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COMPANY LAW PROSPECTUS MCQs

1. States the non-applicability of Section 26 of the companies Act, 2013

a. Not applicable to existing shareholders or debentures

b. is not applicable to issue of shares or debentures of similar nature which are already issue by the company

c. Both a and b

d. None of the above

2.States the procedure of alteration of contents of prospectus?

a. General meeting – Special resolution shall be passed

b. The prescribed details of the notice shall be published in two newspaper, one in English and other vernacular language, circulating in the city in which the registered office of the company is situated

c. Both a and b

d. None of the above

3.Restriction on use of money through prospectus shall not be used For buying, trading or otherwise dealing in equity shares of any other listed company. True or False.

a. True

b. False

c. Partly True

d. Partly False

4. State the Section of companies Act, 2013 for alteration of content of prospectus.

a. Section 27

b. Section 25

c. Section 26

d. Section 28

5.State the circumstances, under which issue of prospectus is not necessary under the provision of the Companies Act, 2013

a. Private Placement through issue a Private Placement letter

b. Securities are offered to existing holders under a right issue

c. Securities are offered to existing holders under a bonus issue

d. All of the above

6.……………..is a public offer made by a company to subscribe for its securities by the public through prospectus.

a. Initial Public offer/ Further Public Offer

b. Offer for sale

c. Private Placement

d. Right issue

7. ………… prospectus means a prospectus in which a permanent or constant information of earlier year is given for numerous number of issue over such period.

a. Deemed Prospectus

b. Red herring Prospectus

c. Shelf Prospectus

d. Abridged Prospectus

8. Shelf Prospectus is valid for …………. Years.

a. 1 Year

b. 2 Year

c. 3 Year

d. 5 Year

9. Section 29 of the Companies act, 2013, dematerialization is mandatory for every company making public offer. True or False.

a. True

b. False

c. Partly True

d. Partly False

10. M/s ABC ltd., is a Public Limited company desires to go for an Initial public offer. Whether Dematerialization is mandatory for such company?

a. Yes

b. No

c. Partly Yes

d. Partly No

11. Red herring Prospectus shall be filed by the company with the ROC at least …….. days prior to the opening of the subscription and the offer

a. 10 days

b. 20 days

c. 30 days

d. 60 days

12. The company shall file actual prospectus with ROC & SEBI containing details of……….

a. Total capital raised

b. Closing and final price of shares

c. Any other details not included in Red Herring Prospectus

d. All of the above

13. Public will place bidding on the basis of ……….. Prospectus in given price band and bidding will be converted into offer.

a. Deemed Prospectus

b. Red herring Prospectus

c. Shelf Prospectus

d. Abridged Prospectus

14.

Any changes between Red Herring Prospectus and a Prospectus shall be highlighted as ‘variations’ in actual Prospectus. True or False.

a. Yes

b. No

c. Partly Yes

d. Partly No

15. Mr. Ram is not satisfied with Abridged Prospectus of M/s ABC Ltd. He demand the regular prospectus from M/s ABC Ltd. Whether he can do so?

a. Yes

b. No

c. Partly Yes

d. Partly No

16. The Article of Association of ABC Ltd. contained a provision that up to 4% of issue price of the shares may be paid as underwriting commission to the underwriters. The Board of directors of ABC Ltd. decided to pay 5% underwriting commission. State the validity.

a. Valid

b. Invalid

c. Neutral

d. Can’t say

17. After allotment, a Return of allotment in Form PAS 3 containing details shall be filed with ROC…….

a. List of security holder

b. Full name and address of security holder

c. Number of securities allotted and other relevant information prescribed

d. All of the above

18. The Company shall not accept any cash towards subscription of securities?

a. Yes

b. No

c. Partly Yes

d. Partly No. Section 42 of the Companies Act, 2013, cash not to be accepted towards subscription.

19. ABC Pvt. Ltd. is a Private Limited Company desires to issue shares through private placement to 35 group of persons. At the same time Company also offered securities to 10 employee under ESOP u/s 62(1)(b). While calculating number of persons for private placement under section 42 of the companies Act, 2013, can company also considered numbers of employees to whom the securities has been offered under ESOP u/s 62(1)(b)?

a. Yes

b. No

c. Partly Yes

d. Partly No

20. MNO Pvt. Ltd. i desires to issue shares through private placement to 50 group of persons. At the same time Company also offered securities to 2 Qualified Institutional buyer. While calculating number of persons for private placement under section 42 of the companies Act, 2013, can company also considered numbers of Qualified Institutional buyer to whom the securities has been offered?

a. Yes

b. No

c. Partly Yes

d. Partly No

21. No further offer under section 42 of the Companies Act, 2013 shall not be made unless the earlier offer or invitation, if any ………………

a. the allotment have been completed

b. such offer or invitation has been withdrawn or abandoned by the company

c. Either a or b

d. None of the above

22. KIA Pvt. Ltd. is a Private Limited company desires to offer shares under private placement but the earlier allotment of company have not been completed. Whether Company can do so?

a. Yes

b. No

c. Partly Yes

d. Partly No

23. Any offer which is in contravention to Section 42 of the Companies Act, 2013 shall be treated as public offer?

a. Yes

b. No

c. Partly Yes

d. Partly No

24. ZOOM. Ltd. is a Public Limited company desires to offer shares 60 persons under private placement. Whether Company can do so?

a. Yes

b. No

c. Partly Yes

d. Partly No

25. Issue of offer letter to investor under private placement in Form number……………

a. PAS 1

b. PAS 2

c. PAS 3

d. PAS 4

26. Under Private Placement, if the application money not refunded, company shall pay interest 12% p.a. from the end of …. Days.

a. 30 days

b. 40 days

c. 60 days

d. 90 days

27. Under Private Placement, if the application money not refunded, company shall pay interest ………….. p.a. from the end of 60 Days.

a. 10%

b. 12%

c. 20%

d. 30%

28. ZIO. Ltd. is a Public Limited company, is failed to allot securities under Private Placement within 60 days from the date of submission application money. Whether it is necessary for company to refund the application money along with interest?

a. Yes

b. No

c. Only application money

d. Only interest

1. c.

2. c.

3. a.

4. a.

5. d.

6. a

7. c.

8. a.

9. a,

10. a,

11. a

12. d

13. b

14. a

15. a

16. b

17. d

18. a

19. b

20. b

21. c

22. b

23. a

24. b

25. d

26. c

27. b

28. a

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