Ch # 1.

Introduction, types and registration Page 185

1. Which type of business structure is created by a process of incorporation

(a) Sole Proprietor
(b) Partnership
(c) Company
(d) None of the above

2. Body corporate or corporation includes

(a) A company incorporated under Companies Act, 2017 or company law
(b) A company incorporated outside Pakistan
(c) A body corporate declared as body corporate under relevant statute
(d) All of the above

3. “Men may come and men may go but the company exists”. This explains which characteristics of
the company as per the Companies Act, 2017.
(a) Separate legal entity
(b) Perpetual Succession
(c) Perpetual Liability
(d) Capacity to Sue

4. What is separate legal personality

(a) That the members in general meeting are regarded by law as a person.
(b) That the board of directors is regarded by law as a person
(c) That the company as an entity is regarded by law as a person
(d) That the managing director of the company is regarded by law as a person.

5. The effects of separate legal personality are

(a) Limited liability of the owners of the business
(b) Separation of ownership form control
(c) Transfer of ownership and perpetual succession.
(d) All of the above

6. The concept of limited liability applies to

(a) The directors of the company
(b) To the creditors of the company
(c) To the owners (Shareholders) of the company
(d) To the Bankers of the company

7. If a limited company is unable to pay its debts, it may be forced into liquidations. The assets of the
company will then be used to pay some of its unpaid liabilities and
(a) The directors will be required to pay personally remaining unpaid debts of the company
(b) The shareholders will be required to pay personally remaining unpaid debts of the company
(c) The debenture holders will be required to pay personally remaining unpaid debts of the
company
(d) The shareholders will not be required to pay personally remaining unpaid debts of the
company
8. Limited liability applies to
(a) All companies
(b) All public companies
(c) All limited companies
(d) All unlimited companies
Ch # 1. Introduction, types and registration Page 189

33. Securities and Exchange Commission of Pakistan (SECP) established under the Securities and
Exchange Commission of Pakistan Act 1997 was operationalized on
(a) 1st January, 1899
(b) 1st January 1999.
(c) 1st February 1997
(d) 1st January, 1998

34. There are ___________ offices of SECP, including Head office.

(a) 7
(b) 8
(c) 6
(d) 9

35. It is the duty of Registrar to ____________

(a) Keeps the records of mortgages and charges
(b) track of company routine documents
(c) maintain the records of companies
(d) All of above

36. After revocation of licence all the assets of the company will be transfer to another company within
____________ days.
(a) 90
(b) 45
(c) 30
(d) 15

37. After revocation of licence, Board of Directors shall file a report to Registrar within ____________ Days.
(a) 45
(b) 30
(c) 15
(d) 21

38. Process of voluntary winding up will be commenced within ____________.

(a) 45 days of revocation of licence
(b) 30 of revocation of licence
(c) 30 days of acceptance of report
(d) 90 days

39. Company registered under Companies Act, 2017 is separate legal entity from its members?
(a) Yes
(b) No
(c) Partly Yes
(d) Partly No

40. Mr. Superman is a truck driver formed a Single member company for testing trucks. The name of
the company is Thhok Diya Limited. There are 20 employees (Drivers) of the company and Mr.
Superman was also an employee. It is a policy of the company to compensate its employees in case
of damage of death. At one day Mr. Superman drove a truck and went into accident with bicycle and
lost his life. Now his widow wants to claim compensation from Thhok Diya Limited. Whether wife
of the Superman can receive the compensation from the company?
(a) Yes
(b) No
Ch # 1. Introduction, types and registration Page 190

(c) Partly Yes

(d) Partly No

41. ABC Pvt. Limited, company is a private limited having 5 members only. All the members of the
company were going by car in relation to some business. An accident took place and all of them
died. Whether existence of the company has also come to the end?
(a) Yes
(b) No
(c) Partly yes
(d) Partly no

42. Mahesh is a creditor of an unlimited company. The company was wound-up. Mahesh, therefore,
wants to sue the members of the company to recover the dues. Advise Mahesh regarding the
remedy available to him.
(a) As it is an unlimited liability company Mahesh can sue the members
(b) As it is an unlimited liability company Mahesh can sue the members as well as the company
(c) Mahesh cannot sue the members or the company even though the liability is unlimited
(d) Mahesh can sue the company but not the members as the members liability is unlimited
towards the company and not towards the creditors.

43. Six persons are the only members of Tab (Pvt.) Ltd. All of them went to USA on apleasure trip by
airplane. On the way, the plane crashed and all the six members died. Does Tab (Pvt.) Limited still
exist?
(a) As all the members forming the company are dead the company shall also die.
(b) As all the members of the company are dead the Court shall decide as to whether the company
shall continue or not
(c) As the company has a separate legal entity having an existence separate from its members the
death of the members shall not affect the existence of the company.
(d) As all the members of the company are dead the Registrar shall strike off the name of the
company.

44. Certificate of incorporation is something like a :

(a) Evidence of company’s formation
(b) Birth certificate of company
(c) Both i) & ii)
(d) None of the above

45. Proof of the existence of the company is:

(a) Articles of the association
(b) Memorandum of association
(c) Certificate of incorporation
(d) Stamp

46. A company is said to have been registered when?

(a) It files Memorandum of association and Articles of Association
(b) It gets incorporation certificate with the Registrar of Companies.
(c) It gets certificate for commencement of business.
(d) It actually starts its business.

47. Which of the following is obligated to be registered under Companies Act, 2017:
(a) A co-operative society with 35 members already registered under relevant law.
(b) A joint family of 27 members carrying on the joint family business.
Ch # 1. Introduction, types and registration Page 191

(c) A trading partnership firm with 22 partners

(d) A law partnership firm with 22 partners

48. Any persons associated for any lawful purpose may, by subscribing their names to a memorandum
of association and complying with the requirements of the Act in respect of registration, form a
public company.
(a) Two
(b) Two or more
(c) Three
(d) Three or more

49. Under the provisions of the Companies Act, 2017, the composition of a company’s board shall be
deemed to be controlled by another company if that other company by exercise of power
exercisable by it at its discretion can:
(a) Appoint all or a majority of the directors
(b) Appoint or remove majority of the directors
(c) Appoint or remove all or majority of the directors
(d) Appoint majority of directors

50. Mega Stars Limited (MSL) shall be deemed to be the holding company of Little Stars (Private)
Limited (LSPL) if:
(a) MSL owns 50% shares of LSPL and by virtue of such investment, MSL has nominated three
directors out of six directors on board of LSPL
(b) MSL and one of its associated companies own 45% and 10% voting shares of LSPL respectively
(c) MSL and one of its associated companies own 30% and 35% voting securities of LSPL and by
virtue of such investments, both companies have nominated two directors each out of six
directors on the board of LSPL
(d) MSL owns 5% voting shares in LSPL; however, LSPL’s other shareholders having 60% voting
shares have empowered MSL to appoint four directors out of six directors of LSPL

51. Which of the following information does NOT form part of ‘Certificate of incorporation’?
(a) The name and registration number of the company
(b) The date of commencement of business
(c) Whether it is a private or a public company
(d) Whether it is a limited or unlimited company

52. A company limited by guarantee means a company in which liability of members is limited, in the
event of its being wound up, by the:
(a) articles of association, to such amount as the members may respectively thereby undertake to
contribute to the liabilities of the company
(b) articles of association, to such amount as the members may respectively thereby undertake to
contribute to the assets of the company
(c) memorandum of association, to such amount as the members may respectively thereby
undertake to contribute to the liabilities of the company
(d) memorandum of association, to such amount as the members may respectively thereby
undertake to contribute to the assets of the company
Ch # 1. Introduction, types and registration Page 192

53. 24.Orange International Association (OIA) has been formed as a charitable organisation. However,
due to non-compliance of the requirements of the Companies Act, 2017 the Commission revoked
its licence.
On 11 March 2022, OIA’s board has completed all the compliances related to the revocation of the
license. Which of the following dates would be the latest date of filing the compliance report to the
registrar?
(a) 21 March 2022
(b) 25 March 2022
(c) 9 April 2022
(d) 9 May 2022
Ch # 1. Introduction, types and registration Page 193

Sr. No. Answer Sr. No. Answer

1 C 31 D
2 D 32 A
3 B 33 B
4 C 34 D
5 D 35 D
6 C 36 A
7 D 37 C
8 C 38 C
9 B 39 A
10 D 40 A
11 A 41 B
12 A 42 B
13 C 43 C
14 B 44 C
15 D 45 C
16 B 46 B
17 C 47 C
18 D 48 D
19 A 49 C
20 B 50 D
21 D 51 B
22 A 52 D
23 D 53 B
24 D
25 D
26 A
27 D
28 C
29 A
30 C
Ch # 1. Introduction, types and registration Page 191

(c) A trading partnership firm with 22 partners

(d) A law partnership firm with 22 partners

48. Any persons associated for any lawful purpose may, by subscribing their names to a memorandum
of association and complying with the requirements of the Act in respect of registration, form a
public company.
(a) Two
(b) Two or more
(c) Three
(d) Three or more

49. Under the provisions of the Companies Act, 2017, the composition of a company’s board shall be
deemed to be controlled by another company if that other company by exercise of power
exercisable by it at its discretion can:
(a) Appoint all or a majority of the directors
(b) Appoint or remove majority of the directors
(c) Appoint or remove all or majority of the directors
(d) Appoint majority of directors

50. Mega Stars Limited (MSL) shall be deemed to be the holding company of Little Stars (Private)
Limited (LSPL) if:
(a) MSL owns 50% shares of LSPL and by virtue of such investment, MSL has nominated three
directors out of six directors on board of LSPL
(b) MSL and one of its associated companies own 45% and 10% voting shares of LSPL respectively
(c) MSL and one of its associated companies own 30% and 35% voting securities of LSPL and by
virtue of such investments, both companies have nominated two directors each out of six
directors on the board of LSPL
(d) MSL owns 5% voting shares in LSPL; however, LSPL’s other shareholders having 60% voting
shares have empowered MSL to appoint four directors out of six directors of LSPL

51. Which of the following information does NOT form part of ‘Certificate of incorporation’?
(a) The name and registration number of the company
(b) The date of commencement of business
(c) Whether it is a private or a public company
(d) Whether it is a limited or unlimited company

52. A company limited by guarantee means a company in which liability of members is limited, in the
event of its being wound up, by the:
(a) articles of association, to such amount as the members may respectively thereby undertake to
contribute to the liabilities of the company
(b) articles of association, to such amount as the members may respectively thereby undertake to
contribute to the assets of the company
(c) memorandum of association, to such amount as the members may respectively thereby
undertake to contribute to the liabilities of the company
(d) memorandum of association, to such amount as the members may respectively thereby
undertake to contribute to the assets of the company
Ch # 1. Introduction, types and registration Page 192

53. 24.Orange International Association (OIA) has been formed as a charitable organisation. However,
due to non-compliance of the requirements of the Companies Act, 2017 the Commission revoked
its licence.
On 11 March 2022, OIA’s board has completed all the compliances related to the revocation of the
license. Which of the following dates would be the latest date of filing the compliance report to the
registrar?
(a) 21 March 2022
(b) 25 March 2022
(c) 9 April 2022
(d) 9 May 2022
Ch # 1. Introduction, types and registration Page 193

Sr. No. Answer Sr. No. Answer

1 C 31 D
2 D 32 A
3 B 33 B
4 C 34 D
5 D 35 D
6 C 36 A
7 D 37 C
8 C 38 C
9 B 39 A
10 D 40 A
11 A 41 B
12 A 42 B
13 C 43 C
14 B 44 C
15 D 45 C
16 B 46 B
17 C 47 C
18 D 48 D
19 A 49 C
20 B 50 D
21 D 51 B
22 A 52 D
23 D 53 B
24 D
25 D
26 A
27 D
28 C
29 A
30 C