MULTIPLE CHOICE QUESTION(SAMPLE)

BUSINESS LAW SYBAF SEM 4

1.Minimum number of members required to apply for incorporation certificate in a public ltd
company is

a. 3 b. 2 c. 7 d. 50

Ans. C

2. The address of the registered office of the company must be notified to the registrar within
_________ days of registration, if it is not done at the time of incorporation

a. 15 b. 30 c. 60 d. 45

Ans. B

3. The articles of association needs to be signed by

a. all proposed directors b. registrar c. subscribers of memorandum

d. none of the above

Ans. C

4. Number of clauses in Memorandum of Association is

a. 5 b. 6 c. 7 d. 8

Ans. B

5. Which of the following clause of Memorandum of Association cannot be altered

a. Name b. Object c. situation d. liability

Ans. D

6. The Prospectus must be issued to the public within ______________ days of its date

a. 30 b. 60 c. 90 d. 100

Ans. C

7. Powers, rights, remuneration, qualification and duties of directors are discussed clearly in

a. Memorandum of Association b. Articles of Association c. Prospectus d. none of the above

Ans. B
8. A company is known as the _______company of another company if it has control over that
other company.

a. subsidiary b. holding c. controlling d. statutory

Ans. B

9. A person cannot hold directorship in more than ____ public companies

a. 3 b. 10 c. 20 d. 7

Ans. C

10. .Private company prohibits any invitation or acceptance of deposits from persons other than
its ___________

a. Members b. directors c. Partners d. banks

Ans. A

11. The company needs to obtain prior permision from central government when it changes the
address of its registered office from

a. one city to another city b. with in the same city

c. one state to another d. one country to another country

Ans. C

12. ___________ cannot give invitation to the public to subscribe for any shares in or debentures
of the company

a.Subsidiary company b. Statutory Company c. Private company

d. Registered company

Ans. C

13. What is known as a charter of a Company?

 [A] Memorandum of Association

 [B] Bye laws

 [C] Articles of Association

 [D] Prospectus

Ans. A

14. The most important document of a company is its__________.

 [A] prospectus

 [B] annual report.

  [C] memorandum of association

 [D] articles of association

Answer: C

15.Property of the company belongs to

a) Company b) Share holders c) Members d) Promoters

Ans. A

16. Which company shares can be freely transferable

a) Private Company b) Public Company c) Both (a) & (b) d) None of the above

Ans. B

17. Generally Company liability is

a) Limited b) Unlimited c) Situation does not arise

ANS C

18. Generally partnership firm liability is

a) Limited b) Unlimited c) Situation does not arise

Ans. B

19. A company is named as govt. company if it is holds ______% of paid up share capital

a) more than 30 b) more than 40 c) more than 50 d) None

Ans. C

20. Central Government permission is required in case of _______ conversion __________ a)

Private to public b) Public to private c) Both (a) or (b) d) None of the above

Ans B

21. 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 C

22.Alteration of articles must be done only by passing

a) Special resolution b) Ordinary resolution

Ans A
23. M.M. ltd is incorporated on Jan 1, 2021. It must hold its first AGM before. a) Dec 31 2022 b)
Dec 312021 c) June 302021d) June 30 – 2022

Ans C

24. Ultra vires means

a) Beyond the power b) with in the power c) Both d) None of the above

Ans A.

25. Ultra vires loans granted by the company are

a) Void b) Voidable c) Valid d) None of the above

Ans A

26. _____ is the charter of a company.

a) Memorandum b) Articles c) Both a) and b) d) None of the above

Ans A

27. The granting of the certificate of incorporation renders the illegal objects include in the

memorandum:

a) Legal b) Void c) Voidable d) None of the above

Ans B

28. If minimum subscription is not received application money should be refunded with in
_____ days

a) 20

b) 30

c) 25

d) 10

Ans d

29. Which of the following is not a stage of the development of company?

(a) Promotion (b) ProductionD(c) Incorporation (d) Commencement of Business

Answer: B

30.which of the following company/companies are registered by the Companies Act, 2013?

(a) Government Company (b) Private Company (c) Public Company (d) All of the above

Answer: D

31. Which of the following statement is false?

(a) No legal formality is required to form a company.

(b) The shareholders of a company have limited liability.

(c) A company can own property in its own name.

(d) A company is managed by the elected representatives of shareholders.

Answer: A

32. Which of the following are the functions of a promoter?

(a) Decides name of a company

(b) Nomination of directors

(c) Settles the details of memorandum and articles

(d) All of these

Answer: D

33 The companies are regulated under .

(a) Companies Act, 1596 (b) Companies Act, 1957A(c) Indian Partnership Act,1932 (d)
Companies Act, 2013

Answer: D

34. Company is managed by

(a) Shareholders (b) Board of Directors (c) Karta (d) Both(a)&(b)

Answer: . B

35 Accepting of deposits from public in case of private company is

(a) Prohibited
(b) Restricted
(c) Acceptable
(d) None of these
Ans. (a)
36 Ultra vires loans granted by the company are
(a) Void
(b) Voidable
(c) Valid
(d) None of the above
Ans. (a)

37. Ques. conceives the idea of the business

(a) Promoters
(b) Directors
(c) Auditors
(d) None of the above
Ans. (a)

38. If any body wants to file a case against the company they should file at what place _____
(a) Company
(b) Registered Office
(c) BOD
(d) Books of accounts
Ans. (b)

39____ are the shares issued by the company to it employees or directors for consideration other
than cash
(a) Bonus
(b) Sweat
(c) Right
(d) None of the above
Ans. (b)

40. Accepting of deposits from public in case of private company is

(a) Prohibited
(b) Restricted
(c) Acceptable
(d) None of these
Ans. (a)

41 Forfeiture can be made only if it is authorized by ______

(a)AOA
(b)MOA
(c)ROC
(d)C.G
Ans. (b)

42 Listing is mandatory for ------------------.

a) Trading in stock market
b) Marketing a new issue
c) Trading in international markets
d) Declaring dividend
Ans C

43.Equity shares are the ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ shares of a limited company

(a) Voting (b) Ordinary (c) Limited (d) Unlimited
ANS B

44 Equity shares and preference shares are ownership securities, also known as
‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
(a) Debt capital (b) Capital stock (c) Fixed capital (d) Capital issue
ANS B
45.Bonds, debentures etc. are creditor ship securities, also known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
(a) Debt capital (b) Capital stock (c) Working capital (d) Capital issue
ANS A

46‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ are equity shares issued by the company to employees or directors at a

discount or for consideration other than cash.
(a) Derivatives (b) Securitized instruments (c) Sweat equity shares (d) detachable warrants
ANS C

47.The companies Act (Sec. 85) describes preference shares as those which carry a ‐‐‐‐‐‐‐‐right to
payment of dividend during the life time of the company.

(a) Dividend (b) Interest (c) Preferential (d) Priority

ANS C
48 Convertible preference shares can be converted to equity shares at the option of the holder, so
these shares are also known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) Conversion of preference shares (b) Quasi equity shares (c) fully convertible preference
shares (d) Participating preference shares

ANS B

49.Debenture is a ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ instrument issued by the company with a promise to pay

interest and repay the principal on maturity.

(a) Credit (b) Debt (c) Cash (d) Negotiable

ANS B

50.IPO stands for ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) Initial Public Offer (b) Initial Public Offering (c) Individual Public offer (d) none of these
ANS A

51.Bonus issue is the issue of shares to ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ out of the free reserves of the company.

(a) Existing shareholders (b) New shareholders (c) None of these (d) All of them
145.
ANS A

52. Underwriters charge a commission for their service which is known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
(a) Commission (b) Penalty (c) Underwriting charge (d) Underwriting commission

ANS C

53. The company must deliver share certificate within______ if

the sharesapplied for transfer.
A. 3 months
B. 2 months
C. 5 months
D. none of these
Ans B

54Minimum no. of Directors in case of a public company is ___

A. 1
B. 2
C. 3
D. 4
Ans C
55.Transfer of shares in the case of public company is
A. prohibited
B. restricted
C. freely transferable
D. none of these
Ans C
56. The ___________ constitute the top administrative organ of the company. .
 [A] general manager .
 [B] shareholders.
 [C] board of directors.
 [D] advisory panel.
Ans C

57. Share premium received by issuing shares can be used for ___________.
 [A] payment of dividend
 [B] issue of bonus share
 [C] remuneration to management
 [D] any business purpose
Ans B
58.The liability of shareholders of a public company is limited to the _________.
 [A] paid up value of shares
 [B] nominal value of shares
 [C] extent of their private assets
 [D] amounts called up.
Ans A
59Which of the following is not an ownership security?
 [A] equity shares.
 [B] debentures.
 [C] preference shares.
 [D] None of the above
Ans B
60. A ___________ is a combination of two companies to form a new company.
 [A] merger
 [B] public
 [C] private
 [D] private
Ans A