Company Law MCQ Quiz in తెలుగు - Objective Question with Answer for Company Law - ముఫ్త్ [PDF] డౌన్‌లోడ్ కరెన్

The correct answer is Option 1.

Key Points

• The Standards on Auditing have been accorded legal sanctity in the 2013 Act and would be subject to notification by the NFRA. Auditors are now mandatorily bound by the 2013 Act to ensure compliance with Standards on Auditing.

Additional Information

• The Companies Act 2013 has made the audit of accounts of companies' compulsory. Section 139 to 148 provide for the qualifications, disqualifications, appointment, removal, rights, duties & liabilities of company auditors. 

The correct answer is Option 2.

Key Points

• In the case of private companies, the maximum limit has been increased by the new Companies Act, of 2013 from 50 to 200. There is however no maximum limit on the no. of members in a public company.

 Additional Information

• A Private Limited Company is a business entity held by a small group of people. It is registered for pre-defined objects and owned by a group of members called shareholders. The business entity gets recognized as a Company through its registration under the Companies Act of 2013 in India.

The correct answer is Option 1.

Key Points

• Section 253 of the Companies Act, 2013 deals with the determination of a company's sickness. It's part of Chapter XIX of the Act, which is about the revival and rehabilitation of sick companies.

Additional Information

• Liabilities of directors under the Companies Act, 2013 are a fundamental aspect of corporate law, serving as a mechanism to balance the powers granted to directors with accountability. 
• The Companies Act, 2013 defines promoters as the persons whose name appears on the face of prospectus, who controls the affairs of company or according to whose directions the members of board of directors are accustomed to work.
• Section 2(56) of the Companies Act, 2013,  “memorandum” means the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of this Act

The correct answer is Option 3. 

Key Points Not holding an annual general meeting (AGM) is not a ground for compulsory winding up of a company. However, companies that don't hold their AGM within the stipulated period are liable to pay a fine. 
Some grounds for compulsory winding up of a company include: 

• The company passes a special resolution to wind up the company
• The company acts against the sovereignty and integrity of India
• The company defaults in filing Annual Returns or Financial Statements for 5 Consecutive financial years
• The company has unpaid debts
• The company or its management commits an unlawful act

The correct answer is Option 3.

Key Points

• According to Section 26 of the Companies Act, 2013, every prospectus issued by or on behalf of a company must be dated and that date shall unless the contrary is proved, be regarded as the date of its publication.
• It shall state such information and set out such reports on financial information as may be specified by the SEBI in consultation with the Central Government.
• A copy of the prospectus shall be signed by every director or proposed director or by his agent must be delivered to the registrar on or before the date of publication.
• Every prospectus issued to the public should mention that a copy of the prospectus along with the specified documents has been filed with the registrar.
• If prospectus includes a statement made by an expert, the expert must not be engaged or interested in the formation or promotion or in the management of the company. A written consent of the expert should also be obtained before the issue of prospectus with the statement.
• A prospectus must not be issued more than 90 days after the date on which a copy thereof is delivered for registration. If a prospectus is issued it will be deemed to be a prospectus a copy of which has not been delivered to the registrar.
• A prospectus shall make a declaration about the compliance of the provisions of the act and nothing contained in the prospectus is in contravention of the provisions of the Companies Act, Securities Contracts (Regulation) Act, 1956 and Securities Exchange Board of India Act, 1992.

The correct answer is Option 4.

Key PointsEntrepreneurs can register different types of companies under the Companies Act, 2013 (‘Act’) in India to conduct their business and provide a legal structure for the business. The different types of companies are as follows:

• One Person Company
  • The Act introduced the concept of a One Person Company (OPC). As per the Act, an OPC is a company that has only one member. The member can also be the director of the company. Though the OPC should have only one member, it can have a maximum of 15 directors.
• Private Limited Company
  • A private limited company is a company where there cannot be more than 200 members. A minimum of two members are required to establish a private limited company. The members cannot transfer their share, and it is suitable for businesses that prefer to register as private entities. There needs to be a minimum of two directors, and there can be a maximum of 15 directors in a private limited company.
• Public Limited Company
  • A public limited company means a company where the general public can hold the company shares. There is no maximum shareholders limit for a public limited company, but there needs to be a minimum of seven members to establish a public company. The company needs to have three directors and can have a maximum of 15 directors.

The correct answer is Option 2.

Key Points

•  According to Section 2(7) of Companies Act 1956, An auditing standard means the standards of auditing or any addendum thereto for companies or class of companies referred to in sub-section (10) of section 143.
•  According to Section 2(2) of Companies Act 1956, An accounting standards means the standards of accounting or any addendum thereto for companies or class of companies referred to in section 133. 

The correct answer is Option 4.

Key Points Memorandum of Association (MOA)

• Section 2 of the Companies Act, 2013 memorandum means the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of this Act.
• According to the Companies Act, 2013, every person who subscribes to a company's Memorandum of Association (MOA) must take at least one share.
• The MOA lists the names and addresses of the first subscribers. 

The Companies Act also states that the minimum number of members for a company is: 

• Private company: Two
• Public company: Seven
• One Person Company: One

Section 13 of The Companies Act, 2013 governs the process and conditions for alteration in Memorandum of Association (MOA).

The following clauses can be changed as per this section-

1. Name Clause
2. Situation Clause
3. Object Clause
4. Capital Clause

However, they are also supported by other section to give effect to respective changes.

Correct answer is (1)

 Key PointsSection 2(68) of the Companies Act,2013 defines "Private Company" means a company having a minimum paid-up share capital as may be prescribed, and which by its articles,—

(i) restricts the right to transfer its shares;

(ii) except in case of One Person Company, limits the number of its members to two hundred

Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member.

Provided further that—

(A) persons who are in the employment of the company; and 

(B) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and

(iii) prohibits any invitation to the public to subscribe for any securities of the company.

A Private Company commence its business as soon it receives Certificate of Incorporation.The details of the company have to be submitted to the Registrar of Companies during the application process. The application must also contain a subscribed version of the Memorandum of Association of the company as well as other related documents with the prescribed fees. After that registrar issue the Certificate of Incorporation.

Additional Information On the basis of liabilities there are three type of Private Limited Companies-

a) Private limited companies limited by shares- the amount unpaid by the company in terms of shares is the liability of its members.

b) Private limited company limited by guarantee-the amount that the members guarantee to pay when the company stops functioning is their liability.

c) Private company with unlimited liability for members- where even personal assets of the members will be considered when the company stops functioning.

Also the concept of One Person Company with one person as shareholder or subscriber to its Memorandum of Association.

Correct answer is (3)

Key Points According to Section 2(71) of the Companies Act,2013 ―Public Company means a company which—

(a) is not a private company;

(b) has a minimum paid-up share capital as may be prescribed:

Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles.

The minimum number of members required to incorporate a Public Company is Seven. There is no maximum limit. The number of directors in a Public Company is minimum three, and if listed then one-third director should be listed.

Additional Information Section 2(68) of the Companies Act,2013 provides for the defination of Private Company.

A private company means a company having a minimum paid-up share capital  as may be prescribed, and which by its articles,—

(i) restricts the right to transfer its shares;

(ii) except in case of One Person Company, limits the number of its members to two hundred:

Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member:

Provided further that—

(A) persons who are in the employment of the company; and

(B) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and

(iii) prohibits any invitation to the public to subscribe for any securities of the company.

The minimum number of members in a Public Company is two and Maximum is 200.