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Contents
1 COMPANY LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 COMPANY LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1. COMPANY LAW
NARAYAN CHANGDER
1.1 COMPANY LAW
1. Which company doesn’t conduct any busi-
ness but just exists to hold the assets or
intellectual properties?
A. Associate company
B. Dormant company
C. Producer company
A. Organ
D. Small company
B. Fiction
2. When a company is formed for improper C. Juridical Facts
conduct or fraud
D. Purposeful Wealth
A. Corporate Veil is recognized by court
B. Corporate Veil is lifted by court 4. Our clients have been dispute for six
C. Corporate Veil does not exist months.
D. none of above A. in
B. of
3. Only humans can be subjects of law.
Therefore, a legal entity is not a legal sub- C. on
ject and the rights given to a legal entity D. by
are essentially rights without a legal sub-
ject. This theory states that the assets of 5. Perpetual Succession is mentioned under
a legal entity do not consist of rights as is
usually the case with human rights. What A. Section 8
is important here is not who the legal en- B. Section 9
tity is, but that the assets are managed
C. Section 10
with a specific purpose. is a statement of
the theory D. Section 11
1. B 2. B 3. D 4. A 5. B 6. B
1.1 COMPANY LAW 3
6. The process of incorporating a company in- 12. There is no need for One Person Company
volves? to prepare Cash flow statement is pro-
vided under

A. Creating a partnership agreement
B. Drafting the articles of association A. Section 2(20)
C. Obtaining a trade license B. Section 2(24)

C. Section 2(49)
D. Registering the company with the local
municipality D. Section 2(40)
7. Minimum paid up capital for a public com- 13. What is charter of company
pany A. AOA
A. 5 l B. MOA
B. 2 L
14. Do the courts like to interfere in matters
C. 4 L connected with fiduciary duty?
D. 10 L A. Yes, they like to interfere completely.
8. Non-compliance with the provisions re- B. They don’t care.
lated to prospectus issuance can lead to C. No, they are reluctant.
imprisonment.
D. I need to study more.
A. True
B. False 15. What is the primary purpose of invest-
ment for a company?
9. Articles of Association deals with A. To generate revenue
A. shareholders B. To attract potential shareholders
B. Outsiders C. To fulfill legal requirements
C. Directors D. To maintain company records
D. Employees
16. Dividends can be define as
10. Conceives the idea of the business A. a payment made by a company to its
A. promoter shareholders.
B. directors B. a long-term Debt Instrument
C. auditors C. a financial market that handles the buy-
ing and selling of company stocks
D. none of these
D. a documents which illustrates the
11. An independent director can be appointed structure of a company
for how many years
17. A partnership agreement can be used to in-
A. 5 corporate a company under the Companies
B. 3 Act 2017.
C. 4 A. True
D. 6 B. False
7. A 8. B 9. A 9. C 10. A 11. A 12. D 13. B 14. C 15. A 16. A 17. B 18. B

1.1 COMPANY LAW 4
18. Saloman was carried which kind of busi- 24. time frame to call for EGM without special
ness? resolution
A. cloths A. within 14 days
B. Boot B. within 28 days
C. Chocolate C. within 7 days from the notice
D. Mobile D. within 32 days
19. Who can call for an extraordinary general
NARAYAN CHANGDER
25. Companies Issued debentures for raising
meeting (EGM) of a company under the finance
Companies Act 2017 in Pakistan?
A. Long-term
A. Shareholders holding at least 10% of
the voting shares B. Short-term
B. Board of Directors C. Monthly
C. Company Secretary D. Quarterly
D. Auditors 26. Maximum number of members in a private
20. Which of the following is not the clause of company shall not be more than
Memorandum of Association. A. 100
A. Name B. 150
B. Object C. 200
C. Capital D. 300
D. Loan
27. A prospectus is issued by
21. Companies act 2013 commenced on A. A private company
A. 30th August 2013 B. A public company seeking investment
B. 29th August 2013 from public
C. 31st August 2013 C. A public enterprise
D. 1st October 2013 D. A public company
22. is the constitution of the company 28. The doctrine which advocates the fact that
A. Memorandum company cannot act beyond the scope of
B. Articles its memorandum of association is:
C. Prospectus A. Doctrine of constructive notice
D. Agenda B. Doctrine of indoor management

C. Doctrine of ultra vires
23. A company issues prospectus within of
its registration D. Doctrine of intra vires
A. 30 days 29. Right shares are offered to existing share-
B. 3 months holders at a discounted price.
C. 60 days A. True
D. 6 months B. False
19. A 20. D 21. B 22. A 23. C 24. A 25. A 26. C 27. D 28. C 29. A 30. D
1.1 COMPANY LAW 5
30. A company has 36. To bring together a group of people for a

A. Separate Legal Entity meeting.

B. Perpetual Existence A. condemn
B. convene
C. Limited liability
C. convict
D. all of the above
D. consider
31. The Companies Act 2017 applies to both
private and public companies. 37. WHICH OF THE FOLLOWING ARE NOT THE
CHARACTERISTIC OF A COMPANY?
A. True
A. IT EXISTS ONLY UNDER THE LAW
B. False
B. THE MEMBERS CANNOT BE SUED FOR
32. Every co. must use the word “ltd.” or THE DEBTS OF A COMPANY
“Pvt. Ltd.” except
C. IT COMES TO AN END ON THE DEATH
A. Charitable companies OF ALL ITS MEMBERS
B. Non-Trading company D. none of above
C. All of the above
38. is the most popular types of companies
D. none of above A. Statutory companies
33. The most important document of a com- B. Association for profit
pany is C. Registered companies
A. Annual Report D. One person company
B. Balance Sheet
39. A public company can be called as a body
C. Prospectus corporate after it
D. Memorandum of Association A. Receives certificate of commencement
of business.
34. Authorized capital of the company men-
tioned in B. Issues prospectus
A. Memorandum of Association C. Receives certificate of incorporation
B. Articles of Association D. Receives approval from the registrar
for the proposed name of the company
C. Prospectus
D. none 40. Which of the following is NOT a charac-
teristic of a private company limited by
35. A person appointed by a shareholder to at- shares?
tend and vote at a meeting in his/her place
A. It may choose to have a constitution
when the shareholder is unable to attend
B. Members’ liability is limited to the
A. company secretary
amount of unpaid shares
B. proxy C. It can issue a prospectus for funding
C. liquidator D. It may be converted into an unlimited
D. shareholder company
31. A 32. C 33. D 34. A 35. B 36. B 37. C 38. C 39. C 40. C 41. B
1.1 COMPANY LAW 6
41. Which of the following is FALSE state- 46. Important documents for incorporation of
ment? company
A. Company can sue and sued by its own A. memorandum of association
name
B. articles of association
B. Liability of members up to company’s
C. prospectus
debt
C. Company is perpetual succession D. all of above
NARAYAN CHANGDER
D. Company can acquire, own and dis- 47. The term Company is defined under section
pose property
A. 2(20)
42. If any untrue statement is made in the B. 2(30)
prospectus, then the company and the
shareholders, directors and all persons C. 2(40)
who authorised issuance of the prospectus D. 2(22)
incur
A. Civil Liability 48. May a partnership cease to exist when a
partner dies?
B. Criminal Liability
A. No.
C. Both Civil and Criminal Liability
B. Yes.
D. No Liability
C. It exists for only a short time.
43. Mortgages and charges must be registered D. I need to study more.
with the Registrar of Companies?
A. True 49. Auditors are responsible for appointing
the directors of a company.
B. False
A. True
44. A business organization where the owners
are personally responsible for the business B. False
debts a(n)
50. The shareholders were dissatisfied the
A. C Corporation dividend.
B. LLC A. by
C. Partnership B. for
D. Sole proprietorship C. from
45. The process of organizing and planning the D. with
the finances of business enterprise under
the corporate form is called 51. A business run by one person is a(n)
A. Prospectus A. Corporation
B. Promotion B. LLC
C. Directors C. Sole proprietorship
D. none of above D. Partnership
42. C 43. A 44. A 45. B 46. D 47. A 48. B 49. B 50. D 51. C 52. D
1.1 COMPANY LAW 7
52. A member of One Person Company can be C. Liquidity

A. An Indian Citizen D. Goodwill

B. A person who is not a minor 56. A legal entity separate from its members
C. A natural person is for
D. All of the above A. Sole Proprietorship
53. Paul is a creditor of Jar King Berhad (JK). B. Company

On 1 May, Paul filed a petition in court for C. Liability Limited Partnership
the winding up of JK. Paul served the peti-
D. Partnership
tion to JK on 30 May. The court heard the
petition on 15 September. The winding up 57. What is the purpose of an audit in relation
order of JK was made by the court on 2 to company accounts?
October. On which of the following dates
is the winding up of the company deemed A. To ensure compliance with tax regula-
to have commenced? tions
A. 2 October B. To verify the accuracy of financial

statements
B. 15 September
C. To assess employee performance
C. 30 May
D. To evaluate market trends
D. 1 May
58. The companies which are established by
54. Mr. Lewis pays taxes on dividends for king and queen is known as
stocks he owns in a manufacturing com-
pany. The company also pays taxes on its A. Statutory companies
income before distributing it to stockhold- B. Chartered companies
ers.
C. Registered companies
D. Government companies
59. Which type of share capital can be issued

without an invitation to the public to sub-
scribe?
A. Preference shares
B. Equity shares
A. Sole Proprietorship
C. Bonus shares
B. Partnership
D. Right shares
C. Corporation
D. none of above 60. The amount of minimum subscription may
be learnt from
55. The process of forming a company includ-
ing where it becomes a legal entity is A. Prospectus
known as B. memorandum of association
A. Incorporation C. articles of association
B. A franchise D. records of general meetings
53. A 54. C 55. A 56. B 57. B 58. B 59. C 60. A 61. A

1.1 COMPANY LAW 8
61. Company members are generally not per- B. Solomon vs. Solomon
sonally responsible for the money owed by C. TCS vs Cyrus Investmements
the company.
D. None of the above
A. True
67. A company is called an artificial person be-
B. False
cause
62. Select all reasonable grounds for winding A. It does not have the shape of a normal
up on just and equitable grounds. man
NARAYAN CHANGDER
A. Company has no members B. It cannot be sued in the court of law
B. Breakdown of trust C. It is invisible and intangible
C. Deadlock D. It exists only in contemplation of law
D. Oppression 68. A managing director is a person
63. The word ‘Ltd’ is used for company A. who is in charge of the day to day func-
A. Private company tioning of the business
B. Public Company B. who is in charge of finances of a busi-

ness
C. Guarantee company
C. who manages the human resource of
D. Listed company a business
64. Person engaged in developing or taking D. who is in overall charge of the running
the initiative to form a company (arrang- of an organization or business.
ing capital, obtaining personnel, making
69. Rights shares are first offered to the
arrangements for filing corporate docu-
mentation) A. Existing shareholders
A. liquidator B. public
B. auditor C. promoters
C. shareholder D. debenture holders
D. promoter 70. Section 216 confers upon to investi-
gate matters relating to company for the
65. A is one who performs the preliminary du- purpose of finding out true persons
ties necessary to bring a company into be-
ing and float it. A. Central Government
B. State Government
A. Auditor
C. Both
B. Promoter
D. None
C. Director
D. Finance 71. The relationship of the promoter to the
company
66. In which case it was held by hon’ble
A. Agent
Supreme Court that articles are binding on
company and its shareholders B. Trustee
A. Then Rangraj Vas. Vb Gopalakrishnan C. Fiduciary
And Ors D. Officer
62. B 62. C 62. D 63. A 63. C 64. D 65. B 66. A 67. D 68. D 69. A 70. A
71. C 72. A
1.1 COMPANY LAW 9
72. The court ordered the to wind up 77. By the provision of section 21 Companies
(legally and formally close /end a com- Act 2016, the capacity of a company is
pany) before next December.

A. limited to 3 business activities
A. Liquidator
B. unlimited
B. Proxy
C. shareholder 78. Which company turnover should not ex-
ceed 2 crore?
D. Auditor
A. One person company
73. Joseph suffer lung cancer and he cannot
B. Small company
hold the office as the director of Sutera
Sdn Bhd well. On 20th June 2021, he died. C. Subsidiary company
Advise Sutera Sdn Bhd. D. Associate company
A. Joseph position as the company direc-
tor can be vacate accordance to the Com- 79. The provisions of the Companies Act, 2016
panies Act 2016 are applicable to
B. Joseph position can be replace by aby A. Private Company only
of his children B. Public Company Only
C. The company can remove Joseph from
C. Government Company only
his position
D. All Companies
D. none of above
74. Which of the following is/are important 80. Officer in default is defined under section
content(s)/clauses(s) in the MOA of a com- A. 2(56)
pany?
B. 2(57)
A. Name of the company
C. 2(59)
B. Place of business of the company
D. 2(60)
C. Objects of the company
D. Share capital of the company 81. In a way that is agreed or supported by
E. All ofthe above everyone in a particular group.
A. uniquely
75. Which is required about qualification of di-
rectors: B. unanimously
A. PIN C. unequivocally
B. TIN D. unconditionally
C. FROM
82. According to section of the companies
D. CIN act any document inviting the public to buy
76. MOA is a document its shares or debentures
A. Principal A. Section 2(36)

B. Secondary B. Section 2(63)
C. Optional C. Section 2(54)
D. Computer D. Section 2(14)
73. A 74. E 75. C 76. A 77. B 78. B 79. D 80. D 81. B 82. A
1.1 COMPANY LAW 10
83. A legal person rights and duties under A. 80.00%

the law just like a natural person. B. 90.00%
A. owes C. 100.00%
B. invests D. 120.00%
C. manages
89. Find the reason why LP is not a popular
D. owns business structure:
NARAYAN CHANGDER
84. Character in Avengers is A. No Act that can regulate its operation
B. Limited Partners are “armchair in-
vestors”
C. Registration by the Registrar of Com-
panies
D. General Partners incur all the liabili-
ties of the LP
A. Thanos
90. The maximum number of shareholders for
B. Thor public company
C. Loki A. 200
D. Captain America B. 300
85. Who is the head and brain of the company? C. 400
A. Shareholders D. Unlimited
B. Employees 91. The term Body Corporate is defined under
C. Directors section
D. Stakeholders A. 2(9)
B. 2(10)
86. Since companies are considered legal per-
sons, they can sue and be sued by others. C. 2(11)
A. True D. 2(12)
B. False 92. A company may issue
87. The minimum number of members required A. Equity shares
for a meeting is called as B. Preference shares
A. BOD C. both
B. Proxy D. None of the above
C. Quorum
93. Companies Act 2013 consists sections
D. none of above
A. 250
88. Allotment of shares or debentures must B. 270
be made after getting subscription
against entire public issue as per SEBI C. 360
guidelines D. 470
83. D 84. C 85. C 86. A 87. C 88. B 89. B 90. D 91. C 92. C 93. D 94. B
1.1 COMPANY LAW 11
94. Which of the following is a valid method A. director

for incorporating a company in Pakistan?
B. auditor

A. Partnership agreement
C. company secretary
B. Memorandum of Association
D. none of above
C. Informal verbal agreement
D. Individual declaration 98. A person cannot act as managing director
of more than company
95. The limited partnership company contains A. One
two types of partners:
B. Two
A. Secret Partner and Affiliate Partner
C. Four
B. Limited partner and joint partner
D. Five
C. An engaged partner and a withdrawing
partner 99. In which year present Companies Act
D. none of above comes into force?
96. A private company is a company owned A. 1956

and capitalized by an individual. This indi- B. 2013
vidual business is one of the simplest and
C. 2018
easiest businesses to be set up by any-
one. The advantages of setting up a pri- D. 2020
vate company are
100. Which among the following is type of
share issued to existing shareholders to in-
crease its subscribed share capital
A. Bonus Shares
B. ESOP
C. Right Issue
D. Preference Shares
A. Full distribution of business profits for
sole business owners 101. What can be lifted if the company is used
B. There is no limitation of liability to perpetrate fraud or act ultra vires?
C. Business-related decisions can be A. The carporate veil may be lifted.
made quickly without having to consult
B. The company loses money.
with several parties
C. An expensive fine may be lifted.
D. If an entrepreneur is in debt, his per-
sonal wealth becomes collateral to pay off D. I need to study more.
his debt
102. In Chandler v Cape plc [2012], did the
97. An independent certified public accountant Court of Appeal pierce the corporate veil?
who audit the financial statements that
A. Yes
the company management has prepared.
The above describe B. No
95. B 96. A 96. C 97. B 98. B 99. B 100. C 101. A 102. B 103. C
1.1 COMPANY LAW 12
103. Which types of business structures are 110. A company with no limit on the liability
known as “body corporate”? of its members.
A. Company and GP A. A company limited by shares and guar-
B. GP and LP antee
C. LLP and Company B. A company limited by shares
D. LP and LLP C. A company limited by guarantee
D. An unlimited company
104. Preference shares carry voting rights in
NARAYAN CHANGDER
company meetings. 111. All below are names of traditional cakes
A. True except
B. False A. Burnt sugar cookies
105. Do employees of the company holding B. Face cake
shares are counted for limiting the number C. Kuih talam
of total members of the company?
D. Dimsum cake
A. Yes
B. No 112. The joint partner in the limited partner-
ship must be fully qualified and a natural
C. Partially counted person:
D. Either a or c A. mistake
106. Companies limited by shares is defined B. correct
under section
113. The word Company is derived from
A. 2(21)
B. 2(22) A. French
C. 2(23) B. Latin
D. 2(30) C. Japan
D. Indian
107. Companies cannot own properties or en-
ter into contracts. 114. Class meeting is a type of meeting?
A. True A. Creditors
B. False B. Debtors
108. Corporate Veil is a principle which pro- C. Shareholders
tects the members from being personally
D. All of the above
liable for company’s debts
A. True 115. What is a ‘proxy?’
B. False A. A person appointed, on behalf of a
member, to attend, speak and/or vote at
109. Only the directors have the power to call a general meeting on the member’s behalf
a general meeting. True or false?
B. A member who appoints another per-
A. True son to attend, speak and vote at a general
B. False meeting on his behalf.
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1.1 COMPANY LAW 13
C. A member who has agreed not to use 121. Nimi Ltd. was a confectionaries manufac-
the votes attached to his shares. turing company which has 7 members and
all of them died in an aircraft. Despite this,

D. A director of a company who owns
shares in that company. the company still exists unlike partnership
form of business. Which feature of a com-
116. Partners in British and American busi- pany is involved in this case?
nesses are not liable for the partnership A. Common Seal
debt.
B. Artificial Legal (Judicial) Person
A. true
C. Separate Legal Entity
B. false
D. Perpetual Succession
Explanation:Partners are fully liable for
the company’s debts. 122. Which of the following is incorrect regard-
ing a public and private company?
117. According to Section 43 of Companies Act,
2013, How many types of share capital A. The name of a public company may or
exists may not end with “Berhad”
A. 2 B. The number of members of a public

company must be more than 50
B. 3
C. A private company cannot ask for in-
C. 4 vestment from the public
D. 5 D. A private company may have limited or
unlimited liability
118. Company can be a citizen of country?
A. True 123. External directors can give more objec-
tive advice than full-time directors.
B. False
A. true
C. Partially true
B. false
D. Partially false Explanation:Non-executive directors are
often more objective.
119. What is the notice period for the annual
general meeting of a public company? 124. Extraordinary general meetings (EGMs)
A. More Twenty-one clear days. can only be called by the board of direc-
tors.
B. Within Twenty-one clear days
A. True
C. More Fourteen clear days.
B. False
D. Within Fourteen clear days, unless the
articles provide for a longer period. 125. The process where the assets of the com-
pany are collected, its debt paid and the
120. An official decision that is made after a surplus (if any) distributed among its mem-
group or organization has voted. bers. The above statement refers to
A. solution A. lifting corporate veil
B. resolution B. winding up
C. dissolution C. dissolution
D. motion D. none of above

1.1 COMPANY LAW 14
126. A prospectus is required when a company A. Statutory companies

issues shares only to existing sharehold-
B. Chartered companies
ers.
A. True C. Registered companies
B. False D. Government companies
127. Minimum number of members required to
132. Which entity type requires relatively lit-
form a public company are
tle paperwork?
NARAYAN CHANGDER
A. 2
A. corporation
B. 5
C. 1 B. partnership
D. 3 C. sole proprietorship
128. Who is officer of the company? D. none of above

A. Explain in Section 2 of the Companies
133. Sum stated in the memorandum as the
Act 2016
capital of the company with which it is to
B. Define in Salomon’s case be registered being the maximum amount
C. takeover which it is authorised to raise by issuing
D. liquidator appoint in involuntary wind- shares
ing up A. Called Up
129. The procedure whereby the assets of a B. Paid up
company are gathered in and realized, the
liabilities met and the surplus, if any, dis- C. Nominal
tributed to members. D. Subscribed
A. insolvent
B. winding-up 134. Person appointed by a court, the com-
pany or its creditors to wind up the com-
C. liquidator pany’s affairs
D. bankruptcy
A. district Attorney
130. A constitution is a binding contract be-
B. liquidator
tween
A. a company and its members C. proxy
B. members inter se D. director
C. a company and its creditors
135. Companies act 1956, is promulgated on
D. none of above
recommendations of which committee
131. The companies which are established by A. Dr. BR Ambedkar Committee
king and queen is known as
B. J.L. Nehru Committee
C. Indira Gandhi Committee
D. H.C Bhabha Committee

1.1 COMPANY LAW 15
136. The rule which prevents members of a 142. The provision words “private limited”
company from seeking benefit of corpo- must be added at the end of the name of
rate personality is enshrined in the private company is mentioned under

A. Section 3A section:
A. 4(1)a
B. Section 3B
B. 4(1)b
C. Section 3C
C. 5
D. 2(56)
137. Any natural or legal person may be a 143. Minimum members required for a public
partner in a limited partnership: company?
A. No, it is not permissible A. 6
B. Yes, it is permissible B. 7
138. Which chapter provisions relating to com- C. 2

panies involved in farming related activi- D. none of above
ties
144. company law is related with
A. XXI
B. XXII
C. XXIA
D. XV
139. What is odd?

A. culture
A. company
B. dance
B. partnership
C. society
C. legal person D. corporate sector
D. sole proprietor
145. Salwa as director never received any
140. Internal control system of the company is copies of Financial Account of the company.
reviewed in meeting She complain this matter to the board. Ad-
vise Sarah.
A. Annual General Meeting
A. Sarah has a right to received docu-
B. Board Meeting ment of financial account
C. Creditor’s Meeting B. Sarah doesn’t has right to received Fi-
D. None of the above nancial Account because she only a direc-
tor not an accountant of the company
141. Companies Act 1956 was repealed by
146. Partnership are governed under the
A. Companies Act 2002 A. Partners Act 1961
B. Companies Act 2010 B. Partnership Act 1991
C. Companies Act 2013 C. Partnership Act 1961
D. Companies Act 2015 D. Partners Act 1991

1.1 COMPANY LAW 16
147. ROC stands for purpose for payment of bonus to the work-
A. Regional office certificate men got reduced. Here a company created
a subsidiary and transferred to it, its in-
B. Registrar of Companies vestment holdings in a bid to reduce its li-
C. Region of corpus ability to pay bonus to its workers.
D. Register of companies A. To avoid a legal obligation
B. To determine the character of the com-
148. One Person Company can be incorporated
NARAYAN CHANGDER
pany i.e. to find out whether co-enemy or
by: friend
A. A person who is an Indian citizen C. To protect revenue/tax
B. A person who is an Indian resident D. Company formed for fraud/improper
C. A natural person who is a citizen conduct or to defeat law
D. A natural person who is an Indian citi- 152. The state of not being able to pay one’s
zen and resident debts or having an excess of liabilities
over assets.
149. On successful registration of a company,
the Register of Companies gives A. insolvent
A. Share Certificate B. bankrupt
B. Certificate of completion C. liquidation
C. Certificate of Incorporation D. winding-up
D. None of Above 153. Subuh prayer is performed before Zohor
prayer
150. How many types of companies are there
on the basis of liability A. True
A. 1 B. False
B. 2 154. The ‘s report informed shareholders
C. 3 some irregularities found on the company
accounts.
D. 4
A. Liquidator
151. Ziva Limited purchased shares of Zan-
B. Proxy
jeer Limited by investing a sum of Rs. 6,
50, 000. The dividend in respect of these C. shareholder
shares was shown in the profit and loss D. Auditor
account of the company, year after year
and was also accounted for the purpose of 155. Which of the following are circumstances
calculating the bonus payable to workmen by which a company may be wound up by
of the company. Ziva Ltd. transferred the the court? I. The company has by an ordi-
shares of Zanjeer Limited, to ZZ Limited nary resolution resolved that the company
a subsidiary, wholly owned by it. Thus, is to be wound upII. The company is being
the dividend income did not find place in used for unlawful purposesIII. The court is
the Profit & Loss Account of A Ltd., with of the opinion that it is just and equitable
the result that the surplus available for the for the company to be wound upIV. The

1.1 COMPANY LAW 17
company does not commence its business 159. The placing of a company into liquidation
within six months of its incorporation as a result of an application to the court,
usually by a creditor.

A. I, II and III only
B. II and III only A. bankruptcy
C. I, II and IV only B. insolvency
D. I, III and IV only C. compulsory liquidation
156. Mere sham is one of the factor that court D. winding-up

will lift up the corporate veil to look into
160. The liability of members in a Company is:
the wrongdoer behind the case
A. Limited
B. Unlimited
C. Stable
D. none of above
161. A Company is created by:

A. Special Act of the parliment
B. Companies Act
A. True C. Investors
B. False D. Members
157. Separate legal entities are also known as 162. A Company has been formed to under-
take the business of making designer
A. Members of company will be liable for shoes. This objective of the company
mismanagement of company would be found in which of the following
documents?
B. Members of company and the com-
pany are both liable for mismanagement A. Certificate of incorporation
of company. B. MOA
C. The company and members of com- C. Directors certificate of commence-
pany are legally separated from one an- ment of business
other.
D. AOA
D. Director will solely be liable for mis-
management of the company 163. Under the Companies Act, 2013, “Signifi-
158. As per Companies Act 2013, what is cant influence” constitutes how much % of
maximum tenure of preference shares ex- total share capital or of business decisions
cept for infrastructure projects under an agreement?
A. 20 years A. At least 2%
B. 15 years B. At least 5%
C. 10 years C. At least 10%
D. 25 years D. At least 20%

1.1 COMPANY LAW 18
164. Remembering:What is the most common 170. First time it was decided that the com-
type of business structure? pany has separate legal entity in the case
A. Sole Proprietorship of
B. Partnership A. Salomon vs. Salomon

C. Corporation B. Kondoli Tea Company ltd. case
D. Co-operative C. Either a or b
NARAYAN CHANGDER
165. In which year consolidated law on in- D. None of the above
corporation, regulation and winding up of
companies was passed 171. Which of the followings is NOT a pro-
A. 1866 moter’s duty?
B. 1876 A. Duty to disclose

C. 1888 B. Duty to act in good faith
D. 1864 C. Duty to be independent in his report
166. How many days closed at a time the re- D. Duty to avoid taking up any opportunity
sister of Members in a year: that belongs to the company
A. 25 E. Duty not to disclose any confidential in-
B. 30 formation to third parties
C. 35
172. Dividends can only be paid out of profits
D. 45 available for distribution.
167. Who are the real owners of a company? A. True
A. Debenture holders B. False
B. Shareholders
173. Person appointed by the company to ex-
C. Creditors amine the company’s accounts and to re-
D. Debtors port to the shareholders annually on the
accounts
168. Out of profits how much remuneration
can we give to a director? A. company secretary
A. 11% B. liquidator
B. 10% C. receiver
C. 14% D. auditor
D. 12%
174. In case of a legal dispute, people can take
169. Who issues a certificate of incorporation? a company’s shareholders to court.
A. The company itself.
A. true
B. A governental authority.
B. false
C. It’s issues automatically. Explanation:A company has a separate le-
D. I need to study more. gal existance from its owners.

1.1 COMPANY LAW 19
175. Who takes full legal responsibility in a 181. Can the company secretary be a director
company limited by shares? of the company?

A. The shareholders A. Yes, but not the sole director.
B. The owners B. Yes, and become the sole director.
C. The directors C. No, it’s impossible.
D. The government D. I need to study more.
176. What can a company own in its own 182. CRR is mentioned in Companies Act
name? 2013.What does CRR stand for
A. Only the directors own.
A. Current Redemption Reserve
B. The company can’t own.
B. Capital Redemption Reserve
C. Property.
C. Cash Reserve Ratio
D. I need to study more.
D. Cash Redeemable Reserve
177. Jamil intends to establish an NGO to man-
age donations. What type of company 183. If the company refuse to ratify pre-
would be best for him? incorporation contract, the person who
shall be responsible is
A. Public company limited by guarantee
A. the person who entered on behalf of
B. Public unlimited company
the company
C. Public company limited by shares
B. the director
D. Private unlimited company
C. the liquidator
178. Directors are responsible for the day-to- D. the company secretary
day management of a company.
A. True 184. Small company means a company, other
than a public company, having paid-up
B. False share capital of which
179. Directors are A. Does not exceed fifty lakh rupees
A. the person who audits the company’s B. Does not exceed hundred lakh rupees
account
C. Exceeds fifty lakh rupees
B. the corporate advisory
D. Does not exceed ten lakh rupees
C. the persons to whom the management
of company is entrusted 185. A private company can start business
D. none of above once it receives the Certificate of Incorpo-
ration
180. Articles of Association is the foundation
A. True
upon which the whole structure of the com-
pany is built up B. False
A. True C. Maybe
B. False D. none of above

1.1 COMPANY LAW 20
186. The Companies Act 2017 requires compa- D. receiver

nies to maintain proper accounting records.
192. Appointment of directors is made in
A. True meeting
B. False A. Annual General Meeting
187. By the provision of section 215 Compa- B. Board Meeting
nies Act 2016, a director is allow to rely
C. Creditor’s Meeting
on information made by others and will be
NARAYAN CHANGDER
release from being liable for any wrong de- D. None of the above
cision making if
193. Shares in private company
A. does not exercise care in his judgment
A. never transferable
B. it is made in good faith
B. can be transfer with approval of other
C. after making independent assessment members
C. Freely transferable
D. none of above
D. Transfer by company law Board only
188. A company can be incorporated in Pak-
istan without a Memorandum of Associa- 194. The Registrar may reserve the name for
tion. days from the date of application
A. True A. 50
B. False B. 60
C. 70
189. prospectus were issued in case secu-
rities were issued in stages D. 80
A. Deemed 195. A shareholder purchased in the open mar-
B. Shelf ket shares of a company whose prospectus
contained some misstatements. He
C. Red herring
A. can rescind the contract only but can-
not claim damages
190. Below are the situation that falls under B. can claim damages only but cannot re-
Judicial veil of lifting EXCEPT:- scind the contract
A. Perpetration of Fraud C. has no remedy against the company.
B. Tax avoidance D. has remedy against the directors re-
C. Evasion of obligation sponsible for the issue of the prospectus
D. Section 131 of the Act 2016 196. Which company comes together to form
an association to exploit business oppor-
191. Michael has act as representative for the
tunities?
incorporation of the company. Who is
Michael? A. Public company
A. director B. Formation of company
B. promoter C. Dormant company
C. secretary company D. none of above

1.1 COMPANY LAW 21
197. What documents constitute the ‘constitu- C. Ashok sharma

tion of a company’? D. R K singla

A. An article of association & contract.
203. Remembering:What is the legal definition
B. Memorandum of association & letter
of a corporation?
of application.
C. article of association. A. A business owned by one person
D. I need to study more. B. A business owned by two or more peo-

ple
198. If a director wants to undischarged
C. A business that is a separate legal en-
bankrupt, what he need to do?
tity from its owners
A. get a leave from the official receiver or
D. A business that is not a separate legal
from the court
entity from its owners
B. get a leave from the office
C. get a leave to go for vacation 204. First law on companies was laid down in
D. get a leave from the Ministry of Fi- A. 1846

nance B. 1848
199. is the first stage of formation of a C. 1850
company D. 1860
A. Registration
205. Capital of Small Company cannot exceed
B. Promotion
A. 20 lacs
C. Commencement of business
D. Application B. 25lacs
C. 1 crore
200. The doctrine of does not apply to acts
void ab initio. D. 50 lacs
A. Ultra virus 206. How many types of companies are there
B. constructive notice under Companies Act 2013
C. Intra virus A. 3
D. Indoor management B. 4
201. The term “Turn Over” is defined under C. 5
section D. 6
A. 2(91)
207. What are the owners of a company insu-
B. 2(88) lated against?
C. 2(66)
A. Personal liability.
D. 2(71)
B. Public liability.
202. Who is the author of company law book? C. They are not insulated against any-
A. Ramesh Jain thing.
B. Jane’s lover D. I need to study more.

1.1 COMPANY LAW 22
208. The defines a companys relations B. the company shall be restricted from
with the outside world. carrying on any business or activity that
A. prospectus is not within those objects
C. the company shall have limited by guar-
B. memorandum of association
antee
C. articles of association
D. none of above
D. statement in lieu of prospectus
214. To ratify AOA resolution is needed
NARAYAN CHANGDER
209. is the constitution of the company A. General
A. Memorandum B. Special
B. Articles C. quorum
C. Prospectus D. Minutes
D. Agenda
215. Since I can’t attend the next meeting, the
210. Which are the partners who share profits will do it and will vote for me.
and losses A. Liquidator
A. Active partner B. Proxy
B. Sleeping partner C. shareholder
C. Secret partner D. Auditor
D. Partner by estoppel 216. The whole process of the company for-
mation may be divided into three direct
211. Which of the following are not required
stages, the sequence is
to issue prospectus?
A. Promotion, incorporation by registra-
A. Private company
tion, commencement of business.
B. Incase of right issue
B. Incorporation by registration, com-
C. Sweet equity issue mencement of business, promotion
D. All the above C. Commencement of business, promo-
tion, incorporation by registration
212. a person who gets part of the company’s
D. Commencement of business, incorpo-
profits and the right to vote on how the
ration by registration, promotion
company is controlled is called a
A. shareholder 217. An act ultra virus the directors can be rec-
tified if it is not ultra vires
B. auditor
A. the articles
C. proxy
B. the memorandum
D. liquidator
C. Company Act
213. The effect of having objects clause in con- D. None of the above
stitution is that
A. the company shall have an unlimited 218. LIC is an example of
capacity A. Statutory company

1.1 COMPANY LAW 23
B. Registered company the vital issue in the case of Re W & M

C. Public company Roith Ltd?

A. failure to act as director
B. Eye test
219. Below are the requirement to be a direc- C. failure to act bona fide for the best in-
tor EXCEPT? terest of the company
A. Full age D. failure to give judgment for the best in-
B. Sound mind terest of the company
C. disqualified under the Companies Act 223. The term perpetual succession mean
2016
A. Going to be die
D. be a natural person B. Never dies
220. Director of company shall be liable to pay C. Member operated only
the company’s worker EPF if the Company D. Separate property
does not make any payment
224. Companies Act 1956 was repealed by
A. Companies Act 2013
B. Companies Act 2010
C. Companies Act 2002
D. none of above
225. Which document provides detailed infor-
mation about the company to potential in-
A. True
vestors and is required for issuing shares
B. False to the public?
221. Which type of meeting allows sharehold- A. Memorandum of Association

ers to discuss and vote on important com- B. Articles of Association
pany matters? C. Share certificate
A. Annual general meeting (AGM) D. Prospectus
B. Board meeting
226. DIN stands for
C. Committee meeting A. Director identification number
D. Extraordinary general meeting (EGM) B. Directive identification Nil
222. *A director, Mr Roith, entered into a ser- C. Decisive information number
vice contract with his company providing D. Director information numerical
for pension to be given to his wife in the
event of his death without taking into con- 227. Following are the clauses of the MOA
sideration as to whether the contract was A. Name Clause
for the benefit of the company. The object B. Object clause
of the contract was considered not to be
binding on the company as it did not ben- C. Register office clause
efit the company but Mrs Roith. What is D. All of the above

1.1 COMPANY LAW 24
228. What is company’s constitution? 232. Every co. must use the word “ltd.” or
A. internal management document of the “Pvt. Ltd.” except
company A. Charitable companies
B. it is a guideline B. Government companies
C. Certified Form or Certified document
C. All of the above
D. company financial account
D. none of above
229. Person appointed by creditors to oversee
NARAYAN CHANGDER
the repayment of debts 233. The type of winding up that starts up by
A. receiver members itself
B. auditor A. voluntary winding up
C. accountant B. member’s voluntary winding up
D. driver C. creditor’s voluntary winding up
230. Issue of a shares at a price more than the D. compulsory winding up
face value is called
A. issue at a profit 234. An company is a company, the princi-
pal business of which consist in acquiring,
B. issue at loss holding and dealing in shares and securi-
C. issue at premium ties.
D. issue at discount A. Dormant
231. The passive partner only acts to provide B. Government
capital and supervise the performance of
C. Investment
the active partner, so if the passive part-
ner continues to carry out external CV D. Producer
management activities
235. Which type of share capital carries prefer-
ential rights with regard to dividend pay-
ment?
A. Ordinary shares
B. Equity shares
C. Preference shares
A. The liability of passive partners is not
only limited to the capital deposited in the D. Bonus shares
CV but extends to personal assets
B. Passive partners will be declared to 236. The process through which company is
have committed acts of exceeding their dissolved, is known as
authority A. Dissolution
C. loss of legal protection that the pas- B. Amalgamation
sive partner has in terms of liability for
CV’s debts or obligations C. Liquidation
D. a and b are true D. None of Above

1.1 COMPANY LAW 25
237. Dividends are typically paid to?

A. Employees of the company

B. Shareholders of the company
C. Creditors of the company
D. Auditors of the company
238. The term ‘ultra vires’ means

A. with the power
A. Ramesh Pokhriyal
B. Beyond the power
B. Dharmendra Pradhan
C. Directors power C. Anurag Thakur
D. Shareholders power D. Sushil Gupta
239. Who is a promoter? 243. What type of business is described in the

diagram below?
A. director
B. secretary
C. a person who forms the company
D. shareholder
240. Maximum number of members in a pri-

vate company is A. Sole Proprietorships
A. Unlimited B. Partnerships
B. 50 C. Corporation
D. none of above
C. 100
D. 200 244. Who may not appointment of secretory:
A. By Promoters
241. A is a company that has full legal B. Articles of Association
rights and responsibilities according to the
law. C. Memorandum of Association
D. By Directors
A. firm
B. partnership 245. A company is a
A. sole proprietorship
C. legal person
B. business option
D. business
C. corporation
242. IDENTIFY THIS PERSONALITY D. none of above

1.1 COMPANY LAW 26
246. The provision of remuneration of Manag- C. Investment company

ing directors/whole time directors is men- D. Government company
tioned under
A. Section 196 252. What is a mortgage in the context of com-
pany law?
B. Section 187
A. A legal document granting ownership
C. Section 197 rights to a property
D. Section 198 B. A charge on company assets to secure
NARAYAN CHANGDER
247. Debenture holders are called of the a loan or debt
company C. A document specifying the terms of a
A. Debenture loan agreement
B. Creditor D. A financial instrument used for raising

capital
C. Debtors
D. Both a and b 253. The requirement of Qualification shares
relates:
248. Which company should not transfer A. Shareholders
shares?
B. secretory
A. Private company
C. Directors
B. Public Company
D. Members
C. Government company
D. Domestic company 254. Annual general meetings (AGMs) must be
held within 9 months of the end of the fi-
249. One person company is defined under sec- nancial year.
tion A. True
A. 2(50) B. False
B. 2(52)
255. Which of the following are linked to the
C. 2(68) deregistration of a company? I. Striking
D. 2(62) off processII. Compulsory winding up of a
companyIII. An action that brings a com-
250. Can a company get separate legal entity pany’s existence to an end IV. An action
before incorporation? that results in a company’s name being
A. Yes taken off the Register of Companies
B. No A. I, II and III only
C. Neither a or b B. II and III only
D. none of above C. I, II and IV only
251. company is prohibited to issue D. I, III and IV only

prospectus 256. A company limited by share is
A. Private company A. A company which issues shares to the
B. Public company public

1.1 COMPANY LAW 27
B. A company not eligible to issue shares 262. What is an ‘ordinary resolution?’

C. A company having limited capital A. A resolution that is passed by 50 per

D. None of the above cent or more of the members.
257. Small company is defined under section B. A resolution that is passed by a major-
ity of not less than 75 percent.
A. 2(85)
B. 2(88) C. A resolution that is passed if 100 per
cent of the members agree.
C. 2(24)
D. 2(90) D. A resolution that is passed by a simple
majority.
258. Shareholders are:
A. Creditors of the company 263. A company’s is where a company de-
cides to accept jurisdiction and NOT its ac-
B. Owners of the company
tual location.
C. customers of the company
A. statement of the company’s address
D. none of these
B. location of incorporation
259. company law is related with
C. article of incorporation
D. jurisdiction
264. What type of the business entity doesn’t

have limited liability?
A. Plc
A. culture
B. Ltd
B. dance
C. LLP
C. society
D. corporate sector D. sole trader
260. Which of the following is the feature of 265. One Person Company is
registered company?
A. One single person as a member
A. Transferability of shares
B. One single director
B. Perpetual succession
C. Limited liability C. Company limited with liability
D. All of the above D. All of the above
261. According to section 42 Companies Act 266. The minimum number of directors in a
2016, a private company shall not have public company
more than
A. 2
A. 20 members
B. 50 members B. 3
C. 100 members C. 10
D. none of above D. 15

1.1 COMPANY LAW 28
267. It is not necessary to put common seal on 272. What is the maximum period within
which document of the company? which a company must register a charge
A. Share warrants with the Registrar under the Companies
Act 2017 in Pakistan?
B. Share certificates
A. 7 days
C. MOA
D. Deeds executed in any place in India B. 14 days
C. 21 days
268. According to Section 218 (2) of the Act
NARAYAN CHANGDER
2016, an officer or agent or officer of the D. 30 days
Stock Exchange who commits a breach of
this section shall be? 273. In which case it was held that the expe-
A. Imprisonment for five years or thirty rience of the promoters of the company
thousand ringgit. could be considered as experience of the
company in determining its technical exper-
B. Imprisonment for 10 years or thirty tise.
thousands ringgit
A. New Horizons ltd. vs. UOI
C. Whipping of 10 strokes and thirty thou-
sands ringgit B. Workmen v. Associated Rubber Indus-
D. Whipping of 5 strokes and thirty thou- try Ltd.
sands ringgit C. In Re F.G. Films Limited
269. This logo is for bank D. State of UP V Renusagar Power Com-
pany
274. Company is a
A. Artificial person
B. Natural person
A. Maybank 275. Debenture holders are paid a interest
B. Muamalat Bank
A. Amount
C. AmBank
B. Fixed
D. Citibank
C. Unfixed
270. All investments made by a company must
be approved by the Securities and Ex- D. Non of the above
change Commission of Pakistan (SECP)?
276. A private company enjoys which of the
A. True following privileges over a public com-
B. False pany:
271. Memorandum of Association deals with A. Not required a report on an annual
general meeting
A. Insiders
B. Outsiders B. Not to appoint an independent director
C. Directors C. Not to appoint more than two directors
D. Employees D. All of the above

1.1 COMPANY LAW 29
277. What is the evidence that the promoter 282. years of imprisonment will be im-
activities ended? posed incase of issue of prospectus with
untrue statements

A. certificate of incorporation
B. signed articles of incorporation A. 1
C. naming the directors B. 2
D. naming a secretary C. 3
D. 4
278. Information memorandum 4 shelf
prospectus together constitutes 283. means the total amount of called up
A. Memorandum capital on the shares issued and subscribed
by the shareholders on capital account
B. Articles
A. Called-up capital
C. Prospectus
B. subscribed capital
C. nominal capital
279. Capital of a Company is divided in units
D. Paid-up capital
which is called:
A. Debenture 284. ultra vires
B. Share A. beyond power
C. Stock B. within power
D. Bond C. correct
280. Capital of a business is D. wrong
A. the money it has available to pay for 285. Which of the following is not a type of
its day-to-day operations and to fund its share capital?
future growth
A. Ordinary shares
B. the money reserved to pay future
debts B. Preference shares
C. assets of a company C. Debentures
D. none of the above D. Equity shares
281. The company comes into existence 286. Which of the following is NOT the pur-
poses of carrying on an audit?
A. at the time submission to incorpo-
rated made to Companies Commission of A. to advise corporate affairs
Malaysia B. to express opinion whether the com-
B. upon the date specified in the notice of pany accounts comply with accounting
registration standard
C. at the time of recognition as body cor- C. to give assurance that accounts are
porate free from any misstatement
D. none of above D. none of above

1.1 COMPANY LAW 30
287. A company where the liability of its mem- 292. Select all qualifications to become a com-
bers is limited to such amount as the mem- pany director.
bers undertake to contribute in the event A. natural person
of its being wound up is
B. must be eighteen years old
A. unlimited company
C. must be twenty one years old
B. Company limited by guanrantee
D. must not be undischarged bankrupt
C. Company limited by shares
NARAYAN CHANGDER
E. never convicted of any mismanage-
D. none of above ment, fraud or bribery
288. The liability of members if company is lim- 293. In a Public company which is maximum %
ited by shares of remuneration of directors of Net Profit:
A. Unpaid value of shares A. Not more than 5%
B. Guarantee amount B. Not more than 7.5%
C. Unlimited liability C. Not more than 10%
D. none D. Not more than 11%
289. Company’s chief administrative officer 294. The principle of corporate veil separates
whose responsibilities include accounting
and financing duties, personnel administra- A. the company with creditors
tion and compliance with employment leg-
B. the creditors with shareholders
islation, security of documentation, insur-
ance and intellectual property rights C. the company from people behind it
A. shareholder D. none of above
B. company secretary 295. GP can be established by ?
C. receptionist A. Conduct
D. driver B. Charter
290. Which financial statement provides a C. Crown

summary of a company’s assets, liabilities, D. Agreement
and shareholders’ equity at a specific point
in time? 296. To conduct Board Meeting days notice
is required.
A. Income statement
A. 2
B. Balance sheet
B. 7
C. Cash flow statement
C. 14
D. Statement of changes in equity
D. 21
291. Charges on company assets can be cre-
297. Which financial statements are typically
ated to secure a loan or debt.
included in a company’s annual accounts?
A. True A. Income statement, balance sheet, and
B. False cash flow statement

1.1 COMPANY LAW 31
B. Profit and loss statement, budget re- 302. Many companies are not owned by their
port, and tax return directors or managers.

C. Sales report, purchase ledger, and em- A. true
ployee payroll
B. false
D. Marketing plan, customer feedback, Explanation:Manage and directors only
and market analysis run the company for the owners.
298. Mr. Wells owns a card shop. Because 303. When did the Companies Act 2013 came
baseball cards have declined in popularity in to force?
his business is struggling. He decides he
has to sell his house to pay off his busi- A. 5th Aug 2013
ness debts. B. 10th Aug 2013
C. 15th Aug 2013
D. 20th Aug 2013
304. A legal person cannot

A. enter into contracts
B. sue others
A. Sole Proprietorship C. own property
B. Partnership D. avoid liability
C. Corporation
305. A public company can be defined ‘as a
D. none of above company, other than a private company’,
299. When you are a company director, you which must be listed in the stock exchange
must always act in good and must have more than fifty sharehold-
ers.
A. belief
A. True
B. faith
B. False
C. confidence
D. diligence 306. Below are directors duties EXCEPT?
300. East India Company was an example of A. Duty to monitor

A. Foreign company B. Fiduciary duties
B. Chartered company C. Duties of Care, SKill and diligence
C. Public company D. other statutory duty
D. none of above
307. The income statement provides informa-
301. Under the law, a company and its mem- tion about a company’s financial position
bers are distinct legal personalities. at a specific point in time.
A. True A. True
B. False B. False

1.1 COMPANY LAW 32
308. Which one of the following is not the con- 313. The supreme executive authority in the
tent of the Memorandum of Association? control of a company and its affairs resides
A. Name clause is persons known as
A. Board of directors
B. Registered office clause
B. Shareholders
C. Objects clause
C. Independent directors
D. Board of Directors clause
D. Nominees
NARAYAN CHANGDER
309. Understanding:What are the steps in-
volved in forming a company? 314. A company is a company which is in-
corporated in a country outside India under
A. Obtain Business Licenses, Register the law of that other country and has place
Business Name, File Incorporation Papers of business in India
B. Obtain Business Licenses, File Incor- A. Government
poration Papers, Register Business Name
B. Dormant
C. File Incorporation Papers, Register
C. Foreign
Business Name, Obtain Business Licenses
D. Investment
D. Register Business Name, Obtain Busi-
ness Licenses, File Incorporation Papers 315. The limited partner acquires the status of
a merchant by law:
310. Evaluating:Which business structure is
best suited for a small business with few A. mistake
employees? B. correct
A. Sole Proprietorship 316. Quorum of meetings of directors:
B. Partnership A. One third of total no.
C. Corporation B. Two third of total no.
D. Co-operative C. Half of total no.
311. In GPs, only General Partner has unlim- D. 4/5th of total no.
ited liability
317. A company doesn’t have
A. True
A. shareholders
B. False B. board of directors
C. Not given C. creditors
D. none of above D. absolute power
312. When can a company issue redeemable 318. Person elected by the shareholders to
preference shares? manage the company and decide its gen-
A. Only during the initial incorporation eral policy
B. At any time after incorporation A. auditor
C. SECP B. official receiver
D. Only when the company is in financial C. director

distress D. proxy

1.1 COMPANY LAW 33
319. Audit of accounts are compulsory in case 325. The minimum number of shareholders in
of public companies. a private company

A. False A. 2
B. Partially false B. 7
C. True C. 50
D. Partially true D. 200
320. has been introduced to encourage en- 326. The name of a company can be changed
trepreneurship and corporatization of busi- by
ness.
A. an ordinary resolution
A. Private company
B. a special resolution
B. One person company
C. the approval of the union government
C. Not for profit company
D. a special resolution and with the ap-
D. Small company
proval of the central government
321. UNDER WHAT BASIS COMPANIES ARE
327. Debentures represent ownership in a
CLASSIFIED AS PUBLIC AND PRIVATE?
company.
A. INCORPORATION
A. True
B. LIABILITY
B. False
C. OWNERSHIP
D. MEMBERSHIP 328. What documents are needeed for the con-
stitution of the company?
322. Currently we study which company law A. The memorandum of association and
act? the articles of association
A. 1956
B. very important papers
B. 2012
C. the list of company members and their
C. 2013 photos
D. 2015 D. rules and plans of company members
323. A company can change its name at its 329. The doctrine of Lifting of Corporate Veil
own discretion by passing was considered firstly in the Indian case of
A. Ordinary resolution A. Dinshaw Maneckjee Petit case
B. Special resolution B. Aruna Oswal vs. Aruna Oswal Pankaj
C. Boards resolution Oswal
D. None of the above C. Birla Corporation ltd vs. Adventz In-
vestments and Holdings
324. company law year of enactment
A. 1956
B. 1953 330. LLPs are governed by the
C. 2130 A. LLP Act 1907
D. 2013 B. LLP Act 2007

1.1 COMPANY LAW 34
C. LLP Act 2000

D. LLP Act 1900
331. The term TURNOVER means

A. the rate at which employees leave a
workforce or are replaced
B. the amount of money lost by a busi-
ness in a particular company
NARAYAN CHANGDER
A. Partnerships and Corporations
C. the amount of money taken by a busi- B. Sole Proprietorships, Partnerships,
ness in a particular period. and Corporations
D. Both a and c C. Only Corporations
332. The term capital includes D. Sole Proprietorships and Corporations
A. working capital 336. The Companies Act 2017 applies to which

country?
B. equity
A. India
C. trading capital
B. Pakistan
D. All of these
C. United Kingdom
333. What two documents constitute the ‘con- D. Australia
stitution of a company’?
337. Which of the following is a special fea-
A. An article of association & contract.
ture of a Company?
B. Memorandum of association & letter
A. Artificial Person
of application.
B. Separate Legal Entity
C. Memorandum of association & article
of association. C. Limited Liability
D. I need to study more. D. All of them
338. Which type of share capital can be freely
334. The shares, debentures or other interest
transferred between shareholders?
of any member in the company shall be
movable property transferable in the man- A. Preference Share
ner provided by the articles of company. B. Equity shares
Which section lays down this provision C. Bonus shares
A. Section 41 D. Right shares
B. Section 42
339. Authorized Capital of PT
C. Section 43
D. Section 44
335. A person who takes a risk to produce

goods and services in search of a profit
is an entrepreneur. In which kind of busi-
ness structure may entrepreneurs estab-
lish a business?

1.1 COMPANY LAW 35
A. Rp. 50.000.000, -. 344. Which theory is involved in the famous

case law of Salomon Vs. Salomon and Co
B. Founder’s Agreement
Ltd.?

C. 25% of the authorized capital
A. Lifting of Corporate Veil
D. based on PT’s net worth B. Formation of subsidiaries to act as
agents
340. The lending of funds ultra vires, the com-
pany has no rights C. Company formed for fraud / improper
conduct or to defeat law
A. under the company’s Act
D. Corporate Veil
B. contract Act
345. Select all effects of incorporation.
C. under equity
A. company able to sue and being sued
B. company able to acquire, own, hold,
341. The following is NOT TRUE about Private develop and dispose any property
Company C. company becomes a body corporate
D. company enjoys perpetual succession
346. To alter the Memorandum, we need ap-

proval from
A. Municipality
B. Board of Directors
A. Cannot invite public to subscribe share C. Central Government
B. 2-50 members D. State Government
C. Can invite public to subscribe share 347. Any contract made before the company is
D. Anual General Meetiing is an option incorporated is known as
A. Reccission of contract
342. Private limited companies are required to
hold AGM. B. Pre-incorporation contract
C. Perpetual succession
A. True
D. corporate veil
B. False
C. Not applicable 348. A one-person company is incorporated as
a private company with:
D. none of above
A. 1 member
343. Minimum number of members required to B. 1 member 1 director
form a public listed company are C. 2 member
A. 1 D. 4 member
B. 5
349. Main feature which differentiates a pub-
C. 7 lic company from the private
D. 3 A. Restriction

1.1 COMPANY LAW 36
B. Number of Members 355. are in the same position and they

C. Number of shareholders owe same duties to the company as any
other director
D. All of the above
A. Board of directors
350. According to section 9 Companies Act B. Nominee directors
2016, a minimum number to form a com-
pany is C. Shareholders
NARAYAN CHANGDER
A. one D. Independent directors
B. two
356. when was the new companies act intro-
C. ten duced?
D. none of above A. 1956
351. When a company amicably buys another B. 1985
company.
C. 2002
A. merger
D. 2013
B. premises
C. acquisition 357. Sole proprietorship is
D. incorporation A. one person only

B. 2-20 persons
352. Maximum number of members in a pri-
vate company is: C. unlimited
A. 200 D. 2-50 persons
B. 50
358. Select all instances where corporate veil
C. 150 may be lifted up.
D. 250 A. Fraudulent trading
353. The doctrine of indoor management is an B. Company is use to evade legal duties
to the doctrine of constructive notice
C. Company is use as shadow of its con-
A. Exception trollers
B. Extension D. To attribute mental state of a company
C. Alternative
359. When does a compulsory winding up of a
company commence?
354. company incorporated by the act of the A. At the time of the presentation of the
parliament is: petition
A. Statutory Company B. At the time of the passing of the board
B. Private Company resolution
C. Chartered Company C. At the time stipulated in the petition
D. Government Company D. At the time the court order is made

1.1 COMPANY LAW 37
360. What is a ‘quorum?’ 364. A Company is an association of many

persons who contribute money or monies
A. The minimum number of ‘qualifying
worth to a common stock and o employed

persons’ required in order to validly con-
in some trade or business and o who share
duct business.
the profit and loss arising therefrom. This
B. A meeting that lacks a chairman. definition is given by
C. The maximum number of persons who A. Salmond
may attend a meeting. B. Austin
D. A meeting that is invalid because suffi- C. Lindley
cient notice has not been provided.
361. Unger and Unger is a law firm consist- 365. Which of the following statements is cor-
ing of two brothers who started their own rect?
business. They both are responsible for all
profits and risks that their firm will have. A. A public company limited by shares
must have a constitution
B. A public company limited by guarantee
can offer shares publicly
C. Only a public company can be holding
company
D. Members of a private company have
pre-emptive rights on shares
366. The articles regulate the of the af-

A. Sole Proprietorship fairs of the company by way of defining
B. Partnership the powers of its officers and establishing
a contract between the company and the
C. Corporation
members and between the members inter
D. none of above se
A. Internal management
362. A certificate of incorporation is issued
when the proper documents for company B. Rules and regulations
formation have been filed. C. Minutes
A. True D. External management
B. False 367. A quorum of persons is required for
a meeting of shareholders of a public com-
363. According to which section of the Com-
pany, if the total number of members is
pany Act, 2013 the name of the company
not more than 1000 on the date of meet-
should end with “Ltd” or ‘’ Pvt. Ltd”
ing.
A. Sec 10 A. 4
B. Sec 11 B. 10
C. Sec 12 C. 5
D. Sec 13 D. 2

1.1 COMPANY LAW 38
368. Average citizens can buy shares from a C. 18

A. public company D. 17
B. private company
375. Which is not the qualification of secre-
369. A company can issue redeemable prefer- tory:
ence shares that can be repurchased by the A. Member of ICSI
company.
B. Member of ICAI
A. True
NARAYAN CHANGDER
C. Master of Commerce
B. False
D. B. Com
370. Managed by the board of directors is one
of the characteristic for 376. what are the features of a company?
A. Company A. separate legal entity
B. Sole Proprietorship B. perpetual succession
C. Partnership C. common seal
D. Limited Liability Partnership D. natural person
371. Liability of partners is unlimited in case of
377. How many Types of shares
general partnership whereas it is limited
incase of Limited Liability Partnership. A. 2
A. True B. 4
B. False C. 5
C. None of the above D. 6
D. none of above
378. In Malaysia, the main legislation that
372. Which is not a characteristics of a com- govern companies is
pany? A. Companies Act 1965
A. Legal personality
B. Companies Act 2016
B. Limited liability
C. Companies Ordinan 2016
C. Perpetual succession
D. Companies Ordinan 1965
D. No common seal
379. Which one of the cases listed below does
373. Any natural or legal person may be a lim-
not relate to evasion principle under the
ited partner in a limited partnership:
principle of ‘piercing the corporate veil’
A. mistake
A. Jones v Lipman [1962]
B. correct
B. Gilford motor Company Ltd v Horne
374. A director on a given time can serve how [1933]
many companies at a time? C. DHN Food Distributors Ltd v Tower
A. 20 Hamlets LBC [1976]
B. 19 D. none of above

1.1 COMPANY LAW 39
380. A Company is C. Members voluntary winding up

A. Juristic person (MVWU)

B. Separate legal entity D. Creditors voluntary winding up
(CVWU)
C. Not a natural person
385. Tick all the demerits of a company from
D. All of the above
the followinig.
381. Who is responsible for the day-to-day A. Formalities
management of a company?
B. More tax burden
A. Shareholders
C. Limited liability
B. Directors
D. Possibility of fraud
C. Auditors
386. A company wants to computerize its ac-
D. Creditors
counting system. It issues stocks to raise
382. Dan, Tony, and Mac own a pizza parlor. additional funds.
They rotate hours and days off.
A. Sole Proprietorship B. Partnership
B. Partnership C. Corporation
C. Corporation D. none of above
D. none of above
387. A promoter
383. Articles of Association is subordinate to A. is not agent of the company
B. is not a trustee of the company
A. Company Law C. occupies a fidicuary position
B. Central Government D. All of the above
C. Memorandum Explanation:The promoter is neither a
D. Prospectus trustee nor an agent of the company be-
cause there is no company yet in exis-
384. The following are the characteristics of a tence. The correct way to describe his
Voluntary Winding Up EXCEPT legal position is that he stands in a fidu-
ciary position towards the company about
A. Takes place when the company is insol- to be formed. A promoter cannot be al-
vent lowed to make any secret profits. If it
B. The liquidator is appointed by the mem- is found that in any particular transaction
bers of the company, he has obtained a secret

1.1 COMPANY LAW 40
profit for himself, he will be bound to re- C. distribution of profits only to one part-
fund the same to the company.The pro- ner
moter is not allowed to derive a profit D. The destruction of merchandise or the
from the sale of his own property to the completion of the business carried out by
company unless all material facts are dis- the federation
closed. If he contracts to sell his own
property to the company without making 391. Mary opened a dance studio. She re-
a full disclosure, the company may either ceives all the profits from her students’
NARAYAN CHANGDER
repudiate/rescind the sale or affirm the lessons.
contract and recover the profit made out
of it by the promoter.
388. A company can have an unlimited num-

ber of members under the Companies Act
2017.
A. True
B. False
389. Find privileges of partnerships over cor- B. Partnership
porations:
C. Corporation
A. No tax on dividends
D. none of above
B. Less formalities in the formation pro-
cess 392. Company was governed by
C. Profit sharing
D. Agreed decision-making
390. In Article 1646 of the Civil Code, it is

stated that there are five things that can
cause a firm to be dissolved or disbanded,
namely
A. Company Act 1965
B. Company Act 1956
C. Company Act 2015
D. Company Act 2016
393. What is the maximum penalty for non-

compliance with the provisions related to
the issuance of a prospectus under the
Companies Act 2017 in Pakistan?
A. Imprisonment for 1 year
A. There is a desire to dissolve the firm
by one or several partners B. Fine up to PKR 1 million
B. There is a desire to re-establish the C. Fine up to PKR 5 million

firm by one or several partners D. Fine up to PKR 10 million

1.1 COMPANY LAW 41
394. What does the word “insolvency” mean? 400. According to Section 48 of Companies Act,
A. liability 2013, the rights attached to the shares of
any class can be varied with the consent

B. bankruptcy of of the shareholders of that class
C. incorporation A. 1/Offer
D. environment
B. half
395. Which of the following is not requirement C. 1/pc
to be a company secretary>
D. h/chth
A. natural person
B. 21 years old 401. Sally has been appointed as the secretary
company of MNA Sdn Bhd. One of the di-
C. citizen or permanent resident of
rector of the company who is known as Mr
Malaysia
Logic had suggested to the board of direc-
D. none of above tor to allocate pension for his wife upon his
death. Which of the law below is related
396. Partnership act is? to his act as the director of the company?
A. 1932
A. acting in a good fiduciary duty
B. 1930
B. has conflict interest because acting for
C. 1931 his personal interest
D. 1934 C. has acting in a good faith, position of
trust
397. The concept of OPC has been introduced
on the basis of recommendation of the D. acting based on his skills, knowledge
A. JJ Irani Committee and judgment
B. HC Bhabha Committee 402. Officer of the court who commonly acts

C. BR Ambedkar Committee as a liquidator of a company being wound
up by the court
D. None of the Above
A. shareholder
398. Prospectus is not issued in
B. director
A. Public issue
C. managing director
B. Private placement
C. Right issue D. official receiver
D. None of the above 403. The minimum number of directors in a

public company
399. Who may be directors of a company:
A. Any Firm A. 1
B. Any Company B. 2
C. Any Body of Individuals C. 10

D. Only Individuals D. 15

1.1 COMPANY LAW 42
404. Mario and his brother Luigi started a A. Corporate veil

plumbing company together. They split the B. Lifting corporate veil
profits and the expenses.
C. Business judgment rule
D. none of above
409. What is the minimum paid up capital of

public Ltd company?
NARAYAN CHANGDER
A. 10, 000
B. 20, 000
C. 50, 000
D. 100, 000
B. Partnership
C. Corporation 410. A company which restrict to transfer its
shares
D. none of above
405. Who is responsible for appointing the au-
ditors of a company under the Companies
A. Shareholders
B. Board of Directors
C. Securities and Exchange Commission
of Pakistan (SECP)
D. Pakistan Stock Exchange (PSX)
A. Limited scope
406. A private company can call upon general B. Laguna Merbok Sdn. Bhd.
public for investment. Is this statement
correct? C. National Heart Institute
A. No D. Blind Associations
B. Yes 411. The following are the characteristics of
C. Partially correct Maatschap based on Articles 1618-1652
of the Civil Code, except
D. Niether a nor b
407. What is a company?
A. Association of person
B. Individual
C. Both A and B
408. It is a shield that can be use by a director A. there is an agreement between two or
to protect himself if at any point his deci- more people
sion is somehow wrong. The above state- B. The aim is to share profits or benefits
ment refers to from the results of joint efforts.

1.1 COMPANY LAW 43
C. have capital in the form of shares 416. can a sole member attend meetings
D. The parties involved should enter A. yes

something into the alliance.
B. no
412. A private company restricts the transfer 417. after 1
of its shares. This provision is mentioned
under Section: A. 2
A. 2(68) B. 23
B. 2(69) C. 44
C. 2(34) D. 4
D. 2(45) 418. Below are the characteristics of the Com-
pany, except
413. MOA should be in form in case of a
unlimited liability
A. Table A
B. Table B
C. Table E
D. Table C
414. Morgan was no longer as the company’s

director as his term has expired and was
not re-elected. However, she continued A. Be overt
to participate in the management as if she B. make bookkeeping
were the director. 2 shareholders question
about her position. Ali, the company secre- C. incorporated
tary advise the shareholders that she can D. still
be the company director though there is no
re appointment. What type of director is 419. Private company prohibits any invitation
Morgan? or acceptance of deposits from persons
A. Shadow Director other than its
B. De Factor Director A. Members
C. Non Executive Director B. directors
D. Independent Director C. Partners

D. banks
415. For how many days registrar may re-
serve the name alloted to a company? 420. The common seal of the company
A. 15 days A. Is mandatory for all the companies
B. 60 days B. It is mandatoryFor Public Co. only
C. 45 days C. It is mandatory for Pvt. Co. Only
D. 30 days D. It is optional W.E.F 29/05/15

1.1 COMPANY LAW 44
421. A minimum number of a director in a pub- A. Memorandum

lic is
B. Articles
A. one
C. Certificate of incorporation
B. two
D. Minutes
C. three
D. none of above 426. who can call for AGM?
A. shareholders
NARAYAN CHANGDER
422. To ensure legal certainty for partners,
the government has required the establish- B. CEO
ment of civil partnerships, firms and CVs C. members
to be carried out with a written deed made
before a notary as regulated in D. company secretary
427. Any change in the address of the regis-

tered office must be communicated to the
registrar within:
A. 15 days
B. 30 days
C. 1 Month
A. Article 22 KUHD D. 12 months
B. PP No. 8 of 2021
428. Director responsible for the day-to-day
C. UU no. 11 of 2020
operation of a company
D. Minister of Law and Human Rights Reg-
A. managing director
ulation 17 of 2018
B. district Attorney
423. Private company requires minimum
number of membere. C. auditor
A. 2 D. receiver
B. 5 429. The memorandum of association of a com-

C. 7 pany contains regulations relating to the
internal affairs of a company.
D. 100
A. True
424. Where is the register of members of a
company maintain? B. False
A. Registered office 430. Public company requires minimum

B. Branch office number of members.
C. Department head office A. 2
D. On company gate B. 5
C. 7
425. Document contains the rules and regu-
lations regarding the internal management D. 100

1.1 COMPANY LAW 45
431. The conditions for establishing an Individ- 435. Minimum number of directors required to
ual Company are, except form a public company are
A. 3

B. 6
C. 7
D. 8
436. Lifting corporate veil is

A. a principle that will protect members
A. authorized capital which is entirely di-
and officers from being liable to debts and
vided into shares
obligations of the company.
B. in accordance with the criteria for mi-
B. an action where the court ignore the
cro and small businesses.
separation of the company from its mem-
C. The founder makes a statement of bers
founding
C. a contents in Constitution that incon-
D. Shareholders become more than 1 per- sistent with Companies Act 2016
son
D. none of above
432. The owners of limited companies have to
437. Shareholders can also take binding deci-
pay all the company’s debts.
sions outside the GMS provided that all
A. true shareholders with voting rights agree in
B. false writing by signing the relevant proposal
Explanation:The liability is limited to the which is referred to as
value of the share capital.
433. If you have been appointed as a direc-

tor, bur you do nor have any involvement
in the day-to-day running of the company,
you are a/an director.
A. non-executive
A. Extraordinary GMS
B. executive
B. Preferential GMS
C. shadow
C. circular decisions
D. silent
D. AGM
434. How do we call a company that holds
shares to merely facilitate the formation 438. In case of a dispute, people can take part-
of the groups of companies? nerships to court.
A. Holding company A. true
B. Mother company B. false
Explanation:Partnerships are not legal en-
C. Parent company tities; in case of legal actions, the individ-
D. Father company ual is taken to court.

1.1 COMPANY LAW 46
439. The word ‘Ltd’ is used for company 444. By the provision of section 38 Companies
A. Private company Act 2016, a is required to has a consti-
tution.
B. Public Company
A. Company limited by shares
C. Government company
B. Company limited by guarantee
D. Foreign company
C. Unlimited companies
440. Audit of accounts is compulsory for a Pub- D. Private companies
NARAYAN CHANGDER
lic Company:
445. What is the maximum period within
which a company must hold its annual gen-
eral meeting (AGM) under the Companies
A. 3 months from the end of the financial
year
B. 6 months from the end of the financial
year
C. 9 months from the end of the financial
A. True year
B. False D. 12 months from the end of the financial
year
441. A company meeting that is not an annual
general meeting. 446. Is company have its separate legal en-
A. extraordinary tity?
B. special A. Yes
C. exceptional B. No
D. unique C. Can’t say
D. Questions is irrelevant
442. Buyback provision under Companies Act
was amended in 447. Which of the following falls under fidu-
A. 1999 ciary duties of a director?
B. 2001 A. Duties to act in good faith
C. 2000 B. Duties to exercise power for proper
D. 2002 purposes
C. Duty to disclose conflicts of interest
443. Members of which of the following com-
panies cannot transfer shares? D. Duty to exercise skill
A. Private company 448. Roslan is the director of Ribena Sdn Bhd.

B. Public Company As a director, he always deal with many
suppliers who wants to have business
C. Government company with Ribena Sdn Bhd. QRS Sdn Bhd would
D. Domestic company like to supply blue grapes to Ribena Sdn

1.1 COMPANY LAW 47
Bhd. Roslan on the other hand ask his an- 453. According to the rule in Turquand’s case,
other company WWW Sdn Bhd to accept a company is prohibited from dealing in its
QRS Sdn Bhd whereas Roslan is also one own shares.

of the director of WWW Sdn Bhd. Advise. A. True
A. Roslan can be remove as the director
B. False
of the company
B. Roslan has conflict interest as the di- 454. The minimum number of members re-
rector whereby he used his position as di- quired to form and carry on business as
rector and corporate opportunities a private limited company is
C. Roslan has acted in bona fide while A. 2
perform his duty as director to WWW Sdn B. 3
Bhd
C. 4
D. Roslan has use his skill and knowledge
while giving judgement to the company D. 5
449. To conduct Annual General Meeting 455. Audit of a company’s financial state-
days notice is required. ments is mandatory for all companies?
A. 2 A. True
B. 7 B. False
C. 14
456. Who may petition the court for an order
D. 21 to wind up a company?
450. what is a meeting A. The government
A. meeting of only 1 person B. The customer
B. meeting of more than 1 person C. The company
C. meeting at the office D. Any member of the public
D. meeting among the board of directors
457. Selects all duties of an auditors.
451. Which of the following is not a stage of
the development of company? A. To carry out an audit and prepare re-
ports on company’s account
A. Promotion
B. Investigate and be independant in his
B. Production reports
C. Incorporation
C. Advise company’s corporate affairs
D. Commencement of Business
D. Exercise reasoanable degree of care
452. What is the maximum number of mem- and skill
bers allowed in a private company under
the Companies Act 2017 in Pakistan? 458. Selects all qualifications to be an auditor
A. 25 members A. registered public accountant with MIA
B. 50 members B. at least 18 years old
C. 100 members C. fit and proper person
D. Unlimited members D. independent of the company

1.1 COMPANY LAW 48
459. Which entity best protects the property 462. Manjit was assigned to incorporate a
and the assets of the shareholders? company by Malik and Michael. Who is
Manjit?
A. corporation
A. Director
B. partnership
B. Promoter
C. sole proprietorship
C. Shareholder
D. none of above
D. Subscriber
NARAYAN CHANGDER
460. In Petrodel Resources Ltd v Prest [2013], 463. Ordinary shares have preferential rights
Lord Sumption stated that there is only with regard to dividend payments.
one instance in which the courts can pierce
the veil. What is this one instance? A. True
B. False
A. Where a subsidiary is acting as an
agent for the parent. 464. General Meeting provisions are not appli-
B. Where a group of companies are to be cable to OPC are mentioned under
regarded as a ‘single economic unit.’ A. Section 122
C. Where a person is under an exist- B. Section 123
ing legal obligation which he deliberately C. Section 124
evades or whose enforcement he frus-
trates by interposing a company under his D. Section 125
control.
465. Is it mandatory to have common seal un-
D. Where a parent owes the employees of der companies act 2013?
its subsidiary a duty of care. A. Yes
461. when the partnership of the established B. No
firm suffers losses or goes bankrupt, all C. Partially Yes
members of the firm’s associates
D. Partially No
466. How many types of companies are there

on the basis of incorporation?
A. 2
B. 3
C. 4
D. 5
A. are obliged to take responsibility
jointly and severally 467. Which new type of company was intro-
duced in Companies Act 2013?
B. only partners who receive a special
designation are responsible A. One Person Company (OPC)
C. is not responsible because he has B. Associate Company
given power of attorney C. Small Company
D. transfer to the company’s leadership D. All of the above

1.1 COMPANY LAW 49
468. Which of the following NOT the require- 474. Property of the company belongs to
ment needed for registration of company. A. Shareholders

A. Nature of business B. company
B. Proposed registered address
C. members
C. Status of private or public company
D. promoters
D. Home address
475. The is the group of people who share-
469. Method of joining membership of a com- holders choose to manage a company or
pany: organization.
A. By sign on Memorandum of Associa- A. Managers
tion
B. legal persons
B. By application and allotment
C. shareholders
C. By transfer of shares
D. board of directors
D. By surrendering share warrant
E. All the above 476. What does ‘Limited Liability by Shares’
principle mean?
470. Member of the company by virtue of an
acquisition of shares A. liability of shareholder’s are unlimited
A. proxy B. liability of shareholder’s are limited to
the re sale value of shares they have in the
B. receiver
company
C. shareholder
C. liability of shareholder’s are limited to
D. company director the extent of the nominal value of shares
471. Which document contains the rules and in the company
regulations for the internal management D. share holder’s have no liability for com-
of a company? pany’s losses
A. Memorandum of Association 477. Evaluating:Why is it important to choose
B. Articles of Association the right business structure?
C. Certificate of Incorporation A. To minimize tax liabilities
D. Shareholder Agreement B. To ensure compliance with regulations
472. How many kinds of a company meetings: C. To facilitate growth and attract invest-
A. 3 ment
B. 4 D. All of the Above

C. 5 478. What is the minimum share capital re-
D. 6 quired for a public company under the Com-
panies Act 2017 in Pakistan?
473. Articles of Association contain the rules
A. PKR 1 million
and regulations for the internal manage-
ment of a company. B. PKR 5 million
A. True C. PKR 10 million
B. False D. PKR 50 million

1.1 COMPANY LAW 50
479. Memorandum of Association defines a A. correct

company relationship with the outside B. incorrect
world:
A. True 485. The Companies Act 2017 governs the in-
corporation and regulation of companies in
B. False Pakistan.
480. A prospectus is not required when a com- A. True
pany issues shares to the public. B. False
NARAYAN CHANGDER
A. True
486. A person whom you choose to do some-
B. False thing officially for you, for example vote
481. Understanding:What are the advantages at a meeting or in an election when you
of forming a corporation? are not able to vote yourself.
A. Unlimited liability for owners A. power of attorney
B. Limited liability for owners B. representative

C. proxy
C. No liability for owners
D. secretary
D. Shared liability for owners
487. What are the two types of duty owed by
482. What does ‘piercing the corporate veil’
directors of a company?
imply?
A. Duty of interaction.
A. To treat rights and liabilities of a corpo-
ration as rights and liabilities of its share- B. Duty of care; fiduciary duty.
holders C. They don’t owe any duty.
B. To treat rights and liabilities of parent D. I need to study more.
as rights and liabilities of its subsidiary
C. To treat rights and liabilities of corpo- 488. The U.S. English equivalent to the U.K
ration as rights and liabilities of its direc- word memorandum of association is:
tors A. articles of incorporation
D. none of above B. articles of association
483. Below are how companies obtain their C. statutory forms

capital except D. board of directors
A. share capital 489. After every meeting, the minutes of that
B. loan capital meeting are written by
C. personal assets A. Director
D. trade finance B. Auditor
484. Director has no power to vote in the C. Company Secretary

board of meeting. D. Shareholder

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