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Company Law Exam Questions and Answers PDF

Company Law Exam Questions

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: Rate of brokerage for the deposits which have term between 1-2 years
(a) 1.5%
(b) 2%
(c) 1%
(d) None of these
Ans. (a)

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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: Depositing of proxy with the company should be made with in how many hours
(a) 24
(b) 48
(c) 36
(d) 72
Ans. (b)

Question: Rate of brokerage for the deposits which have term for more than two years
(a) 1.5%
(b) 2%
(c) 2.5%
(d) None of these
Ans. (b)

Question: Bonus shall be paid by employer in cash. If there is any dispute and settlement has been done then employer should pay bonus within
(a) 2 months
(b) 1 month
(c) 3 months
(d) None of these
Ans. (b)

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

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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)

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

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Question: The minimum application money should be ________ of nominal value as per SEBI guidelines
(a) 25%
(b) 30%
(c) 40%
(d) None of these
Ans. (a)

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)

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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)

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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)

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)

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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)

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

Question: As per SEBI application money should be refunded from the end of___________ day
(a) 60
(b) 70
(c) 80
(d) 90
Ans. (a)

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)

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)

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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)

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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 refunds are delayed by more than 10 days after this period. The directors become liable to
repay the money with how much interest as per SEBI Guidelines.
(a) 10%
(b) 15%
(c) 20%
(d) None of these
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: Where any employee committed any fraud in that accounting year. Mention whether he is eligible for Bonus. Who has been dismissed from service?
(a) Yes
(b) No
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)

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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)

Question: Employees employed under IFCI will not cover under payment of Bonus Act.
(a) Yes
(b) No
Ans. (a)

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)

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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)

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)

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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)

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Question: ____ companies are permitted to buy back its shares
(a) Insolvent
(b) Solvent
(c) Both (a) & (b)
(d) None of the above
Ans. (b)

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)

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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)

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)

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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)

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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)

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)

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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)

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)

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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)

Question: Employees of LIC will cover under payment of Bonus Act 1965
(a) Yes
(b) No
Ans. (b)

Question: Employees of DIC will cover under payment of Bonus Act 1956.
(a) Yes
(b) No.
Ans. (b)

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

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Question: Employees of every factory will cover under payment of Bonus Act 1956.
(a) Yes
(b) No.
Ans. (a)

Question: Every other establishment other than factory in which there are more than _____ employees
must be to come under payment of Bonus Act.
(a) 15
(b) 20
(c) 25
(d) 30
Ans. (b)

Question: Employee of a Seasonal factory will be eligible for bonus.
(a) Yes
(b) No
Ans. (a)

Question: Gross Profit of an employer in case of banking company will calculated as per_____ under
payment of Bonus Act,
(a) Schedule I
(b) Schedule IV
(c) Schedule III
(d) None of these
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: For recovery of Bonus due application shall be made with _______  from the bonus payable
becomes due
(a) 2 years
(b) 1 year
(c) 3 years
(d) None of these
Ans. (b)

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)

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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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