that it was
illegal as the Sec 173 required only 4 meetings mandatorily in a year. Is the BM held on 1 st December
2016 Invalid?
a. Yes, 1/12/2016 b. No, 1/12/2016 is a c. No, since 4 d. No, as Board Meeting is
is not a legal legal BM as 4 meetings are to be held after 3 years of
BM, as it’s the meetings are the calculated in FY incorporation hence 5 BM
5th meeting. minimum number of 16-17, it’s a valid are permitted.
BM stipulated. meeting.
4. The following is an extract of balance sheet of a Company on 31stJan , 2016:

Equity Shareholding (FV Rs 10/-) : Rs. 10 lakhs, Liabilities: Rs. 2 lakhs, Profits: 3 lakhs
Assets: Rs. 15 lakhs, Bank A/c Rs. 1 lakh, Debtors 5 lakhs, Other Assets (incl. Fixed Assets) 9 lakhs
The Company incorporated on 1st Jan 2016. As the Balance Sheet shows the company got off to some
good business, and in order to avoid any noncompliance penalty of Companies Act, 2013, Mr. Heavy,
who is one of the 3 Directors holding 100000 shares and deeply involved in the business felt the need
to seek a professional advice on the BM provisions under Companies Act, 2013. Mr. Not Heavy, a
fellow Director on the Board of the Company suggested your name for the same:
What would be your advise to them on 31st Jan 2016 regarding BM provision.
a. Min 4 BM to be b. Min 4 BM to be held c. Min 4 BM in a d. Min 2 BM at interval
held in a Calendar in a Financial Year at Financial Year at not less than 90
year at interval interval not interval not exceeding days and atleast 1
not exceeding 120 exceeding 120 days 90 days between BM in every half of
days between between consecutive consecutive BM and the calendar year
consecutive BM. BM. atleast 1 BM per
Quarter
5. Federation of Indian Chambers of Commerce and Industry (FICCI)’s, (Sec 8 Co’s) President Elect Mr.
Somanytaking over from President Mr. Shah seeks your advise as to the BM provisions applicable to
his organisation. Kindly suggest the procedure to be followed.
a. Min 4 BM to be b. Min 4 BM to be held c. Min 4 BM in a Financial Year d. 1 BM in every
2.2 held in a Calendar in a Financial Year at at interval not exceeding 90 6 calendar

year at interval not interval not days between consecutive year
exceeding 120 days exceeding 120 days BM and atleast 1 BM per
between between Quarter
consecutive BM. consecutive BM.
6. A OPC with 2 or more Directors shall be required to hold a First Board Meeting u/s 173(1) :
a. Within b. Within c. No First BM required u/s d. No First BM required u/s 173(1) if
30 days 60 days 173(1) if atleast 1 BM held atleast 1 BM held every quarter of
of of every half calendar year at the calendar year at interval not
Incorpo Incorpor interval not less than 90 days less than 60 days between
ration ation between consecutive BM’s consecutive BM’s
7. A small company shall be required to hold a First Board Meeting u/s 173(1) :
a. Within 30 b. Within 60 c. No First BM required u/s d. No First BM required u/s
days of days of 173(1) if atleast 1 BM held 173(1) if atleast 1 BM held
Incorporation Incorporation every half calendar year at every quarter of the
interval not less than 90 calendar year at interval
days between consecutive not less than 60 days
BM’s between consecutive BM’s
8. An OPC with 1 Director shall be required to hold a First Board Meeting u/s 173(1) :
a. Within 30 b. Within 60 days c. No First BM d. No First BM required u/s 173(1) if
days of of required u/s atleast 4 BM held every calendar year
Incorporation Incorporation 173(1 )at all at interval not exceeding 120 days
between consecutive BM’s
9. A Dormant company shall be required to hold a First Board Meeting u/s 173(1) :
a. Within 30 b. Within 60 days c. No First BM required u/s d. No First BM required u/s
days of of 173(1) if atleast 1 BM held 173(1) if atleast 1 BM held
Incorporation Incorporation every half calendar year every quarter of the calendar
at interval not less than year at interval not less than
90 days between 60 days between consecutive
consecutive BM’s BM’s
10. A OPC with 2 or more Directors shall be required to hold which of the following minimum number of
Board Meeting u/s 173(1) :
a. Min 4 BM to be b. Min 4 BM to be c. Atleast 1 BM held d. Atleast 1 BM held every
held in a Calendar held in a Financial every half calendar quarter of calendar year
year at interval year at interval not year at interval not at interval not less than
not exceeding 120 exceeding 120 days less than 90 days 60 days between
days between between between consecutive BM’s
consecutive BM consecutive BM consecutive BM’s
11. The following Directors have the respective views on the delivery of Notice of BM:
Mr A. The Notice should be delivered either by hand OR by post OR by electronic means
Mr B The Notice should be delivered by hand AND by post AND by electronic means
Mr C The Notice should be delivered by the preferred mode of delivery of the recipient Director
Which of the aforementioned Directors have the right opinion:
a. Mr A b. Mr B c. Mr C d. None
12. For a BM dealing with non-urgent matters notice of the BM shall be given atleast before :
a. 7 days b. 14 days c. 21 days d. 28 days

2.3
13. When Directors participate through Audio Visual means what are its pre requisites:
a. It should record b. It should record and c. It should recognize d. All of these
the Directors’ store the proceedings the participant
participation of the meeting Director
14. The water pipeline of a reputed hotel company ruptured due to accidental damage. Immediate bids
were obtained from repair contractors; a heavy financial outlay was expected. The BM needs to be
called urgently to select a contractor or else the business suffers loss of reputation and payment of
compensation to clients. Can an urgent BM be held without any Notice being given?
a. Yes b. No c. Yes, but ratify the same at d. Yes, but Independent Directors need
the BM to be present
15. The water pipeline of a reputed hotel company ruptured due to accidental damage. Immediate bids
were obtained from repair contractors; a heavy financial outlay was expected. The BM needs to be
called urgently to select a contractor or else the business suffers loss of reputation and payment of
compensation to clients. Can an urgent BM be held with a shorter Notice being given?
a. Yes b. No c. Notice for a shorter period can be d. Yes, BM can be held without notice also
given and Independent Director (if but Independent Director (if any) shall
any) shall be present at BM OR ratify be present at BM OR ratify the decisions
the decisions taken thereat by taken thereat by circulation.
circulation.
16. Mr. A, a Director of ABC Ltd recently had a housewarming ceremony at which all BOD members,
Secretary & Employees of the ABC Ltd were invited and in attendance. For the next BOD meeting the
Company sent a notice at the address of his newly opened house and not at registered address in
company’s records (which was his old house). This was done in foresight that the notice would not
make it to him had it been sent at the registered address. Is the treatment proper and in line with
Companies Act?
a. Yes, since the newly b. No, since the c. Yes, the invite for d. As per Companies Act the
opened house is house is not house warming is akin Director whose address
indirectly brought to the address to an application for for delivery is in doubt,
attention of the Co’s registered with change in registered shall be served notice
records the company address only by hand
17. An OPC with 2 or more Directors shall be required to give 7 days’ notice for BM :
a. True b. False c. Notice provisions are deemed complied with d. OPC is not required to
if 1 BM every half calendar year is held and conduct BM as it is only
gap between 2 consecutive BM is not less led by One Person.
than 90 days
18. Failure to give BM Notice shall result in following Penalty to the defaulting Officer of the Company:
a. Rs. 25000/- b. Rs. 25000/- + Rs. 100/- for c. Rs. 10000/- d. Rs. 10000/- + Rs 100/- every
every day default continues day the default continues
19. BM was called for an urgent matter required to be deliberated, what are the requirements for such a
BM:
a. An Independent b. An Independent c. If the Company has d. Notice calling such a
Director (if any) Director (if any) shall be Independent BM shall be signed by
shall be the present at such meeting Directors , only they Independent Directors
Chairman of such OR atleast ratify the can vote on such only
2.4 a meeting decisions made thereat urgent matters

through circulation
20. What provisions pertaining to BM are applicable to Specified IFSC public Company:
a. Such company b. Such company shall c. Such company shall d. Such company shall
shall hold First BM hold First BM within 60 hold First BM within hold First BM within
within 30 days of days of Incorporation 30 days of 60 days of
Incorporation and and 1 BM in each half Incorporation and 1 Incorporation and 1
1 BM in each half of calendar year BM in each quarter BM in each quarter of
of calendar year of calendar year calendar year
21. What modes of attendance are available to a Director attending a BM

a. In person b. Video Conference c. Prescribed Audio Visual means d. All of these
22. Mr. A attending his daughter’s destination wedding joined a BM via Video Conferencing:
At this meeting discussion was done regarding financial budgets and approval of the Financial
Statement. Presence at BM via Video Conferencing is not permissible for which of these matters?
a. Discussion for b. Approval of annual c. Both are d. Both are not
budgets are not Financial Statement is permissible permissible
permissible not permissible
23. Mr. A attending his daughter’s destination wedding joined a BM via Video Conferencing:
At this meeting discussion was done regarding wide range of financial budgets and approval of the
Board’s Report. Presence at BM via Video Conferencing is not permissible for which of these matters?
a. Discussion for budgets b. Approval of Board’s c. Both are d. Both are not
are not permissible Report is not permissible permissible permissible
24. Notice was received by Mr. Traveller, Director of Wanderlust Ltd. for BM to be held on 15 th of the
month. On that day Mr. Traveller was to travel to New York and hence couldn’t be able to attend the
meeting.
Mr. Stationary told Mr. Traveller not to worry as the Companies Act, permits attendance through Video
Conferencing as well:
At the meeting that ensued following matters were discussed:
I. Payment of Bonuses
II. Selection of Transport Contractors
III. Approval of Quarterly Financial Statements for Stock Exchange compliances
In light of gravity of the decisions taken thereat, is the attendance of Mr. Traveller through Electronic
mode valid under Companies Act
a. Yes for all matters b. No for all matters c. Yes for I & II only d. No for I & II only
25. What shall be Quorum in case No. of Directors is 12:

a. 3. b. 4. c. 9. d. 2
26. What shall be Quorum in case No. of Directors is 13:

a. 3. b. 4. c. 5. d. 2
27. A. Ltd had 9 Directors on its Board. A Board Meeting was convened on 15 th of the month. On that day,
7 of the Directors were on visit to a Regional Conference. The meeting was conducted by the remaining
two and a letter jointly signed by the 7 absentee member Directors was obtained as a No-Objection for
lack of Quorum.
Is the BM legal if absentee Directors waive Quorum in writing?
a. No, as Quorum is fixed by b. Yes, Quorum can c. Yes, Quorum is a d. Yes, provided
the Act and cannot be be reduced if just a guiding Independent

reduced by Co (only over 2/3rd principle and can Directors
2.5
specific businesses can be Directors consent be waived by unanimously
done when Quorum falls) to do so written declaration approve the same
28. In a 3-person Board, with Mr. A, Mr. B, Miss C as the Directors, 3 resolutions were to be passed, but
following Directors were Interested therein:
Resolution Interested Directors
I Mr A
II Mr B & Miss C
III Miss C
On which Resolution the Board doesn’t hold a Quorum
a. I & III b. II c. None d. All
29. ‘The First Step’ Ltd engages in selling souvenirs made by juvenile inmates and using the surpluses
thereof only to impart vocational education to juveniles in jails, it is incorporated under special
provisions applicable to Social Welfare entities under Companies Act and seeks advise in following case:
A BM was called on 28th June, at the meeting Directors for District No..1 , 4, & 6 were in attendance.
But the Directors for remaining 13 other districts could not make it in time. There is one Director for
each district. Is the quorum at the meeting valid?
a. No as 6 Directors b. No as the requisite c. Yes as 2 Directors are d. A single Director can
are minimum quorum is 4 minimum Quorum in form Quorum in
Quorum in above members or more given case above case
case
30. A meeting is convened on 19th of January, due to lack of Quorum it stands postponed to which of the
following days?
a. 25th January – b. 26th January - Republic c. 27th January - d. 28th January - First working
Friday Day of India Sunday day of the week
31. Out of the 3 Directors on the Board of A Ltd. Mr A passed away and Mr B tendered his resignation
before the BM scheduled for 15th of the month. At such a meeting Mr. C being the sole Director could
no way achieve the Quorum and as such made business decision by passing resolutions himself. The
Shareholders were displeased at such single handed approval system. Will the resolutions passed
stand?
a. Yes, as there is b. Yes, but only if c. No, as the Companies d. Yes, as the BM was already
no way to the Act only allows notified before the events of
achieve the resolutions continuing director/s retirement and death took
mandatory 2 passed are to act in order to place, hence decisions taken
person assented to by restore Quorum or call thereat are legally binding
Quorum the GM of Shareholders
Shareholders
32. Mr A. Director of A.Ltd is also the sole proprietor of Alpha Traders who are the leading supplier of Raw
Material to Supersonic Traders. Supersonic is expecting to receive an order from A Ltd. The BM
convened to grant this order has Mr. A present thereat. Is he an Interested Director?
a. Yes, as he is b. Yes, as he is c. No, as he is a mere d. No, since Mr. A is a sole
indirectly to benefit owner of an supplier to proprietor and as such has
from a better entity other than Supersonic, not an immunity from provisions
financial position of Directorship of A owner/partner of Interested Directors
Supersonic Ltd therein.
33. Mr A. Director of A.Ltd is also the partner in Alpha Traders. Mr. B. his partner in Alpha Traders is also a
2.6 partner in Supersonic Traders. Supersonic is expecting to receive an order from A Ltd. The BM convened
to grant this order has Mr. A present thereat. Is he an Interested Director?
a. Yes, as he is b. Yes, as he is c. No, as he is a mere d. No, since Mr. A is a partner
financially within two partner to Mr. B (who of Mr. B , and as such the
related with a degrees of is separately a partner partnership assumes a
partner of the separation from in Supersonic different legal status and
beneficiary of the bidder i.e. Traders), and not an hence immune to provisions
the resolution. Supersonic owner/partner of Interested Directors
himself.
34. What provision of Quorum is applicable to OPC with more than 1 Director:
a. Quorum 2 or b. 25% or 8 c. No Quorum required d. No Quorum required at BM of
1/3rd members for OPC in this case OPC
35. Mr A. Director of A.Ltd is also the partner in Alpha Traders. Alpha Traders is expecting to receive an
order from A Ltd. The BM convened to grant this order has Mr. A present thereat. As an Interested
Director can he participate?
a. Yes, as an interested b. Yes, but c. No, Interested Directors d. Yes, but such action
director is required not only on are not allowed to vote shall be ratified by
to vote only if he is a disclosing in matters pertaining to Independent Directors’
“Director “ in benefiting interest outside entities where Committee
“Company” they are owners.
36. Mr A. Director of A. Pvt Ltd is also the partner in Alpha Traders. Alpha Traders is expecting to receive an
order from A Pvt Ltd. The BM convened to grant this order has Mr. A present thereat. As an Interested
Director can he participate?
a. Yes, as an interested b. Yes, but c. No, Interested Directors d. Yes, but such action
director is required not only on are not allowed to vote in shall be ratified by
to vote only if he is a disclosing matters pertaining to Independent Directors’
“Director “ in benefiting interest outside entities where Committee
“Company” they are owners.
37. How many Directors are required for making request that a resolution circulated for approval shall
instead be passed by convening BM:
a. 1/3rd or more b. 2/3rd or more c. Minimum 2 d. 1/2 or more
38. Which of the following is correct: The resolution passed by circulation

a. Shall be noted at b. Shall be noted at the c. Shall be noted at d. Shall be noted at the
the next BM and immediate next GM the next BM but immediate next GM held
made part of held by the company not recorded in by the company and
minutes thereof and made part of Minutes ratified by shareholders
minutes thereof
39. NTPC Ltd. (NSE: NTPC) engaged in retail business has a paid up share Capital of 5.5 crore, with total
outstanding liabilities incl. loans and debentures) of 11 crores. It made a turnover of 50 crores . Is it
required to appoint an Audit Committee?
a. Yes, as it has b. Yes, as it has liabilities c. Yes, as its share d. Yes, as it is a Listed
turnover over over minimum limit capital is over Public Company
minimum limit minimum limit
40. Of the 4 Directors on the Audit Committee of A. Ltd. 2 are illiterate and 2 are Chartered Accountants.
This is done so as to bring about inclusivity of opinions. Is the constitution valid under Companies Act?
a. Yes, atleast 50% b. Yes, as the c. No, as majority are d. No, as Companies Act
are able to read education is no required to read requires all Audit
2.7
and understand criteria for selecting and understand Committee members to be
financial Directors for Audit financial statements financially literate
statements Committee
41. Artisans , a sec 8 company is required to form a Audit Committee . It appoints 5 member Directors, only
2 of whom are Independent. Is this a valid constitution of the Audit Committee?
a. No, as more than b. No, as more than 3/4th c. Yes , as the d. Yes, as the provisions are
50 percent shall be shall be Independent, minimum criteria relaxed for a sec 8
Independent and any fraction shall of 2 Independent company, exempting need
Directors be counted as 1 Directors is for majority Independent
fulfilled Director
42. The Audit Committee of Arc Ltd. requested the CA firm engaged in audit of Arc Ltd. to produce its
Auditor’s Report as per terms of reference of such Committee with the BOD. The CA firm outright
declined saying that the Audit Committee was overstepping its limits. Is the view of the CA Firm proper
as per Act?
a. Yes, as the CA Firm is b. No, as the Audit c. No, as the Audit d. Yes , as the right over
answerable to BOD Committee is given Committee is sole documentation of the
and not to a delegated such right under authority for all Audit records solely lies
authority e.g. Audit Companies Act, communications with the auditor.
Committee 2013. with auditors
43. The auditor of Arc Ltd. attended the meeting of Audit Committee thereof. He made a statement about
certain pressing matters about Internal Control weaknesses. In the ensuing resolution of the Board ,
regarding the fortification of Internal Control through digital means, the auditor claimed he had a
special right to vote under Companies Act, as he is the expert on that subject. Is he entitled to vote?
a.Yes, Audit Committee is b. No, the Auditor has no c. Yes, Audit d. Yes, Auditor can cast
required to allow right under Companies Committee is a vote, but only if
auditor to vote on Act to vote at such formed by there is a tie in the
matters towards which meeting, but has right default with the number of votes
he has made to make statement Auditor as a
statements in thereat. member
Committee meeting
44. Medking Ltd. is required to have vigil mechanism and has an existing Audit Committee. Mr. A is a
member of this Audit Committee and Chairperson. Besides, he is a consultant to Goodmeds Ltd., who
supply raw material to Medking Ltd. Mr. Truthful an employee in the testing department found the
supplies of Goodmeds to be substandard and accused Mr. A of accepting kickbacks. And brought this to
notice of the higher-ups. After no response to his complaint he approached the Audit Committee. Mr. A
who is also the Chairman of Audit Committee participated in the ensuing discussions.
Can Mr A participate in such business of Audit Committee despite the apparent conflicts of interest?
a. No, as the Companies Act requires a person b. Yes, provided that such resolutions c. None of
having conflict of interest to recuse himself passed as a result of deliberations are these.
from deliberations on those matters further ratified at Board Meeting
45. Failure of a Company to enforce a proper vigil mechanism u/s 177(9) can result in fine of :
a.1 lakh to 5 b. 5 lakh to 10 lakh c. 10 lakh to 15 lakh d. 5 lakh + 1000/- for every continuing
lakh day without vigil mechanism
46. Defaulting officer of a Company who fails to enforce a proper vigil mechanism u/s 177(9) can be u/s
178(8) :
2.8 a. Imprisoned for upto 1 year OR b. Imprisoned for upto 6 months c. Fine from d. None of
Fined from 25000 to 100000 OR OR Fined upto 10000 10000 to these
Both OR Both 50000
47. Bosch Ltd {NSE:Bosch} is a listed public company having PUC of 5 crores, turnover of 50 crore and
aggregate borrowing and debt of 50 crores:
Will it be required to form a Nomination and Remuneration Committee?
a. Yes, as the PUC b. Yes, as the c. Yes, as aggregate d. Yes as all listed public companies
is above 1 turnover is borrowings are equal to require to have a Nomination and
crore above 10 or exceed 50 crores Remuneration Committee
crores
48. Bosch Ltd is an unlisted public company having PUC of 15 crores, turnover of 50 crore and aggregate
borrowing and debt of 50 crores:
Will it be required to form a Nomination and Remuneration Committee?
a. Yes, as the b. Yes, as the c. Yes, as aggregate d. Yes as all unlisted companies
PUC is above turnover is borrowings are equal require to have a Nomination and
10 crore above 10 crores to or exceed 50 crores Remuneration Committee
49. A Nomination and Remuneration Committee has 4 member Directors including the Chairperson of BOD.
All of whom are non-executive and 2 are Independent Directors. Is the constitution proper? If not, why?
a. Yes , the b. No, as the number of c. No, as the number of d. No, as the minimum
constitution Independent Directors non-executive number of member
is proper shall be a majority, Directors shall be less Directors for a NRC is 5
which it is not than 3.
50. A certain company has Nomination and Remuneration Committee consisting 4 member Directors
including the Chairperson of Company. Of which 3 are non-executive and 2 amongst them are
Independent Directors. Chairperson of Company (only executive member) is elected as the Chair of the
NRC. Is the constitution proper?
a. No, as the no of b. No, as the number of c. No, as the d. Yes, the constitution
Executive directors Independent Directors Chairperson of is in line with
is insufficient is insufficient Company can’t be Companies Act.
Chair of NRC
51. Would it be permissible for Chairperson of Company to Chair the NRC in the above case if such person
was a non-executive Director?
a. Yes, as Non- b. No, as Chairperson of c. No, as the number of d. Yes, as a NRC is
executive Company is prohibited to Executive Directors required to
Chairperson of be Chair of NRC would fall to zero, have only Non-
Company can be a irrespective of whether which is below executive
Chair of NRC executive or non-executive minimum prescribed Directors
52. A 4 person Stakeholders Relationship Committee was formed by Prakash Ltd having 1001 Shareholders.
The 4 members were highly qualified Executive Directors. Amongst them a Director was named
Chairman. Is this a validly constituted SRC, if not, why?
a. Yes, the SRC is b. No, the SRC is not validly c. No, the SRC d. No, the SRC is
validly constituted as there is failure Chairman is invalid, invalid as it consists
constituted to maintain minimum no. of as the post can be members already
Non-Executive Members on held only by Non- serving on BOD.
SRC executive Director
53. Failure of a Company to constitute a proper Nomination & Remuneration Committee can result in fine
of :
2.9
a. 1 lakh to 5 lakh b. 5 lakh to 10 lakh c. 10 lakh to 15 d. 5 lakh + 1000/- for every
lakh continuing day without NRC
54. Defaulting officer of a Company which fails to constitute a proper NRC can be :
a. Imprisoned for upto 1 year b. Imprisoned for upto 6 months c. No Imprisonment. d. None
OR Fined from 25000 to OR Fined upto 10000 OR Both Fine from 10000 to of
100000 OR Both 50000 these
55. The BOD at the BM approved a contract to Arc Builders. The said contractor was having less than 2
years 11 months of Building experience in Infra projects at that point. At the ensuing General meeting 3
months later, the Company added a regulation that only Contractors with more than 3 years of Builiding
experience shall be hired . Arc Builders’ contract was rescinded as a result retrospectively, as the GM
was of the opinion that Shareholders can undo decisions made by BOD, and can provide retrospective
ratification or revocation. Is the treatment correct?
a. No, the BOD’s decisions cannot b. Yes, the Shareholders at c. No, the Shareholders cannot
be retrospectively rescinded by GM are true owners of rescind the contract as on the
GM of shareholders as they the Company and can do relevant date of GM the Arc
were valid on the day they ratify as well as rescind a Builders have requisite
were made contract retrospectively experience
56. Good People, a Sec 8 Company, wanted to pass a resolution through circulation on the matter of
investing of the Company’s funds in select Government securities. Can the Sec 8 Company pass such a
resolution through Circulation?
a. Yes, it is b. No, as the Companies Act c. No, as the Sec 8 d. Yes, but the
specifically prohibits specifically Companies are Securities can only
covered in the passing circular resolution prohibited to be Government
Companies Act. on above matter pass resolutions Guaranteed
by circulation securities
57. Bahd People, a Sec 8 Company, wanted to pass a resolution through circulation on the matter of giving
security towards loan borrowed by it. Can the Sec 8 Company pass such resolution through Circulation?
a. Yes, it is b. No, as the Companies c. No, as the Sec 8 d. Yes, but only if the
specifically Act prohibits Companies are value of security
covered in the specifically passing prohibited to pass any does not exceed
Companies Act. circular resolution on resolutions by Rs. 1 lakh
above matter circulation
58. BOD of A. Ltd wanted to delegate the power of borrowing monies to the Managing Director. Is this a
proper delegation of power?
a. Yes, as such b. No, as a c. No, as the decision of d. Yes, provided the
delegation is delegated borrowing monies is a matter upper limit of
allowed under authority (i.e. that the Companies Act borrowings shall not
Companies BOD ) cannot mandates to be passed by exceed Rs. 1 lakh
Act. further delegate BOD only
59. A. Ltd wanted to make contribution to Topi Kamal Haath Party, a political party. The BOD delegated the
same to a select Committee formed entirely of Independent Directors. Is the delegation proper?
a.Yes , as the Committee b. No, as resolution for c. No, as such d. No, Political
is fully Independent as political Contributions resolution is to be Contributions are
stipulated by are to be made only at passed at BOD in a banned to be made
2.10 Companies Act GM of shareholder convened BM only w.e.f. FY 2017
60. Can the powers of the Board u/s 179(3) be restricted by Shareholders in GM?
a. Yes, the shareholders b. No, the powers of c. Yes, but only the 3 d. Yes, only if the
have a right to put the Board bestowed specific cases as BOD has no
restriction on the under 179(3) are mentioned under Independent
Board’s exercise of absolute and can’t Sec 179(3) (d) (e) Directors
powers u/s 179(3) be restricted by Co and (f) appointed thereto
61. Board of A Ltd wishes to exercise the power to sell its whole undertaking in Ab Ltd its
subsidiary. A. Ltd’s total net worth as per the preceding financial year audited Balance Sheet
was 100 crores. The Investment in Ab Ltd was 30 Crores only. The exercise of such power was
done after consent of the Company through ordinary resolution. Is the treatment correct?
a. No, as the Company b. No, as the c. Yes, as the d. Yes, as the
shall be required to Company shall be Company shall be Company shall be
provide consent by required to required to required to
Special Resolution provide consent provide consent by provide consent by
as the total by Special Ordinary Ordinary
investment exceeds Resolution as the Resolution as the Resolution
20 % net worth. total investment total investment is irrespective of
exceeds 15 % net less than 40 % net %age of
worth worth investment
62. Board of A Ltd exercised the power to sell its whole undertaking in Ab Ltd (its subsidiary). A
Ltd’s total net worth as per the preceding financial year audited Balance Sheet was 100 crores.
The Investment in Ab Ltd was 15 Crores only. The exercise of such power was through
consent of the Company through ordinary resolution. Is the treatment correct.
a. No, as the b. No, as the Company c. Yes, as the Company d. Yes, as the
Company shall shall be required to shall be required to Company shall be
be required to provide consent by provide consent by required to
provide Special Resolution as Special Resolution provide consent by
consent by the total investment only when total Ordinary
Special exceeds 10 % net investment in Resolution in all
Resolution worth undertaking exceeds cases.
irrespective of 20 % net worth
the % age.
63. Board of A Ltd exercised the power to sell its whole undertaking in Ab Ltd its subsidiary. A
Ltd’s total income for the previous financial year was 100 crores. The income share
contributed by Ab Ltd was 30 Crores only. The exercise of such power was through consent of
the Company through ordinary resolution. Is the treatment correct.
a. No, as the b. No, as the Company c. Yes, as the d. Yes, as the
Company shall be shall be required to Company shall be Company shall
required to provide consent by required to provide be required to
provide consent by Special Resolution as consent by Ordinary provide consent
Special Resolution Ab Ltd’s share in Resolution as Ab by Ordinary
as Ab Ltd’s share total income Ltd’s share in total Resolution in all
in total income exceeds 15 % income is less than cases
exceeds 20 %. 40 %
64. Board of A Ltd exercised the power to sell its whole undertaking in Ab Ltd its subsidiary. A 2.11
Ltd’s total income for the previous financial year was 100 crores. The income contributed by
Ab Ltd was 15 Crores only. The exercise of such power was through a consent of the Company
through ordinary resolution. Is the treatment correct?
a. No, as the b. Yes, as the Company c. Yes, as the Company d. Yes, as the
Company shall shall be required to shall be required to Company shall
be required to provide consent by provide consent by be required to
provide consent Special Resolution Ordinary Resolution provide consent
by Special only if Ab Ltd’s share as Ab Ltd’s share in by Ordinary
Resolution in all in total income total income is less Resolution in all
such cases exceeds 20 % than 40 % cases
65. Board of A Ltd exercised the power to invest in trust securities the proceeds of compensation
received as a result of merger/amalgamation. The exercise of such power was through
consent of the Company through ordinary resolution. Is the treatment correct?
a. No, as the b. No, as the c. Yes, as the d. No, as such a
Company shall Company shall be Company shall be decision lies entirely
be prohibited to required to provide required to with Company at
invest such sums consent by Special provide consent by GM and can’t be
as per the Resolution as the Ordinary delegated to BOD in
Companies Act same is stipulated Resolution in all any form
in Companies Act such cases
66. Board of A Ltd exercised the power to remit (ignore) repayment of debt due from Director.
The exercise of such power was through consent of the Company through ordinary resolution.
Is the treatment correct?
a. No, as the b. No, as the Company c. Yes, as the same d. No, as such a
Company shall be shall be required to is exempted decision lies
prohibited to provide consent by from Special entirely with
remit such sums Special Resolution as Resolution under Company at GM
as per the the same is stipulated in the Companies and can’t be
Companies Act Companies Act Act 2013 delegated to
BOD in any form
67. What penal provisions befall a Director who has not disclosed interest u/s 184
a.Imprison : <= 1 yr b. Imprison : <= 6 b. Imprison: c. Imprison: <= 6 mt Fine :
Fine : 1-2 lakh mt <= 1 yr 50000-1 lakh or Both
Or Both Fine : 1-2 lakh Fine : <=1 lakh Or
Or Both Both
68. Mr. A was interested in a contract. He was a Director of A.Ltd. The interest was not disclosed.
On prospective discovery of his interest the Director, the BOD wanted to annul the contract.
Can it do so?
a. Yes, the b. Yes, the contract c. No, the contract d. Yes, the contract is
contract is is voidable by the cannot be voided on voidable and the
voidable at the party in which the a technicality and the Company shall bear
option of the Director has outsiders are all costs that may
Company interest, failing protected by have unduly
2.12 which the Director Doctrine of Indoor befallen on the

shall indemnify Management other party as a
result of voiding
69. A. Ltd’s extract of financial statements is as follows :

Paid-Up Capital and Free Reserves 100 Crores. Sec Premium 10 crores
Money Borrowed 50 crores (includes 10 crores temporary loan repayable within 6 months).
Money proposed to be borrowed 60 crores.
An ordinary resolution at the GM is passed to approve such additional borrowing.
Is the treatment correct?
a. Yes, as aggregate of b. No, as Sp c. Yes, as all d. Yes, as the money
money borrowed and to Resolution is borrowing of to be borrowed is
be borrowed does not required for all money requires less than 3/4ths
exceed PUC + FR+SP, the times when consent by of the total
hence does not require money is Ordinary PUC+FR
Sp Resolution borrowed Resolution
70. In the above question would the treatment be correct if the Money proposed to be borrowed
was 70 crores instead of 60 crores
a.Yes, as the aggregate of money borrowed b. No, as the aggregate of money borrowed
and to be borrowed would not exceed and to be borrowed would exceed
PUC + FR+SP, hence won’t require Sp prescribed limit hence require Sp
Resolution. Thereby current treatment Resolution. Thereby current treatment
would stand would be wrong
71. In question No. 69 would the treatment be correct if the Money proposed to be borrowed was
71 crores instead of 60 crores
a. No, as the aggregate of money borrowed b. No, the same treatment would stand
and to be borrowed would exceed PUC +
FR+SP, hence consent by Sp Resolution
72. In question No. 69 would the treatment be correct if Money Borrowed previously (i.e.50
crores) had temporary loans component of 20 crores instead of 10.
a. Yes, as in that case b. No, as the aggregate of c. Yes, as in any d. No, as in any
the aggregate of the Money borrowed case the ordinary case a Special
money borrowed and to be borrowed resolution is resolution
and to be borrowed would be equal to or required would have
won’t exceed PUC + exceed PUC + FR +SP been required
FR+SP
73. Board of A Ltd exercised the power to sell its whole undertaking in Ab Ltd its subsidiary. A
Ltd’s total net worth as per the preceding financial year audited Balance Sheet was 100 crores.
The Investment in Ab Ltd was 30 Crores only. The exercise of such power was through consent
of the Company through special resolution. The limits for the sale of investment were not
explicitly mentioned in GM-SR. Is the treatment correct?
a. Yes, the b. No, as in addition to c. Yes, as the limits d. Yes, as the BOD is at
requirement of a the Special Resolution are notified for liberty to define the
Special what is also required different class of financial limits
Resolution is the is the mention of the Companies by within which to

sole criteria as limits of funds the Companies exercise the power 2.13
per the Act Act, 2013
74. Board of A Ltd exercised the power to sell its whole undertaking in Ab Ltd its subsidiary
through a consent of the Company vide an ordinary resolution. Later it was discovered in 4
months that the situation warranted a special resolution. Owing to the same, the title of the
purchaser of the undertaking was brought into question. Is the treatment correct.
a. Yes, the title of b. No, as the title of c. Yes, as the decision d. No, as any
the purchaser is the purchaser is free taken relates to sale of suit for this sale
invalid if the from any defect in undertaking hence the transaction is
Company fails to procedure of same is void ab initio time barred as
provide a special approval provided and doctrine of indoor per the Statute
resolution where the purchaser has management doesn’t of Limitations
needed under made purchase in protect outsiders applicable to
Companies Act good faith such case
75. Board of Adarsh (Pvt) Ltd sold its undertaking as defined in explanation to Sec 180(1)(a). The
Company at the GM objected to such an exercise of power calling it to be a wrongful as it was
without approval of Company through Special Resolution as required for sale of undertaking
u/s 180(1)(a) of Companies Act, 2013. Owing to the same, the title of the purchaser of the
undertaking was brought into question. Is the treatment correct.
a. Yes, the title of b. No, as the title of the c. Yes, as the decision taken d. N
the purchaser is purchaser is free from relates to sale of o as
invalid if the any defect in procedure undertaking and the same these
Company fails to of approval provided the is void ab initio and provisi
provide a special purchaser has made doctrine of indoor ons
resolution where purchase in good faith as management doesn’t are
needed under per section 180 protect outsiders N.A. to
Companies Act Adarsh
76. A Ltd seeks to make contribution to Charitable funds of 5 lakh in FY 2017-18. The Board
approved such a resolution without consent of Company at GM. In light of the given extract
for the 3 immediately preceding FY, is the treatment correct?
FY Net Profits (in lakhs)
FY 2014-15 50
FY 2015-16 150
FY 2016-17 100
a. Yes, as for b. No, as the c. Yes, as the d. No, as the amount is
Charitable Companies Act, amount does equal to or exceeds 5 %
fund 2013 prohibits not exceed 5% of the Avg N.P.of 3 IPFY
contribution Charitable fund of the Avg. N.P and hence needs
no consent contribution with or of 3 IPFY no approval of Company at
of Company without consent approval of Co GM
is required at GM needed
77. Would the treatment be correct in the above case change if instead of net profit of 50 Lakhs in
FY 2014-15 the company made net profit of 40 Lakhs.
a. Yes, as for b. No, as the c. Yes, as the d. No, as the amount is
2.14 Charitable fund Companies Act, amount does equal to or exceeds 5 %

contribution no 2013 prohibits not exceed 5% of the Avg N.P.of 3 IPFY
consent of Charitable fund of the Avg. N.P and hence needs
Company is contribution with of 2 IPFY no approval of Company at
required or without consent approval of Co GM
at GM needed
78. A Ltd. with turnover of 100 lakhs Contributed 10 Lakh to the Flower Hand Broom Political
Party. The contribution was consented through a BOD resolution . Some members of the
Company objected that Company’s consent for the same shall have been obtained. Is the
Contribution valid in light of Companies Act, 2013
a.Yes, the b. No, the contribution c. Yes, the contribution d. No, the
contribution is is not valid as the is valid as the Act contribution is
valid as no consent Company’s consent at does not require the invalid as there
of the Company at GM is required if the Company’s consent can be no
GM is required if amount of but only the BOD contribution to
amount is <= 10% contribution is >= 10% resolution approving any Political
of Turnover of Turnover the same Party
79. Would the contribution be valid if in question no 78 A Ltd was a Company in which CG or SG or
partly both held more than 51 % shareholding?
a. Yes, as Government b. No, since the c. Yes, as the d. No, as in case of
Company is not Companies Act, Act allows Government
prohibited to make 2013 expressly Government Companies, Company’s
any political prohibits such a to make approval in GM is
contributions as the contribution to contribution required.
Government itself be made upto 20 % of
owns the Company the turnover
80. Would the contribution be valid in question no. 78 if A Ltd was incorporated 364 days before
making such a contribution?
a. No, as company is in b. No, as company is c. Yes, as the d. Yes, as the
existence for less in existence for contribution is Company has
than 1 FY it is less than 3 FY it is independent of completed 180 days
prohibited to make prohibited to make the time for which as stipulated in the
any political any political the Company has Companies Act,
contributions contributions been in existence 2013
81. Would contribution be valid in question no. 78 if A Ltd made contribution through Cash or
Cheque which was not crossed.
a. Yes, as b. No, as c. Yes, as the amount is d. No, as the amount is
contribution to account payee <= 10% of the >= 10% of the
political party does instruments turnover of the turnover of the
not necessarily are necessary Company the use of Company, hence the
have to be in as stipulated in Account payee use of Account payee
account payee Companies Act instruments is not instruments is
instrument mandatory mandatory
82. A. Ltd. Made contribution to political parties as follows:
1. Flower Hand Broom(FHB) Party Rs. 100000/-

2. Advertisement in the ‘Socialist’ a pamphlet being issued at rallies by FHB Party Rs 10000/-. 2.15
3. Advertisement in ‘Social Soldier’ a brochure chronicling left-leaning seminars, printed by
Mr. Leftist, whose philosophies glorify FHB Party . Rs 5000/-.
The P&L discloses the Contribution to political parties u/s 182 as Rs 100000/- and
Advertisement as 15000/- . Is the disclosure in line with Sec 182 of Companies Act?
a. Yes, as only b. No, as the c. No, as the d. No, as all the amount
direct Contribution in 1. Contribution in 1. shall be mandatorily
contributions and 2. above are 2. and 3. above are classified as
to political covered in Sec covered in Sec 182 Advertisement
parties are 182 so amount so amount shall be Expenditure as stipulated
covered in Sec shall be 110000/- 115000/- by Companies Act, 2013
182
83. A. Ltd made a contribution of Rs 100000/- to political party but did not follow the Sec 182 of
Companies Act 2013. What shall be the punishment for such contravention imposed on the
company?
a. 5x the amount b. 10x the amount c. 15x the amount d. No penalty on the Co.
84. In the above case, what shall be the punishment labelled onto the defaulting officers of the
company?
a.Imprisonment : upto b. Imprisonment : c. Imprisonment d. Imprisonment : upto 1
1 year. Fine : 5x the upto 6 months. : upto 2 years. year. Fine : 10x the
amount Fine : 5x the Fine : 10x the amount
amount amount
85. A. Ltd sought to contribute to the National Defence Fund an amount at 6 % of the average net
profits of 3 years immediately preceding the FY. There is a debate as to who is the proper
authority to approve such a resolution. Who is the proper authority?
a. The BOD b. The person or authority c. The Co. d. All of these
exercising powers of the BOD in GM
86. Mr. Good a Director of A. Ltd. Has developed an interest in a previously approved contract
which at the time of approval he was not interested in. The Director is of the opinion that he is
not liable to any further reporting duty since he has disclosed interest at the time of original
approval. But the BOD takes a contrary view. Who is correct?
a. Mr. Good is b. BOD’s view c. Mr. Good is required to d. BOD’s view is correct
correct as is correct as any disclose the interest only if Mr. Good had
his view is change in the only once he has made voted in favour of the
similar to interest is to be any financial gains, interested party in the
the disclosed mere gaining of an original resolution
Companies forthwith or at interest doesn’t require
Act, 2013 earliest next BM disclosure
87. What form is prescribed under Rule 9 of Companies (Meetings of Board and its Powers) Rules,
2014 for disclosure of interest of Directors and their shareholding?
a.MBP-1 b. MBP-2 c. MBP-3 d. MBP-4
2.16 88. Mr. Executive a Director of A Ltd. was appointed to that Directorship in July 2017. At the time
the flaw in the appointment procedure was not noticed. Mr. Executive voted in many
resolutions. In September the auditors brought to the notice of the BOD the flaw in
appointment. The BOD were of the opinion that the resolutions to which Mr. Executive had
assented shall be invalid by the fact that Mr. Executive was himself invalidly appointed. Is the
view off the BOD correct?
a.Yes, as per the b. No, as per the c. Yes, BOD is d. No, BOD is incorrect as
Companies Act, Companies Act, 2013, correct the wrongfully
2013 all the discovery of any however a appointed Director
resolutions flaw in the Company in shall be required to
assented to by a appointment of GM can make good the losses if
Director whose Director shall not ratify the any, but all resolutions
appointment was repudiate the validity same and shall stand
invalid shall stand of resolutions made validate such
void until such flaw was decisions if it
noticed chooses
89. What is the position in law of resolutions (if any) voted upon by the aforesaid Director in Q No
88 after the flaw was notified to the BOD?
a. Those b. The resolutions c. The Co.at a GM d. The resolutions shall be
resolutions shall passed shall not convened studied by expert
stand as the flaw stand as the within 3 months committee of the BOD of
is presumed to Companies Act shall ratify the which such Director shall
have been explicitly states same not be a part
ignored so
90. A. Ltd purchased lands in the name of the Director who held more than 75 percent of all
shares of the Company. The Company virtually belongs to the Director and so the property is
held in name of the Director, but bought and paid for by the Company. One member objected
to this. What is the position of the Companies Act, 2013 on this issue?
a. The Company can b. The company c. The company can d. The Company can
hold land property can hold all securities neither hold land hold all forms of
in name of any in any other persons property or assets in the name
other person name, but land securities in any of its Executive
without restriction property is prohibited other persons Directors
name
91. Would your answer in the above case differ if instead of land it was shares in a subsidiary
company and the Director was a nominee thereto , and such holding in Directors’ name was
solely so that the number of members are maintained above Statutory limits
a.Yes, as the same is explicitly covered in b. No, as there is no specific distinction
Companies Act,2013 made
92. Mr. A a Director purchased FloorTiles from the Marble Floor Ltd. He holds Directorship in
Marble Floor Ltd. The company extended credit to the Director which was not a policy of the
Company. The Auditors raised question saying that this was not permitted in the Companies
Act. Which of the following is correct
a.The Director is in b. The Company is c. There is no prohibition on d. There
violation of the in violation of the trade between the Director is no
Companies Act as no Companies Act as no and Company but credit violatio

Director is allowed to sale is allowed to be arrangement is prohibited n of 2.17
deal with the Company done to the Director as a loan Co’s Act
wherein he is Director
93. What shall be the penal provisions attracted by the defaulting Company in Q No 92
a.Fine : 1-5 Lakhs b. Fine : 5-25 Lakhs c. Fine : 1 Lakh d. No penalty
94. A Ltd. Held shares as a beneficial owner but the shares were in name of the Depository. A
register as required by law u/s 187 of Companies Act 2013 to enumerate details of such
holdings was not maintained. What are the penal provisions for the same?
a.Fine : 25000-25 lakh b. Fine: 25000- 5 c. Fine: 25000- 1 d. Fine: 25000-50000
lakh lakh
95. What Form is prescribed for the maintenance of Register as stated above in Q No 94 as per
Rule 14 of the Companies ( Meetings of Board and its Powers) Rules , 2014?
a. Imprison : <= 1 yr b. Imprison : <= 6 mt c. Imprison: <= 1 d. Imprison: <= 6 mt Fine :
Fine : 25000-1 lakh Fine : 25000-1 yr Fine : 25000- 25000-50000
Or Both lakh 50000 Or Both Or Both
Or Both
96. Mr. Pro provides tax related advice to the Board of A Ltd which a company with turnover of 5
crores. He does practice also as a Tax consultant. A transaction of leasing of property is sought
to be undertaken by the Company with Mr Pro for 1 crore. The Board wants this to be
approved by the Company as Mr. Pro is a related party in their estimation. Is the treatment
valid?
a. Yes Mr. Pro b. No, Mr. Pro is not c. Yes, Mr.Pro is a d. No, Mr. Pro is a
is a related a related party as the related party as professional and as
party as the fields of Tax Tax consulting such not covered under
BOD is consultancy and land can be Companies Act as
accustomed leasing are not the associated with related person on
to Act on his same even though the land leasing as whose orders the BOD
directions BOD acts on his ways to evade acts, since he does so
directions tax in professional capacity
97. Register for Contracts and Arrangements entered into with Related Parties and those in which
Director are Interested shall be maintained in Form:?
a. MBP-1 b. MBP-2 c. MBP-3 d. MBP-4
98. Mr. A a member of A Ltd wanted to inspect the contract of service / memorandum of terms of
appointment of the employment of M.D. / W.T.D of A Ltd. He was informed that such a record
was not maintained. What are the penal provisions applicable to the Company
a. Fine: 25000 b. Fine: 50000 c. Fine: 75000 d. Fine: 100000
99. In the above case, what are penal provisions applicable to the officers of the Company
a. Fine: 5000 b. Fine: 10000 c. Fine: 15000 d. Fine: 20000
10 Will your answer for Q 98 change if the Company was a Private Company rather than a Public
2.18 0. Company
a. Yes, the Fine for b. Yes, the Fine for c. Yes, as d. No, as no distinction
Private Company Private Company provisions are is made under Act
shall be half the shall be twice the Not Applicable for Public and
fines notified for fines notified for to the Private Private Company
Public Company Public Company Company
Answers 2.19
QUESTION ANSWER (REASON WHEREVER NEEDED)

1 a. As only 3 BM are held
2 b. There is violation of Sec 173 hence Mr. Dumbman is right. Mr. Lostman’s contention
that 2 BM held before 31/3/18 would rectify the situation is wrong as the BM are
counted for a Calendar Year and not Financial Year.
3 b.
4 d. The provisions applicable to an OPC shall be applicable as one Director (Mr. Heavy)
holds whole shareholding. Also the BM cannot be dispensed with as it is not an OPC
with single Director, but more than 1 Director.
5 d. Applicable provisions of Sec 8 Company
6 c. OPC shall be in compliance of provisions of Sec 173 ( which specifies the First BM
requirements) if it holds 1 BM in each half of calendar year atleast 90 days apart
7 c. Same reasons as above are applicable to the Small Company also
8 c. Nothing contained in Sec 173 (which specifies the First BM requirements) shall apply
to an OPC with One Director only. Hence First BM not applicable to OPC with one
Director.
9 c. Dormant Company BM are based on principles similar to 6 above
10 c. OPC shall be in compliance of provisions of Sec 173 ( which specifies the Minimum
number of BM requirements) if it holds 1 BM in each half of calendar year atleast 90
days apart
11 a. Delivery of notice to be done only once in any of the 3 means prescribed.
12 a.
13 d.
14 b. Since the Act prescribes a notice of LESS THAN 7 days in case of Urgent BM, but
nevertheless Notice is necessary.
15 c.
16 b.
17 c. Point d. is not correct as OPC though owned by One Person can appoint more than
one Directors, as is the case in Question
18 a.
19 b.
20 B
21 D
22 b. Approval of only Annual Financial Statement is not permissible , other periodic FS can
be approved
23 B
24 a. Quarterly not Annual Financial Statements are approved .
25 b. 1/3rd comes to 4
26 c. 1/3rd comes to 4.33 which shall be made to 5
27 a.
28 b.
29 b. As total directors is 16 (13+3) the Quorum is 8 or 25% (i.e. 4) w.e.l as it is a Sec 8 Co.
as per information from the Question
2.20 30 d. As 26th is a national holiday and 27th is a Sunday, the adjourned meeting shall be held
on Monday.
31 c.
32 c. Ownership is crucial criteria for “interest” u/s 184
33 c. Direct ownership is crucial criteria for “interest” u/s 184
34 c. Provisions of Quorum do not apply to OPC with 1 Director.
35 c.
36 b. As it is a Private Company. In Public Company this won’t be possible
37 a.
38 A
39 d. As it is listed public company on NSE it has to have an Audit Committee
40 c.
41 d.
42 b.
43 b.
44 a.
45 a. u/s 178(8)
46 a. u/s 178(8)
47 d.
48 A
49 a. As non executive directors are more than 3 and ATLEAST half are Independent
50 c.
51 b.
52 c.
53 a. u/s 178(8)
54 a. u/s 178(8)
55 a. Sec 179(2) states the same
56 a. Sec 179(3) (d)/(e)/(f) gives specific exception to Sec 8 Company
57 a. Sec 179(3) (d)/(e)/(f) gives specific exception to Sec 8 Company
58 a. Proviso to Sec 179(3) gives specific exception to Sec 8 Company
59 c. Covered under Sec 179(3)(k): additional matters prescribed
60 a. Sec 179(4)
61 a. Ab Ltd is an “undertaking” as the Investment therein(i.e. 30 crores) exceeds the 20%
of Co’s Net worth (20%*100 crores). So u/s 180(1)(a) GM-SR is required .
62 c. Ab Ltd is not an “undertaking” as the Investment therein (i.e. 15 crores) does not
exceed 20% of Co’s Net worth (20%*100 crores). So u/s 180(1)(a) GM-SR is not required
.
63 a. Ab Ltd is an “undertaking” as the Income therefrom(i.e. 30 crores) exceeds the 20%
of Co’s total income (20%*100 crores). So u/s 180(1)(a) GM-SR is required
64 b. Ab Ltd is not an “undertaking” as the Income therefrom (i.e. 15 crores) does not
exceed 20% of Co’s total income (20%*100 crores). So u/s 180(1)(a) GM-SR is not
required
65 b. Sec 180(1)(b)
66 b. Sec 180(1)(d)
67 c. Sec 184(4)
68 a. Sec 184(3)
69 a. PUC+FR+SP=110; Money(borrowed +to be borrowed - temporary loans)=50+60-

10=100 2.21
Since 110>=100, no consent vide Special Resolution needed.
10=110
10=111
Since 110<111, consent vide Special Resolution needed.
20=101
73 a. Special Resolution is required as ‘undertaking’ is sold u/s 180(1)(a). Requirement of
mentioning monetary limit in GM-SR applies to 180(1)(c)
74 b. Section 180(3)
75 d. Sec 180 N.A. to Pvt. Co.
76 c. Contribution(i.e. 5 lakhs)<= 5% of AvgNP of 3 Prev FY (i.e. 5%*{(50+150+100)/3}).
77 d. Contribution(i.e. 5 lakhs)> 5% of AvgNP of 3 Prev FY (i.e. 5%*{(40+150+100)/3}).
78 c.
79 b. Sec 182 does not apply to GovtCo’s as is the case in given Question
80 b.
81 b.
82 c.
83 a.
84 b.
85 d.
86 b.
87 a.
88 b. Sec 176
89 b. Proviso to Sec 176
90 c. Exception in 187(2) exist, but option c reflects general rule in Sec 187
91 a. Proviso to 187(1)
92 c.
93 b.
94 a. Sec 187(4)
95 b. Sec 187(4)
96 d.
97 d.
98 a. Sec 190(3)
99 a. Sec 190(3)
100 c. Sec 190(4)
Chapter 4 INSPECTION & INVESTIGATION
Chapter 4 : INSPECTION & INVESTIGATION

4.1
1. The ------------- may by written notice call on the company to produce for his inspection books of accounts,
papers and explanations as he may require, at such place and at such time as he may specify in the notice.
A. CBDT
B. Registrar
C. Director of company
D. Adjudicating authority
2. The ------------------may, if it is satisfied that the circumstances so warrant, direct inspection of book and
papers of a company by an inspector appointed by it for such purpose.
A. State Government
B. Registrar
C. CBDT
D. Central Government
3. Celebrations Company was directed by the Central Government to provide information of some of its sales
transactions and produce documents related to sales and purchases. Under section 206 of the Companies Act,
2013 a company is required to furnish information and produce documents as ordered by Central
Government. But Celebrations Company fails to do so. What is the course of action now?
A. Every officer of the company who is in default shall be liable with Imprisonment
B. Every officer of the company and the Company who is in default shall be punishable with Fine
C. All of the above
D. None of the above
4. What is the quantum of punishment for the above mentioned case?

A. Fine upto Rs50000 and additional fine upto Rs.500 per day in the case of continuing failure
B. Fine upto Rs100000 and additional fine upto Rs.500 per day in the case of continuing failure
C. Fine upto Rs5000 and additional fine upto Rs.500 per day in the case of continuing failure
D. Fine upto Rs500000 and additional fine upto Rs.500 per day in the case of continuing failure
5. The Registrar may by a written notice, require a company to furnish in writing such information and
explanation within such reasonable time as may be specified in the notice.
A. True B. False
6. Flowers Company deals in Purses Business. During the enquiry it was found that they use duplicate leather
and sell them in the name of original leather thereby increasing the cost of the products. Thus they do
fraudulent business. Where the business of a company has been or is being carried on for a fraudulent purpose
every officer of the company who is in default shall be punishable for fraud in the manner as provided in
section---
A. 477 B. 407 C. 744 D. 447
7. The Central Government may having regard to the circumstances by order authorise any ---------------- to
carry out the inspection of books of account of a company or class of companies
A. Regulatory Authority
B. Adjudicating Authority
C. Statutory Authority (section 206(6))
D. Registrar
8. On the receipt of notice from the registrar requiring furnishing of information or documents, it shall be the
duty of the company and its officers to-

4.2
A. furnish such information or explanation
B. produce the documents to the registrar
C. All of the above
9. Under what circumstances the Registrar shall inform the company of the allegations made against it by a
written order?
A. The business of a company is being carried on for a fraudulent or unlawful purpose
B. The Business of a company is not in compliance with the provisions of this Act
C. The grievances of investors of the company are not being addressed
D. All of the above
10. The Registrar or inspector making an inspection or inquiry shall have all the powers as are vested in a civil
court under the Code of Civil Procedure, 1908.
A. True B. False
11. During the course of inspection by the Registrar, he wants to place marks of identification in such books in
token of the inspection having been made.
A. False B. True
12. The Statutory Authority wants to carry out the inspection of books of account of company. What is the pre
requisite for such inspection?
A. Authorisation by Central Government’s order
B. Statutory Authority can’t do such inspection
C. Authorisation by Inspector’s order.
13. It shall be the duty of every director to render all assistance to the Registrar or inspector in connection with
inspection of books of account and other books and papers under section 206.
A. True B. False
14. The Registrar was carrying out the inspection of books of account of ABC Company. During such inspection
the Registrar wanted to make copies of books of account and other books and papers. The officers of the
company refused to do so. Does the action of Officers of ABC Company was correct?
A. Yes B. No
15. Does the Registrar have the powers to summon and enforce the attendance of persons and examining
them on oath?
A. No B. Yes
16. What is the punishment to the director or officer of the company if they disobey the direction issued by the
Registrar under section 207?
A. Imprisonment upto 1 year
B. Fine, which shall not be less than Rs.25000 but which may extend to Rs 100000
C. A and B
D. A or B
17. Who is liable for punishment for contravention under section 206?
A. Company
B. Every officer of the company who is in default

C. A and B
4.3
D. A or B
18. Who is liable for punishment for contravention under section 207?
A. Company
B. Every officer of the company who is in default
C. A and B
D. Any of the Above
19. Mr. Sinful is a director of Sin Company. During the process of Inspection, it was found out by the Registrar
that Mr. Sinful has convicted an offence under section 207. What appropriate action is to be taken against
him?
A. Vacate his office
B. Disqualified from holding any office in any company
C. A and B
D. A or B
20. ABC Company filed annual return for 2016-2017. On scrutiny of documents filed by ABC Company the
Registrar is of the opinion that any further information or explanation related to the company is necessary. By
a written notice the Registrar required the company to furnish in writing such explanation. The Registrar
inspected the books of account of ABC company under section 207. What is the duty of Registrar now?
A. To seize the books of accounts and submit to the Central Government
B. To submit a report in writing to the Central Government
C. To submit a report in writing to the Income tax Department
D. to seize the books and submit report to the Central Government
21. The Registrar submitted a report under section 208. In the report he included recommendation that
further investigation into the affairs of the company is necessary. Is The Registrar authorised to do so?
A. Yes B. No
22. The Registrar believes that the books and papers of DAY Company are likely to be destroyed by the
company. He believes so because he received complaint from a group of creditors of the DAY Company. As
soon as the Registrar received the complaint, he entered and searched the premises of DAY company. The
Registrar even seized the books and papers as he considered necessary. Advice.
A. The Registrar’s action is valid.
B. The Registrar can do so only after obtaining an order from the Special Court
C. The Registrar can do so suo moto
23. The Registrar believes that the books and papers of Sunshine Company are likely to be destroyed by the
company on complaint received by him. The Registrar entered and searched the premises of Sunshine
company after obtaining an order from the Special Court. The Registrar seized the books and papers as he
considered necessary on 1 August 2017. On 5 February 2018, the Sunshine company asked the Registrar to
return them the books of account back. But the Registrar refused to do so. Advice.
A. The Registrar shall return seized books of account within 90 days of such seizure
B. The Registrar shall return seized books of account within 60 days of such seizure
C. The Registrar shall return seized books of account within 180 days of such seizure
D. The Registrar shall return seized books of account within 45 days of such seizure
24. Can Central Government order an investigation into the affairs of the company in public interest?
A. Yes B. No
4.4
25. In what circumstances can Central Government order an investigation into the affairs of the company?
A. In public interest
B. On the receipt of the report from the Registrar under section 208
C. On intimation of a special resolution passed by a company that the affairs of the company ought to be
investigated.
D. All of the above
26. The Central Government shall order an investigation of the affairs of a company if the Tribunal makes an
order that an investigation into the affairs of the company is required.
A. True B. False
27.The Serious Fraud Investigation Office shall be headed by a -----------

A. Director B. Member C. Inspector D. Central Government
28.The Director shall be an officer not below the rank of a Joint Secretary to the Government of India having
knowledge and experience in dealing with matters relating to corporate affairs.
A. Correct B. Incorrect
29. The Central Government shall appoint a Director in the Serious Fraud Investigation Office by issue of a ------
--------
A. Circular
B. Notice
C. Notification
D. Order
30. The Registrar received complaint from the shareholders of the company that Bloom Company is trying to
defraud its creditors. Upon investigation by the Registrar, it was found out that the allegation was true. On
submitting the report to the Central Government by The Registrar, Central Government is of the opinion that
the further investigation is to be carried out. Thus, Central Government Orders Serious Fraud Investigation
Office to investigate into the affairs of the said company. State whether the action of Central Government is
Correct or not.
31. On what grounds, Central Government can order Investigation by SFIO?

A. In the Public interest
B. On receipt of a report of the Registrar under section 208
C. On intimation of a Special Resolution by a company that its affairs are required to be investigated
D. All of the above
32. Where any case has been assigned by the Central Government to the SFIO for investigation under this Act,
then other investigating agencies of Central Government shall proceed with the investigation as before.
A. True B. False
33. Establishment of SFIO by Central Government and Investigation into the affairs of company by SFIO are
guided by ----------- of the Companies Act, 2013 respectively
A. Section 211 and Section 212
B. Section 201 and Section 202
C. Section 210 and Section 211
D. Section 211 and Section 210

4.5
34. The investigation officer of SFIO shall have powers of ------under section 217
A. Member
B. Director
C. Experts
D. Inspector
35. The special court shall not take cognizance of any offence except upon complaint in writing made by –
A. The Director
C. Any officer of the Central Government authorized by general or special order in writing in this behalf
D. Serious Fraud Investigation office
E. Any of the Above
36. SFIO will not have power to arrest in respect of certain offences which are punishable for fraud provided in
section 447 and such person.
A. True B. False
37. A Company passes ordinary resolution that the affairs of the company ought to be investigated and
intimates to the Central Government.
A. True B. False
38. Complaint was received by the Central Government on intimation of a special resolution passed by a
company that its affairs are required to be investigated. SFIO was authorised by the Central Government to
investigate into the affairs of the said company. What is the course of action by SFIO?
A. On completion of the investigation, SFIO will submit report to the Central Government
B. SFIO will issue arrest order to the officers in default of the company
C. Both of the above
39. Big company deals in manufacturing of Laptops. Complaint was received by the Central Government on
intimation of a special resolution passed by Big Company that its affairs are required to be investigated. The
turnover of the company is more than Rs.50 Crore and upto Rs. 200 Crore. Advice
A. Since the turnover is not so large, Central Government refuses to carry out investigation
B. Central Government believes that the Laptop Companies require investigation by Cybercrime Department
C. The Central Government may demand security Rs 15000 for payment of the costs and expenses of the
investigation.
40. Is the security amount demanded by the Central Government refundable?

A. Yes, if the investigation results in prosecution
B. No
41. WINNERS Company is owned by two brothers namely, Mr. Rahil and Mr. Sahil. But since last 6 months,
some of the employees and members have noticed some disputes between the two brothers which is resulting
in disturbance of the working of company. They have complaint Central Government to investigate on matters
relating to the company. The Central Government appoints inspectors to investigate and report on matters
relating to the company----
A. who are or have been financially interested in the success or failure, whether real or apparent of the
company
B. who are or have been able to control or materially influence the policy of the company
4.6
C. None of the above
D. A or B
42. Under section 217(3) the inspector shall not keep in his custody any books and papers produced under the
provisions of this section for more than------------ days
A. 30 B. 60 C. 90 D.180
43. Proceeding of investigation is going on against Mr. S who is officer in default of SS Company. An inspector
appointed by the Central Government is doing investigation. He wants to examine on oath Mr. S under section
217 of the Companies Act 2013. Comment whether can he do so.
A. No, examining on oath does not comes under his powers
B. Yes, with prior approval of the Central Government
44. Proceeding of investigation is going on against Mr. S who is officer in default of SS Company. An inspector
appointed by the Central Government is doing investigation. He wants to examine on oath Mr. S under section
212 of the Companies Act 2013. Comment whether can he do so.
A. No, examining on oath does not comes under his powers
B. Yes, with prior approval of the Director, Serious Fraud Investigation Officer
45. Proceeding of investigation is going on against Mr. T who is officer in default of TT Company. An inspector
appointed by the Central Government is doing investigation. He ordered Mr. T to produce such books and
papers which are relevant for the purposes of his investigation. But Mr. T refuses to do so.
What action can be taken against Mr.T?
A. Imprisonment upto 1 year and fine, which shall not be less than Rs. 25000 but which may extend to Rs 1
Lakh
B. Imprisonment upto 2 years and fine, which shall not be less than Rs. 25000 but which may extend to Rs 1
Lakh
C. Imprisonment upto 1 year and fine, which shall not be less than Rs. 20000 but which may extend to Rs 1
Lakh
D. Imprisonment upto 1 year and fine, which shall not be less than Rs. 2500 but which may extend to Rs 1
Lakh
46. While an inspector was examining Mr. D on oath, the inspector was taking the notes of examination in
writing to which Mr. D objected.
Advice whether the objection taken by Mr. D was correct?
A. Yes B. No
47. Under section 218, if a person fails without reasonable cause or refuses to produce to an inspector he shall
be punishable with-
A. Imprisonment upto 6 months, Fine not less than RS 20000 upto RS 1 Lakh, fine upto Rs 2000 for every day
after the first during which the failure or refusal continues.
B. Imprisonment upto 6 months, Fine not less than RS 35000 upto RS 1 Lakh, fine upto Rs 2000 for every day
C. Imprisonment upto 6 months, Fine not less than RS 25000 upto RS 1 Lakh, fine upto Rs 200 for every day
D. Imprisonment upto 6 months, Fine not less than RS 25000 upto RS 1 Lakh, fine upto Rs 2000 for every day
48. Bee Company deals in manufacturing of Shoes. During the course of investigation of Bee company
Inspector believes that evidence may be available in a country outside India because Bee company has a
manufacturing unit in this country also. Inspector makes an application to the competent court in India that he
believes that evidence may be available in a country outside India. What will Indian court do?
4.7
A. Issue a letter of request to a court in such country to forward all the evidence collected to the court in India
which had issued such letter of request.
B. Issue a letter of request to a court in such country to ban the manufacturing unit
C. Issue a letter of request to a court in such country to arrest such officer in default of such company within
prescribed time limit.
D. None of the above.
49. Laugh Ltd is a company which wants to suspend Mr. Y, the admin manager of the company during the
pendency of the investigation conducted as per the provisions of the Companies Act, 2013. Can the Company
do so?
A. Yes, the company shall make an application to the Tribunal
B. Yes, no need to make an application to the Tribunal
C. No
50. Try Ltd is a company which wants to suspend Mr. Y , the admin manager of the company during the
pendency of the investigation conducted as per the provisions of the Companies Act, 2013. The company
approached the Tribunal on 1 January 2018 for the proposed action. The company on 13 February 2018 passed
an order of suspension without waiting for the orders from Tribunal. Comment whether action done by
company is correct
A. Correct
B. Incorrect
51. Fry Ltd is a company which wants to suspend Mr. Y, the admin manager of the company during the
pendency of the investigation conducted as per the provisions of the Companies Act, 2013. The company
approached the Tribunal on 30 January 2018 for the proposed action. The company on 13 February 2018
passed an order of suspension without waiting for the orders from Tribunal.
Comment whether action done by company is correct.
A. Correct
B. Incorrect
52. The Registrar received complaint from the shareholders of the company that R Ltd. is trying to defraud its
creditors. Upon investigation by the Registrar, it was found out that the allegation was true. On submitting the
report to the Central Government by The Registrar, Central Government is of the opinion that the further
investigation is to be carried out. After carrying out Further Investigation, the Inspector considers it necessary
to investigate the affairs of the R Ltd’s subsidiary company. Does the Inspector have the power to do so?
A. Yes, after obtaining prior approval of the Central Government
B. Yes, No need to obtain Prior approval of the Central Government
C. No
53. The Registrar received complaint from the shareholders of the company that K Ltd. is trying to defraud its
creditors. Upon investigation by the Registrar, it was found out that the allegation was true. On submitting the
report to the Central Government by The Registrar, Central Government is of the opinion that the further
investigation is to be carried out. After carrying out Further Investigation, the Inspector considers it necessary
to investigate the affairs of the KLtd’sholding company. The Inspector proceeded to investigate the Holding
Company of K ltd... Does the Inspector have the power to do so under the provisions of the Companies
Act,2013?
A. Yes, after obtaining prior approval of the Central Government
B. Yes, no need to obtain Prior approval of the Central Government
C. No
4.8
54. Investigation proceeding under the provisions of the Companies Act, 2013 is being carried out against Fishy
Ltd. During the investigation, The Tribunal has a reasonable ground to believe that the removal, transfer or
disposal of funds is likely to take place in a manner that is prejudicial to the interests of the company. So, the
Tribunal made an order under section 221 of Companies Act,2013 that the removal, transfer or disposal of
funds shall not take place for some time. For how much maximum period the assets shall be freeze by the
Tribunal?
A. 1 Year
B. 180 days
C. 6 Months
D. 3 years
55. In addition to the above case, what if the company transfers funds in contravention of order of the
Tribunal? What shall be fine to the Company and the officer in default?
A. Company=Fine not less than Rs.1 Lakh but which may extend to Rs.25 lakh; Officer in default= imprisonment
upto 2 years, or with fine not less than Rs. 50000 but which may extend to Rs. 5 Lakh , or with both
B. Company=Fine not less than Rs.1 Lakh but which may extend to Rs.25 lakh; Officer in default= imprisonment
upto 3 years, or with fine not less than Rs. 50000 but which may extend to Rs. 5 Lakh , or with both
C. Company=Fine not less than Rs.1 Lakh but which may extend to Rs.25 lakh; Officer in default= imprisonment
upto2 years, or with fine not less than Rs. 5000 but which may extend to Rs. 5 Lakh , or with both
D. Company=Fine not less than Rs.1 Lakh but which may extend to Rs.25 lakh; Officer in default= imprisonment
upto2 years, or with fine not less than Rs. 500 but which may extend to Rs. 5 Lakh , or with both
56. The Tribunal during the course of proceeding of investigation found out that the minority shareholders of
the Dull Ltd. are being cornered by the Company. It appears to the Tribunal that an order of restrictions upon
securities is required which may not exceed ---------. The Contravention of the order of the Tribunal attracts-----
------- to the company and ------- to the officers in default.
A. 3 years; fine; fine and/or imprisonment
B. 2 years; fine; fine and/or imprisonment
C. 3 years; fine; fine
D. 3 years; fine; fine and imprisonment
57. If, from an inspector’s report it appears to the Central Government that any person is guilty of any offence
for which he is criminally liable, the Central Government may ------- such person for the offence.
A. suspend
B. prosecute
C. impose a fine
58. After perusal of the inspector’s report it appears to the Central Government that a company is liable to be
wound up under this Act, it may cause to be presented to the Tribunal,
A. A petition for the winding up of the Company on the ground that it Is just and equitable that it should be
wound up
B. A petition for the restructuring of the Company on the ground that it Is just and equitable that it should be
restructured
C. A petition for the merger of the Company on the ground that it Is just and equitable that it should be
merged
59. Mr G, a director of Good Ltd has taken undue advantage due to a fraud taken place in the company. The
inspector found out about this during the investigation proceeding carried out by him. The report made by
inspector to the Central Government stated this fact. The Central Government files an application to the
Tribunal for holding Mr. G personally liable without any limitation of liability. Mr. G objects.
4.9
Advice whether Action of Central Government is correct or not.
60. Who shall bear the expenses of Investigation under the provisions of the Companies Act, 2013?
A. Any person who has filed complaint to do the investigation as per the provisions of the Act.
B. Any person who is convicted on a prosecution instituted, to such extent as may be specified by the court
C. Central Government out of Investors Education and Protection Fund
61. Tubelight ltd. Passed a special resolution for voluntary winding up of the company since they are suffering
losses for quite some time now. Meanwhile, complaint was made to the Tribunal to carry out proceeding of
investigation of the company because the affairs of the company are prejudicial to the interest of the
shareholders. In this situation, advise whether investigation may be initiated against the company under the
provisions of the Companies Act, 2013.
A. Central Government may make such an order of Investigation
B. Central Government cannot make such an order of Investigation
62. Mr. Vakil is a legal advisor of T Ltd. The Registrar of companies, Bangluru, issues an order to Mr. Vakil to
disclose and furnish a copy of communication made by him to the T Ltd. Examine whether the Registrar can
call for the said document from Mr. Vakil.
A. Yes B. No
A legal adviser shall not be bound to disclose to the Tribunal, Central government Registrar or Inspector, any
communication made to him except the name and address of his client. Section 227
63. Are the provisions of the Companies Act, 2013 with respect to inquiry, Inspection and investigation apply
to foreign companies?
A. Yes (Section 228) B. No
64. The Board of directors of Party Ltd. have reasons to believe that some of the business activities of the
company are against the interests of the company and its members. They want the inspection of the affairs of
the company to be carried out. They filed a complaint to the Tribunal by passing a resolution. Advise which
resolution is required to be passed by the company?
A. Ordinary Resolution B. Special Resolution (Section 210)
65. An inspector was appointed under section 210 of the Act to investigate the affairs of the public company.
Mr W, human resource manager of the company wants to know whether he is entitled to any protection
against dismissal by the company, if he discloses the misdeeds during the course of examination by the
inspector.
A. Entitled to protection under section 218 of the Companies act, 2013
B. No such protection under section 218 of the Companies act,2013
66. In addition to the above question, what if company is not satisfied with the order of the Tribunal?
A. It can file appeal to the Appellate Tribunal within 30 days
B. It has to accept the order as passed.
C. None of the above
67. A group of creditors of the XYZ Company made a complaint to the Registrar stating that the Directors of the
company is involved in falsification and destruction of books of account. They demanded to seize the books
and records of the company. Can the Registrar exercise such powers?
A. Yes B. No
4.10
68. Where an investigation is ordered by the Central Government in pursuance of clause (b) of sub-section (1)
of section 210, or in pursuance of an order made by the Tribunal under section 213, the Central Government
may before appointing an inspector under subsection (3) of section 210 or clause (b) of section 213, require
the applicant to give such security ------------------as may be prescribed, as it may think fit, for payment of the
costs and expenses of the investigation and such security shall be refunded to the applicant if the investigation
results in prosecution
A. Not exceeding 20000 Rs.
B. Not less than 25000 Rs.
C. Not exceeding 25000 Rs.
D. Not less than 20000 Rs
69. The Serious Fraud Investigation Office shall be headed by a Director and consist of such number of experts
from the following fields to be appointed by the Central Government from amongst persons of ability, integrity
and experience in:
A. Corporate affairs
B. Taxation
C. Forensic audit
D. Any of the above
70. Firm, body corporate or other association shall be appointed as an inspector.

A. True B. False
71. Some creditors of S. Ltd approached you to guide them to apply to the tribunal for seeking an order for
conducting an investigation into the affairs of the company due to the fact that the business of the company is
being with intention to defraud its creditors. How a person not being a member of the company can apply to
the tribunal to seek an order for conducting an investigation into the affairs of the company?
A. Filing of an application by any other person
B. Any other person cannot file application
72. How much deposit amount is to be paid to the Central Government for the company having
annual turnover more than Rs 50 crore and upto 200 crore?
A. Rs 25000
B. Rs.10000
C. Rs. 15000
73. Who are the eligible members who can seek an order of investigation into the affairs of the company
having share capital?
A. i)100 members orii)one or more member holding 10% of total voting power,whichever is higher
B. i)10 members orii)one or more member holding 10% of total voting power, whichever is lower
C. i)100 members orii)one or more member holding 10% of total voting power, whichever is lower
74. The application to the tribunal for seeking an order of investigation into the affairs of the company need
not be supported by evidence to show that an investigation is necessary
A. True B. False
75. Investigation proceeding is going on against Mr. H who is an employee of Horse Ltd. The company wants to
terminate the employee on the grounds that investigation is going on against him under the provisions of the
Companies Act, 2013. They have filed an application to the tribunal for approval of termination. Company has
not received any reply upto 30 days from the application made. What is the course of action of the Horse Ltd.
now?
4.11
A. Wait for again 30 days extended
B. Consider as deemed approval by the Tribunal
C. Make an application to the Central Government
76. Investigation proceeding is going on against Mr. H who is an employee of Horse Ltd. The company wants to
terminate the employee on the grounds that investigation is going on against him under the provisions of the
Companies Act, 2013. They have filed an application to the tribunal for approval of termination. Company has
received reply within 30 days from the application made. Thus the Company terminated Mr. H. What is the
remedy available to Mr. H?
A. Make an application to the Central Government
B. No remedy available.
C. Appeal to appellate tribunal within 30 days
D. File complaint against Horse Limited within 30 days
77. Complaint was filed to the Tribunal against Last Ltd. company having share capital by members of the
company. The company was carrying out operations with intent to defraud its creditors. Out of total 250
members of the company 125 members filed the complaint. The total share capital of the company is
10000000 Rs. State whether the complaint made by the member were eligible to make the complaint.
A. Yes B. No
78. Where complaint is made by the eligible members to carry out investigation, the Tribunal should be
satisfied about the circumstances exist---
A. That the company was formed for fraudulent or unlawful purpose
B. That the company was carrying operations to do social service
C. That the company was doing political publicity
79. Along with eligible member’s criteria which one more criteria is needed to be fulfilled by the members?
A. The members should be educated
B. The members should attach relevant a copy of sections of the Companies Act, 2013 with the Application
C. The application should be enclosed with the details of members like name. Education, address
D. The application needs to be supported by the evidence
80. Every person who is arrested by the Director, Additional Director of Serious Fraud Investigation Office shall
within ----- be taken to a Judicial Magistrate having jurisdiction
A. 12 Hours
B. 24 Hours
C. 7 days
D. immediately
81. How much deposit amount is to be paid with the application to the Central Government for the company
having turnover upto 50 Crore Rs.?
A. Rs. 25000
B. Rs 20000
C. Rs 10000
D. Rs 15000
82. A group of Shareholders of Friends Ltd. holding 20 % voting power have filed a complaint to the Tribunal
for investigation of affairs of the company because they believe that the affairs of the company are being
carried out to defraud its creditors. The company is having share capital. The Application is supported by the
4.12
evidence.
Out of total 325 members 100 members filed the complaint. State the validity of the complaint made.
A. The application fulfils the requirement of section 213 and is therefore valid.
B. The Application does not fulfil the requirement of section 213 and is therefore invalid
83. A group of Shareholders of Friends Ltd have filed a complaint to the Tribunal for investigation of affairs of
the company because they believe that the affairs of the company are being carried out to defraud its
creditors. The company is not having share capital. The Application is supported by the evidence.
84. A group of Shareholders of Fundays Ltd have filed a complaint to the Tribunal for investigation of affairs of
the company because they believe that the affairs of the company are being carried out to defraud its
creditors. The company is not having share capital. The Application is supported by the evidence.
85. The inspector considers it necessary to investigate any person who has been the company’s managing
director only after obtaining prior approval of---
A. State Government
B. Central Government
C. The Registrar
D. The Tribunal
Answer
4.13
1. B 2. D 3. B 4. B 5. A 6. D
7. C 8. C 9. D 10. A 11. B 12. A
13. A 14. B 15. B 16. C 17. C 18. B
19. C 20. B 21. A 22. B 23. C 24. A
25. D 26. A 27. A 28. A 29. C 30. A
31. D 32. B 33. A 34. D 35. D 36. B
37. B 38. A 39. C 40. A 41. D 42. D
(Special resolution is required(Section
210))
43. B 44. B 45. A 46. B 47. D 48. A
49. A 50. A 51. B 52. A 53. A 54. D
(If the company does (If the company does
not receive any not receive any
objection of the objection of the
Tribunal within 30 Tribunal within 30 days
days the company the company may
may proceed to take proceed to take the
the proposed action). proposed action).
55. B 56. A 57. B 58. A 59. A 60. B
61. A 62. B 63. A 64. B 65. A (Company should give intimation of 66. A
proposed action to the Tribunal and if no
reply is received within 30 days proposed
action can be taken).
67. A 68. C 69. D 70. B 71. A 72. C
(Section
215)
73. C 74. B 75. B 76. C 77. A 78. A
(The members eligible to make complaint
are-
i)100 members or
ii)one or more member holding 10% of total
voting power, whichever is lower)
79. D 80. B 81. C 82. A 83. A 84. B
(In case of a company (In case of a company
having no share capital having no share capital
,1/5th of the total ,1/5th of the total number
number of members are of members are eligible to
eligible to make an make an application to the
application to the Tribunal).
Tribunal)
85. B
Chapter 5 COMPROMISE, ARRANGEMENT & AMALGAMATION
Chapter 5 : COMPROMISE, ARRANGEMENT & AMALGAMATION

5.1
1. A . Ltd and B. Ltd decided to enter into an Amalgamation to form a new company AB Ltd. Which Company
is the transferor company?
A. A Ltd. B. B. Ltd. C. A. Ltd & B. Ltd. D. AB. Ltd
2. Which Company in the above case is the transferee Company?

A. A Ltd. B. B. Ltd. C. A. Ltd & B. Ltd. D. AB. Ltd
3. A. Ltd. was amalgamated into a new Company called AB Ltd. 90% of the shareholders of A. Ltd holding 10 %
shares were also the Shareholders in AB Ltd. Was this a :
A. Amalgamation in Nature of B. Amalgamation in Nature of C. Both of these D. None of
Merger Purchase these
4. Would the answer change if the remaining 10% were a part of the new co AB Ltd instead of the90%? If so,
what would be the answer?
A. Yes it would be B. Yes, it would be C. Yes, it would be D. No change would
Amalgamation in Nature both (Merger and neither (Merger nor occur
of Merger Purchase) Purchase)
5. A. Ltd got amalgamated into AB Ltd. All the assets were transferred from A Ltd to AB Ltd. Furniture were
not transferred as they were sold and the money from sale was transferred to Shareholders of A Ltd. Was
this a:
A. Amalgamation in Nature of B. Amalgamation in C. Both of these D. None of
Merger Nature of Purchase these
6. A Ltd was amalgamated into AB Ltd. AB Ltd had held 100 % shares in AC Ltd. Both AB Ltd and AC Ltd held
10000 shares apiece in A Ltd. before the amalgamation took place. A Ltd had 100000 issued shares in total
before amalgamation and 70000 shares therein were held by B Ltd who also later became shareholder in
AB Ltd under amalgamation. But the shareholders apart from B Ltd. (and excluding AB Ltd. and AC. Ltd)
holding 10000 shares did not become shareholders in the new AB. Ltd. Assuming all other conditions for
Amalgamation in the nature of merger are fulfilled , would this be:
A. Amalgamation in Nature of B. Amalgamation in C. Both of these D. None of these
Merger Nature of
Purchase
7. If in the above case B Ltd held 75000 share instead of 70000 and the balance shareholders (excluding AB
Ltd and AC Ltd) held merely 5000 shares, would the amalgamation be :
8. A Ltd was to be amalgamated in AB Ltd. Equity Shareholders holding 90 % shareholding value in A. Ltd.
were to be shareholders in AB Ltd. as well. Their dues would be settled by AB Ltd. by issue of equity shares
in AB Ltd. and Rs. 2000/- worth of coupons per shareholder to be used at retail outlets of AB Ltd. Balance in
fractions, if any, shall be settled by Cash. Considering all other conditions for amalgamation in Nature of
Merger are settled would this be:
9. After the terms of amalgamation were finalised the Book Values of assets appeared differently in the Books
of the transferee. All other conditions were satisfied as needed for the amalgamation to be classified as
5.2
amalgamation in the nature of merger. Is this:
A. Amalgamation in Nature of B. Amalgamation in Nature of C. Both of D. None of
Merger Purchase these these
10. After the terms of amalgamation were finalised the Book Values of assets appeared differently in the Books
of the transferee as the accounting policies followed were shifted from SLM to WDV method of
Depreciation. All other conditions were satisfied as needed for the amalgamation to be classified as
amalgamation in the nature of merger. Is this:
A. Amalgamation in Nature of B. Amalgamation in Nature of C. Both of these D. None of these
Merger Purchase
11. A meeting of the creditors and any class thereof and the Company was called by the Tribunal. The terms of
the scheme of Compromise and arrangement were to be discussed thereat. The total value of the Creditors
was 93 lakhs. Out of which creditors of Rs 86 lakhs 49 thousand communicated by affidavit their
confirmation to the terms of scheme of Compromise and Arrangement. Can the tribunal dispose off the
requirement of Creditors’ meeting?
A. Yes, as the B. No, the requirement of a C. No, as the value of D. No, since 100 % of
Companies Act meeting is absolute and Creditors exceeds 50 the Creditors have
provides for the under no circumstance Lakhs, the Companies not assented to
waiving of a meeting can such a requirement Act provides the terms of C&A
if >= 90 % of the be excused with as per compulsory meeting the same cannot
Creditors agree and the Companies Act, 2013 even though a be waived off
confirm vide affidavit majority of Creditors without meeting
to the terms of C&A assent to the C&A
terms
12. The Company had total Equity Shareholding of 100 lakhs. Outstanding Debt stood at 50 Lakhs as per latest
audited BS. The notice asking for vote on the adoption of C&A terms was sent out. Mr. A holding 5 Lakhs of
the total Shareholding was against the terms and chose to object. But was dissuaded to do so as he did not
hold proper levels of shareholding. Is this treatment proper?
A. Yes, since the right B. No, since the C. Yes, since the right to D. Yes, since the objection
to object shall Shareholder can object shall be available shall be allowed only
exclusively lie with object to Shareholders having where there is >= 50% of
the creditor. The irrespective of holding >= 10 % of total shareholders of eq
Shareholders the holding in the eq shareholding only shareholding providing
cannot object equity of the assent to the same
Company
13. The Company had total Equity Shareholding of 100 lakhs. Outstanding Debt stood at 50 Lakhs as per latest
audited BS. The notice asking for vote on the adoption of C&A terms was sent out. Mr. A holding 2 Lakhs of
the total debt was against the terms and chose to object. But was dissuaded to do so as he did not hold
proper levels of debt. Is this treatment proper?
A. Yes, since the right B. No, since the C. Yes, since the right to D. Yes, since the objection
to object shall creditor can object object shall be shall be allowed only
exclusively lie with irrespective of the available to creditors where there is >= 50% of
the shareholder. holding in the debt having debt >= 5 % of creditors of company’s
The Creditors of the Company total company’s debt debt providing assent to
cannot object only the same
14. In the scheme of acquisition of shares or any class of shares in a company (transferor company) to another
company (transferee company) needs approval of _________ of the shares within the time period of
_____________ of making offer by the transferee company
A. 3/4th shareholders B. 9/10th C. 9/10th shareholders in D. 90% shareholders,
in value, 120 day shareholders, 120 value , 4 months 120 day

day
5.3
15. The C&A terms were acceptable to be fair to both the Creditors and the Company. The auditors refused
certificate objecting that the same are not in accordance with A.S u/s 133. The Tribunal :
A. Can pass order sanctioning B. Cannot pass the order C. Is bound legally to D. Refers the
C&A on its own without sanctioning the C&A on accept the auditor’s case to
auditor’s certificate its own without version of C&A such as the Court.
auditor’s certificate to meet its requirement
16. After order of the Tribunal to call upon a meeting of Creditors / Members or class thereof; the
“Supplementary Accounting Statement“ shall be required when FY of the merging Co has concluded :
A. 3 months before B. 4 months before the C. 6 months before the D. 9 months before the
the meeting to meeting to approve meeting to approve meeting to approve
approve scheme is scheme is scheme is summoned scheme is
summoned summoned summoned
17. Non-compliance with Sec 232 pertaining to the procedure of merger shall result to the
(transferor/transferee) company in:
A. Fine: 1-5 Lakhs B. Fine: 1-10 Lakhs C. Fine: 5-25 Lakhs D. Fine:1-25
Lakhs
18 Non-compliance with Sec 232 pertaining to the procedure of merger shall result to the officer of every
(transferor/transferee) Company in:
A. Imprisonment: <=1yr B. Imprisonment: C. Imprisonment: <=1yr D. Imprisonment:
Or Fine: 1-5 Lakhs <=6mt Or Fine: 1-3 Lakhs <=6mt
Or Both Or Fine: 1-5 Lakhs Or Both Or Fine: 1-3 Lakhs
Or Both Or Both
19. Which of the following is not circulated at the Meeting called by the Tribunal of the Company and it’s
Creditors/ Members and class thereof:
A. Draft of B. Valuation C. Explanatory statement on D. Statement of compliance of
proposed report of the impact of the compromise scheme as certified by
terms of the expert adopted by Directors CA/CS/Cost Accountant
scheme
20. In case when a acquirer or group of persons become majority holder b holding 90 % of issued eq share
capital: then an offer to the Company of the intention to buy the remaining equity shares shall be made at:
A. Value determined B. Face Value of share as C. Last registered transfer D. At nominal
by the registered originally issued adjusted price of an equity share of value of
valuer for inflation the Company Rs.1
21 The amount as determined above shall be disbursed within :

A. 30 days B. 60 days C. 90 days D. 120 days
22. Mr. Prakash who was a minority shareholder, was offered a price for purchase of his shares by the majority.
The same was disbursed within the stipulated time as per the Act. However, Mr. Prakash was out of town,
and returned only after 2 months of the stipulated deadline. Will he be able to receive the amount. If yes,
upto what period?
A. Yes, upto 6 months B. Yes, upto 9 months C. Yes, upto 1 year D. No, it’s time barred
23 A Director failed to issue circular to registrar for registration but issued the same to the members of
5.4
transferor Company u/s 235. What shall be penal provisions applicable to such Director?
A. Fine: 10000-1 lakh B. Fine: 25000-5 lakh C. Fine: 1-5 lakh D. Fine: 25000- 1 lakh
24. Mr. A who should’ve received shares in ABC Ltd. of his deceased kin through transmission, had failed to
receive the same. Lately KSE Ltd. made acquisition of majority of 91% of issued equity shareholding of ABC
Ltd. KSE Ltd later intimated the Company the willingness to acquire fully all shares. But Mr. A had no
indication of the same. The period of 1 year as statutorily required for maintaining the deposit expired. At 1
year after such expiry Mr. A got aware of his shareholding and decided to make offer for sale. What is the
maximum time for making such offer?
A. 3 years from date of B. 2 years from date C. 30 months from date of D. 18 months from date
majority acquisition of majority majority acquisition of majority
acquisition acquisition
25 What are the modes by which monies may be settled in case a Foreign Transferor Company amalgamates
with an Indian Transferee Company
A. Cash only B. Depository Receipts only C. Both of a & b wholly or in part D. Only through
GOI Bonds
26 How long shall the Books of the Amalgamated Company be maintained:

A. 5 years B. 8 years C. At Company’s discretion D. On CG’s permission
27 Mr. A. Director of A. Ltd. failed to file requisite submissions of A. Ltd with the registrar. Later A. Ltd. was
amalgamated and a new Co named B Ltd was started. The failure to file submissions of A Ltd came to light
in due course. Mr A was sought to be fined for his shortcomings. Mr. A in his defence says that now that A
Ltd is not in existence the submission of documents is a trivial and not with legal standing. Does the
Companies Act rule in favour of Mr. A
A. Yes, since the B. Yes, as soon as the C. No, the Companies D. No, the tacit
Amalgamated amalgamated Company Act specifically understanding is that
Company is now ceases to exist the makes the officer in the proceedings shall
struck off there is compliance proceedings default liable for be now continued
no way to proceed against it cease to exist wrongful actions against the
with penalizing This is done for saving done in a Amalgamating
violations thereof time and resource of Amalgamated Co Company and the old
Ministry officers are not liable
28 In case of compromise arrangement of the company u/s 230(1) of 2013 Act there is meeting between ----?
A. Company & its B. Company & its C. Company & its agents Co. & D. Company & its
creditors Co. & outsider Co. & its purchaser creditor Co. &
debtors sellers members
29 Arrangement u/s 230 includes ------?

A. Reorganization of share B. Appointment of new C. Making a D. Dealing with some
capital director subsidiary new project
30 Any people who have made application shall disclose to tribunal in form
A. NCLT 1 B. CAA 1 C. NCLT 6 D. CAA 4
31. Which of the following points shall be included in affidavit NCLT 6?

A. Latest financial B. Reduction of C. Valuation report in respect of D. All of the above
position of the share capital, if shares, property & assets by
Company any value
32 Creditor’s responsibility statement should be given in form

A. CAA4 B. CAA5 C. CAA1 D. CAA7
5.5
33 Scheme of corporate debt restructuring can be executed only of consented by?

A. 25% creditors M. No B. 75% creditors in value C. 75% creditors M no D. 25% creditors in value
34. Notice of meeting pursuant to order of tribunal u/s 230(3) shall be sent to all creditors, members,
debenture holders in form-------?
A. CAA 4 B. CAA C. CAA 2 D. CAA 6
35 Notice accompanied by scheme of compromise or arrangement shall disclose following actual except-------?
A. Details of order of B. Date of meeting at C. Explanatory statement D. Reduction of
tribunal which scheme was disclosing details of the share capital
approved scheme
36 Notice sent u/s 230(4) provides that voting can be done either through postal ballot or with proxies with of
receipt of such notice
A. 6 months B. 45 days C. 1 month D. 3 month
37 Objection for such compromise or arrangement be made for the person having outstanding debt
amounting to not less than--------------
A. 10% of outstanding B. 20% of outstanding debt C. 5% of outstanding D. 25% of outstanding
debt debt debt
38 The time limit to vote to the adoption of compromise or arrangement is ________ from the receipt of such
notice and can be voted it either themselves or through proxies or through _______________
A. 30 days, e- B. 1 month, postal ballot C. 30 days, postal ballot D. 1 month, e-voting
voting
39 When Tribunal is satisfied that the compromise or arrangement cannot be implemented and company is
unable to pay its debt the Tribunal will…………
A. Cancel such scheme B. Finance such C. File case against the D. Order winding up
company Company
40 When CG is satisfied that 2 or more companies should amalgamate in ---------- interest, CG shall
amalgamate those companies is provided in section of Companies Act, 2013
A. 240 B. 237 C. 233 D. 235
41 When registrar refuses registration of offer of scheme the aggrieved party file appeal to tribunal in Form----
-------- with affidavit---------
A. NCLT 2, NCLT 6 B. NCLT 9, NCLT 6 C. NCLT 7, NCLT 5 D. NCLT 1, NCLT 3
42. Liability in respect of offences committed under this act shall not anyway continue after such merger,
amalgamation, acquisition? True or false
A. False B. True C. Partly true D. Partly false
43 Majority voting u/s 235 is?

A. 75% in value B. 90% in value C. 100% in total D. 25% in value
44 Transferee Company u/s 235 shall give notice to dissenting shareholders in Form
A. CAA 4 B. CAA 14 C. CAA5 D. CAA1
5.6
45 Valuation for listed Companies for purchase of minority shareholding be done according to
A. Fair price B. Methodological C. As decided by SEBI D. Highest price during paid 12
of shares format mths
46 Majority shareholders shall deposit amount of value of shares acquired by them in separate bank A/c for
atleast------------ for payment to minority.
A. 6 months B. 10 months C. 1 year D. 3 yr
47. In the scheme of merger and amalgamation of ABC Ltd. and XYZ Ltd., the valuation of former company was
done on the basis of Book Value method while the valuation of second company was done on the basis of
average market price method. The Regional director opposed the case saying that the method of valuation
for pricing of the shares shall be same. Decide on the above whether this valid or not?
A. The tribunal shall reject the scheme on B. The valuation of shares are carried by professionals and
the ground that RD has contended on the hence unless there is some fraud or mala fide intention
valuation of the shares involved, the scheme can be approved by the Tribunal
48. Notice of proposed scheme inviting objects or suggestion from registrar or official liquidation is issued by
transferor or transferee in Form
A. CAA9 B. CAA1 C. CAA2 D. CAA5
49. The scheme of compromise or arrangement should be approved by the members or class of members or
creditors or class of creditors. What is the minimum requirement for the same
A. It shall be approved by B. It shall be approved by C. It shall be approved by more D. Both a
more than 50% more than 75% majority than 75% majority in number and b
majority in number of in value of members, class of members, class of togeth
members, class of of members, creditors or members, creditors and class er
members, creditors class of creditors of creditors
and class of creditors
50. For division of classes or considering the class of members or creditors, will equity and preference
shareholder stands under the same class or different
A. Equity and preference shareholder shall be B. They both belong under the same class as
considered in different class they are a part of share capital together
51. Whether the unsecured creditors holding decree but not executed and other unsecured creditors stand
under different class for the purpose of meeting to be held under compromise and arrangement
A. Obtaining decrees or filling suits by an B. Unsecured creditor holding decree and unsecured
unsecured creditor does not make him a creditor have different rights shall be treated in
secured creditor and considered as single different classes for Compromise and arrangement
class
52. Comment on the following whether it is true or false: Where a decree has already been executed, the
unsecured creditors will not be clubbed with those who are yet to obtain decrees
A. As the decree has been executed, the rights and B. Even though the decree has been executed,
liabilities are different and hence the statement is the rights and liabilities remains same hence
true the statement is false
53. Which of the following concept is the result of dispute

A. Arrangement B. Merger C. Compromise D. Amalgamation
54. Who can make an application to the NCLT under section 230
A. Member or any B. Creditors or any class C. Company itself D. All of the above
class of members of creditors
5.7
55. The members an creditors have agreed to the scheme of compromise and arrangement in dual majority as
per the Companies Act, 2013. But the Tribunal has not sanctioned the scheme of compromise and
arrangement. Comment on the following whether the scheme shall be binding on company, all creditors,
members or class thereof?
A. The scheme shall be B. the scheme shall be binding C. the scheme shall be binding D. None
binding on company, all on company, all creditors, on company, all creditors, of the
creditors, members or members or class thereof members or class thereof above
class thereof only when when sanctioned by when approved by
approved by requisite tribunal but not necessarily members, creditors, class
majority in number and approved by members, thereof and sanctioned by
value creditors, or class thereof Tribunal
56. The tribunal may not call the meeting or creditors or class of creditors in the following situations
A. When the B. When the creditors C. When the creditors D. When the creditors or
creditors or class or class of creditor or class of creditor class of creditor of 75% in
of creditor majority in number of 90% in value value have given their
majority in and majority in have given their consent by way of
number have value have given consent by way of affidavit
given their their consent in affidavit
consent in writing writing
57. In the famous case of Sadanand Varde Vs State of Maharashtra, what all has been held:
1. Provisions relating to compromise, arrangement and amalgamation are a complete code
2. A scheme of compromise or arrangement is intended to be a single window clearance system
3. If a scheme of C&A includes increasing share capital, it can be done as a part of scheme without
complying with the specific provisions of Companies Act
4. If a scheme of C&A includes reduction of share capital, it can be done as a part of scheme but with
complying with the specific provisions of Companies Act
A. 1,3 &4 B. 1&4 C. 1,2 &3 D. All points 1-4
58. For buy-back of securities which is part of scheme of compromise and arrangement, is it necessary to
comply with Section 68 of Companies Act, 2013 separately
A. As sec 230 is a complete code, it Is not B. The tribunal shall not sanction the scheme of C&A
necessary to comply with sec 68 of involving buyback of securities unless there is
companies act, 2013 compliance of Section 68
59. Satyam Ventures Limited, a listed company filed a petition to the tribunal for the scheme of Compromise
and Arrangement under Section 230. The Scheme included a takeover offer.
The Tribunal approved the scheme of C&A but there was no compliance followed by the Listed company as
per the SEBI (SAST) Regulations, 2011. Comment on the following case
A. The Tribunal has sanctioned the scheme and B. Compromise or Arrangement may include takeover
hence binding on company, members, offer but for listed companies, takeover offer shall be
creditors or class therof and no further according to SEBI (SAST) Regulations, 2011 and
compliance is necessary compliance needs to be done according to
60. Can the Tribunal intervene by supervising or modifying it for its implementation after sanctioning the
scheme of Compromise & Arrangement
A. No the Tribunal B. It is the duty of officers C. Both a and b D. Yes the Tribunal has the
cannot interfere appointed, if any or power to supervise or give
in between the directors to follow the directions or make
5.8
once the scheme orders of Tribunal and modification to make proper
is being make the scheme implementation of the
sanctioned implement properly scheme
61. For amalgamation in the nature of merger, the companies need to follow which of the following conditions:
1. All the assets and liabilities of the transferor company become after amalgamation, the assets and
liabilities of the transferee company
2. Shareholders holding not less than 90% of the face value of the equity shares of the transferor
company become either equity or preference shareholders of the transferee company by virtue of
amalgamation
3. The business of transferor company is intended to be carried on after the amalgamation by the
transferee company
The consideration for the amalgamation receivable by those equity shareholders of the transferor company
who agree to become equity shareholders can also be discharged partly in cash and partly by equity
shareholder
A. 1,2 &4 B. 1,3&4 C. 1&3 D. 2&4
62. The time limit within which the representation if any, of Sectoral regulators shall be made within
_________ from the date of receipt of Notice of the meeting to be called, held and conducted by the
Tribunal
63. Under the scheme of compromise or arrangement, the undertaking, property and liabilities of ABC
Enterprises Pvt. Ltd. and PQR Industries Pvt. Ltd. were transferred to new company XYZ Industries Pvt. Ltd.,
formed under the Companies Act, 2013. Comment which type of merger or amalgamation is it:
A. Merger by B. Amalgamation in the C. Amalgamation in the nature D. Merger by
absorption nature of merger of purchase formation of a new
company
64. the transferor company or companies get wound up in the scheme of amalgamation and merger. what is
this called?
A. Dissolution without B. Compulsory winding up C. Dissolution with NCLT D. Dissolution
winding up orders with high
court order
65. Bajaj Limited was demerged to Bajaj Fiserv Limited and Bajaj Limited. What type of demerger is this ?
A. Total demerger B. Partial demerger C. Internal reconstruction D. Demerger in the nature of
purchase
66. In the scheme of acquisition of shares or any class of shares in a company (transferor company) to another
company (transferee company) needs approval of _________ of the shares within the time period of
_____________ of making offer by the transferee company
A. 3/4th shareholders in B. 9/10th shareholders, C. 9/10th shareholders D. 90% shareholders,
value, 120 day 120 day in value , 4 months 120 day
67. What is the role of transferor company in the event of purchase of minority shareholders by acquirer,
person acting in concert with acquirer or group of persons
A. Delivering agent for minority B. Transfer agent C. Pricing D. Value of its own
shares agent shares
68. The books and papers of amalgamated or transferor company shall be preserved for_________
A. 10 yrs B. Uptil permission to dispose off by CG C. Permanently D. 8 yrs
69. A meeting of members of DEF Limited was convened under the orders of Tribunal. The meeting was
5.9
attended by 600 members holding 18,00,000 shares. 240 members holding 14,00,000 shares in the
aggregate voted for the scheme. 280 members holding 4,00,000 shares in the aggregate voted against the
scheme. 80 members holding 1,00,000 shares abstained from voting. Examine whether the scheme was
approved by the requisite majority
A. Yes the scheme is approved by requisite B. No the scheme is not approved by the requisite majority
majority
70. ABC Limited is a wholly owned subsidiary of VWX limited. The company made an application of merger
under section 232 and the tribunal rejected the application with the view that it should file an application
under section 233. Comment on Tribunals Order of rejection of application
A. The Tribunals rejection reason was not correct and the B. The Tribunal has all right and power to
application cannot be rejected on this grounds reject the application on any grounds
71. For cross border mergers and amalgamation of foreign company with Indian company, the Company
Secretary after complying with the Companies Act Provisions came with the conclusion to issue equity
shares with differential rights to the shareholders of merging company. Advice on the decision of Company
Secretary
A. The company can issues B. The company cannot issue C. No, the consideration D. None of
any type of securities and anything of its choice and can be only cash, the above
hence can issue equity will depend on the Depository receipts or
shares with differential decision of Tribunal and party cash and
rights RBI depository rights
72. For scheme to be approved under section 233, the scheme should be approved by members or class of
members at a ___________________ holding at least ____________ of the total number of shares
A. A meeting called by B. AGM 90% C. A meeting called by Tribunal, D. General meeting
Tribunal, 75% 90% 90%
73. For scheme to be approved under section 233, the scheme should be approved by majority representing
____________ of the creditors or class of creditors
A. 3/4 B. 9/10 C. 75% in value D. 9/10 in value
74 Section 233 refers to merger of which of the following:

1. Between 1 small company and not a small company on other side
2. Between holding and its wholly owned subsidiary company
Between holding and its subsidiary company where it holds 99.9 % shareholding and only 0.1% shares are
held as per section 187
A. Only 2 B. 1&2 C. 2&3 D. All of above
75. Whether the liability of offences committed by officer in default of transferor company under section 240
prior to the merger or amalgamation or acquisition be continued even after such merger or amalgamation
or application shall be dismissed on the grounds that transferor company is no more in existence
A. the liability of offences shall B. The Tribunal shall C. The Existence of company is D. None
continue even after such direct whether they dissolved and hence the of the
merger, amalgamation or shall continue or application or liability of such above
acquisition dismissed offences shall be nullified
76. Comment on the following: “The object clause of memorandum of association shall contain a clause of
approving the amalgamation or merger or acquisition”
A. To amalgamate with another company is B. Memorandum of Association shall contain provisions of
5.10
the inherent power of the company and merger and amalgamation, otherwise the act would be
not an object of company and hence ultravires the company and hence statement is true
above statement is not valid.
Answer
5.11
1. C 2. D 3. B 4. A 5. B 6. B
7. A 8. B 9. B 10. A 11. A 12. C
13. C 14. C 15. B 16. C 17. D 18. C
19. D 20. A 21. B 22. C 23. B 24. A
25. C 26. D 27. C 28. D 29. A 30. C
31. D 32. C 33. B 34. C 35. D 36. C
37. C 38. B 39. D 40. B 41. B 42. A
43. B 44. B 45. C 46. C 47. B 48. A
49. D 50. A 51. A 52. A 53. C 54. D
55. C 56. C 57. C 58. B 59. B 60. D
61. C 62. B 63. D 64. A 65. B 66. C
67. B 68. B 69. B 70. A 71. C 72. D
73. D 74. C 75. A 76. A
Chapter 6 OPPRESSION & MISMANAGEMENT
Chapter 6 : OPPRESSION & MISMANAGEMENT

6.1
1. The rule of “Majority shall prevail” was inferred from which famous case law
A. Reylands v\s Fletcher B. Mohinibibis v\s Dharmodas C. Balfour v\s Balfour D. Foss v\s Horbottle
Ghose
2. The company once proposed to appoint a Criminal for abducting shareholders asking for dividend.75%
directors agreed to this rest 25% disagreed to the same. Whose vote shall prevail?
A. Majority shall prevail B. Minority shall prevail C. Prior permission of chairman D. None
3. Company once proposes to borrow Rs.10 cr from Bank wherein MOA&AOA permitted borrowing only uptil
Rs. 5 crore.70% directors approved to such vote rest 30% could not approve. Whose voting shall prevail?
A. Majority shall prevail B. Minority shall C. Permission of D. Permission of MD
prevail chairperson
4. In which of the following cases majority rule does not prevail?

A. Where the act is ultra B. where the act is C. where the act infringes D. all of the above
vires the company illegal to the company personal rights
5. In the late 1913 act, the only remedy available to oppressed minority was
A. change in management B. removal of majority shareholder C. Winding up petition D. None
6. The term oppression is definition by Lord Cooper in which case

A. Foss v\s Horbottle B. Reylands v\s Fletcher C. Elder v\s Elder & Watson D. Edwards v\s Halliwell
7. Which of the following acts can amount to oppression?

A. Not calling general B. depriving member of C. Refusal to register D. All of the above
meeting the right to dividend’ transmission under will
8. Which of the following acts are not oppressive?

A. an unwise, inefficient or B. lack of details in notice of C. non-maintenance D. all of the above.
careless conduct meeting of records
9. In case company having share capital how many members can apply to court?
A. 100 members or B. 100 members or C. 50 members or 1\8th D. 50 members or 1\8th of
1\10th of total 1\10th of total of total whichever is total whichever is higher
whichever is higher whichever is lower lower
10. Which of the following member cannot apply for relief

A. a holder of share B. a holder of letter of allotment C. a member whose calls D. all of the above
warrant of partly paid have not been paid
11. Which of the following member cannot apply for relief

A. Company incurring B. removal of C. arrangement with creditors D. violation of memorandum
losses director in company’s bonafide
12. All of the following are acts of mismanagement except

A. where there is serious B. continuation in C. company doomed to D. company is
infighting between directors office after expiry trade unprofitably incurring losses
13. Which of the following held to not to amount to mismanagement

6.2 A. merely because company is B. arrangement with creditors in C. removal of D. all of the above
making losses company’s bonafide interest directors
14. On what grounds u/s 245 pertaining to Class Action can the Tribunal reject an application with it:
A. When the application is found to be B. When the tribunal does not want to proceed further with
frivolous or vexatious the application and no reason has been recorded
15. On receipt of application by NCLT u\s 241, the tribunal can frame its opinion on which points :
A. that the company’s affairs have been B. that to wind up the company would C. Both of
conducted in the manner prejudicial to any unfairly prejudice such members or the above
member members
16. The order passed by tribunal shall provide for

A. regulation of conduct of affairs B. restriction on transfer or C. removal of managing director
allotment of shares
D. All Of Above
17. When the order involves reduction of share capital or alteration of MOA the provisions of act shall apply
as may direct
A. CG B. Tribunal C. BOD D. Chairman
18. To whom shall section 245 not apply

A. A family owned B. A public company having C. Banking D. Applicable to all type
private company less than 100 members company of companies
19. Rule of majority was established in which case law:

A. Elder v Elder & B. Foss v. Harbottle C. Shanti Prasad Jain v. D. Thomas Veddon V. J. v
Watson Ltd. Kalinga Tubes Kuttanad Robber Co. Ltd.
20. Application for withdrawal under 241 shall be filed in form as prescribed by
A. ROC B. NCLT C. MCA D. Companies act
21. If the members are filing application by way of class action u\s 245 application shall not be less than
A. 1\8th of total number B. 1\10th of total number C. 1\5th of total number D. 1\4th of total
22. The number of depositors who may file application u\s 245 shall not be less than
A. 100 or 10% B. 200 or 10% C. 50 or 20% whichever D. 150 or 10% whichever is
whichever is less whichever is higher is higher less
23. Power to tribunal for passing order is u\s

A. 240 B. 242 C. 246 D. 245
24. In which of the following cases tribunal shall take prior permission of the party concerned before setting
aside or terminating the order
A. removal of B. recovery of undue gains C. manner in which MD or manager may D. all of
managing director or made by any managing be appointed subsequent to an order the above
any director director or director during removing the existing MD or manager
his appointment or manager of the company.
25. Application to tribunal can be filed if it’s likely that affair of the company will be conducted in a manner
prejudicial to
A. its interest B. its members C. Any of above.
6.3
26. Relief shall be given by tribunal for any affairs conducted in manner following except:
A. prejudicial to public B. prejudicial o oppressive C. prejudicial to interest D. Acted in interest
interest to any member of co of company
27. The company contravenes section 242(5)i.e. alteration to MOA \AOA shall be punished with
A. Fine 500000 - B. Fine 200000- C. Fine 100000- D. Fine 25000-100000
1000000 500000 300000
28. Contravention of section 245 by company shall be penalized

A. 200000-700000 B. 500000-1000000 C. 500000-2500000 D. 100000-300000
29. Class action can be initiated u\s

A. 245 B. 240 C. 242 D. 241
30. Provision of Compromise and Mismanagement dealing with Companies act 1956 was section
A. 336 B.337 C.332 D.335
31. ABC Private Limited has two group of shareholders, one foreign shareholders holding 60% and one Indian
shareholders holding 40% of the shares of the company. Both the groups have equal managerial powers.
The relationship between two groups could not last longer and disputes arose due to deadlock in
management. The Indian Group complained to NCLT for action against the foreign group for oppression.
Whether the case amounts to oppression or winding up under the Act?
A. Both the groups being equally strong B. Foreign group C. The above case is D. Both (a) &
one is unable to oppress the another, can be said to be not tenable under (c).
hence there is deadlock in oppressive over the provisions of
management but not oppression the Indian group oppression
32. The shareholders holding 15% of the voting rights of ABC Private Limited filed an application to NCLT
alleging various acts of fraud and mismanagement done by Mr. Roy, the ex-managing Director of the
company. The acts of mismanagement were done 8 years ago and Mr. Roy was removed after the incident
came to light. Whether the case for mismanagement done in past be filed now?
A. Yes the case can be filed B. Yes the case can C. No, the Case cannot be D. No, the Case cannot
to NCLT even for an act be filed but not referred to NCLT for an act be filed to both
of mismanagement in the to NCLT but to of mismanagement in the NCLT and CLB
past CLB. past.
33. X and Y majority shareholders of the company opposed the special resolution for increase in capital since
they did not have enough funds and feared that Z, the chairman of the company would corner the shares
and become predominant in the company. They proposed for dilution of control of the company by
issuing shares to persons who are shareholders in the company. Z filed a petition complaining of
oppression saying that X and Y wanted to throw him out to bring change in management. What should be
the logical conclusion of the petition?
A. Seeking change B. In terms of the provisions of the act, it is C. Petition filed by Z is D. all of
of permissible for a company to offer shares tenable if it is proved the
management to persons who are not the existing that further issue of non- above
does not, shareholders by passing a special shareholders was to
prima facie resolution. This requirement has been benefit one group to the
tantamount to complied with in the present case; there is detriment of the other.
oppression no illegality in the action of the company.
6.4 34. Does the following acts by the board amount to oppression?
(i) Denial of inspection of books of accounts.
(ii) Not holding board meeting in timely manner.
(iii) Non declaration of dividend
(iv) Company is incurring looses for last 3 years
A. (i), (ii), (iii) - Amount B. (i), (ii)- amount to C. iii), (iv)- Amount to d. None of the above is
to oppression oppression oppression oppression
35. XYZ Ltd. is a company having 8 shareholders. Can members holding less that 1/10 of the share capital of
the company apply to NCLT for relief against oppression and mismanagement?
A. Yes, if a genuine application to B. No C. Yes minority shares D. None of the above.
NCLT is made for the same and have right to file a
approved by NCLT petition to NCLT
36. In the famous case of McDonalds (McDonalds India Private Limited) and Connaught Plaza Restaurants
Private limited, whether an arbitration Clause in the Joint Venture agreement would deprive NCLT to
establish its jurisdiction to hear disputes regarding oppression and mismanagement?
A. Private agreements B. Since JVA is incorporated in the AOA of the company and thus any malafide
like JVA lie beyond the actions or an act of oppression would be considered as oppression against the
scope of this Section shareholders and against the interest of the company. Thus NCLT has the right to
pass the order even though the dispute was arising out of private agreement
C. Both (a) & (b) D. None of (a) & (b).
37. PQR Private Ltd had failed to allot shares against the application money raised by them for issue of
shares. The names of the persons who had paid money for such shares are not in the register of members
of the company. Can this stop the persons to file an application for oppression and mismanagement
against the company?
A. The persons are assumed to B. Share Certificates being C. The names of such D. None of
be shareholders even though a conclusive evidence persons is not in the
their names are not in the of their membership, the register of Above
register of members since since they do not members and
they have paid application possess the share hence they cannot
money for shares and are certificates they are not file a petition
entitled to allotment of shares the members of the against the
by the company. Hence they company and hence not company since
can file a petition against entitled to file a they are not the
oppression and petition against the members of the
mismanagement company company
38. Ajay Private Limited is a holding company of Vijay Private Limited pursuant to transfer of shares. Vijay
Private Limited rejected to enter the name of Ajay Private Limited in the register of members on
unjustifiable grounds and without sufficient cause. Whether the petition filed by the holding company Ajay
Private Limited will be maintainable under this section?
A. No, since Ajay Private B. Yes, even though Ajay Private Limited’s name is not in the register of
Limited’s name is not in the Members the petition is maintainable since the NCLT is a court of
register of members equity and the matter is to be considered on equitable grounds.
39. Shareholders of Lucky Private Limited had entered into transactions which could not be termed as fair
dealing and were against the interest of the company. The minority shareholders lacked confidence in the
transactions entered by majority and thus filed a petition for oppression. What is a valid ground for
petition?
A. Lack of Confidence B. Must involve lack of probity C. There must be continuous D. All the
of the minority in or fair dealing to members in acts on the part of the above
majority does not the matter of proprietary majority shareholders,
prove oppression rights as a shareholder. Continuing upto the date of 6.5
petition.
40. What are the rights of the minority shareholders under the act
A. Class Action Suits B. Application for C. Appointment of Small D. All of above
NCLT Shareholders
41. Does NCLT have powers to grant relief even if the complainant does not make out a case for oppression
and mismanagement? The Case of Needle Industries is an example of the powers of the NCLT (Formerly
CLB).
A. Yes the NCLT can grant a relief even if the complaint does not B. No NCLT cannot provide relief in any
amount of oppression since the NCLT is not powerless to do other cases
substantial justice between the parties.
42. POQ Limited allotted shares without proper application and notice of board meeting. The majority
shareholders claimed that this was done to reduce the majority shareholders to minority. Petition was
filed by majority shareholders for oppression. What should be the ruling in such case?
A. Since No money was received by POQ Limited from the B. Further C. Further issue of D. Both
allottees and the respondents did not furnish any details issue of shares (a)
relating to the allotment made and no application for shares amounts to &
the allotment was made. It is to be held that no shares does not oppression if (c).
could be allotted without a formal application. No amount to the proper
shares could be allotted as the petitioners constitute oppression procedure has
majority in the board. The allotment of shares was not been
accordingly to be cancelled complied with.
43. A Company appointed Mr. Jay as Managing Director of the company without sending proper notice of
AGM. Petitioner claimed that such appointment is Null and Void. Is It Correct?
A. Yes, if there is no proof of sending B. No, if the it is C. No, if it held that D. Both
notice of AGM and filing of requisite proved that the majority shareholders (a) &
forms for appointment of managing notice for AGM was had proposed and (c)
director, the appointment shall be sent and requisite seconded the agenda
null and void. forms are filed in the AGM.
44. What were the takeaways from the recent petition of minority shareholders Cyrus Investments Private
Limited and Sterling Investments Corporation Limited of TATA Sons Limited alleging acts of oppression
and mismanagement in the conduct of affairs of TATA sons Limited?
A. Sections B. To invoke the jurisdiction of the Tribunal under section 241, the C. Mere D.
241 and company must be a going concern, there must be an action in unfairn Bot
242 are for progress and the action should be oppressive or prejudicial to ess of h
preventive any of the members complaining or the company. If these the (a)
reliefs (not elements of section 241 are complied with, the Tribunal will action &
declaratory then ascertain whether the proved facts would justify the complai (b).
) to arrest winding-up of the company on just and equitable grounds. ned of
the malafid Lastly the Tribunal must arrive at the finding that the winding- is
e ongoing up of the company on just and equitable ground would unfairly enough
in a prejudice the member. Only once this entire process is to
company achieved, the Tribunal can then pass relief under section 241 invoke
for oppression and / or mismanagement. section
241
45. XYZ Private Limited has been experiencing liquidity crisis which has majorly hit its operating cycle. The
6.6 company is unable to pay its debt obligations. In order to protect the interest of creditors an arrangement
was made to issue shares in lieu of their amount due and to appoint them as directors. Does it amount to
mismanagement or oppression?
A. No, since the B. Yes it results in dilution C. Yes since the creditors would be D. Both (b)
arrangement was in of control of the existing appointed as directors they will & (c).
bona-fide interest of shareholders and hence have the power to take decisions
the company against their interest which works in their favour
46. Jack Private Limited appointed new directors and removed the existing directors from the board. Can it be
challenged in a petition under this section
A. Yes if the B. No, change in the board does not C. Yes such change has D. Both
directors amount to misappropriation or prejudicially affected the (a) &
were oppression. It is only when the new interest of the company or the (b).
removed directors misconduct the affairs of the general public interest.
without a company than it can be said that they
justified had been working to the prejudice of
reason the company
46. If a company has not declared dividend since last 8 years and is building up reserves for further
investments and growth. Does this act of the company amount to Oppression or mismanagement
A. No, Non declaration of dividend B. Yes, Non declaration of C. Yes, if the shares D. None of above.
does not amount to Dividend results in loss are devalued.
misappropriation and to the shareholders and
oppression is against their interest.
47. . Whey Private Limited was incurring losses since its incorporation and has not been able to meet the
expectation of the shareholders. The shareholders feel that the operations of the company are
mismanaged by the authority and have filed a petition under this section. Is the allegation valid?
A. Yes since shareholders have B. No merely because company C. Yes if it is proved D. Both (b)
invested in the company with incurs losses it cannot be said that the losses have & (c).
an expectation to earn to be mismanaged by the occurred due to
returns. authority. mismanagement
49. The Board of directors of Say Limited have indulged in the following acts. Whether the following acts can
be said to be mismanagement :
(i) Not filing documents with Registrar of Companies
(ii) Sale of assets at glaringly low price.
(iii) Violations of provisions of law and of memorandum or articles of association.
(iv) Application of company finances.
A. i), (ii) & (iv) are B. (ii), (iii) & (iv) are C. (i), (ii) & (iii) are D. All are mismanagement
mismanagement mismanagement mismanagement
50. Removal of Mr. Alok from the post of director of Jai Private Limited without giving sufficient reasons have
made Mr. Alok to file a petition under this section for oppression. Can Mr. Alok do so?
A. Yes, Mr. Alok can B. Yes, Mr. Alok can file a petition since he feels C. No, Mr. Alok cannot D. Both
file a petition that it is prejudicial to the interest of file a petition under (a)
since his removal companies as other directors have a strategy this section since he is &
is unjustified. to take undue advantage which Mr. Alok had not a (b).
opposed to. shareholder/member
51. In Pork Private Limited, the managing director was removed pursuant to an order passed by the tribunal
under section 242 in the year 2015. Can the person be appointed as manager in the year 2019?
A. Yes, if the person B. No, he cannot be C.. Yes, he can be appointed after a period of D. Both (a)
takes leave from the appointed 5 years has elapsed from the date of & (c).
tribunal termination of such agreement 6.7
52. Taking the above case, What will be consequences if he continues to act as managing director even after
termination of the agreement by the tribunal
A. Imprisonment B. Fine of Rs 1,00,000 C. Imprisonment of 6 D. Imprisonment up to 6 months
upto 1 year months and Fine of or fine of Rs 5,00,000 or both
Rs 5,00,000
53. What are the consequences if a group of members have formed an alliance to stop the company from
entering into an agreement which they are not interested and hence have made frivolous objections and filed
an application to the tribunal to abstain the company from entering into the agreement?
A. The Tribunal may B. The tribunal after investigation with C. The tribunal D. The tribunal
accept the application reasons to be recorded in writing will reject will not
and pass an order reject the application and pass an the accept the
abstaining the order to the applicant to pay a cost to application application
company from entering the opposite party not exceeding of Rs with reasons
into the agreement 1,00,000 in recording
54. Can a Tribunal consolidate similar applications prevalent in any jurisdiction and appoint a lead applicant in
order to save its time and dispose off the proceedings faster
A. Yes but only of same jurisdiction B. No C. May be D. Yes
55. Members and depositors have filed class action suits for the same cause of action differently. Will both the
application be accepted
A. No, only a single class action suit is allowed for a B. Yes different class action suit can be filed by
same cause of action. different interest groups
56. When can a member make a complain to the Tribunal under Section 241:
A. The affairs of the B. affairs of the company have C. The affairs of the D. All of the
company have been been or are being company have been or above
or are being conducted in the manner are being conducted in
conducted in the prejudicial or oppressive to the manner prejudicial
manner prejudicial such member or any other to interest of the
to public interest member company
57. When can a Central Government make a complain to the Tribunal under Section 241
A. The affairs of the B. The affairs of the C. The affairs of the D. The affairs of the
company have been company have been company have been or company have been or
or are being or are being are being conducted in are being conducted in
conducted in the conducted in the the manner prejudicial the manner prejudicial
manner prejudicial manner prejudicial to interest of the to interest of the
to public interest to public interest company company
58. The Tribunal gave an order of terminating of agreement under Section 242 to ABC Limited. Advice the
company what will be the consequence on the directors, managing director or manager due to the order of
Tribunal with respect to their role In the company
A. The MD, Manager B. The MD, Manager and C. The Managing director, D. No the director,
and other directors other directors shall other director or MD and manager
if found guilty of vacate their office, if manager for the period are not
any fraud and found that they had of 5 years without the responsible for
misfeasance shall the knowledge of such leave of the tribunal, any of the act and
6.8 be penalized with act and fraud on their shall not be appointed or won’t affect their
Rs. 1,00,000 each part causing act as MD, other roles in the
oppression and directors or manager of company unless
mismanagement the company Tribunal so
specified
59. The 20 members out of 200 members of ABC Ltd. a company having share capital has authorized Mr. A to
make an application to the Tribunal under section 241.Where this 20 members hold 5% of the authorised
share capital and 9% of issued share capital. Mr. A made an application on to Tribunal. Is the application of Mr.
A valid according to Companies Act
A. Yes application by Mr. A, B. No the criteria of minimum C. Only Central Government
authorized by other members is number of members making can make an application and
valid under the act and also an application is not hence the application by
requirement of minimum number complied with and hence Mr. A is not valid
is satisfied application is not valid
60. MJK Private Limited has two group of shareholders, one foreign shareholders holding 55% and one Indian
shareholders holding 45% of the shares of the company. The AOA provides for the terms of mutual
understandings of both the groups. Both the groups have equal managerial powers. The relationship between
two groups could not last longer and disputes arose leading to deadlock in management. The Indian Group
complained to NCLT for action against the foreign group for oppression. Whether the case amounts to
oppression or winding up under the act
A. Both the groups being equally strong B.Foreign group can be C. The above case is D. Both (a)
one is unable to oppress the another, said to be oppressive not tenable under & (c).
hence there is deadlock in management over the Indian group. the provisions of
but not oppression oppression.
61. The members of XYZ Limited filed the case of oppression against the directors saying that despite sufficient
reserves and profits they hadn’t declared dividend to the members. Advice whether the allegation filled falls
under the category of oppression?
a) Yes, non-payment of dividend is the b) Failure to declare the dividend does not amount to
matter of oppression oppression
62. Mr. X a minority shareholder and wanted to file an application for oppression and mismanagement but
before he could file an application he died. Advice whether the legal heir of Mr. X can file an application to the
Tribunal?
a) Yes the application can be filed by legal heir of the b) No the application can be filed only by the
deceased who stands under the criteria of minority victim i.e. the minority holder
63. In terms of prevention of oppression and mismanagement, what does issue share capital mean?
a) Issued share capital includes only equity b) Issued share capital is that part of share capital only
share capital which is fully paid up
c) Issued share capital includes both equity and preference share capital d) None of the above
64. Can the decision of BOD for writing off bad debts be considered as the matter of mismanagement and
oppression and does it require a judicial interference?
a) The decision of BOD is a commercial b) The writing off of bad debts is the decision of members
decision and does not require any judicial and BOD does not have any power to do so, and can file a
interference petition
65. The Board of directors of Relay Industries Private Limited sold the asset of the company at a price lower than
the market price and not according to the required provision. Advice whether this act of BOD would attract
mismanagement or not?
a) Yes this act of selling the asset amount to b) This act amount to oppression of the interest of
6.9
mismanagement member
c) The act is a commercial decision and does d) None of the above
not mean oppression or mismanagement
66. When would the act of further issues of shares amount to be oppression and needs to be prevented?
a) When the issues of shares was not done b) When the issue benefited only the directors and small
for the benefit of the company group of people
c) The only purpose for further issue of shares was to convert the majority d) All of the above
into minority
67. What penalty is levy if the company does not abide by the orders of Tribunal?
a) Company In default: Fine: 5 to 25 Lac b) Company In default: Fine 1 lac Rs but which may extend
and to Officer in default: to 5 Lac Rs and officer in default: imprisonment which may
imprisonment upto 3 years and fine extend to 1 years and fine 25000 Rs but may extend to
25000 to 1 Lac 50000 Rs
c) Also penalties under section 337 to 341 shall also apply d) a and c
68. Following is not the exception to the general rule of “one who holds the majority rule the company”
a) Ultravires or illegal acts b) Transactions requiring special majorities
c) The fraud on the minority exception d) Payment of Interim Dividend
69. What are the circumstances under which the Central Government make an application to the Tribunal for its
order under section 241
a) Can suo motu make an application if the b) Can suo motu make an application if the affairs of the
affairs of the company are conducted in company are conducted in the manner prejudicial to the
the matter prejudicial to the stakeholders members
c) Can suo motu make an application if the affairs of the company are d) All of the above
conducted in the matter prejudicial to the public interest
70. Examine the following: after the petition being filed to the Tribunal u/s 241, some of the petitioners have
withdrawn their consent and the criterion of minimum members was breached. What will be the result of such
fall in requisite number of applicants on the petition filed to the tribunal
a) The Tribunal can b) The validity of the petition is judged on the facts as they were at the time of
dispose off the petition presentation of petition, and hence the petition would proceed further
c) Again a fresh petition with the minimum number of d) Both c and b (order would be first c and
members need to be filled then b)
71. Which of the following is an act of oppression & mismanagement

a) Continuous losses to the company inspite b) Payment of no dividend or low dividend
of the efforts by the members and directors
c) Payment of salary to the directors and not d) Sale of asset for the benefits of directors themselves
declaring the dividend
72. Within how many days should the certified copy of order of Tribunal be filled with Registrar
a) 30 days b) As per specified in order
c) 60 days d) 90 days
73. Comment on the following: Can a single act of renting out the premises without the knowledge of members
be termed as oppression or mismanagement?
a) Single act without knowledge of members b) A single act cannot be termed as oppression
6.10 is inherently oppressive
74. The tribunal by order terminated the agreement of PKL Enterprises Pvt. Ltd. with ABC Ltd. ABC Ltd, and then
sued the PKL Enterprises Pvt. Ltd for damages caused due to termination of agreement. Advice on such petition
filled by other party for damages
a) The company will have to pay basic b) As the contract was terminated on orders of Tribunal, no
damages caused to the other party on claims or damages can be claimed by other party and
termination of the agreement hence the petition is not maintainable
75. Mr. A and Mr. B, members of company ABC Developers Private Limited filed two different applications under
section 245 to the Tribunal requesting suitable action against the auditor of the company for the improper and
misleading statements in audit report regarding the company. Advice the company on the following application
of class action
a) Both the application shall be filed and b) Two class action applications for the same cause of
proceeded by making it a joint application action shall not be allowed;
c) Both the application shall be rejected and filled with the appellate d) None of the above
tribunal
76. Who shall bear the cost and expenses connected with the class application:
a) Applicant b) Company or person responsible for oppressive act
c) Cost and expenses shall be borne by all the d) Partly by both the parties
members or applicants collectively
Answers 6.11
1. d 2. b 3. b 4. d 5. c 6. c
7. d 8. d 9. b 10. d 11. d 12. d
13. d 14. a 15. c 16. d 17. b 18. c
19. b 20. b 21. c 22. a 23. b 24. d
25. c 26. d 27. d 28. c 29. a 30. b
31. c 32. d 33. d 34. d 35. a 36. b
37. a 38. b 39. d 40. d 41. a 42. d
43. a 44. d 45. a 46. c 47. a 48. d
49. c 50. c 51. d 52. d 53. b 54. c
55. a 56. d 57. a 58. c 59. a 60. c
61. b 62. a 63. c 64. a 65. a 66. d
67. d 68. d 69. c 70. b 71. d
72. a 73. b 74. b 75. b 76. b
Chapter 7 REGISTERED VALUER
Chapter 7 : REGISTERED VALUER

1. Who shall carry out the valuation of any property, stocks, shares, debentures, securities or goodwill or any
other assets or net worth of a company or its liabilities?
a. CFO b. Liquidator c. Registered Valuer d. None of the above 7.1
2. Who shall appoint the Registered Valuer of the Company?

a. Board of b. Audit Committee c. Nomination and d. Audit Committee, in their
Directors Remuneration committee absence by Board of Directors
3. What factors shall a Registered Valuer consider while conducting valuation of assets or liabilities of the
Company?
a. Make an b. exercise due c. not undertake valuation of any assets in which he d. All of the
impartial diligence has or will have a direct or indirect interest any above
valuation time during or after the valuation of assets.
4. Mr. X sold a building to PQR Ltd. in Jan 2016. In the year 2018, PQR Ltd. seeks to appoint Mr. Y (Brother of
Mr. X) as its Registered Valuer. Will the appointment be considered valid?
a. No, as 3 years have not b. No, as 5 years have not c. No, as 8 years have not d. None of the
lapsed from the date lapsed from the date lapsed from the date above
Mr. X sold the asset. Mr. X sold the asset. Mr. X sold the asset.
5. Mr. X sold a building to PQR Ltd. in Jan 2016. In the year 2018, PQR Ltd. seeks to appoint Mr. X as its
Registered Valuer. Will the appointment be considered valid?
a. No, as 3 years have not b. No, as 5 years have not c. No, as 8 years have not d. None of
lapsed from the date Mr. lapsed from the date lapsed from the date Mr. X the
X has sold the asset. Mr. X has sold the has sold the asset. above
asset.
6. Mr. X sold a building to PQR Ltd. in Jan 2016. In the year 2018, PQR Ltd. seeks to appoint Mr. Y (Friend of
Mr. X) as its Registered Valuer. Will the appointment be considered valid?
a. No, as 3 years have not b. No, as 5 years have c. No, as 8 years have not d. None of the
lapsed from the date Mr. X not lapsed from the lapsed from the date Mr. X above
sold the asset. date Mr. X sold the sold the asset.
asset.
7. In the year 2018, PQR Ltd. was appointed Mr. X as its Registered Valuer. Mr. X seeks to sell a building to
PQR Ltd. in Jan 2020. Can the transaction be entered into?
a. No, as 5 years have not b. No, as 3 years have not c. No, as 8 years have not d. None of the
lapsed from the date of lapsed from the date of lapsed from the date of above
appointment of Mr. X. appointment of Mr. X. appointment of Mr. X.
8. Mr. X sold a building to PQR Ltd. in Jan 2012. In the year 2018, PQR Ltd. seeks to appoint Mr. X as its
Registered Valuer. Will the appointment be considered valid?
a. Yes, as 5 years have lapsed b. Yes, as 6 years have c. Yes, as 3 years have d. None of
from the date Mr. X has sold lapsed from the date lapsed from the date Mr. the above
the asset. Mr. X has sold the asset. X has sold the asset.
9. Mr. Akhil sold a building to Ranka Ltd. in Jan 2012. In the year 2018, Ranka Ltd. seeks to appoint Mr. Akhil
as its Registered Valuer. In March 2018, Mr. Akhil conducts valuation of its shares and debentures. Will he
face any consequence?
a. fine which shall not be less b. fine which shall not be less c. fine which shall not be less d. None of
than Rs. 25,000 but which than Rs. 15000 but which than Rs. 5000 but which the
7.2 may extend to Rs. 1 Lac. may extend to Rs. 1 Lac. may extend to Rs. 1 Lac. above
10. Mr. Raman sold a building to Ranka Ltd. in Jan 2016. In the year 2018, Ranka Ltd. seeks to appoint Mr.
Raman as its Registered Valuer. In March 2018, Mr. Raman conducts valuation of its shares and
debentures. Will he face any consequence?
a. fine which shall not be less b. fine which shall not be c. fine which shall not be less d. None of
than Rs. 25,000 but which less than Rs. 15000 but than Rs. 5000 but which the
may extend to Rs. 1 Lac. which may extend to Rs. 1 may extend to Rs. 1 Lac. above
Lac.
11. Mr. P, valuer of LMN Ltd. contravened with the provisions of Section 247 with an intention to defraud the
company. What are the consequences he will have to face?
a. Imprisonment up to 1 year b. Fine: Rs. 1 lac up to Rs. 5 lakh. c. (a) or (b) d. (a) and (b)
12. Mrs. Prachi, valuer of LMN Ltd. contravened with the provisions of Section 247 with an intention to
defraud the company. What are the consequences she will have to face?
a. Imprisonment up to b. shall be liable to: c. (a) d. (a)
one year and Fine Rs. i. refund the remuneration received and or and
1 lac up to Rs. 5 lakh. ii. pay for damages to the company or to any other person (b) (b)
affected.
Answers
1. C 2. D 3. D 4. D
(As interest held by relative of Registered Valuer is not
considered in sec 247) 7.3
5. A 6. D 7. B 8. C
(As interest held by friends of Registered Valuer is not considered in
sec 247)
9. D 10. A 11. D 12. D
(Since 3 years have lapsed from the
date of sale, his appointment is valid
and will not face any consequence)
Chapter 8 REMOVAL OF NAME OF COMPANIES
Chapter 8 : REMOVAL OF NAME OF COMPANIES

8.1
1. Certificate of Incorporation would be deemed to be cancelled from
a. Date of Date mentioned in a. Date from which the b. Date from which the
application to the notice by the directors decides to company stops its
ROC ROC dissolve the company business
2. XYZ Ltd filed an appeal with the Tribunal against the order issued by the Registrar regarding removal of
their name from the registrar of companies and Tribunal passes the order in the favor of the Company
on 16th October 2018, what would be the status of the Certificate of incorporation of company.
a. The old b. Tribunal will issue c. Registrar will d. Company needs to file the order
certificate of new Certificate of issue new issued by the Tribunal within 30
incorporation would Incorporation certificate of days from the date of order and
stand valid incorporation ROC will issue a fresh certificate
3. XYZ company was incorporated on 1.4.17 and it started its business on 30.3.18, Registrar sent a notice
to the company on 15th April 2018 stating that as there is no business in the FY2017-18 the companies
name would be removed from the ROC. Does Registrar have power to send notice on this basis
a. Yes b. No
4 ABC Pvt Ltd changed its registrar company address on 6th May 2018, On 15th July 2018 it changed its
name from ABC Pvt to XYZ Ltd and 30th September made an application to the ROC for removal of
name, Under Section 248 can the Registrar accept the application for the removal of the name
a. Yes b. No
5 LML Company after discharging all its liabilities wanted to make an application to Registrar for removal
of its name and for the same they came up with the below proposal, Suggest the correct proposal to
the company
a. Company needs to b. Company needs c. Company needs to d. Company needs to
take consent of 55% to take consent of take consent of 75% take consent of 75%
members in terms of 75% members in members in terms of members in terms of
share capital terms of share capital paid up share capital paid up share capital
6. Any person aggrieved by the order of the ROC may file an appeal before the Tribunal within
a. 20 years from b. within 3 c. within a period of three years from d. within 1 years
the publication in years of the the date of passing of the order of the order
the Official Gazette order passed dissolving the company under section passed by ROC
by ROC 248
7. LMN Ltd along with its directors receive notice from the Registrar about his intention to remove name
of the company from Registrar of Companies under Section 248 and also asked to send their
representative along with relevant document if any, Within how many days the LMN Ltd will have to
send their representation?
a. 60 days from the date b. 30 days from the c. 30 days from the d. 60 days from the
of notice date of notice receipt of notice receipt of notice
8. ROC may strike off name of the company from the Registrar of companies
a. On expiry of time b. After expiry of 30 c. After expiry of 45 days d. After expiry of 60 days
mentioned in days from the from the time from time mentioned
notice notice sent mentioned in notice in notice
9. When can the registrar send a notice to the company for removal of its name from ROC
a. When Registrar b. When company c. When company d. When company is not
8.2
believes that the is not carrying its is not carrying its carrying its business for a period
company failed to business for a business for a of 2 immediately preceding FY
commence its business period of 1 period of 2 and the company has applied
even after 2 years of immediately immediately for status of dormant Company
incorporation preceding FY preceding FY u Sec 455
10. Prohibition to remove name of company from the Registrar of Companies in case of Amalgamation and
Merger is covered under which section of Companies Act
a. Sec 248 b. Sec 248(2) c. Sec 249 d. Sec 252(2)
11. LALAL Ltd name was struck off on 20.4.13 and its certificate of incorporation was cancelled but its
creditor LALI with whom the company was buying material knew the companies business was
operational till 31.3.13, hence LALI wanted to appeal to Tribunal on 1.4.18 what is the time period
within which they can file an application with the Tribunal for the same
a. 5 years from the b. 5 years from the c. 20 years from the date d. 20 years from the
date of publication in the of dissolution publication in the Official
dissolution Official Gazette Gazette
12 Kishan Ltd has been striked off by the Registrar from the list of Registrar of companies , Directors and
Members of the company declare that as the company has been striked off by the Registrar they are
relived from any kind of obligations and liabilities the company owes , Do you agree with them
a. Yes No
13. The notice for removal of the company u sec 248(1) needs to be published in Official Gazette and
newspaper, and the newspaper needs to be :-
a. It b. It needs to be c. It needs to be published in d. It needs to be published in
needs to published leading English newspaper leading English newspaper and
be vernacular and Vernacular newspaper leading Vernacular newspaper
published newspaper wherein both having wide circulation in both having wide circulation in
English the companies the State wherein the the state wherein the companies
newspaper Registered office is companies Head office is Registered office is located
located located
14. If a company files an application in violation of Section248(1) it shall be punishable with

a. Strike off of b. Cancellation of c. Fine which may d. Fine which may
Company Certificate of Incorporation extend up to 1 lac extend upto 2 lacs
15. Section 252 of the Companies Act 2013 empowers Tribunal

a. To issue a b. To reject the plea c. To reject the plea of d. To pass an order for the
Fresh Certificate of the appeal by the the Registrar restoration of company which
of Incorporation applicant company has been struck off by ROC
16 PQR Ltd stood dissolved under sec 248 from 1st April 2018 and ceased to operate from that day and
Certificate of Incorporation also deemed to cancelled from that date except
a. Till appeal b. Till fresh certificate c. Amount due to the company is realized d. Till DIN number
to Tribunal is of incorporation is for the payment or discharge of the of the Directors is
done issued liabilities/obligations of the company. cancelled
17. Which companies are exempted u/s Sec 248(2).

a. Private Ltd company b. Public Ltd Company c. Section 8 companies d. LLP
Answer 8.3
1. B 2. D 3. B
Hint: As per Sec 250(1) , On and Hint: Company needs Hint: As per Sec 248(1) if the company fails
from the date mentioned in the to file the order issued to commence business within 1 year of its
notice the Company shall cease by the Tribunal within incorporation, Registrar has power to send
to operate as a company and 30 days from the date of notice for removal of companies name from
Certificate of Incorporation order and ROC will issue ROC but in the above case the company had
issued shall be deemed to be a fresh certificate started business within 1 year hence Registrar
cancelled from such date does not have the power to send notice on
this basis
4. B 5. D 6. B
Hint :An application to remove the company name Hint:- Company Hint:- As per Sec 252 Any
shall not be made if any time in the previous 3 needs to take person aggrieved by the
months the company has changed its name and in consent of 75% order of the ROC may file an
this case, the company has changed its name in members in terms appeal before the Tribunal
previous 3 months hence their application would of paid up share within 3 years of the order
not be accepted by the Registrar capital passed by ROC
7. c 8. A 9. C
Hint: Hint: On expiry of the time Hint:-As per Section 248(1) A company is
Representation mentioned in the notice, the ROC not carrying on any business for a period of
shall be sent within may, strike off its name from the 2 immediately preceding FY & has not
30 days from the register of companies and publish applied within such period for obtaining the
date of receipt of notice thereof in official gazette status of a dormant company under section
notice 455
10. C 11. D 12. B
Hint: Prohibition to remove Hint: The Tribunal, on an application Hint: Strike off does not
name in case of Merger and made by the company/ relieve the directors and
Amalgamation of companies is member,/creditor or workman before members from their
covered under Sec 249 of the expiry of 20 yrs from the publication liabilities, if any, under the
Companies Act 2013 in the Official Gazette of the notice of law.
dissolution of the company
13. D 14. C 15. D
Hint: Notice for removal of name under sub- Hint: In pursuance of Hint: Section 252 of the
section (1) of section 248 needs to be published Section 249(2) that if a Act empowers the
in English language in a leading English company files an Tribunal, to pass an
newspaper and at least once in vernacular application in violation order for the
language in a leading vernacular language of Section 248(1) it shall be restoration of company
newspaper, both having wide circulation in the punishable with fine which which has been struck
State in which the registered office of the may extend to Rs. 1 lakh. off by the ROC
company is situated.
16. C 17. C
Hint :As per Section 250 of the Act, if a company stands dissolved under section Hint: sec 8 would be
248, it shall on and from the date mentioned in the notice of dissolution, exempted u sec 248(2)
cease to operate as a company and the Certificate of Incorporation issued to
it shall be deemed to have been cancelled from such date except for the
purpose of realizing the amount due to the company and for the payment or
discharge of the liabilities or obligations of the company
Chapter 10 WINDING UP
Chapter 10 : WINDING UP
10.1
1. Mr. Anup has been listed in B list contributories during the winding up proceedings and order is passed
by the court to recover amount payable by him on unpaid calls. Mr. Anup’s shares were forfeited
earlier. Whether company can demand money and add his name in B List Contributories even after his
shares are forfeited before winding up procedure started?
A. A. No the company cannot demand B. B. Yes Mr. Anup will be liable to pay if the winding up
from Mr. Anup as he is no more a took place before expiry of 1 year from the order of
member of the company. forfeiture of shares.
C. C. Yes Mr. Anup will be liable to pay of List A D. Both (b) & (c).
contributories are unable to meet the debts.
2. JAZ Ltd had two group of shareholders holding 40% each and the rest were held by a trust in which
these two groups had equal members as trustees. Dispute arose between the two groups with regard to
management of the affairs of the company and since the dispute could not be settled amicably, one of
the groups filed a petition for winding up on two grounds i.e. unable to pay the debts and it was just
and equitable to wind up the company. There were over 1000 workers employed in the company on the
date of winding up. The workers being members of the union made an application to set aside the
winding up petition. Will an application of workers be considered by the court to decide whether to
wind up or not?
A. Yes it is the duty of the court B. No the section in the act provides only creditors and
to consider interest of contributories to oppose the petition so workers union cannot
workers while deciding on be allowed to file an application to set aside the winding up
winding up. order.
C. No the duty of the court to consider the interest of workers would D. Both (b) & (c)
not create a right of workers to intervene the proceedings in the
absence of provisions in the act.
3. A past member is not liable to contribute

A. In respect of any liability contracted after he ceased to be B. One year passed since he ceased
member of the company. to be a member
C. In case of company limited by shares, no liability arises if D. All of the above
shares are fully paid up
4. Which of the following statement is true:

A. Preference share capital together with B. The holders of cumulative preference shares are
any arrears of dividend will have priority entitled to arrears of dividend if there is a surplus
for payment over equity capital. after return of equity capital.
C. Preference shares are treated D. If articles provides for payment of arrear of dividend, then it
as fully secured creditors. must be paid even by contributories if shares are partly paid
5. After appointment of Company Liquidator, a report is to be submitted within

A. 30 days B. 60 days
C. 90 days D. 45 days
6. The report to be submitted by the liquidator shall include :

A. Details of trademarks
B. The manner in which company was incorporated
C. Viability of Business
D. All of Above
7. Can creditors and contributories make application to tribunal to revise the time limit within which the
10.2 entire proceedings be completed?
A. Yes B. No
8. In case of Prayag Private Limited, the tribunal after hearing from the liquidator, creditors and
contributories decided to sell the company as going concern and hence did not order winding up of the
company. Can a tribunal pass such order?
A. Yes the tribunal can pass an order in the interest of company B. No the tribunal cannot pass
and public at large order for sale of company
C. No power of the tribunal under the section restricted to decide D. Both (b) & (c).
whether the company should be wound up or not.
9. Dissolution of a company is synonymous to winding up

A. In winding up the assets and liabilities are settled B. Dissolution of company means the existence
by the liquidator and Dissolution is a process after of the company comes to a end, while in
the proceedings of winding up are over. winding up the company still exists.
C. The company can be dissolved without winding up. D. All of above.
10. The provisional liquidator appointed by the tribunal shall be from

A. Panel maintained by Central Government B. Registered insolvency professionals
C. Panel maintained by ROC D. Registered chartered accounts
11. The liquidator appointed is required to give a declaration disclosing their interest or lack of
independence if any, within
12. The winding up committee constituted by the tribunal shall consist of

A. Official liquidator B. Nominee of secured creditor
C. A professional nominated by tribunal D. All of above.
13. The advisory committee is same as winding up committee

A. Yes B. No the winding up committee is formed to look into the process of winding up and
advisory committee is formed to advise the liquidator and report to the tribunal.
14. Maximum number of members of advisory committee shall be

A. 12 B. 4
C. 5 D. 15
15. Members of the advisory committee shall be decided by the tribunal among the existing:
A. Statutory auditors of the company B. Creditors and contributories
C. Shareholders D. Banks
16. In case of Maz Limited, the directors were held liable by the tribunal to contribute towards payment of
debts and liabilities of the company beyond contributions made by them as ordinary members. When is
the director not liable to pay?
A. a person who has been a director or manager B. a person who has been a director or
shall not be liable to make such further manager shall not be liable to make such
contribution, if he has ceased to hold office for a further contribution in respect of any debt
year or upwards before the commencement of or liability of the company contracted after
the winding up he ceased to hold office
C. Subject to the articles of the company, a director or manager shall not be liable to D. All of
make such further contribution unless the Tribunal deems it necessary to require the above
contribution in order to satisfy the debts and liabilities of the company, and the
costs, charges and expenses of the winding up. 10.3
17 Who can file a petition for winding up under section 272?

A. The company B. Prospective creditors
C. The registrar D. All of above
18 Circumstances under which a company may not be wound up by the tribunal

A. If company is unable to pay its debts B. If the tribunal has ordered winding up
19 Jay Prakash Private limited has failed to pay a debt of Rs 25,00,000 of Mr. Deepak for a period
exceeding six months. Mr. Deepak has send a written notice for deanding payment of such sum on 14 th
November 2018. The Company has failed to make payment or even create security or re-structure the
debt till January 2019. Shall Jay Prakash Private Limited be deemed to be unable to pay debts?
A. Yes the company is deemed to be unable to pay its B. No only after the tribunal determines
debt since it has elapsed a period of 21 days from through investigations , it can be said
the receipt of notice to take reasonable steps for that the company is unable to pay the
satisfaction of creditor debt
C. No the company cannot be deemed to be unable to pay its debt D. Both (b) & (c).
only on the grounds of default in payment of a single creditor.
20 Pratik Hydro Power Limited has resolved by passing a special resolution to wind up the company by
tribunal and has made a petition for the same. The company has not filed statement of affairs along
with the petition to the tribunal since they were not audited.
Will the petition be admitted in the tribunal?
A. Yes it can file unaudited statement B. No Petition has to be accompanied with the statement of
of affairs with the petition affairs
21 What are the powers of the tribunal on receipt of petition for winding up?
A. To dismiss it with or without cost B. To make interim orders
C. To appoint provisional liquidator D) All of above
22 A Company was incorporated in July 2015 with main object of providing services of merchant banking
and other ancillary services. But it could not get approval of RBI and hence the business could not be
started. The company has no assets. Petition has been filed by the company under section 272 for
winding up. Keeping in view the powers of the tribunal, will winding up be passed for such a company
having no assets?
A. Yes tribunal can make an order for B. No the tribunal will refuse to pass an order for winding up
winding up even if the company has since there is no security in the form of assets for
no assets discharge of creditors.
C. Yes the tribunal will make an order for winding up since the D. Both (a) & (c)
company has not started business.
23 Creditors have filed a petition for winding up before the tribunal and have deposited security amount.
The tribunal has directed the company to file its objections along with statement of affairs within 30
days. The Company files its objections but fails to provide the statement of affairs. Does a company
have a right to file objections without statement of affairs? What are the consequences of such failure?
A. Yes the company can file B. No the company’s right to oppose the petition is forfeited and
statement of affairs within 30 directors responsible for such non-compliance are punishable
days of filing objections with imprisonment for a term upto 6 months or fine or both.
C. Yes the company can file statement of affairs within such extended D. None of the above.
period as directed by the tribunal

10.4
24 Winding Up order has been passed by the tribunal for Helix Limited. The tribunal has received an
application for seeking leave under section 279 for a suit pending before the high court. Does this
section apply to proceedings pending before the high court?
A. Yes a leave can be granted by the tribunal for all B. No this section does not apply to
proceedings in any judicial bodies. proceedings in the high court
C. Yes the section applies to proceedings in the high court D. Both (a) & (c)
but not Supreme Court.
25 Company passes Special Resolution for winding up by the

A. High court B. ROC
C. Tribunal D. MCA
26 Tribunal has ordered winding up of the company under

A. Chapter XIX B. Chapter XXI
C. Chapter XIV D. Chapter XXX
27 Tribunal winds up company when company has made default in filing its financial statements or annual
returns with ROC for immediately preceding
A. 5 Years B. 2 years
C. 3 Years D. 1 year
28 Company shall be deemed to be unable to pay its debts when company fails to pay within 21 days after
receipt of notice of creditor or failed to provide adequate security if the amount of such debt is more
than
A. 1 lakh B. 5 lakhs
C. 2 Lakhs D. 10 lakhs
29 Company should pay debt of creditor within……..days of receipt of notice of demand

C. 30 days D. 60 days
30 Which of the following are not permitted to present the petition for winding up?
A. Company B. Contributories
C. Creditors D. Related Party
31 Which of the following are permitted to present the petition for winding up?
A. Creditors B. Contributories
C. Company D. All of the above
32 Shareholder can act as contributory only when he has held share for by him immediately before
winding up
A. atleast 6 months during 18 months B. atleast 3 months during 12 months
C. atleast 9 months during 15 months D. atleast 12 months during 18 months
33 Registrar shall be entitled to present petition for winding up

A. u/s 271 B. u/s 272
C. u/s 274 D. u/s 276
34 Registrar can present a petition when company is unable to pay its debts only when 10.5
A. The financial condition is reflected in its balance sheet B. from report of an inspector appointed
C. Both A or B D. company is in no mood to pay debts
35 Copy of petition filed under sec 272 based on which registrar shall submit his views to tribunal within a
period of
36 The tribunal has a power to refuse from making winding up order when the company has no assets or
the existing assets are mortgaged for an amount equal to or in excess of those assets.
Is the above statement true?
A. True B. False
37 The company can file its objectives along with statement of affairs only when the petitioner is
A. other than an Individual B. other than a LLP
C. Bother than a Company D. other than a Firm
38 Compliant u/s 274 to be filed by registrar before

A. NCLT B. Central Government
C. High court D. Special Court
39 Official Liquidator can be appointed by way from amongst

A. Insolvency professional under IBC, 2016 B. By way of passing SR
C. By way of Board Resolution D. By way of a contract
40 Mr. B was appointed as official liquidator of Z ltd. During the course of winding up he realized one
creditor to be his immediate relative result of which he settled their debts on priority. Later he got
penalized heavily. What he should have done ideally according to law?
A. File a declaration within 7 days regarding conflict of interest and lack of independence
B. Enter into a NDA with such creditor
C. File a declaration with 7 days
41 When is the “Notice of Discharge” not applicable under the winding up process?
A. When business is not continued B. When business is making less profits
C. When business is continued D. When the business is under inspection
42 Winding up committee should be constituted within

A. 30 days of BM B. 3 weeks from order
C. 15 days of Special Resolution D. 45 days of Notice
43 Winding up committee shall consist of..

A. Auditor B. Independent Director
C. Professional nominated by Tribunal D. Nominee of directors
44 Company tribunal shall place before tribunal report along with minutes of committee on basis
A. Monthly B. Quarterly
C. Fortnightly D. Weekly
10.6
45 Draft Final report of winding up committee after approval shall be placed before tribunal for passing
A. Winding up order B. . Dissolution order
C. Disclaimer Order D. Stay order
46 Pending litigation on existing suits is not allowed to be continued except cases with
A. SAT B. NCLT
C. ITAT D. HS & SC
47 Existing suits or new suits against company can be proceeded during winding up only if permission by
tribunal is given within
C. 90days D. 100 days
48 If directors, promoters, officers or employees fails to extend full cooperation to company liquidator, he
shall be penalized by
A. Imprisonment upto 6 months or, B. Imprisonment upto 3 months or, Fine upto Rs.100000
Fine upto Rs.50000
C. Imprisonment upto 10 months or, D. Imprisonment upto 12 months or, Fine upto Rs.50000
Fine upto Rs.50000
49 .In which of the following cases the “Person who has been a member” is NOT liable to contribute while
winding up
A. When current members are able to B. When such member is ceased to be a member for 1 year
pay or more before commencement of winding up
C. Debt is contracted after his cessation D. All of the above
50 Company Liquidator is compulsorily required to make on progress.

A. Quarter end report B. Month end report
C. Half year end report D. Year-end report
51 Company Liquidator shall give receipt and payment account in duplicate at least
A. Once a year of tenure B. Twice a year of tenure
C. Thrice a year of tenure D. 4 times in a year of tenure
52 Company owing any amount to contributory can set off in case of unlimited company for any
independent deal or contract except amount owed as
A. Dividend B. Insurance
C. Interest D. Others
53 Examination on oath is by
A. Word by mouth B. Written interrogatories
C. On affidavit D. Any of the above
54 Mr. A was a person having property, accounts & papers of company in his possession and was about to
leave India for evading payment of calls or of avoiding examination affairs of company. The tribunal has
the power to detain him and seize his property under section
A. Sec 300 B. Sec 304

C. Sec 302 D. Sec 301
10.7
55 Workmen’s dues payable for a period of preceding the winding up order or such period as may be
prescribed shall be paid first
A. 4 years B. 6 months
C. 1 year D. 2 years
56 Which of the following is correct priority for payment of debts under 327
1. all accrued holiday remuneration 2. all revenues, taxes, cesses and rates due from the
becoming payable to any employee: company to CG or SG within 12 months preceding that
date
3. all wages or salary including wages 4. all employers contribution payable during 12 months’
payable under ESIA
A. 2,3,4,1 B. 1,2,4,3,
C. 3,2,4,1, D. 4,3,2,1
57 Affidavit can be sworn only in India

A. True B. False
58 If the tribunal is satisfied that the company does fraudulent preference. The tribunal may
declare such transaction as
A. Cancelled B. Invalid
C. Illegal D. Valid
59 Any transfer or assignment by a company of its properties to trustees for the benefits of all its directors
shall be
A. Valid B. Illegal
C. VOID D. Legal
60 If 12 months before commencement of winding order a floating charge was created shall be invalid
unless proved that after creation of charge the company is
A. Under winding up B. Under insolvency
C. Solvent D. Financially weak
61 If property of company consist of onerous property the CL may with the permission of tribunal at any
time within 12 months after commencement of winding up
A. sell the property B. surrender the property
C. Disclaim the property D. Mortgage the property
62 If existence of onerous property was not known to company liquidator within …month of
commencement of the time of 12 months shall be calculated after he becomes aware
A. 3 months B. 2 months C. 1 month D. 6 months
63 Offences by officers of companies in liquidation shall be

A. Imprisonment for 3-5 years B. Both
C. Fine 1 to 3 lakhs D. None
64 Every invoice, order of goods or letter head of company after being wound u shall contain a statement
that the co is being wound up. If not, penalty

10.8
A. 50000 to 3 lakhs B. 10000 to 2 lakhs
C. 10000 to 4 lakhs D. 20000 to 5 lakhs
65 After the dissolution of company and after its winding up books and papers should be disposed as
A. ROC Directs B. MCA directs
C. Tribunal directs D. Official liquidator Directs
66 The Company Liquidator shall file audited form within prescribed details about proceeding within of
commencement.
A. 2 YR B. 3 YR
C. 1 YR D. 5 YR
67 No audit of proceedings of winding up is required if provisions of sec are applicable

A. 290 B. 292 C. 294 D. 299
68 If Official Liquidator receives money by way of an official liquidator of any company he shall pay the
money to
A. Tribunal B. RBI .
C. CG D. SBI
69 Every CL shall deposit monies received by him in his capacity to

A. Scheduled Bank B. ITAT
C. CG D. RBI
70 Neither OL nor CL shall deposit any money received by him in that capacity to Private Banking account.
Is the above statement true?
A. True B. FALSE
71 The CL shall deposit into “Company Liquidation Dividend and Undistributed Asset account” any money
representing
A. Dividend payable to any creditor B. On dissolution of company, unpaid dividend and
but unpaid since 6 months undistributed assets
C. Assets refundable remain undistributed for 6 month D. All of the above
72 Failing to deposit any amount in “Company Liquidation Dividend and Undistributed Asset account” will
have to pay interest
A. 10 B. 8
C. 12 D. 15
73 Amount remained unclaimed in “Company Liquidation Dividend and Undistributed Asset account” shall
be transferred to general revenue account of CG after
A. 10 Yr. B. 12 Yr.
C. 15 Yr. D. 20 Yr.
Answer
10.9
1. D 2. D 3. D 4. C 5. B 6. D
7. A 8. A 9. D 10. B 11. C 12. D
13. B 14. A 15. C 16. D 17. D 18. D
19. A 20. B 21. D 22. A 23. B 24. B
25. C 26. A 27. A 28. A 29. A 30. C
31. D 32. A 33. A 34. C 35. A 36. C
37. C 38. D 39. A 40. A 41. A 42. C
43. C 44. A 45. B 46. D 47. A 48. A
49. D 50. A 51. B 52. A 53. D
54. D 55. D 56. A 57. B 58. B 59. C
60. C 61. C 62. C 63. B 64. A 65. C
66. C 67. C 68. B 69. A 70. A 71. D
72. C 73. C
Chapter 11 COMPANIES AUTHORISED TO REGISTER UNDER THIS ACT
Chapter 11 : COMPANIES AUTHORISED TO REGISTER UNDER THIS

ACT 11.1
1. Can partners of "AAA LLP", convert the LLP into a company limited by shares with just 3
partners Amar, Akbar and Anthony as the minimum requirement for a company to register is 7
members
a. Yes , As there are more b. No, As the c. Yes , As there is d. No as LLP cannot
than 2 members it can minimum no minimum be registered as
be registered as requirement is requirement for firm
company 7 members
2. Ms. Devaki wanted to take benefit of Companies Act 2017 and register her certain entities
under this Act. Which group of entities from the below list can be registered under this Act?
a. b.
 M/S Dwarkananth (Proprietor firm)  Kishanlal LLP
 Kana Pvt Ltd (Registered under Companies  Radhe Co-operative Society
Act 2013)  Radhe Kishan Partnership firm
 Kishanlal LLP  M/S Dwarkananth (Proprietor firm)
 Maganlal LLP
c. d.
 Kishanlal LLP  Kishanlal LLP
 Radhe Co-op Society  Maganlal LLP
 Kana Pvt Ltd (Reg under Co Act 2013)  Radhe Co-op Society
 Radhekishan Partnership firm  Radhekishan Partnership firm
3. RR LTD was registered under Companies Act 2017 as Company Limited by guarantee, Mr. R was
a member of the company and he ceases to be a member of the company on 1.1.2017, On
2.2.2018, the company winds up and there is a net liability payable by the Company amounting
to Rs 25 lacs which is due from past 3 years. Will Mr. R be held liable to contribute?
a. No, Mr. R has b. Yes, Mr. R has c. Yes, Mr. R has d. No, The company
ceased to be a ceased to be a ceased to be a has been wound up
member of the member of the member of the after 1 year of his
Company Company but as the Company but the resignation hence
hence is not company is company has he would not be
liable anymore registered as winded up within 2 liable even if liability
to the Company limited by years after he was during the term
companies guarantee , members ceases to be a when he was a
liabilities would be liable even member hence he member
if they have resigned is liable
4. "XYZ LLP" has been now registered under the Companies Act 2017 as "XYZ Pvt Ltd Company",
but XYZ LLP has still not completed the formalities to dissolve the LLP, what are the
consequences for the same
a. LLP will have b. As the LLP has been c. LLP will d. LLP will have to Obtain
to pay a fine of registered under have to chartered accountant
500 per day Companies Act 2017 the make an certificate once the
from the date LLP will be deemed to have applicatio winding up procedure
of winding up been dissolved under that n in Form is complete and file an

11.2
to the date of Act without any further act 24 application in Form 24
filing or deed
5. SYZ Partnership Firm having 3 partners’ wants to get registered their firm as unlimited
company, can they do so?
a. Yes b. No
6. Ram Shyam LLP had 2 partners and they wanted to get itself converted into Unlimited
Company , as per the Provisions of the Act are they allowed to do so
a. No, LLP can be b. Yes, as they fulfill c. No, As they can d. Yes, LLP can be
converted into the requirement of be converted only converted as Unlimited
only company having 2 members into Company company as there is no
limited by hence they can go Limited by restriction for the type
shares. ahead and convert guarantee of company to be
converted
7. Is NOC from the concerned Registrar of Firms or Registrar of companies (LLP) required for
conversion of entities?
a. Yes No
8. Section 368 of the Act covers

a. Certificate of Registration b. Saving of Existing c. Vesting of Property d. Effect of
of Companies Liabilities on Registration Registration
9. Unless and until all the liabilities of the company are paid off the entity conversion into the
company cannot be done. Is this statement true?
a. True, As it is a b. False, Conversion c. True, As per the d. False, The earlier entity
new entity itself of the company amendment the can pay off debts and
hence assets of does not affect conversion takes then wind up, it does
liabilities of the the rights or place only when all not impact the
earlier entity obligations of the the liabilities of the conversion of the
would not be of company entity has been company as they are 2
the new entity cleared off different entities
10. A railway company incorporated under any Act of Parliament or other Indian law or any Act of
Parliament of the United Kingdom would be a registered Company or Unregistered Company?
a. Registered Company b. Unregistered Company
11. Which form needs to be filled by the LLP for registration with ROC for its conversion into
Company
a. URC-1 b. URC-2 c. No application required d. URC-3
12. SSS partnership firm converted into a Company Limited by guarantee, before the conversion
the company had filed a legal case against XYZ Pvt Ltd for recovery of its dues, XYZ Pvt Ltd kept
a stand in the case stating that they were liable to pay SSS Partnership firm and not Company
hence the legal case would not stand valid in the court unless and until the partners of the firm
in their individual capacity file the case against XYZ Pvt Ltd, Do you think stand of XYZ Pvt Ltd is
Correct?
a. Correct, Legal case was b. Not Correct, As c. Correct, As the d. None of the 11.3
made by the partners conversion into partnership has above
on the XYZ Pvt Ltd company does not been ceased
hence once the change any rights or lawfully the case
existence of obligations of the would be now on
partnership ceases the converting company individual partners
case would not stand and not company
13. UNO Pvt Ltd was incorporated in Germany but they had a company in India to look after Indian
business after 2 years of incorporation the Indian Company decided to close its Indian office.
What would be the procedure for winding up of Indian Office?
a. As the company has b. The company will c. The company will d. Indian company
been incorporated have to follow all have to follow all can be wounded
outside India, Indian the guidelines as the guidelines as up only when the
Company would those of those of incorporated
automatically get Registered Unregistered company which in
wound up once they Company requires Company requires this case is
stop their business. for winding up of for winding up of Germany is
the company. the company. wounded up.
14. Which is the entity which cannot be registered under the Companies Amendment Act 2017
a. Trust b. Society c. Companies formed under Companies Act 2013 d. Partnership firm
15. XYZ Company had permanent paid up capital of 5 lacs and it wanted to register its company
under the new amendment Act , Which type of Company it can get itself registered
a. Company Limited b. Company Limited by c. Unlimited d. Limited Company
by Shares Guarantee Company
16. How much majority is required to assent for company to register as a Limited Company
a. 1/4th of the b. 3/4th of the members c. 3/4th of the d. 1/4th of the
members present present in person or members present members present
in person or proxy proxies if proxies are only no proxies only no proxies
if proxies allowed allowed allowed in this case allowed in this case
17. Can companies with less than 7 members get itself registered as Private Company as per Co Act
2017
a. Yes b. No
18. For which type of company to register under Co Act 2017 , it requires assent of members
accompanied by resolution
a. Unlimited b. Company Limited by c. Company Limited by d. Public Limited
Company Shares guarantee Company
19. Can HUF be converted into a registered company as per the Co Act 2017 as HUF has more than
2 members
a. No, As HUF b. Yes, as HUF has c. No , As HUF is governed d. Yes, HUF can be
11.4
is more than 2 by Hindu Marriage Act it registered a s only
considered members it can be cannot be registered under Company limited by
as a single registered as Co Act 2017 guarantee under this Act
person Company
20. In computing any majority, when a poll is demanded how would the number of votes be
regarded
a. Number of b. Number of shares held c. number of votes to d. Number of
members present by each members would which each member members including
would be number be the total number of is entitled according the proxies would be
of votes votes to the regulation of the number of total
the company votes
21. Table F & Table I are applicable to all the entities registered under Co Act 2017.
a. Yes, As it is a b. Only Table I is c. Only Table I is d. Table F in Schedule I
registered Company applicable and F is not applicable and F shall not apply unless
hence all the tables applicable is adopted by and except in so far as it
would be applicable special resolution is adopted by special
for them resolution
22. In Publication of notice of registration what needs to be published in newspaper

a. Notice of conversion b. Notice of new c. Notice about d. Notice of winding
of entity and the new Registration registration and up of earlier entity
registered entity Office and seeking objections
name members if any
23. Is Stamp duty payable on Vesting of Property on Registration

a. Yes b. No
24. As per the Co Act 2017 , Shares of all the companies registered under this Act need to be
numbered
a. Shares of all the b. There is no need c. Numbering of d. Numbering of shares
companies of any kind of shares shall not is required for only
registered under numbering for apply to any those companies who
this Act need to shares company whose are registered as
be numbered numbers are not Company limited by
numbered shares
25. M/s Ruby a proprietor firm was a family business which was carried on by two members ,
Turnover of M/S Ruby was 49 lacs , they wanted to register their firm as M/s Ruby Pvt Ltd as
per Co Act 2017, Can it get registered under this Act
a. No, As M/s Ruby b. Yes, As there are 2 c. No, As the d. Yes, As the
is proprietary members hence companies turnover of the
firm it cannot be minimum required to turnover does not company is 49 lacs
registered under register company is exceed 50lacs it can be
Co Act 2017 fulfilled hence it can hence it cannot be registered
be registered registered
26. XYZ Pvt Ltd who is a registered Company under this Act gets a notice of winding up from the
ROC and also a provisional liquidator for the same has been appointed , There was a legal 11.5
proceeding against the company by its supplier for the recovery of amount , What will the role
of Liquidator in the proceedings of this case
a. Liquidator will ensure b. No suit or legal c. The company d. Liquidator
that the amount will proceeding can be cannot be winded up will appeal to
be paid to the supplier processed against the until the legal case the Tribunal in
from the Receipts of company or the contributor matter is resolved such matter
winding up of the company
27. Section 374 of the Act covers

a. Power of Court to b. Continuation of c. Effect of d. Obligation of
Stay or Restrain Pending Legal Registration companies Registering
Proceedings Proceedings under this Part under this Part
28. Power to Wind up Foreign Companies is covered under which Section of Co Act 2017
a. Sec 367 b. 376 c. 375 d. 373
11.6 Answer
1. A 2. D 3. D
(Unregistered entities like (As per the Section 366 of (For companies registered as
LLPs, partnership firms, The Companies Act, 2013, the "Company Limited by guarantee"
societies, etc. with two or companies capable of being under this act, in the event of
more members can with effect registered includes any Company being wound up while he
from 15th August, 2018 society, cooperative society, is a member, or within one year
onwards opt for conversion partnership firm, limited after he ceases to be a member, he
into a company limited by liability partnership, or any will be liable for payment of the
liability or guarantee or with other business entity which debts and liabilities of the
unlimited liability in has been incorporated under company as may have been
accordance with the provisions any law other than contracted before he ceases to be
of Act) Companies Act Indian a member)
Companies Act)
4. B 5. A 6. A
(Provided that upon registration as a (As per the provisions (An LLP is permitted to get
company under this Part a limited liability of the Act, Partnership itself converted in a company
partnership incorporated under the Limited firm can be converted limited by shares only, i.e.,
Liability Partnership Act, 2008 shall be into unlimited conversion of an LLP into an
deemed to have been dissolved under that company). unlimited company or
Act without any further act or deed company limited by
(Companies Act 2017)). guarantee is not permitted
under the Act).
7. A 8. C
(NOC from the concerned Registrar of Firms or Registrar of companies (LLP) is required for
conversion of entities).
9. B
10. A
(Hint: As the above company is specifically excluded from Unregistered Companies list , it would be a
registered Company)
11. A 12. B 13. C
(Hint: An applicant (All suits and other legal (Hint: As per Section 376 of the Act Where a
for registration proceedings taken by or body corporate incorporated outside India
with the ROC has against which are pending at which has been carrying on business in India,
to be done in Form the time of the registration of ceases to carry on business in India, it may be
URC-1 to get a company in pursuance of wound up as an unregistered company under
converted into this Part, may be continued this Part, notwithstanding that the body
Company.) in the same manner as if the corporate has been dissolved or otherwise
registration had not taken ceased to exist as such under or by virtue of
place). the laws of the country under which it was
incorporated.)
14. C 15. A 16. B
(Hint: Company registered (Hint: Company (Hint: Company to register as a limited company
under the previous company shall be requires majority to assent: where a company
law: a company registered registered in not having the liability of its members limited
under the Indian Companies pursuance of by any Act of Parliament or any other law for
Act, 1882 or under the Indian this section as a the time being in force is about to register as a
Companies Act, 1913 or the company limited limited company, the majority required to
Companies Act, 1956, shall not by shares only if assent as aforesaid shall consist of not less than
register in pursuance of this it has a 3/4th of the members present in person, or 11.7
section) permanent paid- where proxies are allowed, by proxy at the
up (Sec 366)) meeting.)
17. A 18. C 19. A
(Hint: Entity (Hint: where a company is about to register as a (Hint: HUF is considered
consisting of 2 or company limited by guarantee, the assent to its legally as one person only
more members can being so registered shall be accompanied by a even if it has lot of
register itself as a resolution declaring that each member undertakes members in it, hence it
Private Company as to contribute to the assets of the company, in the cannot be registered
per Companies Act event of its being wound up while he is a member, under Companies Act as
2017.) or within one year after he ceases to be a it does not fulfill the
member). condition of having at
least 2 members.)
20. C 21. D 22. C
(Hint: In computing any (Hint: Table F&I shall (Hint: Publication of notice of
majority, when a poll is not apply to the registration: publish in a newspaper,
demanded regard shall be to entities registered advertisement one in English and one in
the number of votes to which under Co Act 2017 vernacular language in such form as may
each member is entitled unless and until it is be prescribed giving notice about
according to the regulation of adopted by special registration under this Part, seeking
the company.) resolution.) objections and address them suitably.)
23. B 24. C 25. A
(Hint: Nowhere under the Stamp Act does it provides (Hint: The (Hint: The minimum
for payment of stamp duty on vesting of property. In provisions of number of member
the matter of Vali Pattabhirama Rao Vs. Sri Ramanuja this Act relating required to be
Ginning and Rice Factory (P) Ltd. AIR 1984; Andhra to the registered under this
Pradesh 176[4]; it was stated that “The Division Bench numbering of Act is 2, as this a
of Andhra Pradesh High Court relying on Section 575 of shares shall not proprietary firm it does
the Companies Act, 1956 has held that if a partnership apply to any not fulfill this criteria
firm registered as a company, there was a statutory company whose hence it cannot be
vesting including of all immovable property and no shares are not registered under the
separate conveyance was required for the same;”) numbered) purview of the Act.)
26. B 27. D 28. B
(Hint: Refer Sec 373, where an order has been made for (Hint: Sec (Hint: Sec 367 of Co Act
winding up, or a provisional liquidator has been appointed 374 covers 2017 covers Power to
for, a company registered in pursuance of this Part, no suit Obligation Wind up Foreign
or other legal proceeding shall be proceeded with or of Companies, although
commenced against the company or any contributory of the companies Dissolved).
company in respect of any debt of the company, except by Registering
leave of the Tribunal and except on such terms as the under this
Tribunal may impose.) Part)
Chapter 12 FOREIGN COMPANY/COMPANY REGISTERED OUTSIDE INDIA
Chapter 12 : FOREIGN COMPANY/COMPANY REGISTERED

OUTSIDE INDIA
12.1
1. IPL Ltd, incorporated outside India, having place of business in India and 60% of its Paid Up capital is held
by one or more Indian citizens. State the type of company.
a. Indian Company b. Foreign company c. Deemed Indian Company d. None of the above
2. PQR Ltd, incorporated outside India, having place of business in India and 45 % of its Paid up capital is
held by Indian Body Corporate. State the type of company and laws applicable to it.
a. Indian Company, b. Foreign company, c. Deemed Indian d. None of the
Companies act 2013 Chapter of Foreign Company, Companies above
Company act,2013
3. LIT Ltd, incorporated outside India, is a company having place of business in Canada and 45 % of its
capital is held by Mr. Pankaj, an Indian citizen, state the laws applicable to LIT ltd.
a. Companies b. Chapter of Foreign c. Companies act,2013 considering it d. None of the
Act, 2013 Company as Deemed Indian Company above
4. If minimum 50% of Paid up capital of Foreign Company is held by then provisions of

Companies Act, 2013 shall NOT apply:
a. One or more citizen or b. One or more companies c. One or more bodies d. None of the
citizens of India; or/& in India; or/& corporate in India. above.
5. Under the Companies Act, 2013 a foreign LLP shall be considered as :

a. Foreign LLP b. Subsidiary of Indian Company c. Indian Company d. None of the above
6. Z ltd ,a foreign company shall, within how many days of the establishment of its place of business (POB)
in India, deliver to the Registrar for registration the documents required —
a. within 30 days b. Within a month c. Within 60 days d. Within 90 days
7. X ltd is an existing Foreign Company who has not filed the documents and particulars u/s 592(1) of the
Companies Act, 1956 shall file under following section of the Companies Act, 2013.
a. Sec 383 b. Sec 382 c. Sec 381 d. Sec 380
8. Filing of details of Foreign Co. u/s 380 are in form:

a. Form FC 1 b. Form FC 2 c. Form FC 3 d. Form FC 4
9. RMN Ltd., a Foreign company has made alteration in the documents delivered to the Registrar, do they
need to file the revised documents with the ROC and within how many days?
a. Within 15 days In b. Within 30 days In Form c. Within 15 days In d. Within 30 days
Form FC 2 FC 2 Form FC 1 In Form FC 1
10. A ltd is a Foreign Company which can issue prospectus to Indian Public if the Prospectus is:
a. b. c. d.
i. Signed by the Chairman i. Signed by the i. Signed by the i. Signed by the
& 2 other directors of the Chairman & 1 Managing Chairman & 1 director Chairman & 2 other
Company Director and 1 CS of the of the Company. directors of the
ii. Approved by the Company. ii. Approved by the Company
resolution of the MD. ii. Approved by the resolution of the MD. ii. Approved by the
iii. Delivered to ROC for resolution of the BOD. iii. Delivered to ROC resolution of the BOD.
registration iii. Delivered to ROC for for registration. iii. Delivered to ROC for
12.2 iv. Stating that it is being registration iv. Stating that it is registration
delivered to ROC & iv. Stating that it is being being delivered to iv. Stating that it is being
consent is rightfully delivered to ROC & ROC & consent is delivered to ROC &
obtained u/s 388 as consent is rightfully rightfully obtained u/s consent is rightfully
stated above obtained u/s 388 as 388 as stated above obtained u/s 388 as
stated above stated above
11. JHU Ltd. a Foreign Company, contravened provisions of chapter “Company Incorporated outside India”.
What is the consequence of such contravention?
a. Fine which b. Fine which c. Fine which shall not be less d. Fine which shall not be less
shall not be shall not be than Rs. 1 lakh but which than Rs. 1 lakh but which
less than Rs. 1 less than Rs. 1 may extend to Rs. 5 lakh; may extend to Rs. 3 lakh;
lakh but which lakh but which and for continuing offence and for continuing offence
may extend to may extend to Additional fine which may Additional fine which may
Rs. 3 lakh; Rs. 5 lakh; extend to Rs. 50 thousand extend to Rs. 50 thousand
for every day for every day
12. Any process, notice, or other document required to be served on a foreign company shall be deemed to
be sufficiently served:
a. If sent by b. if addressed to any person c. left at, or sent by post to, the d. Any of the
electronic mode whose name & address have address which has been so above
been delivered to the ROC delivered to the Registrar
13. HUL Ltd. is a Foreign Company and seeks to know which of the following sections shall apply. Comment.
a. Section 71 b. Section 128 relating c. Sec 135 related to Corporate Social d. All of the
related to to Books of Accounts Responsibility subject to such above
Debentures exceptions, modifications, adaptations.
14. Sec 387 related to ‘Dating of prospectus and particulars to be contained therein’ for a Foreign Company
shall not be applicable for issue of prospectus of/ for:
a. Securities issued for b. To existing shareholders c. For securities of the same d. (b) &
formation of or debenture holders nature which are already issued (c)
company or future irrespective of whether by company and are listed on
formation of they renounce the shares recognized stock exchange
company. or not
15. LYT Ltd., a Foreign Company failed to comply with the provisions of chapter on ‘Company Registered
outside India’. Company is of the opinion that the acts and contracts entered into by it shall not be
affected. Further, since it was in a dispute with XYZ Pvt. Ltd. it seeks to file a suit against it against it.
Comment.
a. Since the b. Since the Company has c. Though the Company d. Since the Company has
Company has failed to comply with the has failed to comply failed to comply with
failed to comply Chapter, it cannot file any with the Chapter, it the Chapter, the acts
with the Chapter, suit until compliance is can file suits and also and contracts entered
its acts shall be made however the acts the acts and contracts into by the Company
construed invalid and contracts entered entered into by the shall be invalid.
and it cannot file into by the Company shall Company shall be However, it can file
any suit as well. be valid. valid. suit.
16. LYT Ltd., a Foreign Company contravened the provisions of chapter on ‘Company Registered outside
India’ and they seek to know the consequences of the same.
a. Fine - not less than b. Fine which shall not c. Fine, which shall not d. Fine which shall not
Rs. 1 lakh but which be less than Rs. 1 be less than Rs. 1 lakh be less than Rs. 1 lakh
may extend to Rs. 5 lakh but which may but which may extend but which may extend
lakh; and for extend to Rs. 3 lakh; to Rs. 5 lakh; and for to Rs. 3 lakh; and for 12.3
continuing offence and for continuing continuing offence continuing offence
Additional fine offence Additional Additional fine which Additional fine which
which may extend to fine which may may extend to Rs. 50 may extend to Rs. 50
Rs. 50,000 for every extend to Rs. 50,000 thousand for every thousand for every
day for every day day. day
Every officer in Every officer in Every officer in Every officer in

default: default: default: default:
i. Imprisonment i. Imprisonment i. Imprisonment which i. Imprisonment
which may extend which may extend may extend to 6 which may extend to
to 6 months or; to 6 months or; months or; 6 months or;
ii. Fine which shall ii. Fine which shall ii. Fine which shall not ii. Fine which shall
not be less than Rs. not be less than Rs. be less than Rs. 25 not be less than Rs.
25,000 but which 25,000 but which thousand but which 25 thousand but
may extend to Rs. 5 may extend to Rs. 5 may extend to Rs. 3 which may extend to
lakh or; lakh or; lakh or; Rs. 3 lakh or;
iii. Both. iii. Both. iii. Both. iii. Both.
17. LIFE Ltd, incorporated outside India, having place of business in India and 57% of its Paid Up capital is
held by one or more Indian citizens. State the type of company.
a. Indian Company b. Foreign company c. Deemed Indian Company d. None of the above
18. Marine Ltd, incorporated outside India, having place of business in India and 39 % of its Paid up capital is
held by Indian Body Corporate. State the type of company and laws applicable to it.
a. Deemed Company, b. Foreign company, c. Indian Company, d. None of the
Companies act 2013 Chapter of Foreign Companies act,2013 above
Company
19. TILT Ltd is a company incorporated in India having place of business in Mexico of which 45 % capital is
held by Mr. Pankaj, an Indian citizen, state the laws applicable to LIT ltd.
a. Companies Act, b. Chapter of Foreign c. Companies act,2013 considering d. None of the
2013 Company it as Deemed Indian Company above
20. If minimum 50% of Paid up capital of Foreign Company is held by following then provisions of
Companies Act, 2013 shall not apply to:
a. One or more companies in b. One or more citizen or c. One or more bodies d. None of the
India; or/& citizens of India; or/& corporate in India. above.
21. Under the Companies Act, 2013 a ………………….. shall be considered as foreign LLP:
a. Foreign LLP b. Subsidiary of Indian Company c. Indian Company d. None of the above
22. EMNM ltd, a foreign company shall, within how many days of the establishment of its place of business
(POB) in India, deliver to the Registrar for registration the documents required —
a. within 60 days b. Within a month c. Within 30 days d. Within 90 days
23. X ltd is an existing Foreign Company who has not filed the documents and particulars u/s 592(1) of the
Companies Act, 1956 shall file under following section of the Companies Act, 2013.
a. Sec 382 b. Sec 383 c. Sec 380 d. Sec 381
12.4 24. Filing of details of Foreign Co. u/s 380 are in form:
a. Form FC 1 b. Form FC 2 c. Form FC 3 d. Form FC 4
25. SHTA Ltd., a Foreign company has made alteration in the documents delivered to the Registrar; do they
need to file the revised documents with the ROC and within how many days?
a. Within 30 days In b. Within 15 days In Form c. Within 30 days In d. Within 15 days
Form FC 2 FC 2 Form FC 1 In Form FC 1
26. A ltd is a Foreign Company which can issue prospectus to Indian Public on if the Prospectus is:
a. b. c. d.
i. Signed by the i. Signed by the i. Signed by the Chairman i. Signed by the
Chairman & 2 other Chairman & 1 director & 1 Managing Director Chairman & 2 other
directors of the of the Company. and 1 CS of the Company. directors of the
Company ii. Approved by the ii. Approved by the Company
ii. Approved by the resolution of the MD. resolution of the BOD. ii. Approved by the
resolution of the MD. iii. Delivered to ROC for iii. Delivered to ROC for resolution of the BOD.
iii. Delivered to ROC for registration. registration iii. Delivered to ROC for
registration iv. Stating that it is iv. Stating that it is being registration
iv. Stating that it is being being delivered to ROC delivered to ROC & iv. Stating that it is
delivered to ROC & & consent is rightfully consent is rightfully being delivered to ROC
consent is rightfully obtained u/s 388 as obtained u/s 388 as & consent is rightfully
obtained u/s 388 as stated above stated above obtained u/s 388 as
stated above stated above
27. HUM Ltd. a Foreign Company, contravened provisions of chapter “Company Incorporated outside
India”. What is the consequence of such contravention?
a. Fine which shall not be less b. Fine which c. Fine which d. Fine which shall not be less
than Rs. 1 lakh but which shall not be shall not be than Rs. 1 lakh but which
may extend to Rs. 5 lakh; less than Rs. 1 less than Rs. 1 may extend to Rs. 3 lakh;
and for continuing offence lakh but which lakh but which and for continuing offence
Additional fine which may may extend to may extend to Additional fine which may
extend to Rs. 50 thousand Rs. 5 lakh; Rs. 3 lakh; extend to Rs. 50 thousand
for every day for every day
28. Any process, notice, or other document required to be served on a foreign company shall be deemed to
be sufficiently served:
a. if addressed to any person b. If addressed c. left at, or sent by post to, d. Any of the
whose name & address have by electronic the address which has been above
been delivered to the ROC mode so delivered to the Registrar
29. SIM Ltd. is a Foreign Company and seeks to know which of the following sections shall apply. Comment.
a. Section 71 b. Section 128 c. Sec 135 related to Corporate Social d. All of the
related to relating to Books Responsibility subject to such exceptions, above
Debentures of Accounts modifications, adaptations.
30. Sec 387 related to ‘Dating of prospectus and particulars to be contained therein’ for a Foreign Company
shall not be applicable for issue of prospectus of/ for:
a. Securities issued for b. To existing shareholders c. For securities of the same d. (b) & (c)
formation of or debenture holders nature which are already
company or future irrespective of whether issued by company and

formation of they renounce the are listed on recognized
company. shares or not stock exchange
12.5
31. LYT Ltd., a Foreign Company failed to comply with the provisions of chapter on ‘Company Registered
outside India’. Company is of the opinion that the acts and contracts entered into by it shall not be
affected. Further, since it was in a dispute with ZYS Pvt. Ltd. it seeks to file a suit against it against it.
Comment.
a. Since the Company b. Since the Company has c. Though the d. Since the Company
has failed to comply failed to comply with Company has failed has failed to comply
with the Chapter, its the Chapter, it cannot to comply with the with the Chapter,
acts shall be file any suit until Chapter, it can file the acts and
construed invalid and compliance is made suits and also the contracts entered
it cannot file any suit however the acts and acts and contracts into by the
as well. contracts entered into entered into by the Company shall be
by the Company shall be Company shall be invalid. However, it
valid. valid. can file suit.
32. YNT Ltd., a Foreign Company contravened the provisions of chapter on ‘Company Registered outside
India’ and they seek to know the consequences of the same.
a. Fine - not less than Rs. 1 b. Fine, which shall not c. Fine which shall d. Fine which shall not
lakh but which may be less than Rs. 1 not be less than be less than Rs. 1
extend to Rs. 5 lakh; and lakh but which may Rs. 1 lakh but lakh but which may
for continuing offence extend to Rs. 5 lakh; which may extend extend to Rs. 3
Additional fine which may and for continuing to Rs. 3 lakh; and lakh; and for
extend to Rs. 50,000 for offence Additional for continuing continuing offence
every day fine which may offence Additional fine
extend to Rs. 50 Additional fine which may extend
Every officer in default: thousand for every which may extend to Rs. 50 thousand
i. Imprisonment which may day. to Rs. 50,000 for for every day
extend to 6 months or; every day
ii. Fine which shall not be Every officer in default: Every officer in
less than Rs. 25,000 but i. Imprisonment which Every officer in default:
which may extend to Rs. may extend to 6 default: i. Imprisonment which
5 lakh or; months or; i. Imprisonment may extend to 6
iii. Both. ii. Fine which shall not which may extend months or;
be less than Rs. 25 to 6 months or; ii. Fine which shall not
thousand but which ii. Fine which shall not be less than Rs. 25
may extend to Rs. 3 be less than Rs. thousand but which
lakh or; 25,000 but which may extend to Rs. 3
iii. Both. may extend to Rs. lakh or;
5 lakh or; iii. Both.
iii. Both.
Answer
12.6
1. c. (> 50% by specified persons u/s 379(2) 17. c
2. b. (< 50% by specified persons u/s 379(2) 18. b
3. d. ( Not Foreign Co. as defined since POB is 19. a
outside India)
4. d. 20. d
5. a. 21. a
6. a. 22. c
7. d. 23. c
8. a. 24. a
9. b. 25. a
10. d 26. d
11. d. 27. d
12. d. 28. d
13. d. 29. d
14. d 30. d
15. b. 31. b
16. b 32. c
Chapter 13 GOVERNMENT COMPANY
Chapter 13 : GOVERNMENT COMPANY

1. Government company requires to prepare annual report within three months 13.1
a. from last day of financial year to b. from the date of AGM in c. from the date d. none of the
which financial statements which the CAG gave of audit report above
pertains comment
2. What are the documents a Government Company should place before both house of Parliaments/ State
legislation?
a. Annual report b. Audit report c. Comments of CAG d. All the above
3. Government company means company in which 51% or more paid up share capital is held
a. Partly by CG and partly by SG b. CG or SG c. CG and SG or SGs d. All of the above
4. Government company means a company which is

a. Subsidiary of b. Holding of c. both of above d. none of the above
government company government company
5. Central Government and Government of Karnataka together hold 40% of the paid up share capital of XY
Limited. A Government Company also holds 20% of the paid up share capital in XY Limited. Examine with
reference to the provisions of the Companies Act 2013 whether XY Limited is Government Company.
a. Government company b. Private Company c. Public Company d. None of the above
6. Government of Gujarat and Government of Orissa are members of AB Limited such that AB Ltd. is a
Government Company. Central Government is not a member. Examine with reference to the provisions of
the Companies Act 2013, what documents are to be prepared?
a. Annual reports on the working and b. GST Report c. Managerial d. Profitability
affairs of the company. Remuneration report statement
7. Government of Gujarat and Government of Orissa are members of AB Limited such that AB Ltd. is a
Government Company. Central Government is not a member. Examine with reference to the provisions of
the Companies Act 2013, what documents are to be prepared?
a. Annual reports on the working and b. Profitability c. Board report d. All of above
affairs of the company. statement
8. Central Government is a member of a government company AB limited. AGM was held on 3rd July 2018 in
which the CAG has given its comments on the audit report. Examine with reference to the provisions of
the Companies Act 2013, what should be done by the AB limited?
a. Prepare an annual b. Prepare an annual c. Prepare Consolidated report d. (b) and (c)
rd rd
report within 3 Aug report within 3 Oct within 3 months from the
‘18. ‘18. date of AGM
9. In the situation above (Q8.) what further action is required to be taken?

a. Submit the Annual b. File appeal c. Place the Annual Report, Audit Report along with d. All of
Report in court if aggrieved CAG comments, before both houses of Parliament above
10. Shares of GH Limited is held by Government of Maharashtra and Government of Rajasthan to the extent
of 62%. As per the provisions of Sec 395, before which Authority shall such company place its Annual
Report?
a. Court b. Parliament c. State Legislature d. Registrar
13.2 11. Shares of GH Limited is held by Central Government and by Government of Rajasthan to the extent of
52%. As per the provisions of Sec 394, before which Authority shall such company place its Annual Report?
a. Court b. Both House of Parliament c. State Legislature d. (b) and (c)
12. Shares of GH Limited is held by Central Government to the extent of 58%. As per the provisions of Sec
394, before which Authority shall such company place its Annual Report and Audit Report?
a. Court b. Both House of Parliament c. State Legislature d. (b) and (c)
13. Blooming Flowers Limited is a subsidiary of a government company but not a wholly owned subsidiary of
a Government company. Examine with reference to the provisions of Companies Act whether Blooming
Flowers Limited is Government Company.
a. Government Company b. Sec 8 Company c. Private Ltd. d. None of the above
14. Mr. Somebody is appointed as a director of a Government Company. He did not file his consent to act as
director under DIR2 after appointment. Examine with the provisions of the Companies Act if he is legally liable
considering the contravention.
a. Should file b. Director of Government c. Company and Officer in default d. None of the
consent within 30 Company is exempted from shall be punishable with fine of above
days of appointment. filing consent with the ROC. Rs. 50,000 to Rs. 5, 00,000.
15. A government company holds 10% of the paid up share capital in Excel Limited. Central Government
holds 55% of the paid up share capital of Excel Limited. Examine whether Excel Limited can be considered as
Government company as per the provisions of Companies Act.
a. Government company b. Public Company c. Private Company d. None of the above
16. 30 % of the paid capital of AB Limited is held by a government company. State government also holds
30% of the paid up capital of AB Limited. As per the provisions of Companies Act, for AB Limited to be called as
Government company which of the following conditions is to be fulfilled?
a. 21% or more to be b. 21% or more to c. 21% or more to be held by Central d. None of
held by Government be held by Government or State government or the above
Company Public Company Subsidiary of a Government Company
17. FTI Ltd. a Government Company has inadequate profits in the year 2018-19. The directors of the Company
proposed to declare dividends for the said year, but later changed their minds quoting inadequate profits
as a reason. The members of the company are of the view that since profit for the current year is
inadequate a dividend at maximum 10% can be still be paid as per law. Comment.
a. No dividend can b. Members are c. Since the profits for the current year is d. None of
be declared on correct in claiming inadequate, dividends can be declared in the above.
account of dividend only to compliance with sec 123 from
inadequate the tune of accumulated profits by following rules as
profits. maximum 10% prescribed.
18. XYZ Ltd., a Government Company declared dividend on 8th April 2018. The Company however failed to
deposit the dividend in a separate bank account within 5 days of declaration. What are the repercussions?
a. Company shall be liable to pay b. Officer in default shall be c. (a) and (b) d. No legal
interest @ 12% p.a. from the liable to a penalty of Rs. repercussion
date of such default. 1000/- per day.
19. SKP Ltd. involved in the manufacturing of ‘Fans’, ‘Coolers’, ‘Fridges’, etc. did not comply to the
requirement of AS-17. The directors of SKP Ltd. are of the view that since it is a Government Company,
segment reporting as per AS-17 is not required. Comment.
a. The view b. Contention of the c. Contention of the directors d. Contention of the directors is
posed by directors is is incorrect, as compliance incorrect, as compliance with
directors incorrect, as AS-17 with AS-17 on Segment AS-17 on Segment Reporting is
is correct. on Segment Reporting is exempted for exempted for Government 13.3
Reporting is Government Companies Companies involved in Defence
applicable to all dealing with Agricultural Production.
companies. Products.
20. AOA of XYZ Ltd. a Government Company specifies a maximum of 16 directors. There are 16 directors on
Board. The Company seeks to appoint Mr. Sinha as Additional Director. Can the same be done?
a. Since the maximum b. Appointment of Additional c. Since, XYZ Ltd. is a d. None of the
number allowed is 16, Director is not considered Government Company, above.
appointment of in the total count of it can appoint
Additional Director is Directors hence can be maximum no. of
possible only after appointed by passing a directors above 15 by
passing a GM-SR. GM-OR. passing GM-OR only.
13.4 Answers
1. b 2. d 3. d 4. a
5. c
(Hint: XY Limited is not Government company because holding of Central Government and Government of
Karnataka is less than prescribed 51%.The holding of the Government Company is not taken into account).
6. a 7. a 8. b
(Hint: If the CG is a member of Government Company then such company shall prepare
an annual report within 3 months from the date of AGM in which the CAG gave
comment on the audit report u/s 143(6))
9. c 10. c 11. d
12. a 13. b 14. b (Hint: Newly appointed director of Government Company is exempted
from filing his consent to act as director under DIR2)
15. a
(Hint: Because the holding of the central government is more than prescribed 51% under the definition of
Government company. The holding of the Government Company cannot be taken into account)
16. c
(Hint: Because the holding of the central government or state government or its subsidiary should be more
than prescribed 51% under the definition of Government company. The holding of the Government Company
cannot be taken into account).
17. d
(Hint: In case of inadequate profit in the Current Year a Government Co. can declare the dividend out of
accumulated profit without compliance of the rules).
18. d
(Hint: The requirement of depositing dividend amount (incl. interim dividend) to be deposited in a separate
scheduled Bank in a separate account within 5 days from the date of declaration does not apply to Govt. Co.)
19. d 20. c
Chapter 14 REGISTRATION OFFICES AND FEES
Chapter 14 : REGISTRATION OFFICES AND FEES

14.1
1. Office of Registrar shall be open for transaction of business between what hours :
a. 10:30 a.m to 3:30 p.m b. 24 x 7
c. 9:00 a.m. to 5:00 p.m. d. Based on token system obtained online
s
2. Seal u/s 396 of Companies Act shall bear the words:
a. Registrar of Companies, Government of India b. Registrar of Companies, (Place and State)
c. Registrar of Companies, M.C.A, Govt. of India d. Any of the above
3. Court has rejected as evidence Xerox copy (duly authenticated by the Registrar) of a Return filed by the
Company with the Registrar: Is the treatment valid:
a. Yes , Xerox copy is invalid whether or not b. No, Xerox copy is authenticated and u/s 397 gains
authenticated validity without original document
c. Yes, Xerox authenticated by Registrar is not d. No, provided that the Xerox is
admissible proof at Court but is admissible at Tribunal authenticated in the preceding 6 months
4. A person wanted to exercise his right to inspect documents delivered to the Registrar with a Prospectus
u/s 26 (Matters to be stated in Prospectus): 30 days had elapsed since the publication of Prospectus, can
he inspect?
a. Yes, inspection is not time bound b. No, as 14 days have elapsed, he cannot
c. Yes, as 45 days have not elapsed d. No, Such documents can’t be inspected at all
5. A person wanted to exercise his right to inspect documents delivered to the Registrar with a Prospectus
u/s 388(1)(b) (expert’s consent and allotment): 30 days had elapsed since the publication of Prospectus,
can he inspect ?
a. Yes, inspection is not time bound b. No, as 14 days have elapsed, he cannot
c. Yes, as 45 days have not elapsed d. No, Such documents can’t be inspected at all
6. Can the above rights be exercised after 14 days:

a. Yes, CG permission is needed b. No, such right cannot be exercised after 14 days
c. Yes, permission of Tribunal is needed d. Yes, permission of Court is needed
7. In exercise of Power of Board u/s 179(3) resolutions were passed by Board on certain matters enlisted
therein. The same resolutions were filed in compliance of Sec 117(3)(g) with Registrar: Can the same be
inspected by a person exercising right u/s 399?
a. Yes, as Board resolutions and GM resolutions are not b. No, as the same is prohibited under
seen separately for this right u/s 399 law
c. Yes, provided that a 14 days’ notice is given to Registrar d. None of the above
8. Where a physical Form is prescribed for submission to Registrar, an electronic form can be used to:
a. be submitted exclusive of physical form b. be submitted in alternative to physical form
c. be submitted in addition to physical form d. All of these
9. In case the Companies Act 2013 and the Information Technology Act 2000 are inconsistent with each
other: Which of the Acts shall be given effect to w.r.t. that inconsistency?
a. Companies Act, 2013 b. Information Technology Act, 2000
c. As per case by case basis, ruling of HC/SC d. As per case by case basis, ruling of Tribunal
10. Office of Registrar shall be functional on all days except:

14.2 a. Saturdays & Sundays b. All Public Holidays
c. Both a. and b. d. 26th January, 15th August & 2nd October
11. Where a Document/(s) was/were required to be filed but weren’t so filed, the same may be filed on
payment of ________ fee u/s 403:
a. Additional Fee b. Compensatory Fee
c. Conciliatory Fee d. None of the above
12. Additional Fee for filing after due date of submissions u/s 92 or 137 shall not be less than:
a. Rs 100 per day b. Rs 200 per day
c. Rs 500 per day d. Rs 1000 per day
13. Where there is a repetitive failure of two or more times to make timely submissions of requisite records
u/s of the Companies Act, 2013 the same shall be filed on payment of:
a. Higher Additional Fee b. Higher Compensatory Fee
c. Higher Conciliatory Fee d. None of the above
14. Quantum of Higher Additional Fee as above shall not be less than……the additional fee:
a. 2x b. 3x
c. 10x d. 20x
15. Will the payment of Additional Fee or Higher Additional Fee (as the case may be), absolve the Company
and its Officers of any other liability under Companies Act, 2013 for such failure:
a. Yes b. No
c. Yes, Company will be absolved d. Yes, Officers will be absolved
Answer
Q. NO ANSWER (REFERENCE WHERE REQUIRED) 14.3

1. a (Rule 4 of Companies (Registration Offices and Fees) Rules, 2014)
2. b (Rule 6 of Companies (Registration Offices and Fees) Rules, 2014)
3. b Sec 397 of Companies Act, 2013
6. a Sec 399 of Companies Act, 2013
7. b (Rule 15 of Companies (Registration Offices and Fees) Rules, 2014)
8. d Sec 400 of Companies Act, 2013
10. c Sec396 & (Rule 4 of Companies (Registration Offices and Fees) Rules, 2014)
Chapter 15 POWER TO DEMAND INFORMATION & STATICS
Chapter 15 : POWER TO DEMAND INFORMATION & STATICS

1. As per Sec 405 of the Companies Act, 2013, who shall have the right to demand information or 15.1
statistics w.r.t. constitution or working of the Company?
a. RBI b. ROC c. CG d. None of the above
2. Sanika Ltd. failed to provide some statistical information to the Central Government within time. It
seeks to know of the repercussions, if any. Kindly inform.
a. Company: Penalty b. Company: Penalty c. Company: Penalty d. Company: Penalty of
of Rs. 25,000 of Rs. 50,000 of Rs. 25,000 and Rs. 25,000
Every officer: Jail up Every officer: Jail up Every officer: Jail Every officer: Jail up to
to 6 months & fine to 6 months & fine up to 6 months & 6 months or fine from
from Rs. 25,000 to from Rs. 50,000 to fine from Rs. Rs. 25,000 to Rs. 3 lac
Rs. 3 lac Rs. 3 lac 50,000 to Rs. 3 lac or Both
3. CG published in the Official Gazette to a Class of Companies for submission of certain documents,
XYZ Ltd. being one of those companies. However, Mr. Chander, a director in XYZ Ltd. is of the opinion
that since direction is given to a class of companies and not specifically to XYZ Ltd., it is under no
obligation to provide the documents. Is the contention of the director valid?
a. No, CG may demand b. Yes, Company is under c. No, CG shall demand d. None
documents from a specific an obligation to submit documents a class of of the
company or a class of documents only on companies through a above
companies through a receipt of Individual notification in the
notification in the Official and specific demand of Official Gazette only.
Gazette. information.
4. CG published in the Official Gazette to a Class of Companies for submission of certain documents on
20th Jan 2019 within 30 days. XYZ Ltd. being one of those companies, got the knowledge of such
demand on 28th Jan 2019. Within what date shall the documents be submitted by XYZ Ltd. and other
companies in the same class?
a. XYZ. Ltd: 27th Feb b. XYZ. Ltd: 28th Feb c. XYZ. Ltd and d. XYZ. Ltd and Other
2019 2019 Other Companies: 20th Feb
Other Companies: Other Companies: Companies: 19th 2019
th th
19 Feb 2019 28 Feb 2019 Feb 2019
5. PQR Ltd. submitted all the requisite information and Statistics to the CG as required by it, However,
CG wishes to know the veracity of the information so received. What steps can be taken by the CG in
order to ensure that the information and statistics provided is correct and complete?
a. CG may take an affidavit b. CG may order the c. CG may examine d. Any of the
from PQR Ltd. to ensure Company PQR Ltd. to the officers of above
it receives correct and allow inspection of the PQR Ltd. under
complete information. documents so provided. oath.
Answers
1. c 2. d 3. a 4. c 5. b
Chapter 16 NIDHI COMPANIES
Chapter 16 : NIDHI COMPANIES

16.1
1. Suyog Mutual Benefit Nidhi Limited is of the view that its objective is to develop a habit of saving not
only amongst its members for mutual benefit and lending to each other but also of 3 rd Party. Is the
statement valid?
a. Yes b. No c. Can’t say, depends on the object d. Yes, only after unanimous resolution by
clause of the Company members.
2. Nidhi Company means a company which the CG has notified in the Official Gazette as a Nidhi or Mutual
Benefit Society. Is the statement true?
a. Yes b. No c. Can’t say, depends purely on if the object of d. No, as it furthers needs
the Company is to inculcate a habit of registration as Nidhi
saving amongst its members. Company.
3. Rathi Mutual Benefit Nidhi Limited is of the opinion that provisions of the Companies Act do not apply
to Nidhi Company as special provisions for Nidhi Companies are applicable. Check the veracity of their
opinion.
a. Special provisions b. CG may direct that c. CG may direct that provisions of d. (b) or (c)
for Nidhi provisions of the Act the Act shall apply with
Companies have are not applicable to exceptions, modifications or
been formulated. Nidhi Co. adaptations.
4. Nidhi Companies shall be treated as …………….

a. Private Company b. Public Company c. Sec 8 Company d. None of the above
5. To be formed as Nidhi Company, a company shall have minimum of ………..

a. Paid Up Capital b. Paid Up Capital c. Paid Up Capital of Rs. 5 d. Paid Up Capital of Rs. 10
of Rs. 5 Lacs of Rs. 10 Lacs Lacs or Turnover of Rs. 10 Lacs or Turnover of Rs.
Lacs 100 Lacs
6. Ratan Nidhi Company intends to issue Preference shares along with equity shares, can the same be
done?
a. No, Nidhi b. Yes, Nidhi c. Yes, Nidhi Companies can d. Yes, Nidhi Companies can
Companies Companies can issue Preference shares also issue Preference shares
can only issue issue Preference but after approval from also but after approval
Equity shares shares also Equity shareholders from Central Government.
7. Sneha Nidhi Company was incorporated on 1st Jan 2018. It shall ensure within a year of its
incorporation:
a. Minimum 200 b. Net Owned Funds of 10 Lacs or more; c. Ratio of NOF to d. All of the
members; and Unencumbered Deposits of 10% Deposits can be 1:20. above.
8. Ankita Nidhi Company seeks your advice on the time limit of filing a return as a statutory requirement
and the appropriate Form. Name the form and time limit for filing the same.
a. Form NDH-2 ≤ 30 b. Form NDH-1 ≤ 90 c. Form NDH-1 ≤ 30 days d. Form NDH-2 ≤ 90 days
days end of FY days end of FY end of FY end of FY
9. Anwesha Nidhi Company seeks your advice on the time limit of filing on compliance of provisions by it.
Name the form and time limit for filing the same.
a. Form NDH-2 ≤ 30 b. Form NDH-1 ≤ 90 days c. Form NDH-1 ≤ 30 d. Form NDH-2 ≤ 90
days end of first FY end of first FY days end of first FY days end of first FY
10. XYZ Nidhi Company wants to accept a minor as its member. It seeks your advice on acceptability of a
16.2
minor as its member.
a. Can be accepted if a b. Cannot be c. Can be accepted if Legal d. Can be accepted if
Trustee is appointed. accepted as a Guardian accompanies AOA so provides.
member. the minor.
11. A draft copy of the notification proposed to be issued shall be laid before each House of Parliament
while it is in session for …………
a. 1 month b. 30 days. c. 60 days d. 15 days each
12. The House of Parliament after laying down the draft copy of proposed notification was adjourned for a
period of 2 days, then held in session for 12 more days and again adjourned for 3 days. Will it
constitute as laying before the Houses of Parliament for 30 days in session?
a. No, as the number of b. Yes, as the number of days of c. No, as no adjournment d. None of
days of adjournment adjournment was not for a is permitted during the the
was for 5 days. consecutive period of 4 days. said period. above.
13. Within how many days shall the copies of every notification notifying a Company as Nidhi Company
issued by CG be placed before each House of Parliament?
a. 30 days b. 1 month c. Immediately d. 60 days
14. Which is the business prohibited to Nidhi Companies?

a. Carrying business b. Accepting Deposits c. Enter into a partnership d. All of the above
other than lending from any other for borrowing and
or borrowing person lending.
15. Which of the following can a Nidhi company not do?

a. Accept Body b. Accept Trusts as its c. Accept minor as its d. All of the above
Corporate as members. member unless legal
its members. guardian accompanies him.
Answer
16.3
1. a 2. a 3. d 4. b 5. a 6. b
7. d 8. b 9. a 10. c 11. b 12. b
13. c 14. d 15. d
Chapter 17 NCLT & NCLAT
Chapter 17 : NCLT & NCLAT

17.1
1. ………….. means a member of the Tribunal or the Appellate Tribunal appointed as such and includes the
President or the Chairperson, as the case may be
a. Chairperson b. Judicial Member c. President d. Member
2. NCLT\NCLAT shall be constituted by the---------by notification in the Official Gazette.

a. State Government b. Central Government c. High Court d. Supreme Court
3. NCLT shall consist of a --------

a. President, Chairman, b. President, c. Chairman, Technical d. President, Technical
Member Chairman, Secretary members, Judicial Member member, Judicial Member
4. NCLAT shall consist of a --------

a. President, b. President, c. Chairman, Technical d. President, Technical
Chairman, Member Chairman, Secretary members, Judicial Member member, Judicial Member
5. What is the maximum number of Judicial & Technical members in NCLAT?

a. 3 b. 11 c. 6 d. 10
6. The President and the members of NCLT shall be appointed by the Supreme Court.
a. True b. False c. Partly True d. Partly False
7. A president of NCLT shall be a person who is or has been Judge of High Court for ----- years.
a. 5 Years b. 2 Years c. 7 years d. 1 year
8. A person shall not be qualified to be appointed as a Judicial member unless he is or has been,
a. A judge of a High b. A District judge for at c. At least 10 Years been an d. Any of the above
Court least 5 years advocate of a Court.
9. Mr. AB was appointed as a Technical Member in NCLT. He has been in practice as a Chartered Accountant
since 12 years. Is the Appointment of Mr. AB as a Technical Member in order?(He does not possess any other
qualification)
A. Yes B. No C. Don’t Know D. May be
10. Ms. Vidya has been a presiding to Tribunal under Industrial Disputes Act, 1947 for more than 5 years. Is Ms.
Vidya eligible to be a technical Member in NCLT?
a. Yes b. No c. Don’t Know d. May be
11. The President of the Tribunal shall be appointed after consultation with the------------
a. President of India b. Prime Minister of India c. Home Minister of India d. Chief Justice of India
12. Selection Committee recommends the appointment of ---------------of Tribunal.

a. Members b. Chairman c. President d. All of the above
13.Selection Committee consists of—

a. Chief Justice of India, Senior Judge b. Secretary in Ministry c. Secretary in Ministry d. All of the
of SC or Chief justice of HC of Corporate Affairs of Law and Justice Above
14. The President /Chairperson and Members of Tribunal/ Appellate Tribunal shall hold office for a term of ----
years from the date on which he enters upon his office
17.2
A. 3 years + 3 years B. 5 Years + 5 Years C. 5 years + 3 years D. 10 Years
15. Mr. P was appointed as a President of NCLT when he was 64 years of age. During his tenure of 5 years, he
attains the age of 67 years. As per the Provisions, a president of the tribunal shall hold office for a period of
years and can be reappointed for a period of 5 years, as such until he attains 67 years. What action is to be
taken?
A. Continue till the tenure ends B. Vacate the office C. None of the above
16. Mr. Dev wants to be a member of Appellate Tribunal. His age is 48 years. Is he eligible to be appointed as a
member of Appellate Tribunal?
A. Yes B. No C. Not Applicable
17. Mr. Dev wants to be a member of Tribunal in the year 2020. His age is 49 years in 2018. Would he be
eligible for appointment as member of the Tribunal?
a. Yes b. Not Applicable c. No d. Can’t say
18. Mr. Y, President of NCLT died due to heart attack during his tenure. Thus the vacancy is created in the office
of President. The other members are Mr. U, age 59 years and Mr. V, age 62 years. Who shall act as president of
NCLT until the date on which a new President enters upon his office?
A. Mr. U B. Mr. V C. Nobody D. Chief Justice of India
19. Mr. H, President of NCLT wants to resign from office. He submitted his resignation in writing, signed and
addressed to the Central Government. Is his Resignation in order?
a. Yes b. No c. May be d. Don’t know
20. Mr. T was a President of NCLT. Due to some circumstances he resigned from the office of president of NCLT
on 1 June 2018. He still acts as president of NCLT. Another Member objected on this on 2 July 2018. His term
expires on 10 July 2018. Is his objection valid?
a. Yes b. Can’t say c. No d. Not Applicable
21. Mr. Loot, President of NCLT has been adjudged insolvent. Can the Central government after consultation
with the Chief Justice of India remove him from office of the President?
A. Yes b. No c. Don’t Know d. Not Applicable
22. The Central government after consultation with the Chief Justice of India removed the president of NCLT,
Mr. Y from office of the President without giving the reasonable opportunity of being heard on grounds of
moral turpitude. Is the removal in order?
a. Yes c. No c. Don’t Know d. May be
23. The order of removal of the President, Chairman or the member can be made by the----------
a. State Government b. Central Government c. High Court d. Adjudicating Authority
24. The Principal Bench of the Tribunal shall be at ---------

a. Mumbai b. Bengaluru c. Chennai d. New Delhi
25. How shall decision be taken if the members of a Bench differ on opinion on any point?
a. Mutual agreement b. Majority c. None of the Above
26. Tribunal passed an order on 1 August 2018. Within some days it realised that it contained mistake apparent
from the record. Tribunal wanted to rectify the order. What is the time limit to rectify the order?
a. Within 1 year from b. Within 2 years from c. Within 3 years from d. Within 4 years from the
the date of the order the date of the order the date of the order date of the order 17.3
27. Mr. S is aggrieved by the order of NCLT. A copy of the order of tribunal was made available to Mr. S on 1
July 2018. He wants to file appeal to the Appellate Tribunal. What is the time limit to file appeal?
a. 15 Days b. 30 Days c. 45 Days d. 60 Days
28. Mr. G was found indulged in activities of money laundering. During the proceedings order was made by the
Tribunal. But he was aggrieved by the order made by Tribunal and filed appeal before the Appellate Tribunal.
Further, the order was made by the Appellate Tribunal. Again he was aggrieved by the order made by the
Appellate Tribunal. What can be the next course of action?
a. File an Appeal to the b. Accept the order and c. File an appeal to the d. File an appeal to the
High Court pay Fine Sessions Court Supreme Court
29. What is the time limit from the date of receipt of the order to file Appeal to the Supreme Court?
a. 30 Days b. 45 Days c. 15 Days d. 60 Days
30. The Appeal to the Supreme Court may be filed only on a question of --------- arising out of the order of the
Appellate Tribunal.
a. Law b. Fact c. None of the above d. Both of the above
31. Proceedings under Prevention of Money Laundering Act, 2002 was going on against Mr. D. During the
proceedings he was asked by the Authority to submit documents related to the income and bank transactions.
Along with these transactions, some other documents were also asked to be submitted. Mr. D refused to
submit the documents citing the reason that this does not come under the powers of Tribunal. State whether
Mr. D is correct or not.
a. Correct b. Incorrect c. Partially correct d. Partially incorrect.
32. Mr. Q was appointed as a Technical Member of the NCLT on 15 July, 2017 for a period of 5 years. He will be
completing 62 years on 14 June, 2022. Whether he can be re-appointed on the NCLT on completion of his
tenure in 2022?
a. Yes b. No c. May be d. Don’t Know
33. Only such proceedings relating to the winding up of companies shall be transferred to the Tribunal as are at
a stage as may be prescribed by the Central Government.
34. The President of the Tribunal and the Chairperson and Judicial Members of the Appellate Tribunal shall be
Appointed after consultation with the chief justice of India.
35. The President of the Tribunal shall hold office as such for a term of 5 years from the date on which he
enters upon his office but shall not be eligible for re appointed for another term of 5 years.
A True B. False
36. The President of Tribunal shall be a person who is or has been a ---------------for 5 Years
a. Judge of High Court b. District Judge c. Advocate of a Court d. Any of the Above
37. Mr. X is a Judge of a High Court for 5 years. He wants to be a Judicial Member of NCLAT. His age is 49 years.
Is he eligible to be Judicial member of NCLAT?
a. Yes b. No
17.4
38. Where an order is made by the Tribunal with the consent of the parties, no party shall have a right to prefer
an appeal to the Appellate Tribunal.
a. True b. False
39. Every application presented before the Tribunal shall be disposed off by it within---------------- from the date
of such application.
a. 3 months b. 90 days c. 30 days d. 1 month
40. A person shall not be qualified for appointment as a Technical Member unless he-
a. is, or has been, in practice b. is, or has been, in practice c. is, or has been, in d. Any of the
as a Chartered Accountant as a Cost Accountant for at practice as a Company above
for at least 15 years least 15 years Secretary for at least 15
years
41. The Chairman & Judicial Member of NCLAT shall be appointed after consultation with the--------
a. President of India b. Prime Minister of c. Home Minister of d. Chief Justice of India
India India
42. Mr. X, a qualified CA has been practicing for 26 years in Investment and Accountancy and seeks to be
appointed as a Technical Member in NCLAT, can he be so appointed?
a. No, as practicing b. No, as experience of 30 c. Yes, as experience of 25 d. Yes, as experience of 15
CA cannot be years is required in years is required in years is required in
appointed as Investment and Investment and Investment and
Technical Accountancy to be Accountancy to be Accountancy to be
Member in appointed as a Technical appointed as a Technical appointed as a Technical
NCLAT. Member of NCLAT. Member of NCLAT. Member of NCLAT.
43. Mr. X, a qualified CA has been practicing for 26 years in law and seeks to be appointed as a Technical
Member in NCLAT, can he be so appointed?
a. No, as experience of 30 years is required in b. Yes, as experience of 25 years is required c. None of
Law to be appointed as a Technical in Law to be appointed as a Technical the above
Member of NCLAT. Member of NCLAT.
44. Which quasi-judicial forums have been replaced by NCLT?

A. Company law board b. BIFR C. Both of the above D. None
45. Appellate Authority is constituted in place of:

A. Company law board B. BIFR C. Industrial & financial Reconstruction D. Special court
46. Person shall be qualified to act as president of NCLT only when he has been
A. Member of Indian B. Practicing chartered C. Judge of high court D. Judge of supreme court for 5
corporate law service accountant for 15 years for 5 years years
47. A person shall be qualified to act as Judicial member of the NCLT only when he is or has been
A. a Judge of HC or B.. a district judge for C. an advocate court D. any of the above…
atleast 5 years, or for atleast 10years,or
48. A person shall be qualified to act as Technical Member only when he is or has been
A. Member of Indian B. is or has been C. is or has been a presiding officer of a D. any of the
Corporate law in practice as labour court, tribunal or national above
service or Indian CA, CWA, CS tribunal constituted under Industrial 17.5
legal service disputes act
49. Mr. B is a judge by profession. He has served high court of Aurangabad for more than 7 years and wishes to
get himself on the board of NCLT. Where is he eligible to be appointed based on his experience?
A. Qualified as Judicial B. qualified as C. Qualified as D. Qualified as Manager
member Technical Member President
50. Chairperson of NCLAT shall be person who is or has been

A. Judge of Supreme Court B. Judge of High Court C. ‘a’ or ‘b’ D. Judge of district court
51. Judicial member of NCLAT shall be a person who is or has been

A. Judge of high court B. Judicial Member of tribunal for 5 years C. ‘a’ or ‘b’ D. None
52. Selection committee shall consist of the following except

A. Secretary into MCA – B. Secretary in Ministry of C. Judge of District D. Chief justice of India or his
member law & justice –member Court nominee
53. President of the Tribunal shall hold office upto….of age

A. 65 years B. 67 years C. 62 years D. 60 years
54. President and every other member shall hold office for a term of ------
55. Member of the tribunal shall hold office uptil the age of
A.70 years B.65 years C.60 years D.75 years
56. President of the Appellate Tribunal shall hold office uptil the age of
57. President of tribunal ,shall for disposal of any case relating to rehabilitation ,restructuring or winding up of
companies shall constitute
A. Special Bench B. Judicial Bench C. Additional Bench D. Junior bench
58. Member of the appellate tribunal shall hold office upto

A. 65 years B.67 years C.72 years D.70 years
59. In case of disposal of case relating to rehabilitation or winding up, the CG shall constitute a…..which shall be
the head of all the benches.
A. Special Bench B. Principle Bench C. Additional Bench D. Deputy Bench
60. Tribunal can amend or rectify the order passed by it within a period of …..years
A. 5 years B. 2 years C. 1 year D.3 years
61. No act of …..in pursuance of section 10 FP shall be called in question in any court before any authority on a
ground whatsoever
A. Junior metropolitan B. Deputy metropolitan C. Additional D. Chief metropolitan
Magistrate Magistrate metropolitan Magistrate Magistrate
62. Any person aggrieved by any decision or order of Appellate Tribunal may file an appeal to supreme court
17.6
within….from the date of communication of order of Appellate Tribunal
A. 45 days B. 30days C. 15 days D. 60 days
63. Chairperson or member shall be removed when

A. He is adjudicated as B. He has convicted an offence C. has abused his D. all of the above cases
an Insolvent involving moral turpitude position
64. Any person aggrieved by opinion of Tribunal can file case to appellate tribunal within a period of
A.30 days B.60 days C.20 days D.45 days
65. The powers of tribunal can be exercised by Judicial & Technical members u\s
A.10 FQ B.10FH C.10FI D.10FA
66. Vacancy in tribunal is dealt in section

A.10 FL B.10FH C.10FB D.10FA
67. The tribunal member for appellate tribunal shall have special knowledge & experience of not less than------
YRS
A.10 B.25 C.30 D.40
68. Mr. X, a qualified CA has been practicing for 26 years in law and seeks to be appointed as a Technical
Member in NCLAT, can he be so appointed?
a. No, as practicing CA b. No, as experience of 30 years c. Yes, as experience of 25 years is d. None
cannot be appointed is required in Law to be required in Law to be appointed of the
as Technical appointed as a Technical as a Technical Member of NCLAT. above
Member in NCLAT. Member of NCLAT.
Answer
17.7
1. B 2. B 3. D 4. C 5. B 6. B (Hint: The President and the members of NCLT shall be
appointed by the Central Government. Sec 408 & Sec 410)
7. A 8. D 9. B 10. A 11.D
(Hint: Minimum experience of (Hint: Minimum experience of 5 yrs as
15 years as a CA in practice is presiding officer to Tribunal under Industrial
required to be appointed as a Disputes Act, 1947 to be appointed as a
Technical Member). Technical Member is required.)
12. A 13. D 14. B 15. B 16. B 17. A
(Hint: To be a member of NCLT, Minimum
age should be 50 years)
18. B 19. A 20. C
(Hint: As per Sec 415(1) any (Hint: U/s 416, the (Hint: In spite of the fact that the President
vacancy at the office of President, has resigned from his office he shall
chairman or president shall be Chairperson or any continue in office until 3 months have
filled by the senior most Member by notice expired from the date of receipt of his
member who shall temporarily in writing under his resignation by the Central Government. Or
reside in such office until the hand address a person duly appointed as successor enters
new president or chairman is his/her resignation upon his office or the expiry of his term of
appointed). to the CG) office, whichever is the earliest.)
21. A 22. B 23. B 24. D
(Hint: As per the proviso to Sec 417, the President, the Chairperson
or the Member shall not be removed on any of the grounds specified
in clause (b) to (e) without giving him a reasonable opportunity of
being heard).
25. B 26. B 27. C 28. D 29. D 30. A
31. B 32. A 33. A
(Hint: ‘’Requiring the discovery and production (Hint: Mr. Q may be reappointed to
of documents” is one of the powers of Tribunal hold office as a Member of NCLT for
and Appellate Tribunal. (Section 424)) the period 15 July 2022 to 14 June
2027.)
34. A 35. B 36. A 37. B 38. A
(Section 413) (Hint: A person who has not completed 50 years of (Sec 421)
age shall not be eligible for appointment as Member
of the Appellate Tribunal)
39. A 40. D 41. D 42. C 43. C
(Hint: As per Companies Amendment Act, 2017, 15 yrs of
experience in the following is required to be appointed as a
Technical Member in NCLT: Industrial Finance / Industrial
Management / Industrial Reconstruction, Investment and
Accountancy).
44. C 45. C 46. C 47. D 48. D
49. C 50. C 51. C 52. C 53. B
54. B 55. B 56. C 57. A 58. B
59. B 60. B 61. D 62. D 63. D
64. D 65. C 66. B 67. B 68. D
Chapter 18 PRODUCER COMPANY
Chapter 18 : PRODUCER COMPANY

18.1
1. Which of the following shall not relate to object of producer companies?
a. Production, Harvesting, b. Promoting c. Revitalization of land d. None of
procurement of goods, marketing, techniques if and water resources the above
selling mutuality
2. Objects of producer company shall be in section

a. 571 B b. 581B c. 581 H d. 581 I
3. Status of producer co will be private company for situations where chapter....is silent.
a. IX-A b. X-A c. XI-A d. XII-A
4. Only..... Co-operative society can become Producer Company.

a. Single state b. Multi state c. Dual state d. Triple state
5. Liability of members is.....in producer company.

a. Limited b. Unlimited c. Guaranteed d. Non-guaranteed
6. Amendment of AOA shall not be inconsistent with

a. 581 A b. 581 B c. 581 C d. 581 I
7. Mr. P is a director of Anand Producer Limited Company, has vacated his office since he has been convicted
by court for an offence involving moral turpitude and sentenced for a period of 4.5 months. Is this
vacation required?
a. Yes b. No c. Partly yes d. Partly No
8. One shall vacate due to default made in repayment of loans or advances from the Producer Company in
which he is a...
a. Promoter b. Partner c. Director d. Shareholder
9. Failure to appoint a CS can result in a penalty of.... till the default continues.
a. Rs.100000 per day b. Rs.10000 per day c. Rs.1000 per day d. Rs.500 per day
10. Quorum of AGM for producer company is..

a. 1/3rd or 2 b. 1/2 of total membership c. 1/3rd or 3 d. 1/4thof total membership
11. Every member shall within.....of his becoming a member name a nominee to whom his shares shall vest
in case of death.
a. 6 Months b. 1 Months c. 3 Months d. 45 days
12. Share Capital of Producer Company shall consist of only equity shares. The above statement is..
13. In case of death of a director of a producer company shares held by him shall be transferred to nominee.
If nominee is not a producer then board shall
a. Re-issue the share b. Sell the shares to c. Direct to surrender the d. Simply transfer the
him. shares shares to him
14. The aggregate amount of donation and subscription in any FY shall not exceed ....of net profit in
immediately preceding FY.
18.2
a. 3% b. 5% c. 5% d. 3.5%
15. Anand Producer Company limited has made a contribution of 2% of its net profit to a Political Party for
its welfare. Is the above contribution valid?
a. Yes, its valid b. No, it’s not valid c. Valid since within the limit d. Invalid since exceeding the limit
16. Loans and advances against security specified in articles to any member is repayable within the period …
a. More than 6 months b. More than 1 year c. More than 3 months d. More than 9 Months but
but not more than 2 years but not more than 5 but not more than 7 not more than 10 years.
years years
17. Any loan or advance to any director or his relative shall be granted only after...
a. Approval of Board in b. Approval of c. Approval of Chairman d. Approval of Members in
BRLM Promoters GM
18. Any PCL may invest in any other company for an amount not exceeding..
a. 15% of its aggregate b. 30% of its aggregate c. 10% of its aggregate d. 20% of its aggregate paid
paid up capital and free paid up capital and free paid up capital and free up capital and free reserves.
reserves reserves reserves
19. Producer company shall become a Body Corporate as if it’s a private company without having …
a. Any limit of paid up b. Any limit for c. Any limit to the d. Any limit to the number
capital transferability of shares number of members of directors.
20. Total Number of directors including additional directors shall be...

a. Max 15 b. Max 18 c. Max 12 d. None of the above
21. Which of the following can incorporate a producer company?

1.Any ten or more persons engaged in any activity connected with primary produce or 2 or more producer
institutions or companies
2.Any 2 or more producer institutions or companies
3.A combination of 10 or more individuals and producer institutions
4.Any other institution
a. 1 and 2 b. 2 and 3 c. 1 and 3 d. 2 and 4
22. Registered Producer company......

a. Can never be a b. Is a Private Co. for c. Is always a private d. Is a Private Co. for
private limited situations where limited company situations where Chapter
company Chapter X-A is silent IX-A is silent
23. The 1st AGM of the shareholders has to be held within a period of ___of its registration.
a.180 days b.90 days c.30 days d.15 days
24. Blossom Producer Company Limited is having a having an average annual turnover exceeding Rs.8 Crores
in each of 3 consecutive financial years, has appointed Mr. Rex as CA to take care of all the secretarial
practices like filing returns, forms, legal documentations, etc. Is the appointment of Mr. Rex valid?
a. No b. Yes c. May be d. Yes, if it is valid as per clauses in AOA.
25. Blossom Producer Company Limited is having a having an average annual turnover exceeding Rs.7 Crores
in each of 3 consecutive financial years, has appointed Mr. Rex, a member of the ICSI as a whole time
secretary to take care of all the secretarial practices like filing returns, forms, legal documentations, etc. Is
the appointment of Mr. Rex valid? 18.3
26. Mr. Patil a member of Lotus Producer Company Limited seeks to avail of a credit facility from the
Company in relation to business of the Company. For what period can the same be availed?
a. not exceeding 2 b. not exceeding 6 c. not exceeding 3 d. not exceeding 9 months
months months months
27.Credit facility to any member in connection with business of the company for a period not exceeding
a.12 months b. 3 months c. 6 months d. 9 months
28. Blossom Producer Company Limited is having an average annual turnover exceeding Rs.3 Crores in each
of 3 consecutive financial years, has appointed Mr. Rex as CA to take care of all the secretarial practices like
filing returns, forms, legal documentations, etc. Is the appointment of Mr. Rex valid?
29. Suffix of the Producer Company will be

a. ...........private ltd b. ...........public ltd c. ...........& company d. ...........producer company limited
30. Who can be subscriber or member of Producer Companies?

a. Primary b. Marketing agents to c. Producer doing value addition to d. All of the
Producers increase the market the products making it marketable above
31. For the purpose of law, the Producer companies shall be dealt as if it is:
a. Public Limited b. Private Limited c. Limited by Guarantee d. Unlimited Company
company company company
32. Who can form the Producer Company

a. 10 Individual b. 2 Producer c. combination of 10 or more d. a or b or c
Producers Institutions individuals and producer companies
33. What are the minimum number of directors for producer company
a. 5 directors b. Minimum 2 director as in private c. 3 directors d. No minimum number of
company directors
34. Now the farmers and producers of the Onion want to incorporate the Company under Companies Act,
2013. But there are only 8 primary producers of Onion. Also, there is 1 Producer Institution who wishes to
incorporate a PC. Can these People incorporate a PC?
a. Yes they can b. No as the requirement c. Yes They can d. No they cannot as public
incorporate the PC of 10 individual and incorporate as a company but can as
as a private institution is not public company private company
company complied
35. ABC Producer Company Limited was formed with the object of producing, harvesting the grains and
selling the same by marketing. There were 11 members and out of which 1 member “A” got his interest
conflicted to that of producer company and one member “B” ceases to be a primary producer but was
carrying out the ancillary work related to primary produce. Will it amount to surrender of shares by both of
these members?
a. The member “A” shall cease to be member as b. Both A and c. Both A and B shall d. None of the
his interest in conflicted with that of the B would not cease to be the above
company and “B” shall continue to be cease to be members of
18.4
member as he is related to primary produce member Producer
and included as primary producer Company
36. Amulya Producer Company Limited was formed with equity shares of Rs. 5,00,000 (50000 equity shares
of Rs. 10 each) and now for raising its funds the company intends to issues debentures to its members and
increase the capital by doing so. It intends to raise the capital of Rs. 3, 50,000 (3500 debentures of Rs. 100).
Can the company do so?
a. The Company can b. The Company can do c. The company cannot d. Can issues part amount of
issue debentures so only upto Rs. issue debentures to its equity and part amount
and increase its 2,50,000 as debt members and can only of debentures
capital cannot exceed 50% raise it by equity
of the equity issued shares
37. PQR Producer Company Limited has a Paid-up capital of Rs.4,00,00,000 and average annual turnover of
Rs. 6,00,00,000 of preceding 3 financial years. Does the company need to appoint a company secretary
under Sec 203 of companies Act or under section 581K?
a. No the requirement of b. The company needs to c. No the requirement d. None of the
Company Secretary is appoint company secretary of Company Secretary above
not mandatory to under section 581K of is not mandatory to
Producer companies companies Act, 1956 Producer companies
38. PQR, a multistate co-operative society wants to convert itself to the Producer Company. But the existing
members are more than 500 in number and also the directors are 12. Can a co-operative society be
converted to Producer Company?
a. Yes it can be converted as b. The number of members needs to c. No a co-operative d. Both
there is no limit on number be only maximum upto 200 so as society cannot be B and
of members even if the to form the producer company converted into C
producer company acts as a which gets the status of Private Producer Company
private limited company Limited company under the act
39. XYZ Producer Company Limited held 4 board meeting in 2017-2018 but held once in every 3 months and
the gap between 2 meeting of June 2018 and December 2018 exceeded 120 days. Was there any non-
compliance on the part of Producer Company?
a. No according to b. The Company has held 4 meeting in a c. There was non- d. There is no
sec 581V the calendar year according to sec 173 of compliance requirement
company has companies Act but the days between any according to of minimum
held 4 meeting 2 meetings cannot exceed 120 days and both Companies number of
and 1 in each thus there is a non-compliance, as Act, 1956 and board
quarter, so there Producer Company needs to comply the Companies Act, meeting for
was no non- provisions of Companies Act 2013 in line 2013 the producer
compliance with the Companies Act, 1956 company
40. “X” a producer member of XYZ Producer Company Limited nominated Mr. A as his nominee within 3
months of his being a member In producer company. Now Mr. X is deceased and his shares are transferred
to Mr. A - nominee of Mr. X who is not a producer of any primary products? Whether such transfer of shares
is justified
a. The shares will be transferred to b. The nominee though c. The nominee’s d. None of
nominee and thereafter the board of not a primary business or his activity the
Directors shall direct the surrender of producer can still is not concerned for above
shares by nominee hold the shares his holding of shares
41. How does voting rights of member is being calculated or recognized or determined:
a. In a case where b. In a case where the membership c. In a case where the d. All of
the membership consists of Producer institutions membership consists of the 3 18.5
consists solely of only, the voting rights of such individuals and above
individual Producer institutions shall be Producer institutions,
members, the determined on the basis of their the voting rights shall
voting rights shall participation in the business of the be computed on the
be based on a Producer Company in the previous basis of a single vote for
single vote for year, as may be specified by articles every Member
every Member
42. Whether the limits of internal audit of sec. 138 is applicable to Producer Companies or is it mandatory for
producer companies to get the Internal audit done by a Chartered Accountant?
a. Every producer b. If the limits specified for the c. Internal audit is d. Producer
company needs to applicability of internal audit applicable only to the company are
carry out the under section 138 gets companies whose exempted from
internal audit of the attracted, then only internal turnover is more than provisions of
producer company audit is applicable. Rs. 3 Crores Internal audit
43. XYZ PCL wants to make some donations and subscriptions to a political person for the purpose of general
awareness. Can the donation be done and to what extent?
a. No contribution b. The PCL can c. The PCL can make the contribution d. The PCL can make
can be made to make the with the only condition that it will be the donations,
any political contribution used only for the purpose of general contribution or
person or to any to the extent awareness and for the benefit of subscription to
person for of only 3 % of general public at large any extent.
political reasons its profit
44. Is it mandatory to transfer funds to general reserve by PCL?

a. Every Producer Company shall maintain a b. No it is not c. Depends on d. Depends on the wish
general reserve in every financial year, in mandatory the wish of of members and profit
addition to any reserve maintained by it the earned for the
as may be specified in articles. directors financial year
45. ABC PCL appointed the Chief Executive officer “c” who was the nominee of the member “A” in the
company, Can the company do so?
a. No, the company b. The Act provides that c. Any person d. The PCL need not
cannot appoint only a member cannot be whether member appoint any CEO as it
the member’s appointed as the CEO of or no can be is exempted
nominee as a Chief PCL, so nominee can act appointed as the
Executive Officer the CEO of company CEO of PCL
46. An inter-state co-operative society was converted into a PCL on 01st April 2018 and has 18 directors on its
Board after incorporation. Advice the company whether it can have such number of directors?
a. The PCL incorporated can b. No a PCL can have c. There is no criteria d. The PCL has its own
have more than 15 only maximum of for maximum existence and is managed
directors on the Board 15 directors on its number of by its members and do
for a period of 1 year Board since its directors not require to appoint
after incorporation incorporation directors in the company
47. Who are the first directors of the Producer Company Limited?
a. The members who sign the memorandum acts as first directors of The directors shall be appointed by
the company, until the directors are appointed at the AGM. But the members of the company within
there shall be minimum 5 number of directors 90 days of its incorporation
18.6
48. Aditya a director in Amulya Ltd., Producer company Limited failed to call for annual general meeting due
to natural calamity which occurred where the registered office of the company was situated. Advice the
company on vacation of office of directorship of Aditya?
a. The office of director b. There is no responsibility on the c. No, the office of d. None of
shall become vacate as part of director to call for AGM director shall not be the above
director failed to call and hence he Is not liable for the vacate as it is an
for annual general default and will not vacate the exception to Section
meeting office 581Q
49. Who shall be responsible for sending notice to directors for calling of Board Meeting of Producer
Company
a. Company secretary, if appointed b. Managing c. Chief Executive d. Manager
or any director authorised director Officer
50. The producer company had 32 members and now the AGM was called for the members. 7 members
were present for the meeting and there were 10 directors (out of which 2 are members not included in 7
members).Advice Whether the requirement of quorum is fulfilled?
a. There was no b. The adequate quorum was c. The adequate quorum was d. None of
adequate quorum present as the members present as there is requirement the above
as only 7 members present are more than 8 of only 5 members to be present
were present (i.e. 1/4th of the members) for AGM
51. In ABC Ltd, a producer company has 12 individual members and 3 producer institution forming part of
the members of such company. The members decide to call for an EOGM and thus 3 Producer Institution and
1 member proposed and send the notice in writing for calling of EOGM. Advice the company on whether the
notice was duly sent to members for calling EOGM?
a. The meeting is not duly called as the b. The EOGM is duly c. Producer d. None of
minimum requirement for members to called and hence is a company cannot the
call the notice Is 5 members valid meeting hold an EOGM above
52. XYZ Ltd, donated material to a politician for distribution to general public value of which is not exceeding
3% of its net profits of the previous financial year, after obtaining requisite approval of members. Is it a valid
transaction?
a. Yes since approval of b. Yes Since it is within the limit of 3% of c. Both A&B d. It is
members is obtained. net profits of the previous financial year. Invalid.
53. PQR Ltd subscribed shares of QP Ltd, a producer company by obtaining approval of members in the
general meeting. However the total amount of subscription is 50% of its paid up capital. Is approval of
central government required?
a. Yes since it b. No members’ c. No it is to be calculated on total d. None of the above
exceeds the approval is of paid up capital and free
limits sufficient. reserves.
54. PZ Ltd, wants to issue bonus shares to its members by capitalization of its general reserves. Can a
Producer Company Issue Bonus Shares?
a. No b. Yes with prior approval c. Yes with approval of d. Yes with approval of Board and
of board only. Members central government.
55. Mr. Ajay, a member of a producer company wants to transfer his shares to Mr. Rupesh. Can he do so?
a. Yes, with approval b. Yes, with approval c. Both a & b d. No, shares cannot be
of other members of Board transferred.
18.7
56. Light Producer Company Ltd. wants to grant credit facility to a member who is a relative of a director for
a period of 2 months. The transaction is approved in the Board meeting. Is this transaction within the powers
of board as per Section 581R?
a. The Board Can b. No, the board c. Yes, the Board can d. No, members’ approval
grant credit facility cannot grant the grant without any is mandatory.
subject to a limit credit facility. limit
57. James Ltd. has a paid up capital of Rs 5 Crores in previous financial year. Is it mandatory to appoint a
Whole Time Company Secretary?
a. Yes b. No c. Not mandatory d. None of the above
58. Mr. Joy a member of Race Ltd has ceased to be a primary producer. The Board has asked Mr. Joy to
surrender his shares at par. Mr. Joy does not agree to such surrender of Shares. Is he entitled to continue as
Member of the company?
a. No Mr. Joy is liable to surrender his b. Mr. Joy can continue to be a None of the above
shares member
59. PJ Ltd wants to appoint an internal auditor as per section 581ZF. It intends to appoint AZ & Associates, a
Cost Accountant firm as internal auditors. Can a Cost Accountant be appointed as internal auditor?
a. Yes b. No
18.8 Answer
1. d 2. b 3. a 4. b 5. a
6. b 7. b 8. c 9. d 10. d
(Hint: vacation is not required as he is sentenced for a period less 6 months)
11. c 12. a 13. c 14. 15. b
(Hint: any contribution to political party is not allowed)
16. c 17.d 18. b 19. c 20. b
21. c 22. d 23. b 24. a 25. b
(Hint: Every producer company having average annual turnover exceeding
Rs.5 Crores in each of 3 consecutive financial years shall appoint a whole
time secretary who is member of ICSI)
26. b 27. c 28. b 29. d 30. a
(Hint: Every producer company having average annual turnover exceeding
Rs.5 Crores in each of 3 consecutive financial years shall appoint a whole
time secretary who is member of ICSI)
31. b 32. d 33. a 34. b 35. a
36. c 37. b 38. a 39. b 40. a
41. d 42. a 43. a 44. a 45. b
46. a 47. a 48. c 49. c 50. b
51. a 52. d 53. c 54. c 55. b
56. d 57. b 58. a 59. b
Chapter 19 SPECIAL COURT
Chapter 19 : SPECIAL COURT

19.1
1. Special Courts are formed for purpose of:
a. Speedy Trial of b. Speedy Recovery of amount c. Both a. and b. d. Neither a. nor b.
Offences from Defaulting Directors
2. Constitution of Special Court shall be :

a. Single Judge being a Sessions Judge b. Metropolitan Magistrate or c. Both a. d. Neither a.
or Additional Sessions Judge JMFC and b. nor b.
3. Offences punishable under Companies Act, 2013 with imprisonment of 2 or more years can be dealt by:
a. Single Judge being a Sessions Judge or b. Metropolitan c. Both a. and b. d. Neither
Additional Sessions Judge Magistrate or JMFC a. nor b.
4. Offences punishable under Companies Act, 2013 other than above can be dealt by:
a. Single Judge being a Sessions b. Metropolitan c. Both a. and b. d. Neither a. nor b.
Judge or Additional Sessions Magistrate or
Judge JMFC
5. Appointment of Judges/ Magistrate for purpose of Special Court shall be done by :

a. CG in concurrence of the b. SG in concurrence of the c. CG in d. SG in
CJ of HC within whose CJ of HC within whose concurrence concurrence
jurisdiction the appointee jurisdiction the appointee with SC with HC
Judge is working Judge is working
6. Special Court called upon to adjudicate on matters involving 2 years imprisonment or more shall be
selected based on:
a. Location where Registered office b. Location of c. Location of d. As
of the Company in relation to Plaintiff whether Respondent whether decided
which crime is committed Company or others Company or others by the SC
7. In case where 2 or more Special Courts exercise jurisdiction over the area of the Regd. Office of the Co in
relation to which crime is committed and crime is punishable by 2 years or more imprisonment then:
a. Special Court shall be b. Special Court shall be c. Specified by the d. Specified by
selected at option of selected at option of High Court the Supreme
plaintiff respondent Court
8. Where offence is tried at with the Judicial Magistrate: Detention can be done for upto:
9. Where offence is tried at with the Executive Magistrate: Detention can be done for upto:
10. Special Court under Companies Act, 2013 may conduct trail for offences under:
a. Companies Act, 2013 b. Any other offence charged at the accused under c. Both d. None
CrPC 1973
11. Summary Trial can be conducted by Special Court if offence under this Act is not punishable with
imprisonment :
a. >3 years b. > 5 years c. > 4 years d. > 2 years
12. If convictions are determined in case of Summary Trial: the sentence for imprisonment shall not be:
19.2
a. >1 years b. > 2 years c. > 3 months d. > 6 months
13. Until formation of the Special Court, the cases triable thereunder shall be tried under:
a. Court of Sessions b. Court of Metropolitan Magistrate c. Court of JMFC d. All of these
14. Compounding can be done in case of offences punishable by:

a. Fine only b. Imprisonment Only c. Both a. and b. d. Neither a. nor b.
15. Compounding can be done at which stage of prosecution:

a. Before b. After c. Both d. Neither a. nor b.
16. Compounding can be done by :

a. Tribunal b. Regional Director or CG approved officer for fine upto 5 lakhs c. Both d. None
17. If Investigation provisions are invoked can the Company or its officers Compound the offence
a. Yes b. No c. Upto certain monetary limits
18. What period shall elapse before a similar offence compounded previously can be compounded again?
a. 4 years b. 3 years c. 2 years d. 1 year
19. Can fine imposed under Compounding exceed the Fine otherwise imposable had there been no
compounding:
a. Yes b. No c. Upto certain monetary limits
20. Application for Compounding to be made to:

a. High Court b. Supreme Court c. Tribunal/RD/CG Officer d. Registrar
21. Registrar shall forward application for compounding with his comments to:
22. Intimation of offences once compounded shall be made to :

23. Time limit for aforesaid Intimation shall be

24. When Compounding of offences is concluded while a Court proceeding is ongoing, notice to the Court
shall be given by:
a. Respondent b. Plaintiff c. Tribunal/RD/CG Officer d. Registrar
25. For the purpose of providing speedy trial of offences punishable under this Act, with imprisonment of
Two years or more, the ------------ may by notification establish as many special courts as possible.
a. State Government b. Central Government c. Supreme Court d. High Court
26. A Special Court shall consist of a single judge who shall be appointed by the Central Government with
the concurrence of the -----------within whose jurisdiction the judge to be appointed is working.
A. Chief Justice of the B. Prime minister of C. President of India D. Chief Justice of

Supreme Court India the High Court
19.3
27. A person shall not be qualified for appointment as a judge of a Special Court unless he is, immediately
before such appointment, holding office of a Sessions Judge or an------------
A. Director of Government B. Minister in C. Additional Sessions D. Additional Director of
Company Cabinet Judge Government Company
28. All offences under this Act shall be triable only by the Special Court established for the area in which the
registered office of the company in relation to which the offence is committed or where there are more
Special Courts than one for such area, by such one of them as may be specified in this behalf by the ------
-------concerned
A. Supreme court B. High Court C. NCLT D. Sessions Court
29. Where a person accused of, or suspected of the commission of, an offence under this Act is forwarded
to a -----------under sub-section (2) or sub-section (2A) of section 167 of the Code of Criminal Procedure,
1973.
A. Magistrate B. Sessions court judge C. High Court Judge D. Additional Sessions Court judge
30 A Special Court may, upon perusal of the police report of the facts constituting an offence under this Act
or upon a complaint in that behalf, take cognizance of that offence without the accused being
committed to it for trial.
A. True B. False
31. Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the Special Court may, if it
thinks fit, try in a summary way any offence under this Act which is punishable with imprisonment for a
term not exceeding------------.
A. Seven years B. three years C. two years D. an year
32. In the case of any conviction in a summary trial, no sentence of imprisonment for a term exceeding one
year shall be passed.
A. True B. False
33. When at the commencement of, or in the course of, a summary trial, it appears to the Special Court that
the nature of the case is such that the sentence of imprisonment for a term exceeding one year may
have to be passed or that it is, for any other reason, undesirable to try the case summarily, the Special
Court shall, after hearing the parties, record an order to that effect and thereafter recall any witnesses
who may have been examined and proceed to hear or rehear the case in accordance with the procedure
for the regular trial.
A. True B. False
34. Magistrate may authorise the detention of such person in such custody as he thinks fit for a period not
exceeding ----------in the whole where such Magistrate is a Judicial Magistrate and seven days in the
whole where such Magistrate is an Executive Magistrate.
A. fifteen days B. Ten days C. seven days D. twelve days
35. The provisions of the Code of Criminal Procedure, 1973 shall apply to the proceedings before a Special
Court and for the purposes of the said provisions, the Special Court shall be deemed to be a ----------------
and the person conducting a prosecution before a Special Court shall be deemed to be a Public
Prosecutor.
A. High Court B. NCLT C. Court of Session D. None of above
36. For the purpose of providing speedy trial of offences punishable under this Act, with imprisonment of----
19.4
--------, the Central Government may by notification establish as many special courts as possible.
A. A year or more B. Three years or more C. six months or more D. Two years or more
37. A Special Court shall consist of ---------- who shall be appointed by the Central Government with the
concurrence of the Chief Justice of High Court within whose jurisdiction the judge to be appointed is
working.
A. Single judge B. Two judges C. Three Judges
38. Magistrate may authorise the detention of such person in such custody as he thinks fit for a period not
exceeding fifteen days in the whole where such Magistrate is a Judicial Magistrate and ----------in the
whole where such Magistrate is an Executive Magistrate.
A. Seven days B. Ten Days C. Twelve Days D. Fifteen days
Answers
19.5
1. A 2. C 3. A 4. B 5. A
6. A 7. C 8. A 9. A 10. C
11. A 12. A 13. D 14. A 15. C
16. C 17. B 18. B 19. B 20. D
21. C 22. D 23. A 24. D 25. B
26. D 27. C 28. B 29. A 30. A
31. B 32. A 33. A 34. A 35. C
36. D 37. A 38. A
Chapter 20 MISCELLANEOUS PROVISIONS
Chapter 20 : MISCELLANEOUS PROVISIONS

20.1
1. Mr. Ram committed a fraud amounting to Rs. 6 Lakhs. Mr. Ram is of the opinion that he is liable to a
fine of Rs. 6 Lacs or max upto 18 lacs. Is his contention correct?
a. Yes, he will be b. No, he will be c. No, he will be liable d. No, we will be liable to
liable only to a liable to a fine of to a fine of Rs. 20 fine of 100% to 300% of
fine of Rs. 6 Lacs Rs. 20 Lacs and Lacs or jail upto 5 Fraud amount or Jail from
to Rs. 18 Lacs upto 5 years. years or both. 6 months to 10 years
2. Mr. Sam committed a fraud amounting to Rs. 6 Lakhs. Company accuses that the repercussion of the
fraud is affecting Public Interest at large. Mr. Ram is of the opinion that since the amount of fraud is
less than Rs. 10 Lacs, he is liable to a fine of upto Rs. 20 Lacs. Is his contention correct?
a. Yes, he will b. No, he will be c. No, he will be liable to d. No, we will be liable to fine
be liable only liable to a fine of a fine of Rs. 20 Lacs or of 100% to 300% of Fraud
to a fine of Rs. 20 Lacs and jail upto 5 years or amount or Jail from 6
Rs. 20 Lacs. upto 5 years. both. months to 10 years
3. Mr. Smith committed a fraud amounting to Rs. 16 Lakhs. However, no public interest is affected. Mr.
Ram is of the opinion that since no public interest is involved, he is liable to a fine of upto Rs. 20 Lacs.
Is his contention correct?
a. Yes, he will be b. No, he will be c. No, he will be liable d. No, we will be liable to fine
liable only to a liable to a fine of to a fine of Rs. 20 of 100% to 300% of Fraud
fine of Rs. 20 Rs. 20 Lacs and Lacs or jail upto 5 amount or Jail from 6
Lacs. upto 5 years. years or both. months to 10 years
4. Mr. Nikhil committed a fraud amounting to Rs. 16 Lakhs. Company accuses that the repercussion of
the fraud is affecting Public Interest at large. Mr. Ram is of the opinion that since the amount of fraud
is less than Rs. 10 Lacs, he is liable fine of Rs. 16 Lacs or max upto 48 lacs and jail of minimum 6
months. Is his contention correct?
fine of Rs. 20 Rs. 20 Lacs and Lacs or jail upto 5 Fraud amount or Jail from
Lacs. upto 5 years. years or both. 6 months to 10 years
5. Mr. Surya committed a fraud amounting to Rs. 1 Lakh. Company accuses that the repercussion of the
fraud is affecting Public Interest at large. Mr. Ram is of the opinion that since the amount of fraud is
less than Rs. 10 Lacs, he is liable fine of Rs. 1 Lac or max upto 3 lacs and jail of minimum 6 months.. Is
his contention correct?
fine of Rs. 20 Rs. 20 Lacs and Lacs or jail upto 5 Fraud amount or Jail from
Lacs. upto 5 years. years or both. 6 months to 10 years
6. Mr. Nihal committed a fraud amounting to Rs. 1 Lakh. Turnover of the company is 8 Lacs. Mr. Ram is
of the opinion that since the amount of fraud is less than Rs. 10 Lacs, he is liable fine of Rs. 1 Lac or
max upto 3 lacs and jail of minimum 6 months. Is his contention correct?
a. Yes, he will be b. No, we will be liable to fine c. No, he will be d. No, he will be liable
liable only to a of 100% to 300% of Fraud liable to a fine of to a fine of Rs. 20
fine of Rs. 20 amount or Jail from 6 Rs. 20 Lacs and Lacs or jail upto 5
Lacs. months to 10 years upto 5 years. years or both.
7. PQR Ltd. has been in operation for the last 6 months. It comes to the knowledge of the ROC about the
presence of this Company and that it is not registered with the ROC in the jurisdiction to which it
20.2
belongs. What are the consequences of the same?
a. Liable to fine of Rs. b. Liable to fine of Rs. c. Officers involved liable to d. (b) and (c)
1000 to Rs. 5,000 per 500 to Rs. 2,000 per jail of not less than 6
day during such a use. day during such a use. months
8. Mr. Tom committed a fraud amounting to Rs. 14 Lakh. Turnover of the company is 2200 Lacs. Mr.
Ram is of the opinion that since fraud involved does not amount to 1% of the turnover of the
Company; he is liable to a fine of Rs. 20 Lacs or jail upto 5 years or both. Is his contention correct?
a. Yes, he will be liable b. No, he will be c. No, we will be liable to fine of d. None of
to a fine of Rs. 20 Lacs liable to a fine of 100% to 300% of Fraud amount the
or jail upto 5 years or Rs. 20 Lacs and or Jail from 6 months to 10 years above
both. upto 5 years.
9. Mr. Tim committed a fraud involving public interest amounting to Rs. 4 Lakh. Turnover of the
company is 2200 Lacs. Mr. Ram is of the opinion that since fraud involved neither amounts to 1% of
the turnover of the Company nor does it exceeds Rs. 10 Lacs; he is liable to a fine of Rs. 20 Lacs or jail
upto 5 years or both. Is his contention correct?
a. Yes, he will be liable b. No, he will be liable to c. No, we will be liable to fine d. None of
to a fine of Rs. 20 a fine of Rs. 20 Lacs of 100% to 300% of Fraud the
Lacs or jail upto 5 and upto 5 years. amount or Jail from 6 above
years or both. months to 10 years
10. Mr. Nick committed a fraud amounting to Rs. 12 Lakhs. However, no public interest is affected. Mr.
a. Yes, he will be b. No, he will be liable to a c. No, we will be liable to fine of d. None of
liable to a fine of fine of upto Rs. 20 Lacs 100% to 300% of Fraud the
upto Rs. 20 Lacs or jail upto 5 years or amount or Jail from 6 months above
both. to 10 years
11. Mr. Anil committed a fraud amounting to Rs. 3 Lakhs. Mr. Ram is of the opinion that he is liable to a
fine of upto Rs. 20 Lacs as fraud does not exceed Rs. 10 Lacs. Turnover of the Company is 280 Lakhs.
a. Yes, he will be b. No, we will be liable to c. No, he will be liable d. None of the above
liable to a fine fine of 100% to 300% of to a fine of upto Rs.
of upto Rs. 20 Fraud amount or Jail from 20 Lacs or jail upto 5
Lacs 6 months to 10 years years or both.
12. Mr. Anuj committed a fraud involving public interest amounting to Rs. 1.5 Lakhs. Mr. Ram is of the
opinion that he is liable to a fine of upto Rs. 20 Lacs as fraud does not exceed Rs. 10 Lacs. Turnover of
the Company is 280 Lakhs. Is his contention correct?
a. No, we will be liable to b. No, he will be liable to c. Yes, he will be liable to d. None of
fine of 100% to 300% of a fine of upto Rs. 20 a fine of upto Rs. 20 the
Fraud amount or Jail from Lacs or jail upto 5 Lacs above
6 months to 10 years years or both.
13. Mr. Lakshman gave false evidence in the form of an affidavit. What will be the consequence of the
same?
a. He will be liable to jail a. He will be liable to a. He will be liable to a. He will be liable to
of 2 years to 8 years jail of 3 years to 7 years jail upto 5 years and jail of 3 years to 7 years
and fine upto 5 Lacs. or fine upto 10 Lacs. fine upto 10 Lacs. and fine upto 10 Lacs.
14. Ms. Surekha gave false evidence in the form of an oath. What will be the consequence of the same?
20.3
a. She will be liable b. She will be liable to jail c. She will be liable to d. She will be liable to
to jail of 3 years to 7 of 2 years to 8 years and jail of 3 years to 7 jail of 2 years to 8
years and fine upto fine upto 5 Lacs. years or fine upto 10 years and fine upto 5
10 Lacs. Lacs. Lacs.
15. The Board of Directors of Parmar Ltd. by passing a resolution by circulation decided on diversifying
the business of the Company. Is it valid? If not, what are the consequences?
a. Acts are b. Act are invalid c. Acts are invalid. Penalty d. Act are invalid
valid unless further applicable will be Rs. 10,000 plus unless ratified in
approved by GM. 1000 per day under this section. the next BM.
16. The Board of Directors of Tycoon Ltd. by passing a resolution by circulation decided on amalgamation
of Myson Ltd. the business of the Company. Is it valid? If not, what are the consequences?
a. Act are invalid b. Act are invalid c. Acts are d. Acts are invalid. Penalty
unless further unless ratified in valid applicable will be Rs. 10,000 plus
approved by GM. the next BM. 1000 per day under this section.
17. The Board of Directors of LIL Ltd. by passing a Board Meeting resolution amended the Object clause
of the Company. Is it valid? If not, what are the consequences?
a. Yes, b. Yes, valid only if appropriate disclosure c. Invalid, as amending MOA d. None of
valid. made in the Board’s Report is exclusive right of GM. the above
18. The Board of Directors of SIL Ltd. by passing a Board Meeting resolution amended the Article of
Association of Company. Is it valid? If not, what are the consequences?
a. Yes, b. Yes, valid only if appropriate disclosure c. Invalid, as amending AOA d. None of
valid. made in the Board’s Report is exclusive right of GM. the above
19. Mr. Somesh who is in full time employment with XYZ Ltd. was not paid his remuneration for a period
of 3 months. He, therefore, embezzled cash equal to the unpaid amount of remuneration. Will he
face any consequence?
a. Since the amount withdrawn is b. Liable to penalty of c. Compensation for d. (b) and
against the amount liable by the Rs.1 Lac to 5 Lacs and the property or (c)
Company to Mr. Somesh, he will jail up to 2 years delivering property
face no consequence. in original state.
20. Mr. Smart committed a fraud amounting to Rs. 28 Lakh. Turnover of the company is 5700 Lacs. Mr.
Ram is of the opinion that since fraud involved does not amount to 1% of the turnover of the
Company; he is liable to a fine of Rs. 20 Lacs or jail upto 5 years or both. Is his contention correct?
a. Yes, he will be liable b. No, he will be liable c. No, we will be liable to fine d. None of
to a fine of Rs. 20 to a fine of Rs. 20 of 100% to 300% of Fraud the above
Lacs or jail upto 5 Lacs and upto 5 amount or Jail from 6
years or both. years. months to 10 years
21. Mr. Sumit committed a fraud amounting to Rs. 18 Lakhs. However, no public interest is affected. Mr.
a. Yes, he will be b. No, he will be liable to a c. No, we will be liable to fine d. None of
liable to a fine of fine of upto Rs. 20 Lacs or of 100% to 300% of Fraud the
upto Rs. 20 Lacs jail upto 5 years or both. amount or Jail from 6 above
months to 10 years
20.4
22. SIL Ltd. has been in operation for the last 6 months. It comes to the knowledge of the ROC about the
presence of this Company and that it is not registered with the ROC in the jurisdiction to which it
belongs. What are the consequences of the same?
a. Liable to fine of Rs. 500 to b. Liable to fine of Rs. 1000 c. Officers involved liable d. (a) and
Rs. 2,000 per day during to Rs. 5000 per day during to jail of not less than (c)
such a use. such a use. 6 months
23. LMN Ltd. involved in the manufacturing of bearings has been inactive in its operations for 2 years 3
months and has not filed Financial Statements for the said period as well. The directors of the
company seek to know if the Company can apply for a Dormant Status.
a. Yes, as it fulfills all b. No, as it has to be c. No, as it has to d. Yes, if it fulfills all the
the conditions to be inactive for a minimum be inactive for a conditions applicable
enabled to apply for period of 3 years minimum period to be enabled to
dormancy. of 3 years apply for dormancy.
24. LMN Ltd. involved in the manufacturing of bearings has been inactive in its operations for 2 years 3
months and has not filed Financial Statements for the said period as well. The directors of the
company seek to know if the Company can apply for a Dormant Status. They wish to know what are
the additional conditions required to be fulfilled.
a. no prosecution is b. securities not listed on c. does not have d. All of the above
initiated or Stock Exchange outstanding
pending against it Government dues
25. HUL Ltd. involved in the manufacturing of bearings which is listed with the Bombay SE has been
inactive in its operations for 2 years 3 months and has not filed Financial Statements for the said
period as well. The directors of the company seek to know if the Company can apply for a Dormant
Status. They wish to know what are the additional conditions required to be fulfilled.
a. company is not having b. no inspection, inquiry or c. (a) & (b) d. Neither (a)
Public Deposits or investigation is ordered and nor (b) is
Outstanding Loans pending against it applicable
26. Mr. Arijit committed a fraud amounting to Rs. 1 Lakh. Turnover of the company is 220 Lacs. Mr. Ram
is of the opinion that since fraud involved does not amount to 1% of the turnover of the Company; he
is liable to a fine of Rs. 20 Lacs or jail upto 5 years or both. Is his contention correct?
a. Yes, he will be liable b. No, he will be liable c. No, we will be liable to fine d. None of the
to a fine of Rs. 20 Lacs to a fine of Rs. 20 of 100% to 300% of Fraud above
or jail upto 5 years or Lacs and upto 5 amount or Jail from 6
both. years. months to 10 years
27. Realisation Ltd., a Dormant Company wants to apply for the status of an ‘Active’ Company. Which
form shall the application be made in?
a. MSC – 1 b. MSC – 2 c. MSC - 3 d. None of the above
28. Laziness Ltd., a Dormant Company fails to comply with the conditions of Form MSC-1 and hence will
need to apply for the status of an ‘Active’ Company. Which form shall the application be made in?
a. MSC-2 b. MSC-2 c. MSC-4 d. MSC-3
29. Mr. Anuj committed a fraud involving public interest amounting to Rs. 1.5 Lakhs. Mr. Anuj is of the
opinion that he is liable to a fine of upto Rs. 20 Lacs as fraud does not exceed Rs. 10 Lacs. Turnover of
the Company is 280 Lakhs. Is his contention correct?
a. No, we will be liable to fine b. No, he will be liable to a c. Yes, he will be d. None of
of 100% to 300% of Fraud fine of upto Rs. 20 Lacs or liable to a fine the
amount or Jail from 6 jail upto 5 years or both. of upto Rs. 20 above
20.5
months to 10 years Lacs
30. Ms. Smita committed a fraud amounting to Rs. 4.8 Lakhs. Company accuses that the repercussion of
the fraud is affecting Public Interest at large. Mr. Smitha is of the opinion that since the amount of
fraud is less than Rs. 10 Lacs, she is liable to a fine of upto Rs. 20 Lacs. Is her contention correct?
a. Yes, she will be b. No, she will be liable to fine c. No, she will be liable d. Yes, she will be
liable only to a of 100% to 300% of Fraud to a fine of upto Rs. 20 liable to a fine
fine of Rs. 20 amount or Jail from 6 Lacs or jail upto 5 of upto Rs. 20
Lacs. months to 10 years years or both. Lacs
20.6
Answers
1. c 2. d 3. d 4. d 5. d 6. b 7. b
8. c 9. c 10. c 11. b 12. a 13. d 14. a
15. c 16. d 17. c 18. c 19. d 20. c 21. c
22. a 23. d 24. d 25. d 26. a 27. d 28. c
29. a 30. b
Chapter 21 SECURITIES AND EXCHANGE BOARD OF INDIA, 1992
Chapter 21 : SECURITIES AND EXCHANGE BOARD OF INDIA, 1992

21.1
1. X Ltd. wants to come up with an IPO of Rs. 15 crore from public. It has made all the necessary
arrangements for such IPO. The company has tangible assets of Rs. 5 crore in last 2 years. The company
filed offer document with SEBI but SEBI rejected saying that conditions are not fulfilled. Is the contention
of SEBI valid?
a. No b. Yes, Rs. 3 crore tangible c. Yes, Rs. 10 crore tangible d. Yes, Rs. 10 crore tangible
assets in last 3 years assets in last 2 years assets in last 3 years
2. For making an IPO, the company should have minimum average pre-tax operating profit of Rs. ----------
during 3 profitable years out of immediately preceding ---------- years.
a. Rs. 15 Cr. & 2 years b. Rs. 10 Cr. & 4 years c. 15 Cr. & 5 years d. 20 Cr. & 5 years
3. B Ltd. gets incorporated on 22 December, 2010. Due to expansion the company proposes to announce IPO
in the year April, 2013. The company has net-worth of around Rs. 4 crore since its incorporation, can such
company release IPO?
a. Yes b. Not until December 2013 c. With permission of CG d. Not until December 2014
4. In case of an IPO, aggregate of proposed and previous issue in same FY shall not exceed 5 times of its-------
a. Share capital b. Net worth pre issue c. Reserve and Surplus d. Loans and borrowings
5. If the issuer company has changed its name in last 1 year at least -------- of revenue of one full preceding
year shall be earned under new name
a. 75% b. 50% c. 60% d. 100%
6. Q ltd planning to issue IPO could not satisfy eligibility conditions. Issue is then made through book building
process. Q Ltd. should mandatorily allot at least ---to QIB.
a. 75 % b. 25% c. 50% d. 100%
7. B ltd has made public issue & it was successfully subscribed by 800 shareholders. Can the Company allot
to these shareholders?
a. No, atleast 1000 b. No, atleast 1500 c. No, atleast 2000 d. Yes, only 500
prospective prospective allottees prospective allottees prospective allottees
allottees needed needed needed needed
8. For regulation of offer document with SEBI the issuer company shall file atleast -----of draft prospectus
with SEBI
a. 10 copies b. 40 copies c. 30 copies d. 60 copies
9. Changes in offer document to be made --------of filing

a. Within 21 days b. Within 14 days c. Within 7 days d. Within 10 days
10. If the issue is undersubscribed (<90%), under writer shall fulfill commitment within
11. In case of ----------- 50% shares should be reserved for applications below Rs. 1 lakh.
a. Fixed price issue b. Book built issue c. Both of the above d. None
12. Price band in case of book built issue shall be---------

a. 30% b. 20% c. 40% d. 50%
21.2
13. In case of book built issue ---------- shares should be reserved for QIB’s
a. 35% b. 40% c. 50% d. 20%
14. In case of Book building route the electronic book is maintained about price bids. Such book shall be open
for.
15. Pricing of the book building process should be according to ------.

a. Schedule II b. Schedule I c. Schedule X d. Schedule XI
16. Price band in case of book building issue shall have upper limit of-------& floor price
a. 100% b. 150% c. 120% d. 60%
17. Price related disclosure in case of fixed price issue shall be made in ---------------.
a. Red herring prospectus b. Abridged prospectus c. Draft prospectus d. Information memo
18. Red Herring prospectus shall contain everything about IPO except
a. Price b. No. of securities c. Either a. or b. d. None of above
19. A ltd issued an IPO of issue price per share of more than 500. It wants to keep Rs 8 Face value. Is it valid?
a. No b. Yes, provided it must be >=Rs 1 c. Yes, must be <Rs 10 d. No, must be <Rs 5
20. Minimum Promoters contribution in case of IPO shall be atleast----------of post issue capital
a. 10 % or more b. 20 % or more c. 50 % or more d. 60 % or more
21. Mr. D was a promoter of A Ltd. and was holding 20% of post issue capital at 1.6.2010 (Date of allotment) .
The shares of such promoter shall be locked in till-----
a.1.6.2011 b. 1.6.2012 c. 1.6.2013 d. 1.6.2014
22. If the offer size is Rs. 100 Crore or more minimum ------------ shall be offered to public.
a.60% b. 25% c. 10% d. 15%
23. When offer size is Rs. 100 Crore or more, issuer Company should allot 60% to-------.
a. Anchor investor b. QIB c. Trust d. Merchant banker
24. X Ltd. makes a right issue to existing share holders of offer size of Rs. 60 lakhs. Is the Company eligible to
directly file letter of offer to SEBI?
a. Yes b. No ,file draft letter with Board c. No, file draft letter with MCA d. No filing of letter
25. A Ltd. withdrew right issue post announcement of record date. According to law Company should not
make any application for listing of shares to RSE for 12 months. Can equity share on conversion thereof be
listed?
a. No b. Yes, provided issue of convertible c. With approval CG d. With approval of
instruments was prior to record date MCA
26. J Ltd. has a huge amount of reserve in store and proposes to issue bonus shares to the shareholders.
Company had not paid interest due on debt instruments in past 3 years. Is Company eligible to issue
Bonus shares?
a. Yes, default is < 5 years b. No, as any default is c. SR at GM of Co. d. Approval of SEBI
prohibited
27. P Ltd proposes to issue bonus shares to all shareholders. But the Company has failed to pay gratuity to its 21.3
shareholders since 3 years. Can the Company make such issue?
a. Yes, as default is < 5 years b. No, as any default is prohibited c. SR at GM of d. Approval of
Co SEBI
28. Bonus share can’t be issued to partly paid shares. Is this statement true?
a. False b. True, they’re to be firstly c. True, capital is reduced to d. True, bonus is paid
made into fully paid extent of unpaid value of shares as dividend instead
29. S Ltd. has announced to issue of dividend to all shareholders. Due to change in plan Company decided to
issue bonus share instead of dividend. Can the Company do so?
a. Yes, bonus shares can be b. No, bonus shares cannot be c. Only if d. Only if
issued in lieu of dividend. issued in lieu of dividend approved by approved by
shareholders MCA
30. The B Ltd. has enough amounts in revaluation reserve. Can the Company issue bonus shares out of it?
a. Yes, as it’s a valid b. No, as it’s merely a re-valuation c. Only if approved d. Only if approved
financial reserve of assets specifically prohibited by CG by MCA
31. Preferential allotment means issue of shares by body corporate on preferential basis but does not include-
a. Public issue b. Bonus shares c. Sweat equity d. All of the above
32. Mr. X who was a shareholder of A Ltd. has sold equity shares on May, 2018. A Ltd. proposes to issue
shares by way of preferential allotment with relevant date being in September, 2018. Can A Ltd. issue
shares to Mr. X?
a. Yes, as 3 months have elapsed b. No, as 6 months haven’t c. Yes, as no time limit is
elapsed prescribed
33. Pricing of the preferential issue of shares which are already listed for 26 weeks or more shall be Higher of
the average of weekly high/ low of VWAP during -----------------------whichever is higher
a. 26 weeks or 2 weeks b. 26 week or 1 week c. 52 week or 3 week d. 52 week or 2 week
prior to relevant date prior to relevant prior to relevant date prior to relevant date
date
34. Securities allotted to promoter upto 20% of the total capital of the company shall be locked it for
35. The entire pre- preferential share capital held by allottees shall be locked in post pref. allotment for
atleast
a. 10 months b. 6 months c. 2 months d. 1 yr
36. If any person indulges in fraudulent & unfair trade practices relating to securities he may attract penalty
u/s 15HA to the higher of:
a. 1 lakh to 5 cr or 3x b. 5 lakh to 5cr or 3x c. 5 lakh to 25 cr or d. 5 lakh to 25 cr or 5x
profit derived profit derived 3x profit derived profit derived
37. Atleast ------------ of directors of Audit Committee should be Independent director in case of a listed
Company
a. 1/2 b. ¾ c. 2/3 d. 1/8
21.4
38. J Ltd is a Company in the top 100 select group of listed Companies by SEBI. J Ltd has to make create
exclusively of the following committees:
a. Audit Committee b. Risk Management c. NRCM d. SRC
39. The directors of Nomination & Remuneration Committee in case of Listed Company shall be:
a. Executive b. Independent Directors c. Additional Directors d. Non-Executive
Directors Directors
40 The company which is listed shall file its audited standalone financial results within -------days of end of FY
.
41 According to Regulation 24 regarding Corporate Governance requirements, a Listed Entity shall not
. dispose shares in its unlisted material subsidiary to less than ______ without passing GM-SR
a. 75% b. 60% c. 50% d. 29%
42 A Ltd. was selling assets (amounting to more than 20% of total assets) of its material subsidiary under a
. scheme of arrangement duly approved by Tribunal. Will A Ltd. require permission of SH?
a. Yes, since its under scheme b. No, as it’s under c. Yes, since the sale is d. No permission
scheme >20%
43 A listed entity shall file share holding pattern ---------- days before listing of securities on stock exchanges.
a. 21 days b. 10 days c. 1 day d. 30 days
44 Every listed entity shall file a statement showing Investor Grievances within 15 days from the end of
quarter?
a. True b. False, file within 14 days c. False , file within 21 day d. False, file within 30
days
45 Every listed entity shall within 15 days from the end of the quarter shall file report on ---------.
a. Shareholding Pattern b. Investor Grievance c. Financial Result d. Compliance of Corporate
Governance
46 In case of Listed Company who has undergone capital restructuring shall file shareholding pattern within
10 days of such action only when total paid up capital increases by.
a. By 2% b. By 5% c. By 4% d. By 6%
47 BOD of listed entity shall inform RSE 5 days before -------

.
a. Meeting to consider b. Recommendation or c. Both a and b d. None of these
Financial Statements declaration of Dividend
48 In the case where the BOD is having agenda discussing about the matter specified in Section 29(1)(b) the
. BOD shall in Form stock exchange atleast before
a.5 working days b. 2 working days c. 7 working days d. 11 working days
49 When the listed entity wants to notify any record date it is shall intimate RSE atleast ------ before doing so.
a. 11 working days b. 5 working days c. 2 working days d. 7 working days
50 SEBI (ICDR) Regulations,

a. 2010 b. 2011 c. 2009 d. 2015
21.5
51 Management of BOD of SEBI should have 2 members from the officials of
a. Ministry of Defense b. Ministry of Admin c. Ministry of Finance d. Directorate of Account
52 Chairman of the SEBI board shall have age limit of-----

53 Management of SEBI should have atleast 1 member from amongst -----.

a. National Sample Survey b. RBI c. Income Tax Dept d. CAG
54 Cease and desist order proceeding is u/s------- of SEBI Act.

a. 11A b. 11B c. 11C d. 11D
55 Failure to comply with order of inspector in respect of duties stated in 11 C result in imprisonment upto----
a. 6 months b. 1.5 years c. 1 year d. 2 years
56 When any employee is of a listed Company is caught making profit out of Unpublished Price Sensitive
Information , he shall be penalize with Fine of:
a. 30Cr. or 2 times of b. 25Cr. or 4 times c. 10 Lacs to 25Cr. or d. 50Cr. or 2 times of profit
profit of profit 3 times of profit
57 H, a registered stock broker charges an amount of brokerage which is in excess of brokerage specified in
regulation, he shall be penalized to the extent of:
a. 1 lac or 5 times of b. 2 lacs or 6 times c. 5 lacs or 3 times OF d. 4 lacs or 8 times
brokerage brokerage brokerage of brokerage
58 For the process of adjudication Board appoints an Adjudicating officer who is not below the rank of
a. Subordinate Chief b. Additional Director c. Deputy Chief d. Division Chief
59 SAT shall be headed by:

a. Director b. CEO c. Chairman d. Presiding member
60 The tenure of presiding member under SAT shall be:

61 Presiding officer can be

a. Sitting or retired b. Sitting or retired c. Appointed by CG in consultation d. Any of the
judge of SC Chief Justice of HC with Chief Justice of India above
62 Aggrieved party may appeal to SAT within ------ days of order against which appeal to be made is received:
63 In case of allotment of QIP atleast 10 % of eligible securities should be allotted to----

a. Anchor investor b. Share holder c. Promoter d. Mutual Funds
64 If the issue size of QIP is Rs. 350 Crores, the total number of allottees shall be-----.
a. >=2 b. >=4 c. >=5 d. >=7
21.6
65 QIB who are under same ------ shall be deemed to single allottee.
a. Country b. Group c. Capital Adequacy Norms d. None
66 QIB allotment to a single allottee shall not be more than -------

a. 50% b. 60% c. 70% d. 75%
67 Allotment of QIB’s pursuant to special resolution shall be computes within------.

a. 6 months b. 10 months c. 12 months d. 2 years
68 The issuer of QIP shall not make issue of QIB until expiry of 6 months from the date of prior QIP. True or
False.
a. True b. False, 12 months c. False, 18 months d. False, 24 months
69 The aggregate of proposed QIP and QIP made by issuer in same FY shall not exceed of the net
worth of the issuer as per audited Balance Sheet
a. 1x b. 2x c. 3x d. 5x
70 Tenure of convertible securities issued via QIP’s should not exceed more than ---------- months
a. 100 b. 90 c. 60 d. 80
71 Failure to furnish return or maintain books and records u/s 15A shall attract penalty upto lower
of:
a. 1 lakh/day or 1 b. 2 lakh/day or 2 crore c. 5 lakh/day or 5 crore d. 10 lakh/day or 10
crore crore
72 SEBI was set up in

a. 1988 b. 1992 c. 1999 d. 1982
73 Failure by intermediary to enter into an agreement with his client. u/s 15B shall attract lower of:
a. 1 lakh/day or 1 crore b. 2 lakh/day or 2 crore
c. 5 lakh/day or 5 crore d. 10 lakh/day or 10 crore
74 Mr. Oldy, 58 years of age was appointed as Chairman of the SEBI for 5 years. Under the provisions of the
SEBI,1992 decide whether he can be re-appointed on the same post after expiry of the original tenure.
Also decide whether he has the right to relinquish his office at any time before the expiry of his period of
office
A. Yes he can be B. No he cannot be re- C. Yes he can be D. No he cannot be
reappointed and he appointed and he reappointed and he re-appointed and
can relinquish his cannot relinquish his cannot relinquish he can relinquish
office office his office his office
75 What is the manner of relinquishing his office?

A. By giving to the CG B. By giving to the SEBI C. By giving to the CG D. By giving to the Central
notice of not less notice of not less notice of not less than Government notice of not
than 1 month in than 3 months in 3 months in writing less than 2 months in writing
writing writing
76 Mr. Fraud, a member of the SEBI nominated by the RBI has been convicted of an offence which in the
opinion of the CG involves a moral turpitude. What is the course of action now
a. CG has the power to remove B. SEBI has the power to remove C. High court has the power to
remove
21.7
77 Mr. T is a director of IMB Ltd. There is a particular matter coming up for consideration in a meeting of
SEBI’s Board related to IMB Ltd. Mr. T who is a member of SEBI Board has indirect pecuniary interest in
such matter. What would be the course of action now?
A. Mr. T will as usual participate B. Mr T will disclose nature of his C. Mr T will have to vacate
the SEBI meeting and take part interest and will not take part in his office by
in all proceedings any deliberations related to such relinquishment or request
matter the CG to remove him
78 Does any defect in the constitution of the Board invalidate the proceedings of the board?
a. Yes b. No
79 Pooling of funds under any scheme or arrangement , which is not registered with the Board or is not
covered under sub section (3), involving a corpus amount of Rs. 100 crore or more shall be
a. Deemed to be a collective investment scheme b. Called as ESOP c. Deemed to be Bonus issue
80 SEBI received complaints from some investors alleging that ABC Ltd. and some brokers are indulging in
price manipulation in the shares of ABC. Ltd. The allegations were found to be correct by the SEBI. So, SEBI
restrained such persons from accessing the securities market and prohibit any person associated with the
securities market to buy, sell or deal in securities. IS the action of SEBI in order with the SEBI Act, 1992?
a. Yes section 11 (4) b. No
81 SEBI appoints a person to investigate the affairs of an intermediary u/s 11C because:
A. SEBI has reasonable ground to B. Any intermediary or any person C. Both a. D. Neither
believe that the transactions in associated with the securities and b. a. nor b.
securities are being dealt with in market has violated any of the
a manner detrimental to the provisions or directions of the
investors law
82 Mr. Win refuses to comply with the order of inspector to produce to the investigating authority book,
register, and relevant records. State the penalty to which Mr. Win is subject to.
A. Imprisonment for a term B. Imprisonment for a C. Imprisonment for D. Imprisonment for a
upto 6 months or with term upto 2 years a term upto 1 year term upto 1 year or
fine upto Rs 1 crore plus or with fine upto or with fine upto with fine upto Rs 1
Rs. 5 lakhs for every day Rs 1 crore plus Rs. Rs 2 crore plus Rs. crore plus Rs. 5 lakhs
till the default continues 50000 for every 5 lakhs for every for every day till the
day till the Default day till the default default continues
continues continues
83 ------------ prepare an annual statement of Accounts. The accounts of the SEBI shall be audited by----. The
certified accounts of the Board shall be forwarded annually to the--------
A. SEBI, CAG, Central B. Central Government, C. CAG, CAG, Central D. None of the
Government CA, Ministry Government Above
84 The Board shall, …… after that end of each FY, submit to the Central Government, a report in such form as
may be prescribed giving a true and full accounts of its activities, policy and programs during the previous
FY.
A. Within 30 days B. Within 60 days C. Within 120 days D. Within 90 days
21.8
85 What is the penalty to a person who is required to maintain books account, fails to maintain the same?
A. Penalty which shall B. Penalty which shall C. Penalty which shall not D. Penalty which shall
not be less than RS not be less than RS be less than RS 1lakh not be less than Rs.
1lakh but which 1lakh but which but which may extend 50000 but which
may extend by one may extend to one to one lakh rupees for may extend to one
thousand rupees lakh rupees for each day during which lakh rupees for each
for each day during each day during such failure continues day during which
which such failure which such failure subject to a maximum such failure
continues subject continues subject to of Rs. 1 crore continues subject to
to a maximum of a maximum of Rs. a maximum of Rs. 1
Rs. 1 crore. 50000 crore
86 A group of investors are upset with the leading stock broker of Chennai Stock exchange and want to make
a Complaint to SEBI because the stock broker charges an amount of brokerage which is in excess of the
brokerage specified in the regulations. What is the penalty applicable to the stock broker
A. He shall be liable for B. He shall be liable for C. shall be liable for D. He shall be liable for
more than Rs 1 lakh more than Rs 1 lakh more than Rs 1 lakh more than Rs 50000
but which may extend but which may extend but which may but which may
to two times the to five times the extend to five times extend to five times
amount of brokerage amount of brokerage the amount of the amount of
charged in excess of charged in excess of brokerage charged brokerage charged
the specified the specified in excess of the in excess of the
brokerage, whichever brokerage, whichever specified specified brokerage,
is higher. is higher brokerage, whichever is higher
whichever is lower
On the complaint of Mr. Verma after enquiry SEBI finds that Mr. Sharma a CEO of the company on the
87 basis of unpublished price sensitive information, has indulged in the trading of the securities of that
company. What action can SEBI take against Mr. Sharma under the SEBI Act, 1992?
A. Penalty of more than B. Penalty of more than C. Penalty of more than D. Penalty of more than
Rs 10 lakh extending Rs 1 lakh extending Rs 10 lakh extending Rs 10 lakh extending
upto 25 crore upto 25 crore upto 25 crore upto 25 crore
rupees/three times rupees/three times rupees/three times rupees/four times
the amount of profits the amount of profits the amount of profits the amount of profits
made out of insider made out of insider made out of insider made out of insider
trading, whichever is trading, whichever is trading, whichever is trading, whichever is
higher higher lower higher
88 What is the penalty for contravention where no separate penalty has been provided
A. Penalty may B. Penalty shall not be C. Penalty shall not be D. Penalty shall not be
extend to Rs. less than one lakh less than ten lakh less than twenty five
1 crore rupees but which may rupees but which lakh rupees but which
extend to Rs. 1 crore may extend to Rs. 1 may extend to Rs. 1
crore crore
89 What will happen in a situation where the Board on examination of record of any proceedings satisfies
itself that the order passed by the adjudicating officer is erroneous to the extent it is not in the interests of
the securities market?
A. It may order to do B. It may order to carry C. It may order enhancing D. None of the
inspection again out due diligence the quantum of penalty above
90 In continuation to the above question, upto what time limit SEBI can consider the order passed by the
Adjudicating officer?
A. 2 months from the B. 3 months from the C. 30 days from the D. 120 days months from
date of the order date of the order date of the order the date of the order
passed or disposal passed or disposal passed or disposal passed or disposal of 21.9
of the appeal, of the appeal, of the appeal, the appeal whichever
whichever is earlier whichever is earlier whichever is earlier is earlier
91 All sums realised by the way of penalties under this Act shall be credited to the ---------
A. Investors education B. Consolidated fund of C. Prime Minister D. Central
and protection fund India National Relief Fund Government Fund
92 Mr. Vakil has been a retired Judge of Supreme court. Is he eligible to be appointed as a presiding officer of
SAT?
A. Yes No
93 Mr. Vakil has been a retired Chief Justice of High court. Is he eligible to be appointed as a presiding officer
of SAT?
a. Yes b. No
94 Mr. Expert is a person of proven ability, integrity and standing having special knowledge and professional
experience of not less than 15 years in financial sector including securities market .Is he eligible to be
appointed as a technical member of SAT?
a. Yes b. No
95 Mr. Sad was aggrieved with the order made by SEBI. He wants to file Appeal. To whom appeal can be filed
and what is the time limit to file the appeal?
A. Securities Appellate B. Securities Appellate C. Securities D. Securities
Tribunal, 45 days from Tribunal, 30 days Appellate Tribunal, Appellate Tribunal,
the date on which copy of from the date on 60 days from the 90 days from the
order is received by him which copy of order date on which copy date on which copy
is received by him of order is received of order is received
by him by him
96 Any person who discloses the aggregate of his shareholding in the body corporate before he acquires any
shares of that body corporate shall be penalized u/s 15H upto the higher of:
A. 10 Lakhs to 10 crore or 5x B. 10 Lakhs to 25 crore or 5x C. 10 Lakhs to 10 D. 10 Lakhs to 25
the profit derived the profit derived crore or 3x the crore or 3x the
profit derived profit derived
97. If any person fails to pay the penalty imposed by the adjudicating officer or fails to comply with any of his
directions or orders, he shall be punishable with ---
A. Imprisonment B. Imprisonment for a C. Imprisonment for a D. Imprisonment for a
for a term which term which shall not term which shall not term which shall not
may extend to be less than one be less than one be less than one
ten years , or month but which may month but which may month but which may
with fine, which extend to eight years , extend to ten years , or extend to ten years , or
may extend to or with fine, which may with fine, which may with fine, which may
Rs. 25 crore or extend to Rs. 25 crore extend to Rs. 20 crore extend to Rs. 25 crore
with both or with both or with both or with both
98. Any other non-compliance for which no separate penalty has been provided under SEBI Act shall be
punishable by:
21.10
a. Rs. 1 lakh/day upto maximum of 1 crore b. Rs. 2 lakh/day upto maximum of 1 crore
c. Rs. 5 lakh/day upto maximum of 5 crore d. Rs. 5 lakh/day upto maximum of 1 crore
99. Any person who makes a public announcement to acquire shares at a minimum price shall be penalized
u/s 15H upto the higher of
A. 10 Lakhs to 10 crore or B. 10 Lakhs to 25 crore C. 10 Lakhs to 10 crore or D. 10 Lakhs to 25
5x the profit derived or 5x the profit 3x the profit derived crore or 3x the
derived profit derived
100 Any person who makes a public offer by sending letter of offer to the shareholders of the concerned
company shall be penalized u/s 15H upto the higher of
A. 10 Lakhs to 10 crore B. 10 Lakhs to 25 crore or 5x C. 10 Lakhs to 10 crore or D. 10 Lakhs to 25
or 5x the profit the profit derived 3x the profit derived crore or 3x the
derived profit derived
Answers
Q ANSWERS Q ANSWERS 21.11

1. b (Reg 26(1)(a)) SEB(ICDR) 2009 51. c (SEBI Sec 4)
2. c (Reg 26(1)(b)) SEB(ICDR) 2009 52. c (SEBI Sec 5)
3. b (Reg 26(1)(c)) SEB(ICDR) 2009 53. b(SEBI Sec 4)
4. b (Reg 26(1)(d)) SEB(ICDR) 2009 54. d
5. b (Reg 26(1)(e)) SEB(ICDR) 2009 55. c (SEBI Sec 11C)
6. a (Reg 26(2)) SEB(ICDR) 2009 56. c (SEBI Sec 15G)
7. a (Reg 26(4)) SEB(ICDR) 2009 57. a (SEBI Sec 15F)
8. a 58. d
9. a 59. d (SEBI Sec 15L)
10. c 60. b (SEBI Sec 15N)
11. a 61. d (SEBI Sec 15M)
12. b 62. c (SEBI Sec 15T)
13. c 63. d (Reg 86 SEBI (ICDR) 2009)
14. c 64. c (Reg 87 SEBI (ICDR) 2009)
15. d 65. b (Reg 87 SEBI (ICDR) 2009)
16. c 66. a (Reg 87 SEBI (ICDR) 2009))
17. c 67. c (Reg 88 SEBI (ICDR) 2009)
18. c 68. a (Reg 88 SEBI (ICDR) 2009)
19. b 69. d (Reg 89 SEBI (ICDR) 2009)
20. b 70. c (Reg 90 SEBI (ICDR) 2009
21. C 71. a SEBI Sec 15A
22. c Reg 41 SEB(ICDR) 2009 72. a
23. b Reg 41 SEB(ICDR) 2009 73. a SEBI Sec 15B
24. B 74. a (SEBI Sec 5)
25. b 75. c (SEBI Sec 5)
26. b 76. a (SEBI Sec 6)
27. b 77. b (SEBI Sec 7A)
28. b 78. b (SEBI Sec 8)
29. b 79. A
30. b 80. A
31. D 81. c SEBI Sec 11C
32. B 82. D
33. A 83. A
34. C 84. D
35. B 85. C
36. c SEBI Sec 15HA 86. B
37. C 87. A
38. B 88. B
39. D 89. c SEBI Sec 15I to 15JB
40. B 90. B
41. C 91. b SEBI Sec 15I to 15JB
42. b Regulation 24 SEB(ICDR) 2009 92. a SEBI Sec 15M
43. C 93. a SEBI Sec 15M
44. C 94. a SEBI Sec 15M
45. D 95. a SEBI Sec 15T
46. A 96. d SEBI Sec 15H
21.12
47. D 97. d SEBI Sec 24
48. B 98. a SEBI Sec 15HB
49. D 99. d SEBI Sec 15H
50. C 100. d SEBI Sec 15H
Chapter 22 SECURITIES CONTRACT REGULATION ACT, 1956
Chapter 22 : SECURITIES CONTRACT REGULATION ACT, 1956

22.1
1. The objective of Securities Contract regulation Act is to:
a. To Regulate the capital market, protect b. To prevent undesirable transactions in securities by
the interest of investors regulating the business of dealing therein.
c. To regulate intermediaries participating in capital market. d. Both (a) & (B).
2. What is Demutualization of Stock Exchange?

a. Conversion of existing Non-Profit b. Conversion of mutually owned associations to an
Organization into a profit oriented organization that is owned by shareholders.
company
c. Transforming the legal structure of an exchange from mutual business to a d. All of above
business corporation form.
3. Application for recognition of stock exchange is made to:

a. SEBI b. Central Government
c. Securities Appellate Tribunal d. None of the above
4. Scheme for corporatization and demutualization of recognized stock exchange is sent to :

a. Central Government b. SEBI
c. ROC d. None of above
5. SEBI may restrict scheme of corporatization and demutualization on :

a. The voting rights of shareholders who b. The right of shareholders or stock brokers to appoint
are also stock brokers of the recognized the representatives on the board
stock exchange
c. The maximum number of representative appointed shall not exceed ¼ of the d. All of above
total strength of the board.
6. If a stock exchange fails to submit the scheme of corporatization and demutualization or the scheme
submitted is rejected by SEBI, then the central government has the right to:
a. Withdraw the recognition of the stock exchange b. Give an opportunity of being heard.
c. Enforce due performance of contracts entered d. Enquire into the affairs of the stock
before the notification date exchange.
7. A recognized stock exchange intends to amend its rules relating to voting of members in the meeting.
Such amendment shall be valid only if approval of _____________ is taken and published in the official
gazette :
a. SEBI b. ROC
c. Central Government d. None of the above
8. Recognized stock exchange can transfer its functions relating to clearing house to a clearing corporation
being a company incorporated under the Companies Act subject to approval of :
c. ROC d. None of above
9. Duties and functions of clearing house/clearing corporation shall involve:

a. Periodical settlement of contracts and b. The delivery and payment for securities
differences thereunder
c. Submission of periodical settlements d. All of above
10. The power to supersede the governing body of the stock exchange is vested with :
22.2
c. Representatives appointed central government d. ROC
11. What are the consequences of suppression on the stock exchange

a. The members shall cease to be the b. The persons appointed can exercise duties and powers
members. of the governing body which has been superseded.
c. All the property shall vest in such person appointed under this section for the d. All of above
purpose of enabling him to carry on the business.
12. An appeal by an investor pursuant to delisting of securities of the company in which he is a member shall
be made to SAT within :
a. 10 days b. 7 days
c. 15 days d. 30 days
13. Can a civil court pass an injunction order for a matter which a SAT is empowered?
a. No the civil court has no jurisdiction b. Yes the civil court can pass an injunction order
14. A person aggrieved by any decision or order of SAT shall file an appeal to the supreme court within :
15. An appeal to supreme court can be filed only if :

a. If the party is aggrieved by the order of SAT b. There is a question of law arising out of such order
c. The order is not in the favour of the d. The order is not in the interest of public at large.
appellant.
16. What are the penalties in the following cases :

(i) If a director of a stock exchange fails to furnish the authority making an inquiry all such records in
his custody without reasonable cause.
(ii) If a member of a stock exchange enters into contract in notified areas.
(iii) If a person owns a place other than that of recognized stock exchange which is used for the purpose
of entering into contracts in contravention of the provisions.
a. Imprisonment which may extend to 10 years or b. Imprisonment which may extend to 10 years or
fine which may extend to Rs 1 crores or both. fine which may extend to Rs 25 crores or both.
c. Imprisonment which may extend to 5 years or fine which may extend to Rs 10 d. None of above.
crores or both.
17. If a person fails to maintain or furnish information, records, returns, reports to a recognized stock
exchange he shall be liable to penalty which shall be :
a. Not less than Rupees 1 lakh but extend to Rs 1 lakh per day during b. Not less than Rupees 5
which the failure continues subject to maximum of Rs 1 Crore. lakh.
c. Not less than Rupees 1 lakh but extend to Rs 1 lakh per day during d. Not less than Rupees 10
which the failure continues subject to maximum of Rs 50 lakhs. lakhs.
18. If a stock broker fails to resolve investor grievances within the stipulated period, shall be punishable with
a penalty which shall be :
a. Imprisonment which may extend to 5 years or fine which may b. Not less than Rupees 10 lakhs.
extend to Rs 10 crores or both.
c. Not less than Rupees 1 lakh but extend to Rs 1 lakh per day during which the d. None of above.
failure continues subject to maximum of Rs 1 Crore.

22.3
19. If a company fails to comply with listing conditions or commits a breach shall be punishable with a
penalty which shall be :
a. Not Less than Rs 5 lakhs but b. Not less than Rupees 1 lakh but extend to Rs 1 lakh per day during
may extend to Rs 25 Crores. which the failure continues subject to maximum of Rs 1 Crore.
c. Not Less than Rs 5 lakhs but may extend to Rs 1 crore. d. None of above
20. Any person aggrieved by the decision of the adjudicating officer, SEBI or recognized stock exchange may
file an appeal to SAT within :
21. The appeal filed to SAT shall be disposed off :

a. As expeditiously as possible b. Within 3 months
c. Within 6 months d. Within a year.
22. Equity Shares and cumulative preference shares of Private Limited Company were sold under a share
purchase agreement wherein amount was to be paid in 5 equal instalments. A clause in the agreement
stated that the company has no liability due as on the date of agreement. After the purchase of shares it
was realized that income tax and sales tax liability was due. The purchaser defaulted in payment of
amounts and a case was filed. Whether the agreement is illegal under SCRA?
a. SCRA deals with marketable securities and shares of private company b. Yes this is an illegal
are not marketable securities. Hence the legality cannot be determined. agreement.
c. The present contract is not governed by SCRA and hence not illegal. d. Both (a) & (c).
23. A broker registered under the SEBI allowed his terminal to be used by unauthorized person, acting as un-
registered sub broker, did not maintain client registration forms, and delayed payments in violation of
provisions of SEBI and SCRA. Is the registration liable to be cancelled and what are the penalties?
a. Yes, Not Less than Rs 1 lakhs but may extend to Rs 1 crore. b. No
24. An Adjudicating officer shall be appointed by :

a. SEBI b. High Court
c. Central Government d. Stock exchange.
25. Can the business of stock exchange be suspended?

a. No the business of the stock exchange cannot be suspended unless b. Yes SEBI can suspend the
its affairs are held in a manner detrimental to the interest of trade business of the stock
or public. exchange.
c. Yes central government can suspend the business for a period d. Yes SAT can suspend the
not exceeding 7 days for reasons to be set out. business of stock exchange.
26. An order has been passed by the central government to amend the rules of the all the recognized stock
exchange. It shall be complied with within a period of
a. 15 days b. 2 months
c. 30 days d. 3 months.
27. The amendment in bye laws of the recognized stock exchange by SEBI shall come into effect on:
a. Passing an order b. On publication in official gazette of India.
c. On intimation to stock exchange d. One publication in official gazette of state.

22.4
28. An annual report is to be furnished by stock exchanges to :
c. ROC d. Both (b) & (c).
29. Every recognized stock exchange shall preserve its books of accounts and other documents for a period of
a. 8 years b. 10 years
c. As determined reasonably. d. 5 years
30. An inquiry into the affairs of the stock exchange or its members be made by :
c. SAT d. None of the above.
Answers
22.5
1. b 2. d 3. b 4. b 5. d
6. a 7. c 8. a 9. d 10. b
11. d 12. c 13. a 14. c 15. b
16. b 17. a 18. c 19. a 20. b
21. c 22. d 23. a 24. a 25. c
26.b 27.b 28. b 29.d 30.a

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Chapter 1 DIRECTORS: APPOINTMENT & QUALIFICATIONS

Chapter 1 : DIRECTORS: APPOINTMENT & QUALIFICATIONS

2. What is the minimum number of directors required in Private Company?

3. What is the minimum number of directors required in Public Company?

8. Appointment of woman Directors is mandatory for following companies:

9. Casual Vacancy of a woman director shall be filled by ……………..

16. On being appointed as director, he shall file Form ……..with Company.

18. What is the time limit for filing DIR-12?

21. Who shall mandatorily appoint Independent Directors?

23. What is the term of appointment of an Independent Director?

24. Independent Director may hold office for …..

27. Independent Director means a director other than ……..

28. Who shall be eligible to be appointed as Independent Director?

29. Who shall be eligible to be appointed as Independent Director?

42. Casual Vacancy of an Independent director shall be filled by ……………..

55. A Small Shareholder’s Director needs to vacate office if he:

56. First Directors of a Company shall be appointed in the following manner:

Which of the following is a correct sequence to follow in appointment of First Directors?

62. A company on the Board consisting of the following:

be appointed. the members. objected. objected.

resolution by resolution by Director can be appointed by passing

95. First Directors of a Company shall be appointed in the following manner:

110 Which form shall be filed for application of DIN?

111 What is the validity of an allotted DIN?

125. Maximum no. of Public Companies in which a person can be Director:

126. Which of the following shall not be included in calculating Directorships:

133 Director resignation from excess Directorships shall be valid w.e.f:

139 Contravention of sec 184 by Director shall result in:

140 A Director who is removed from office u/s 169 shall:

144 What shall be the tenure of office of the aforementioned Director(s):

determined Directors shall be Directors shall be or not appointments are

145 Private company may:

147 A Director can resign :

154 Documents to be submitted to Registrar by Director when intimating of his/her resignation:

u/s 163 term u/s 149(10)

Q. NO. OPTION NO. / REASON

Chapter 2 : DIRECTORS: BOARD MEETINGS & ITS POWERS

the following dates:

4. The following is an extract of balance sheet of a Company on 31stJan , 2016:

2.2 held in a Calendar in a Financial Year at at interval not exceeding 90 6 calendar

a. 7 days b. 14 days c. 21 days d. 28 days

2.4 a meeting decisions made thereat urgent matters

21. What modes of attendance are available to a Director attending a BM

25. What shall be Quorum in case No. of Directors is 12:

26. What shall be Quorum in case No. of Directors is 13:

the Act and cannot be be reduced if just a guiding Independent

38. Which of the following is correct: The resolution passed by circulation

2.10 Companies Act GM of shareholder convened BM only w.e.f. FY 2017

2.12 which the Director Doctrine of Indoor befallen on the

69. A. Ltd’s extract of financial statements is as follows :

Resolution is the is the mention of the Companies by within which to

2.14 Charitable fund Companies Act, amount does equal to or exceeds 5 %

82. A. Ltd. Made contribution to political parties as follows:

1. Flower Hand Broom(FHB) Party Rs. 100000/-

Companies Act as no Companies Act as no and Company but credit violatio

QUESTION ANSWER (REASON WHEREVER NEEDED)

69 a. PUC+FR+SP=110; Money(borrowed +to be borrowed - temporary loans)=50+60-

Chapter 4 : INSPECTION & INVESTIGATION

4. What is the quantum of punishment for the above mentioned case?

duty of the company and its officers to-

B. Every officer of the company who is in default

27.The Serious Fraud Investigation Office shall be headed by a -----------

31. On what grounds, Central Government can order Investigation by SFIO?