Dr.G.R.Damodaran College of Science (Autonomous, affiliated to the Bharathiar University, recognized by the UGC)Re- accredited at the 'A' Grade Level by the NAAC and ISO 9001:2008 Certified CRISL rated 'A' (TN) for MBA and MIB Programmes IL B.Com (CS) [2018-2021] Semester IIT Core: Company Law And Secretarial Practice II 305 C Multiple Choice Questions. 1. The power of the company to borrow is exercised by its A. directors B. members C. shareholders D. manager ANSWER: A 2. Limit of the borrowings of the company is laid down in sec. of the companies act. A. 180(1}{c) B. 180(1)(b) €. 180(1)(@) D. 180(1)(d) ANSWER: A 3. According to provisions of the act the borrowings of the company does not e A. Total paid up share capital B, Total free reserves C. authorised capital D. total paid up capital and free reserves ANSWER: D 4, The minimum number of persons required to form a private company is AT B.2 C3 D4 ANSWER: B 5. Borrowings which are are beyond the powers of the company is, A.ultra-vires borrowings B. intra-vires borrowings C. unapproved borrowings D. unauthorised borrowings ANSWER: A 6, In case of ultra-vires borrowings, lender has the following remedy/remedies. A. Restitution B. subrogation C. injunction D. all the aboveANSWER: D 7. A mortgage requires registration under A. Companies Act 2013 B. companies act 1956 C. Transfer of Property Act 1882 D. Indian contract act 1872 ANSWER: C 8. When is a company said to have been registered? A. When it files the memorandum of association with the registrar of companies. B. When it gets the certificate of incorporation C. When it gets the certificate of commencement of business D. When it actually starts its business ANSWER: B 9, When a group of lenders provides loan facility, then it is called as ‘A. secured loan B. unsecured loan C. syndicated loan D. bilateral loan ANSWER: C 10. The debentures, which are payable to the registered debenture holders is ‘A. naked debentures B. registered debentures C. secured debentures D, bearer debentures ANSWER: B 11, The issue of debentures with an option to convert shall be approved by a A. directors B. a special resolution at a general meeting C. company law board D. central government ANSWER: B 12. Which of the following reserve must be created for redemption of debentures? ‘A. Debenture redemption reserve B, general reserve C. capital redemption reserve D. dividend equalisation fund ANSWER: A 13, Debenture redemption reserve must be utilised only for the purpose of ‘A. redemption of debentures B. paying out dividend C. redemption of preference shares D. purchase of fixed a ANSWER: A 14, Which of the following companies must file a statement in lieu of prospectus? A.A private limited company B.A cooperative societyC. A company that has issued a prospectus D. A public company that has not issued a prospectus ANSWER: D 15, A mortgage can be created on A. Specific immovable property B. Movable property C. Stock D. All the above ANSWER: A 16. The most important document of a company is its, A. prospectus B. annual report. C. memorandum of association D. articles of association ANSWER: C 17, Registration of charges must be filed with the ROC within days. A30 B.50 C.45 D~25 ANSWI A 18. Debentures with voting rights ‘A. cannot be issued B. can be issued with approval of shareholders C. can be issued with the approval of CLB D. can be issued with the approval of the Board ANSWER: A 19, Registration of charge in case of debentures is to be filed in Form A.CHG9 B.CHG3 C.CHG4 D. CHGS ANSWER: A 20, Return paid on debentures is A. interest B. dividend C. commission D. tax ANSWER: A 21. Registration of charge in case of other than debentures is to be filed in Form ‘A.CHG 9 B.CHG3 C. CHG 5 D. CHG 1 ANSWER: D 22. Debentures which have a charge on the assets of the company isA. registered debentures B, unregistered debentures C. secured debentures D. unsecured debentures ANSWER: C 23, Debenture payable to the holder of the certificate is ‘A. bearer debentures B. registered debentures C. unregistered debentures D, secured debentures ANSWER: A 24, The share capital of a company may be reduced by ‘A. an ordinary resolution B. a special resolution C. aresolution of the board of directors D. obtaining permission from the company law board ANSWER: B 25. Condonation of delay in registration shall be made by registrar up to creation of charge. A. 200 B. 150 C. 300 D. 3 months ANSWER: C 26. Debenture holders are A. owners of the company B. creditors of the company C. debtors of the company D. none of the above ANSWER: B 27. Debentures form part of the company's A. capital B. loan C. fund D. reserve ANSWER: B 28. Which of the following charges must registered? A.A floating charge on the company's assets B. a charge on ship C. issue of debentures D. all the above ANSWER: D days from the date of 29. When the charge is created on the specific fixed property of the company, it is known as A. floating charge B. specific charge C. fixed charge D. lienANSWER: C 30. Provisions related to charges are provided in sec. of companies act. ATT B.78 Cus D. 151 ANSWER: A 31. A floating charge will not become fixed charge in the following case. A. if the company goes into liquidation B. if the company ceases to carry on its business C. appointment of receiver to take possession of property charged D. if the company issues shares ANSWER: D 32. Alan may become a director of a company. ‘A. partnership firm . B. person of unsound mind C. individual . D. body corporate ANSWER: C 33. How many directors of a public company, unless the articles provide otherwise, must be appointed by the ‘company in general meeting? A. All the directors B. One half of the directors . C. Two-thirds of the directors D. Three-fourths of the directors . ANSWER: C 34, The constitute the top administrative organ of the company. A. general manager B. shareholders. C. board of directors D. advisory panel . ANSWER: 35. Persons responsible to maintain books is/ or ‘A. Managing director B. whole time director in charge of finance C. chief financial officer D. all the above ANSWER: D 36. Copy of the financial statement is to be filed with registrar within days of date of annual general meeting. A.30 B. 60 C.90 D. 120 ANSWER: A 37. Who are the first directors of the company?A. promotors B, subscribers to the MOA C. Persons named in the AOA D. either B or C ANSWER: D 38, Maximum directors of a public ltd company are AT B.10 c.12 D.15 ANSWER: D 39, Which of the following are statutory books? A. Register of investments B. register of charger C. register of members D. all the above ANSWER: D 40. The minimum numbers of directors of a private Itd company are A.two B. three C. one D. five ANSWER: A 41. A person can be a director of maximum of, companies. AT B.10 Cs D.20 ANSWER: D 42. Which of the following is beyond the powers of the board of directors ? A. To issue debentures . B. To make loans C. To remit the payment of any debt due by a director D. to issue prospectus, ANSWER: C 3. Which of the following is not the statutory books? A. Minutes books B. Books of accounts C. register of fixed deposits D. register of transfer ANSWER: D 44, The total managerial remuneration to the directors and the manager in respect of any financial year must not exceed percent of the net profit. A. one. B. three. C. eleven, D. tenANSWER: C 45. Which of the following company must have at least one woman director in their board? A. Every listed company B. a public company having paid up capital of Rs, 100 crores or more C. a public company having tumover of Rs. 300 crores or more D. All the above ANSWER: A 46. Disqualifications of a director are mentioned in sec. __ A. 164 B. 161 C. 168 D.177 ANSWER: A 47. DIN represents A. Directory Identiti B, Director Identification Number C. Doctor Identification Number D, Direct Identification Number ANSWER: B 48. Which of the following is not the optional books? ‘A. register of certification B, share application and allotment books C. log book D. minutes book ANSWER: D 49. A person cannot act as managing director of more than company /companies at a time. A. one B. two C. four. D. five. ANSWE! 2B 50. Who is not Key managerial personnel in the compan} ‘A. the company secretary B. the whole time director €. the CFO D. accountant ANSWER: D 51. If any individual or director of a company contravenes any provisions of the sec. 152, 155 and 156, they are punishable with months imprisonment or with fine of rupees. A. 6, / 50,000 B.3/ 30,000 C. 6 25,000 D. 325,000 ANSWEI 52. Additional director can be appointed by A. shareholderB. creditor C. debenture holders D. board of directors ANSWER: D 53. A promoter is a person who A. is a director . B. is arelative of the company C. is a wellwisher of the company D. takes part in the companys incorporation ANSWER: D 54, General provisions related to appointment of directors are contained in A. Sec. 152(2) to 152(7)(b) B. Sec. 152(2) to 152(7)(b) C. Sec. 150(2) to 152(7)(b) D. Sec. 151(2) to 152(7)(b) ANSWER: B 55. When can a private company commence business ? A. at any time. B. after applying for registration. C. after obtaining the certificate of incorporation D. after obtaining the certificate of commencement of business ANSWER: C 56. Who will provide DID A.ROC B, State Govt, C. Central Govt D. CLB ANSWER: C 57. Sec. 167 provides for the provisions related to A. appointment of directors B. removal of directors C. vacation of directors D. DIN ANSWER: C 58. Sec__ to Sec. deal with winding up by the national company law Tribunal. A. 271,303 B. 272, 303 C.271, 304 D. 271, 305 ANSWER: A 59, Every listed public company must have at least of total number directors as independent directors. A, two-third B, one-third C. one-fifth D. half ANSWER: B60. Which of the following is not the specific powers of the directors? A. to make calls on shares B. to borrow monies C. to issue debentures D. to sell part of theundertaking ANSWER: D 61. A prospectus is to be issued within days of registration. A.30, B, 60. C. 90. Dz 180, ANSWER: C 62. A director who contravenes the provisions of sec. 167 is punishable ypto months of imprisonment. ose D.12 ANSWER: D 63. All monies received with the application of shares are to be deposited A. with the controller of capital issues B. in the companys bank account C. ina special account opened in a scheduled bank for the purpose D. with the registrar of companies ANSWER: C 64. A company shall not pro of prospectus A. second B. third C. fifth D. seventh ANSWER: A -d to allot shares until the beginning of the day from the date of issue 65. Underwriting means A. selling shares at a discount B, purchasing property at less than market pris C. agreeing to purchase shortfall of shares in company in case of under subscription D. offering new shares to outsiders ANSWER: C 66. The Return of document is to be filed with the Registrar in the case of A. allotment of debentures B. reissue of forfeited shares C. issue of shares D. all of the above ANSWER: C 67. The minimum subscription is to be received within days of the offer. A.30, B. 60.C. 120, D. 150. ANSWER: C 68. The private company requires conversion of a public company into a ‘A. an ordinary resolution . B. a special resolution C. a special resolution and union governments approval D. a special resolution and company law board approval ANSWER: C 69. A private company is to become a public company if its average turnover in the previous three years exceeds ARs. derore. B.Rs. 8 crore C.Rs. 10 crore D. Rs. 50 crore. ANSWER: C 70. The charter of a company refers to its A. prospectus, B. memorandum of association C. articles of association D. statement in lieu of a prospectus ANSWER: B 71. A Person ceases to be a company members when ‘A. he lost his share certificate . B, he becomes insolvent C. his share certificate is converted into a share warrant D. his shares are forfeited for nonpayment of call monies ANSWER: D 72. Which of the following are characteristics of a company ? A. Ithas unlimited liability. B. It exists only in contemplation of law C. It has not a perpetual succession D. It comes to an end on the death of all its members. ANSWER: B 73. A company is a juristic person with a perpetual succession A. as such it dies. B. its life depends on the life of its members, C. it is created by a process of law and can be put to an end only by a process of law D. none ANSWER: C 74, Ona share of Rs, 100 of a company, a sharcholder has already paid Rs. 30.His Liability is now limited to75. A private company becomes a public by process of law. A. where not less than 25 percent of its paid-up share capital is held by one or more bodies corporate. B, where not less than 10 percent of it paid-up share capital is held by another single private company. C. where less 25 percent of the paid-up share capital of a public company is held by it. D. where not less than 20 percent of it paid-up share capital is held by another single private company. ANSWER: A 76. The liability of a shareholder in a company limited by shares is ‘A. unlimited B. limited by guarantee, C. limited to the unpaid value of shares subscribed by him. D. none of the above. ANSWER: C 77. The first meeting of the company after incorporation is, A. AGM B. extra-ordinary meeting C. statutory meeting D. class meeting ANSWER: C 78. Time gap between two annual general meeting should not exceed months, A12 BIS C18 D.21 ANSWER: B 79. The first AGM should be conducted within months from the date of incorporation. AAD BIS C18 D.6 ANSWER: C 80. days clear notice should be given to hold a AGM AT Bild C.21 Dz 28 ANSWER: C 81. Shorter notice (less than 21 days) is sufficient if of members give their consent. A.75% B. 80% C.85% D. 95% ANSWER: D 82. Persons authorized to convene extra-ordinary general meeting is —~ A. The BOD B. The Board on requisition of members C. TribunalD. All the above ANSWER: D 83. What are the contents of the notice of AGM? A. The place where it is to be held B. the date and hour of the meeting C. a statement of the business to be transacted D. all the above ANSWER: D 84. The memorandum and Articles of a company ate open to inspection by A. the members of the company B, the members and creditors of the company. C. everybody D. the Registrar. ANSWER: C 85. Any person who induces a company to allot shares in a fictitious name is punishable with__. Ava fine of Rs. 5,000. B.a fine of Rs. 10,000. C. imprisonment upto 5 years D. a fine of Rs. 5,000 and imprisonment upto 5 years ANSWER: C 86. The first board meeting should be held within days of the date of incorporation, A.30 B.45 C.60 D.75 ANSWER: A 87. How many board meeting should be conducted in a year? days notice should be given for Board meeting. 89. Share capital of a company means, ‘A. equity share capital B. preference share capital C. equity and preference share capital D. equity and preference share capital and debentures. ANSWER: C 90. Which of the following matter/s cannot be dealt in a meeting through video conferencing A. the approval of the annual financial statementsB. the approval of the board's report C. the approval of the prospectus D. all the above ANSWER: D 91. According to the companies act, 2013 the resolutions passed in the general meeting are of, types. ‘A. three B, four C. two D. five ANSWER: A 92. Which section deals with ordinary resolution? A. 1141) B. 1142) cus D.116 ANSWER: A 93, Shares can be issued. A. at par. B. at discount, C. at premium, D. all of the above. ANSWER: D 94, Quorum for the board meeting is or two directors whichever is higher. ‘A. 183 of total strength B. 1/2 of total strength C. 1/4 of total strength D. 1/5 of total strength ANSWER: A 95. Which of the following is not the right/s of the proxy? ‘A. right to speak B. right to vote C. right to be counted D. Aand B ANSWER: D 96. Annual General Meeting can be called by, A. anaging director. B. shareholders. C. board of directors. D. company secretary. ANSWER: D 97. A share certificate is required to be signed by . A. company secretary. B. two directors. C. two directors and company secretary. D. all directors and company secretary. ANSWER: C98. A secretary should have sound knowledge of, A. company law. B. tax laws, C. labour laws. D. all of these. ANSWER: A 99, Written record of the business done at a meeting is known as, . A. agenda B, minutes C. reports. D. none ANSWER: B 100. Transmission of shares takes place in the following case ‘A. sale of shares. B. theft of shares. ANSWER: C 101. A shareholder in a company. A. can be its debentureholder. B. cannot be its debentureholder. C. alone can become its debentureholder D. must also become its debentureholder within a year of being a shareholder ANSWER: B 102. The dividend on preferen A. whenever there are profits. B. only if there are profits. C. even if there are no profits. D. only when the directors recommend it ANSWER: D pital is paid 103. A Company at least 51% of whose share capital is held by the government, is called a ‘A. public enterprise B. public company. C. public corporation, D. government company. ANSWER: D 104. Functions of a company secretary is dealt in sec. A. 205 B. 206 C.207 D. 204 ANSWER: A 105. When a public Itd company can starts its business? A. when it files the memorandum of association with the registrar if companies B. when it gets the certificate of incorporation C. when it gets the certificate of commencement of businessD. when it actually starts its busines ANSWER: C 106. Shares can be issued A. at par B. at discount. C. at premium, D. all of the above. ANSWER: D 107. After re-issue of forfeited shares the balance of forfeited share account is transferred to__. A. general reserve. B, profit & loss ale. C. capital reserve. D. none of these, ANSWER: C 108, The debenture holders of a company are company’s : ‘A. owners. B. creditors C. customers. D. all of thes ANSWER: B 109. A company secretary has to be ‘A. firm or body corporate. B. registered with securities and exchange board of india (sebi). C. person with desired professional degree D. . part of any secretarial agency. ANSWER: C 110. A share certificate is required to be signed by A. company secretary. B. two directors C. two directors and company secretary. D. all directors and company secretary. ANSWER: C 111. The duties of Company Secretary s regarding company meetings are restricted upto___. A. before company meeting B, during company meeting C. after company meeting. D. In all the above situations ANSWER: D 112. Which one of the following is NOT an advantage of the incorporation of the company? ‘A. perpetual succession B. limited liabilities of members. C. capital contribution forming part of the joint stock f the company. D, Freedom to do any business ANSWER: D 113, Economic oligarchy, fraudulent practi limitations of a , bureaucratic management and difficulty in formation are theA. sole proprietary concern. B. partnership firm C. joint stock company. D. co-operate society. ANSWER: C 114, To enable a company to pay dividends, a special authority is ‘A. not needed either in the memorandum or in the articles B. needed either in the memorandum or in the articles CC. needed only in the memorandum D. needed only in the articles. ANSWER: A 115, Which of the following is not feature of a private companies act? A. Limitation of the number of the number of its members. B. Restriction on the right to transfer its shares. C. Ban on floating of debentures D. Prohibition of any invitation to the public. ANSWER: C 116. According to the companies act, which one of the following companies can commence allotment of shares even before the minimum subscription is subscribed or paid? A. Charted company. B. Private company. C. Government company D. Public limited company ANSWER: B 117. Which one of the following companies deal with only its shareholders for their benefit? A. Private limited company B. Chit fund company C. Nidhi company. D. Banking company. ANSWER: C 118, Share premium received by ‘A. payment of dividend B. issue of bonus share. C. remuneration to management. D. any business purpose ANSWER: B ssuing shares can be used for : 119, Under the companies act, which of the following powers can be exercised by the board of directors? A. Power to sell any of the companies undertaking B. Power to make call. C. Power to borrow money in excess of the paid up capital. D. Power to reappoint on auditor ANSWER: B 120. A public limited company can offer pre-emptive rights only to the A. directors of the company. B. existing equity share holders. C. debenture holders. D. short-term creditors of the companyANSWER: B 121. The liability of shareholders of a public company is limited to the A. paid up value of shares B. nominal value of shares C. extent of their private assets D. amounts called up. ANSWER: D 122, Rights shares means the shares which are . A. issued to the directors of the company B. first offered to the debentureholders. C. first offered to the existing shareholders D. issued by a newly formed company ANSWER: C 123. Investment in which of the following is most risky? ‘A. equity shares . B. preference shares C. debenture 124. Which of the following is not an ownership security? A. equity shares B. debentures. C. preference shares D. None of the above. ANSWER: B 125. In which of the following, interest or dividend is payable even if the company does not earn profit? A. equity capital B. preference capital. C. debentures. D. bonds ANSWER: C 126, A manager with a share in the profits, . ‘A. is only a servant of the firm. B. becomes a partner by the operation of law. C. becomes a partner by implied agreement, D. becomes a partner from status ANSWER: A 127. Debentures cannot be ‘A. imedemable debentures. B. participating debentures C. registered debentures D. bearer debentures ANSWER: B 128. Control of management of the company mainly vests in, A. equity shareholders. B. preference shareholders,C. debenture holders D. Alllof these. ANSWER: A 129. Public deposits obtained by a company means. ‘A. deposits received from Government B, deposits received from public at large. C. deposits received from stockists and agent as advance. D. all of these. ANSWER: B 130. A Government company is one in which A. the entire sha re capital is held by the central and / oF state government. B. 50% of capital is held by central government and the remaining 50% by one or more state governments C. at least 51% of the capital is held by central and / or state governments D. none of these. ANSWER: C 131, The liability of members of a co-operative society is A. limited to the amount of nominal value of capital held. B, limited to the amount of paid up value of the capital held. C. unlimited. D. limited or unlimited depending upon what the society has opted. ANSWER: D 132. When an existing company offers its shares for sale to the existing shareholders, itis known as ‘A private placing B. bonus issue. CC. rights issue. D. . offer for sale. ANSWER: C 133, The most common method used for marketing of new securities A. sale of existing shareholders. B. stock exchange placing, C. direct sale to public through prospectus. D, sale to biometers. ANSWER: C 134, Reserve Bank of India is a A. statutory corporation. B. a company limited by guarantee. C. a company limited by shares D. an unlimited company. ANSWER: A 135, Which of the following is an example of a company incorporated by a special act of Parliament? ‘A. Delhi Cloth and General Mills Ltd. B. Tata Tron and Steel Co. Ltd '. Industrial Finance Corporation of india Ltd. D. Swadesh Cotton Mills Ltd. ANSWER: C136, Dividend on preference capital will be paid. . A. ata fixed rate B. ata fluctuating rate C. once in two years D. even when the does not have profit ANSWER: A 137. Which of the following securities is not redeemable? ‘A. equity shares. B. preference shares. C. cumulative preference shares. D, debentures. ANSWER: A 138. The Articles of association establishes relationship between ‘A. company and its members. B. company and outsiders C. company and its members and members inter se D. general public company ANSWER: C 139. Articles of Association can be altered by A. a resolution of the board of directors. B. an ordinary resolution in general meeting. C. a special resolution in general meeting D. obtaining permission from the company law board. ANSWER: C 140. Which of the following companies must file a statement in lieu of prospectus? ‘A. a.company which has issued a prospectus. B. a public company which has not issued a prospectus C. a private limited company. D. all of these. ANSWER: B 141. Which of the following is the top administrative organ of the compan; ‘A. shareholders . B. managing director. C. bord of director. D. general manager ANSWER: C 142, Which of the following method can be used to pass resolution? A. voting by show of hands B. voting through electronic means C. poll D. all the above ANSWER: D 143. Promoter is a person who A. takes part in the incorporation ofa company. B. isa director. C. is a relative of the managing director. D. works to get publicity to the co.ANSWER: A 144. A company created by an act of parliament is A. statutory company. B. Legal company. C. Formal company . D. Govt. company. ANSWER: A 145, Further issue of shares can be made to . A. public B. financial institution. C. existing share holders. D. debenture holders. ANSWER: C 146, The first auditor of a company are appointed by ‘A. board of directors B. Members. C. central govt. D, state government ANSWER: A 147. The secretary of a company maybe ‘A. only an individual. B. only body corporate C. group of persons. D. Shareholders. ANSWER: A. 148. A deemed public company must have at least A, Idirector B, 2directors C. 3 directors D. 5 directors. ANSWER: B 149, Dividend and interest are ‘A. Synonymous terms. B. different from each other. C. debited to profit and loss account, D. divisible profits ANSWER: B 150. Auditors act as agent of ‘A. Shareholders. B. directors. C. promoter D. debenture holder, ANSWER: AStaff Name Hemalatha G