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Company Law MCQs Part 1 - CSEET

1. Which of the following statements is not true?

(a) A company is an artificial person created by law.

(b) A company can do every act like a natural person except the acts which are purely of personal nature.

(c) A company can be held liable for violation of the statutory provisions of the Companies Act.

(d) A company can be imprisoned for violation of such provision which attract penalty by way of imprisonment only.

Answer: D

2. Which of the following is not the characteristic of a public company?

(a) It has a separate legal entity.

(b) It has a perpetual succession.

(c) It has a common seal and separate property.

(d) Its shares are non transferable.

Answer. D

3. A and B were the only members of a company who died in a road accident. In this case, the company comes to end on the death of A and B.

(a) True (b) False (c) Partly True (d) Partly False

Answer: B

4. A company being a legal person is also a citizen under the Constitution of India

(a) True (b) False (c) Partly True (d) Partly False

Answer: B

5. A statutory company or corporation is one which is incorporated

(a) By an Act of Parliament

(b) By an Act of State Legislature

(c) Under the Companies Act, 2013

(d) By either (a) or (b)

Answer - D

6. In case of a company limited by guarantee, the liability of the members can be enforced

(a) At any time when the company so decides

(b) Only at the time of winding up of the company

(c) Only by an order of court

(d) Only by an order of Registrar of Companies

Answer: B

7. A Government Company is one in which 51% or more of the paid up share capital is held by

(a) Central Government alone

(b) State Government alone

(c) Central and State Government jointly

(d) Any of the above

Answer: D

8. At the time of registration the filing of Articles of Association with the Registrar of Companies is compulsory for

(a) Private companies, unlimited companies and companies limited by guarantee

(b) Unlimited companies only

(c) Companies limited by shares only

(d) All types of companies

Answer: A

9. If at the time of registration, a company limited by shares does not file Articles of Association with the Registrar, then

(a) The company cannot be registered without this document

(b) The company is deemed to be adopted Table F"

(c) The company is deemed to have become a company with unlimited liability

(d) The directors become liable to be punished with fine at the rate of 250 for each day during which the default continues

Answer: B

10. On 14th July, the Registrar of Companies issued a Certificate of

Incorporation, but it was dated 10th July instead of 14th July. From which

date the company will legally come into existence?

(a) 10th July (b) 14th July

(c) 31stJuly (d) None of these

Answer: A

11. A company comes into existence when

(a) the memorandum of association is signed by the required number of members.

(b) the memorandum of association' is submitted for registration to the Registrar of Companies.

(c) lt is registered under the Companies Act, 2013.

(d) It establishes its registered office and starts functioning there form.

Answer: C

12. A company formed for the promotion of commerce, art, science. religion, charity etc. may not use the word limited at the end of its name, even if it is a limited company.

(a) True (b) False (c) Partly True (d) Partly False

Answer: A

13. The Registered office clause of Memorandum of Association contains

(a) The name of the state in which the registered office of the company is to be situated.

(b) The name of the city/town only and not that of the state.

(c) The name of Registrar of companies.

(d) The complete postal address.

Answer: A

14. The Object clause of Memorandum of Association must be divided into two Sub Clauses, namely (i) main objects clause, and (ii) object in

furtherance of main object clause.

(a) True (b) False (c) Partly True (d) Partly False

Answer: A

15. which of the following statements is correct ?

(a) In limited companies, the liability of members holding fully paid up shares is nil.

(b) In companies limited by guarantee, the liability of members is limited to the amount which they have agreed to pay.

(c) Both (a) and (b) are correct. (d) None of these is correct.

Answer: C

16. For which of the following companies it is not obligatory to have Articles of Association ?

(a) Public Companies Limited by Shares

(b) Public Companies Limited by Guarantee

(c) Private Limited Companies

(d) Unlimited Companies

Answer: A

17. Which of the following statements is correct ?

(a) The memorandum and articles' are binding on the members in their relation to the company.

(b) The memorandum and articles are binding on the company in their relation to the members.

(c) None of these is true

(d) Both of these are true

Answer: D

18. Company's memorandum and articles are public documents.

(a) True (b) False (c) Partly True (d) Partly False

Answer:A

19. In case 'memorandum and 'articles' are inconsistent, then which shall prevail over the others ?

(a) Memorandum of Association

(b) Articles of Association

(c) The one approved by Registrar

(d) None of these

Answer: A

20. A public company having a share capital can start its business on obtaining

(a) Certificate of incorporation and approval of Company Law Board.

(b) Certificate to commence business and approval of Company Law Board.

(c) 'Certificate of Incorporation

(d) Approval of High Court.

Answer: B

21. Company has --------------succession.

(a) Longer

(b) Continued

(c) Perpetual

(d) Limited

Answer: c

22. If company do not follow the principle of separate legal entity------------------can be done.

(a) Lifting of corporate veil (b) Principle of equity

(c) Principle of natural justice (d) All of above

Answer: A

23. Total managerial remuneration in a public company cannot be ---------of net profit.

(a) 10% (b) 11%(c) 18% (d) 11.5%

Answer. B

24. Audit of Government Company is done by C & AG. This statement is:

(a) True (b) False

(c) Partly True I (d) Partly False

Answer: A

25. Any Corporate Body/Association of Firm can be appointed as director of the company. This statement is:

(a) True (b) False

(c) Partly True (d) Partly False

Answer: B

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