Commerce exams sample papers

Company Law Test Objective Type Questions

1. When there is any untrue statement in the prospectus. The shareholder who was A subscriber to
the memorandum can sue the company
(a) Yes

(b) No

Ans. (b)

2. Return of partly paid shares by the shareholders to the company is____________
(a) Surrender

(b) Forfeiture

(c) Lien

(d) None of the above

Ans. (a)

3. A Company can issue sweat equity shares as soon as it started business.

(a) Yes

(b) No

Ans. (b)

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4. A Temporary workman will be entitled to bonus.

(a) Yes

(b) No
Ans. (a)
5. A Temporary workman entitled to bonus on the basis of
(a) Total No. of days worked

(b) All working days
(c) No bonus will be allowable

(d) None of the above.
Ans. (a)

6. Statutory meeting shall be conducted immediately after getting the certificate of commencement of business?

(a) Yes

(b) No

Ans. (b)

7. What is the  maximum period for redemption in case  of preference  shares issued by the
company
(a) 10 years

(b) 15 years

(c) 20 years

(d) None of these
Ans. (c)

8. Capital redemption reserve must be used for issue of
(a) Fully paid bonus shares

(b) Fully paid equity shares
(c) Preference shares

(d) None of the above.

Ans. (a)

9. Under which sec. if company fails to commence its main object the court may order winding up

(a) 403 (f)

(b) 413 (f)

(c) 423 (f)

(d) 433 (f)

Ans. (d)

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10. In case of forgeries acts done in the name of the company are

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(a) Valid

(b) Void

(c) Void ab initio

(d) None of the above
Ans. (c)

11. Where any employee dismissed because of Riotous/ Violent behaviour in the premises whether
he is eligible for bonus.
(a) Yes

(b) No
Ans. (b)

12. Where an employee dismissed but reinstated with back wages will be entitled to bonus.

(a) Yes

(b) No.

Ans. (a)

13. A public company can borrow money _____
(a) before incorporation

(b) Soon after incorporation
(c) after issuing a proposal

(d) after obtaining certificate to commerce business.
Ans. (d)

14. Transfer deed should in form No.
(a) 6 B

(b) 5 B

(c) 7 B

(d) None of these
Ans. (c)
15. ______ is voluntary passage of the rights and duties of member from a share holder.
(a) Transfer

(b) Transmission

(c) Both (a) & (b)

(d) None of the above

Ans. (a)

16. A private company can borrow funds

(a) after incorporation

(b) after obtaining certificate to commerce business

(c) after holding first annual general meeting

(d) None of the above

Ans. (a)

17. ______  gets all liabilities of original owner
(a) Transferor

(b) Transferee

(c) Endorser

(d) Endorsee

Ans. (b)

18. In the case of Company. Audit is
(a) Compulsory

(b) Optional

(c) None of the above

Ans. (a)

19. According to which sec. name of the company should end with “Ltd” or “Pvt Ltd”

(a) 10

(b) 11

(c) 12

(d) 13

Ans. (d)

20. The companies which are formed under special charter granted by the king or queen of England are called

(a) Statutory companies

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(b) Registered companies

(c) Chartered companies

(d) None of these

Ans. (c)

21. Invitation to public offering shares or debentures in case of private company
(a) Prohibited

(b) Restricted

(c) Acceptable

(d) None of these
Ans. (a)

22. The person who is holding share warrant will be a _________________  of the company.
(a) Member

(b) Shareholder

(c) Partner

(d) None of these
Ans. (b)

23. Can an insolvent be a member of the company

(a) Yes

(b) No

Ans. (a)

24. Any amount received from Central Government or State Government can be termed as deposit

(a) Yes

(b) No

Ans. (b)

25. Any amount received as a loan from banking company, SBI and nationalized banks including a co-operative Bank will be treated as deposit

(a) Yes

(b) No
Ans. (b)

26. Maximum paid up capital in case of public company.
(a) 50 Lakhs

(b) 100 Lakhs

(c) 125 Lakhs

(d) None of these

Ans. (b)

27. Can a partnership firm become a member of Sec.25 companies

(a) Yes

(b) No
Ans. (a)
28. Every Company needs company secretary. So in the case of sec.25 companies the same is the
case. Do you agree with this statement?
(a) Agree

(b) Disagree

Ans. (b)

29. Any change in the address of the registered office must be communicated to the registrar within:
(a) 15 days

(b) 30 days

(c) 1 Month

(d) 12 months
Ans. (c)

30. Debentures which have the charge on the property of the company is______________
(a) Secured

(b) Unsecured

(c) Registered

(d) None of the above
Ans. (a)

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31. What is maximum Bonus u/s 11 of the payment of Bonus Act
(a) 20% of wages

(b) 15% of wages
(c) 17.5% of wages

(d) None of the above

Ans. (a)

32. Debenture which are repayable only on the happening of an event of winding up is called
(a) Redeemable

(b) Irredeemable

(c) Perpetual

(d) Both ((b) & ((c)

Ans. (d)

33. Return paid on debentures is___________
(a) Interest

(b) dividend

(c) Commission

(d) Tax
Ans. (a)
34. Which of the following have voting rights__________
(a) Share holders

(b) Debenture holder

(c) Both (a) & (b)

(d) None of the above

Ans. (a)

35. A company must inform the registrar about redemption of preference shares with in
(a) 21 days

(b) 15 days

(c) 30 days

(d) None of the above

Ans. (c)

36. An act ultra virus the directors can be rectified if it is not ultra vires
(a) the articles

(b) the memorandum

(c) Company Act

(d) None of the above

Ans. (c)

37. Address of the registered office is situated in
(a) MOA

(b) AOA

(c) Prospectus

(d) None of these
Ans. (b)

38. Company limited by shares needs to hold statutory meeting

(a) Yes

(b) No

Ans. (a)

39. Basic wages as per EPF Act. Does not include over time allowance
(a) True

(b) False
Ans. (a)

40. _______ are the prospectus issued by the issuing house
(a) Deemed prospectus

(b) Shelf prospectus issued by the issuing house
(c) Red herring

(d) None of the above
Ans. (a)

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