Company Law Exam Questions and Answers PDF

Objective Questions on Company Law with Answers:

Question: A company to issue sweat equity shares must pass a.
(a) Special resolution
(b) Ordinary resolution
(c) Unanimous resolution
(d) None of these

Ans. (a)

Question: Proxy need not be a_____ of the company
(a) Shareholders
(b) Members
(c) Both (a) and (b)
(d) None of the above

Ans. (c)

Question: Under writing commission payment shall be authorised by AOA
(a) Yes
(b) No

Ans. (a)

Question: Can Foreigners be subscriber
(a) Yes
(b) No

Ans. (a)

Question: Can an insolvent vote in the company
(a) Yes
(b) No

Ans. (a)

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Question: In case of joint shareholders company will issue two share certificate
(a) Yes
(b) No

Ans. (b)

Question: Shares warrant should be issued when shares are fully paid up
(a) Yes
(b) No

Ans. (a)

Question: President appointed a proxy. State whether that person will be counted towards quorum
(a) Yes
(b) No

Ans. (a)

Question: While calculating maximum limit in case of private company which of the following will not be included
(a) Employee + Member
(b) Member + Employee
(c) Member
(d) None of these

Ans. (b)

Question: Managing director will be counted as___ while calculating maximum limit in case of private company.
(a) Member
(b) Employee
(c) Shareholder
(d) None of these

Ans. (a)

Question: Governor appointed a proxy. State whether that person will be counted towards quorum
(a) Yes
(b) No

Ans. (a)

Question: Share warrant can be transferred by delivery.
(a) Yes
(b) No

Ans. (a)

Question: Can shares be allotted immediately after the issue of prospectus
(a) Yes
(b) No
(c) None of the above

Ans. (b)

Question: MOA should be in form_____________ in case of company limited by shares
(a) Table A
(b) Table B
(c) Table C
(d) Table D

Ans. (b)

Question: A company not declare dividend at.
(a) Statutory meeting
(b) Annual general meeting
(c) Extra ordinary G.M
(d) None of the above

Ans. (a)

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Question: X Co. having control on Board of Directors of Y Co. Can we say that Y Co. is subsidiary of X Co.
(a) Yes
(b) No

Ans. (a)

Question: Can sec.25 Companies alter their objects clause
(a) Yes
(b) No

Ans. (b)

Question: If as a person is present in more than 1 capacity his presence will be counted as____________
(a) 1
(b) 2
(c) 3
(d) 4

Ans. (b)

Question: A proxy must bear revenue stamp worth.
(a) 30 paise
(b) 15 paise
(c) 45 paise
(d) 50 paise

Ans. (b)

Question: Property of the company belongs to
(a) Company
(b) Share holders
(c) Members
(d) Promoters

Ans. (a)

Question: Which company shares can be freely transferable
(a) Private Company
(b) Public Company
(c) Both (a) & (b)
(d) None of the above

Ans. (a)

Question: Total managerial remuneration cannot exceed ____% of net profit
(a) 11
(b) 12
(c) 13
(d) 14

Ans. (a)

Question: Debenture holders are
(a) Owners
(b) Creditors
(c) Debtors
(d) None of the above

Ans. (b)

Question: _____ is the official recording of the proceedings of a meeting
(a) Quorum
(b) Minutes
(c) Both (a) & (b)
(d) None of the above

Ans. (b)

Question: Premium amount on the securities are transferred to_____________ account
(a) Securities premium
(b) Reserve fund
(c) Capital Reserve
(d) None

Ans. (d)

Question: _____  are the contracts entered into by promoters on behalf of a prospectus company.
(a) Provisional contracts
(b) Pre-Incorporation contracts
(c) Preliminary contracts
(d) Both (a) & (b)

Ans. (d)

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Question: Share warrant does not contain any name on face of it.
(a) True
(b) False

Ans. (a)

Question: Register of deposits should be maintained for__________ years.
(a) 2
(b) 4
(c) 8
(d) 16

Ans. (c)

Question: Return of deposits is to be filed on or before___________ with ROC
(a) 30 th day of June
(b) 30 th day of July
(c) 30 th day of January
(d) 30 th day of May

Ans. (a)

Question: Stamp duty to be paid at the time of issue of share certificate is.
(a) Nominal
(b) High
(c) Very high
(d) None of these

Ans. (a)

Question: Contracts made after incorporation but before the grant of Certificate of commencement of Business _____
(a) Provisional contracts
(b) Pre-incorporation contracts
(c) Preliminary contracts
(d) Both (b) & (c)

Ans. (c)

Question: In case of appointment of Directors________ form is to be filed
(a) 29
(b) 32
(c) 18
(d) 1

Ans. (a)

Question: With in how many days prospectus or statement in lieu of prospectus should file with ROC
(a) 30
(b) 40
(c) 20
(d) 50

Ans. (a)

Question: Advertisement given for deposits is valid for________ months
(a) 3
(b) 6
(c) 9
(d) 12

Ans. (b)

Question: For computation of number of working days as per Sec 14 the day when employee has been laid off under an agreement or by a standing order under Industrial Disputes Act 1947 will be included
(a) Yes
(b) No

Ans. (a)

Question: Private company can start its business immediately after the issue of
(a) Certificate of commencement of Business
(b) Certificate of Incorporation
(c) Both
(d) None of the above

Ans. (b)

Question: If the companies does not increase their paid up capital by 1/5 lakhs with in 2 years such
companies are known as___
(a) Private
(b) Public
(c) Defunct
(d) Govt Company

Ans. (c)

Question: If the employer is a partnership firm. The deduction will be allowed under 3 rd schedule while determining available surplus _____ % of G.P as remuneration to partners.
(a) 40%
(b) 25%
(c) 30%
(d) 60%

Ans. (b)

Question: An appeal is made to whom against stock exchange for refusing the permission of listing.
(a) SAI
(b) NCLT
(c) MAT
(d) ROC

Ans. (a)

Question: In case of companies other than Non -Profit making Companies notice of G.M. should be given with in ____ days
(a) 14
(b) 15
(c) 21
(d) 22

Ans. (c)

Question: Signature of memorandum and articles should be done by ________ number of persons in case of private company
(a) 3
(b) 4
(c) 2
(d) None of these

Ans. (c)

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Question: The expenses of holding an E.G.M by the requisitionists will be ultimately borne by _____
(a) Company
(b) Requisitionists
(c) all directors in default
(d) None of the above

Ans. (a)

Question: The term company is defined under which sec of the Act?
(a) Sec 3(1)
(b) Sec 4 (2)
(c) Sec 2 (4)
(d) Sec 1 (3)

Ans. (a)

Question: Minimum paid up share capital in case of a private company is ________
(a) 1 Lakh
(b) 2 Lakhs
(c) 3 Lakhs
(d) 4 Lakhs

Ans. (a)

Question: Security deposit received from the employee will not be treated as deposit.
(a) Yes
(b) No

Ans. (a)

Question: Prospectus is not required to be issued when sweat equity shares are issued to directors and
employees
(a) Yes
(b) No

Ans. (a)

Question: Y Pvt.Co. is subsidiary of X Co. which is a public Company? Mention Y is a
(a) Private Co.
(b) Public Co.
(c) Government Co.
(d) None of these

Ans. (b)

Question: Company’s owners are shareholders. So the company property belongs to the share holders. Do you agree with this statement?
(a) Yes
(b) No

Ans. (b)

Question: Generally rights and obligations of the company are regulated in
(a) A.O.A
(b) M.O.A
(c) Partnership deed
(d) None of these

Ans. (b)

Question: __ prospectus were issued in case securities were issued in stages
(a) Deemed
(b) Shelf
(c) Red herring
(d) None of the above

Ans. (b)

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Question: A company can change its name by passing
(a) Ordinary resolution
(b) Special resolution
(c) Either by special resolution or by ordinary resolution
(d) None of the above

Ans. (c)

Question: Audit of a private company will not be counted for the limit of audits
(a) Yes
(b) No

Ans. (b)

Question: ______  stands in the fiduciary position of the company
(a) Directors
(b) Promoters
(c) Auditors
(d) None of the above

Ans. (b)

Question: What is punishment for directors, promoters  and   other  persons  for   Misrepresentation  in prospectus
(a) 50,000
(b) 2 years imprisonment
(c) Both of the above
(d) None

Ans. (c)

Question: Small deposits means a depositor who had deposits a sum not exceeding _____ in a financial year
(a) 15,000
(b) 20,000
(c) 18,000
(d) None of these

Ans. (b)

Question: Can a partnership be a member of the company?
(a) Yes
(b) No

Ans. (b)

Question: The capital which is part of the uncalled capital of the company which can be called up only in the event of its winding up it is called
(a) Issued capital
(b) Nominal capital
(c) Authorised Capital
(d) Reserve capital

Ans. (d)

Question: To issue a share warrant Central Government permission is necessary?
(a) Yes
(b) No

Ans. (a)

Question: Voting Rights are available to share warrant holders.
(a) Yes
(b) No

Ans. (b)

Question: No consideration shall be paid by the company in exchange of ________ shares
(a) Lien
(b) Forfeited
(c) Surrender
(d) None of the above

Ans. (c)

Question: If the ownership of shares goes to another by operation of law is called as
(a) Transfer
(b) Transmission
(c) Both (a) & (b)
(d) None of the above

Ans. (b)

Question: In case of allotment Debenture Certificate is to be issued with in ___ Months
(a) 1
(b) 2
(c) 3
(d) 4

Ans. (c)

Question: Amount due on redemption including interest should be claimed with in ___ years.
(a) 10
(b) 9
(c) 8
(d) 7

Ans. (d)

Question: _____ Sec. contains the provision relating to modification of a charge.
(a) 130
(b) 135
(c) 140
(d) 145

Ans. (b)

Question: First AGM must be held with in_______________ from the date of the balance sheet
(a) 6 months
(b) 9 months
(c) 5 months
(d) None of these

Ans. (b)

Question: A company cannot pay under writing commission unless it is authorised by its ______
(a) Articles
(b) Memorandum
(c) Both (a) & (b)
(d) None of the above

Ans. (a)

Question: If company wants to place shares to brokers they should give a maximum of _______  as brokerage commission.
(a) 3%
(b) 2%
(c) 1.5%
(d) None of these

Ans. (c)

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Question: What is maximum period for which deposits can be issued?
(a) 36 months
(b) 24 months
(c) 12 months
(d) None of these

Ans. (a)

Question: A company can accept or renew deposits   for a period less than 6 months if they do not exceed 10% of the aggregate of
(a) Paid up Capital
(b) Free reserves
(c) Paid up capital and Free reserves
(d) None of the above

Ans. (c)

Question: A Notice inviting deposits from the public is______________
(a) Deposit
(b) Fund
(c) Share
(d) None of the above

Ans. (a)

Question: In case of private company the quorum should be
(a) 2 members
(b) 3 members
(c) 4 members
(d) None of these

Ans. (a)

Question: When shares are issued at premium permission of AOA and NCLT is required.
(a) Yes
(b) No

Ans. (b)

Question: The notice offering right shares must allow the members ____ to exercise their option to accept, reject or renounce it
(a) 10 days
(b) 14 days
(c) 15 days
(d) 20 days

Ans. (c)

Question: The company must deliver share certificate within ____ if the shares allotted by company.
(a) 2 months
(b) 3 months
(c) 4 months
(d) none of these

Ans. (b)

Question: Private company can issue share warrant?
(a) Yes
(b) No

Ans. (b)

Question: In case of __________  duplicate can be obtained if it lost
(a) Share warrant
(b) Share certificate
(c) Dividend coupon
(d) None of the above

Ans. (b)

Question: Duplicate certificate obtained if original certificate lost in case of.
(a) Share Certificate
(b) Share warrant
(c) Dividend warrant
(d) None of these

Ans. (a)

Question: Interest out of capital can be paid only if it is sanctioned by
(a) MOA
(b) AOA
(c) NCLT
(d) C.G

Ans. (b)

Question: _____  is an instrument of transfer signed by the transferor in which the name & date are not
filled.
(a) Forged transfer
(b) Blank transfer
(c) Both (a) & (b)
(d) None of the above

Ans. (b)

Question: ____ transfer is null and void
(a) Forged
(b) Blank
(c) Both (a) & (b)
(d) None of the above

Ans. (a)

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Question: Consideration is necessary in case of transmission
(a) Yes
(b) No

Ans. (b)

Question: Share certificate can be issued for partly paid up shares
(a) Yes
(b) No

Ans. (b)

Question: Share certificate can’t be transferred by delivery.
(a) Yes
(b) No

Ans. (a)

Question: Stamp duty to be paid at the time of issue of share warrant.
(a) Nominal
(b) High
(c) Very high
(d) None of these

Ans. (c)

Question: Return paid on shares is
(a) Interest
(b) Dividend
(c) Commission
(d) None of the above

Ans. (b)

Question: _____ is payable even if there are no profits
(a) Interest
(b) Dividend
(c) Commission
(d) None of the above

Ans. (a)

Question: DRR is required to be created for debentures issued prior to ___
(a) 13.12.2000
(b) 13.12.2001
(c) 13.12.2002
(d) 13.12.03

Ans. (a)

Question: The amount unclaimed on redemption is transferred to ____ fund.
(a) Investor education & protection
(b) Children welfare
(c) Workmen compensation fund
(d) None of the above

Ans. (a)

Question: Re-issued debentures are treated as new debentures for the purpose of _____
(a) Debentures certificates
(b) Income Tax
(c) Stamp duty
(d) None of the above

Ans. (c)

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Question: Charge includes __
(a) Loans
(b) Mortgage
(c) Security
(d) Hire

Ans. (b)

Question: Joint shareholders appointed a person as a proxy. State whether he will be counted for quorum
(a) Yes
(b) No

Ans. (b)

Question: XYZ is a company conducting an AGM. There are 3 members personally present and one member present in his individual capacity and as well as a representative of a body corporate. State whether the AGM is valid
(a) Valid
(b) Not valid

Ans. (a)

Question: State whether there is any provision in companies Act. That one member constitute quorum
(a) Yes
(b) No

Ans. (a)

Question: In case of alteration in the object clause of memorandum the resolution shall be passed by show of hands
(a) Yes
(b) No

Ans. (b)

Question: In case of class or debenture holders quorum constitutes _____ members.
(a) 1
(b) 2
(c) 3
(d) 4

Ans. (a)

Question: Casting vote can be cast by whom only in case of equality of votes
(a) Chairman
(b) Director
(c) Auditor
(d) Manager

Ans. (a)

Question: The Chairman on his own motion ______ also order a poll
(a) Must
(b) Should
(c) May
(d) None of the above

Ans. (c)

Question: Poll is conducted by Chairman with in ______ hrs from the demand.
(a) 24
(b) 48
(c) 72
(d) 36

Ans. (b)

Question: If the notice contain a special business then an__________ statement shall be enclosed:
(a) Explanatory
(b) Enquiry
(c) Both (a) and (b)
(d) None of the above

Ans. (a)

Question: With in_______ weeks requisition requiring circulation of a resolution may be deposited with ROC.
(a) 3
(b) 6
(c) 9
(d) 12

Ans. (a)

Question: Which of the following meeting can be held more than once in a calendar year?
(a) E.G.M
(b) S.G.M
(c) A.G.M
(d) None of the above

Ans. (a)

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Question: Employees of IDBI will not cover under payment of Bonus Act 1956
(a) Yes
(b) No.

Ans. (a)

Question: If the employer is a company other than a banking company. Deduction will be allowed under 3rd
schedule is while determining available surplus ____ % of its reserves shown in the   B/S at the commencement of the accounting year.
(a) 7%
(b) 5%
(c) 6%
(d) None of these

Ans. (c)

Question: In which one or more of the following company a member does not have a right to appoint proxy:
(a) Public company having share capital
(b) Public company not having share capital
(c) Private company not having a share capital
(d) None of the above

Ans. (b)

Question: Which one or more of the following resolution need not be filed with the registrar
(a) Special resolution
(b) A resolution of Board relating to appointment of a managing director
(c) A resolution approving the appointment of a sole selling agent
(d) An ordinary resolution

Ans. (c)

Question: In which one of the following cases an ordinary resolution may be passed ___
(a) Commencement of a new business
(b) alteration of articles
(c) Compulsory winding up of the company
(d) none of the above

Ans. (c)

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Jaspreet

Jaspreet (Masters in Commerce-LLB) not only have exceptional command of Accounts and Commerce subjects but also have keen interest in Law. He is consistent in producing high quality assignments.

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