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Question Paper

CS Executive- Company Law & Practice Duration: 40

Details: Test-1 (Ch- 1) Marks: 40

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Q-1 When was the Expert Committee on Company Law under the Chairmanship of Dr. J J
Irani constituted?

(a) August 4, 2004

(b) December 2, 2004

(c) May 31, 2005

(d) September 3, 2005

Q-2 What was the objective of revising the Companies Act, 1956, as stated in the
information?

(a) To adopt internationally accepted best practices

(b) To have a complicated and rigid law

(c) To restrict changes taking place in the national and international scenario

(d) To discourage the evolution of new business models

Q-3 What shift did the Report of the Committee recommend in the company law regime?
(a) Shift from "Shareholder Approval and Disclosure Regime" to "Government Approval
Regime"

(b) Shift from "User-Friendly Regime" to "Complicated Regime"

(c) Shift from "Government Approval Regime" to "Shareholder Approval and Disclosure
Regime"

(d) Shift from "Dynamic Regime" to "Rigid Regime"

Q-4 What was the objective of enacting the Companies Act, 2013 in India?

(a) To discourage business-friendly corporate regulations

(b) To reduce levels of transparency and protect interests of investors

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(c) To facilitate business-friendly corporate regulations and enhance accountability

(d) To restrict the growth and regulation of the corporate sector

Q-5 What is the purpose of Form No. GNL.3?

(a) Filing documents or applications without a prescribed e-form

(b) Filing information for sub-clause (60) of Section 2 of the Companies Act

(c) Filing information for annual financial statements

(d) Paying additional fees for filing documents

Q-6 How has the Companies Act, 2013 been amended to extend relief to business entities?

(a) Through the Companies (Amendment) Act, 2015 only

(b) Through the Insolvency and Bankruptcy Code, 2016 only

(c) Through the Companies (Amendment) Act, 2017 and the Companies (Amendment) Act,
2019 only

(d) Through multiple amendment acts, including the Companies (Amendment) Act, 2015,
the Insolvency and Bankruptcy Code, 2016, the Companies (Amendment) Act, 2017, the
Companies (Amendment) Act, 2019, and the Companies (Amendment) Act, 2020

Q-7 If a company performs an act that is ultra vires the Articles of Association but intra vires
the memorandum of association, what is the status of such acts?

(a) They are valid and binding

(b) They are void

(c) They can be ratified by the company in general meeting

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(d) They require approval from the shareholders

Q-8 Can acts that are ultra vires the company be ratified?

(a) Yes, by a special resolution of the company

(b) Yes, if every member assents to it

(c) No, they cannot be ratified

(d) Yes, by a resolution passed by the directors

Q-9 Under what circumstances can acts that are ultra vires the Articles of Association be
ratified?

(a) If the directors obtain approval from the shareholders

(b) If the company alters its articles by a special resolution

(c) If every member of the company assents to it

(d) If the creditors of the company approve the acts

Q-10 What is an e-form in the context of filing with MCA authorities?

(a) A physical form submitted in person at the MCA office

(b) A document in electronic format for filing through the MCA Portal

(c) A digital signature used for online verification

(d) A conventional form that is scanned and uploaded to the MCA Portal

Q-11 Who is responsible for compliance under the Companies Act and other legislations
within a company?

(a) Registrar of Companies (RoC)

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(b) Company Secretary

(c) Officers in default

(d) Directors of the company

Q-12 Why is it important to ensure that forms are properly filled and adequate documents
are attached before filing with the Registrar of Companies (RoC)?

(a) To avoid technical updates in the forms

(b) To reduce the need for frequent visits to the RoC office

(c) To familiarize oneself with computer and internet usage

(d) To obtain approval from the RoC for the filed documents

Q-13 Who is considered an "officer" under the Companies Act, 2013?

(a) Chief Executive Officer (CEO) only

(b) Directors and Managers only

(c) Key managerial personnel and directors

(d) Directors, managers, and individuals who direct or influence the Board's actions

Q-14 Which of the following is NOT considered a "key managerial personnel" under the
Companies Act, 2013?

(a) Chief Executive Officer (CEO)

(b) Company Secretary

(c) Whole-Time Director

(d) Independent Director

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Q-15 What is the definition of a "promoter" under the Companies Act, 2013?

(a) Any person acting in a professional capacity

(b) Any person identified by the company in the annual return

(c) Any person with control over the company's affairs

(d) All of the above

Q-16 Which of the following companies is required to undergo secretarial audit as per the
Companies Act, 2013?

(a) Private companies with a turnover of one crore rupees or more

(b) Public companies with a paid-up share capital of twenty-five crore rupees or more

(c) Listed companies and public companies with a paid-up share capital of fifty crore rupees
or more

(d) Any company that has outstanding loans or borrowings from banks

Q-17 Which of the following companies would be considered a small company?

a) A public company with a paid-up share capital of Rs. 6 crore and turnover of Rs. 30 crore.

b) A private company with a paid-up share capital of Rs. 3 crore and turnover of Rs. 45 crore.

c) A subsidiary company with a paid-up share capital of Rs. 12 crore and turnover of Rs. 50
crore.

d) A holding company with a paid-up share capital of Rs. 8 crore and turnover of Rs. 35
crore.

Q-18 Which of the following companies would NOT be considered a listed company?

a) A public company that has listed its equity shares on a recognized stock exchange.

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b) A private company that has listed its non-convertible debt securities on a recognized
stock exchange.

c) A public company that has listed its non-convertible redeemable preference shares on a
recognized stock exchange.

d) A public company that has listed its equity shares on a stock exchange in a specified
jurisdiction.

Q-19 Which of the following companies would be exempted from the definition of a small
company?

a) A public company with a paid-up share capital of Rs. 3 crore and turnover of Rs. 35 crore.

b) A subsidiary company with a paid-up share capital of Rs. 5 crore and turnover of Rs. 25
crore.

c) A private company with a paid-up share capital of Rs. 8 crore and turnover of Rs. 30 crore.

d) A holding company with a paid-up share capital of Rs. 2 crore and turnover of Rs. 20
crore.

Q-20 Which of the following companies would NOT be considered a listed company under
the specified rules?

a) A public company that has listed its equity shares on a recognized stock exchange.

b) A private company that has listed its non-convertible debt securities on a recognized
stock exchange.

c) A public company that has listed its non-convertible redeemable preference shares on a
recognized stock exchange.

d) A public company that has listed its equity shares on a stock exchange in a foreign
jurisdiction.

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Q-21 Which of the following entities would be exempted from the requirement of
registration as a company under the Companies Act, 2013?

a) An unincorporated association of 30 individuals engaged in a profit-making business.

b) A partnership consisting of 60 professionals governed by their respective special Acts.

c) A Hindu undivided family conducting a business with 5 members.

d) An unincorporated association of 80 individuals engaged in a non-profit activity.

Q-22 How many maximum persons can form an association or partnership for a profit-
making business without requiring registration as a company under the Companies Act,
2013?

a) 50 persons

b) 75 persons

c) 100 persons

d) There is no specific limit mentioned in the Act.

Q-23 What is the penalty for a member of an association or partnership carrying on a

business in contravention of Section 464(1) of the Companies Act, 2013?

a) Imprisonment for a term not exceeding 3 years.

b) Fine of up to Rs. 10 lakhs.

c) Fine of up to Rs. 1 lakh.

d) Disqualification from holding any office in a company for a period of 5 years.

Q-24 In which situation can the court potentially lift the corporate veil and hold the
members or controlling persons liable for the company's debts and obligations?

a) When the company is engaged in legitimate business activities.

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b) When the company uses its separate legal entity for fraudulent and dishonest purposes.

c) When the shareholders request the lifting of the corporate veil for their own purposes.

d) When the company is facing a tax evasion case.

Q-25 In the case of Premlata Bhatia v. Union of India, what was the outcome regarding the
lifting of the corporate veil?

a) The court lifted the corporate veil and held the shareholders personally liable for the
company's debts.

b) The court refused to lift the corporate veil and held the company solely responsible for
the illegal transfer of premises.

c) The court lifted the corporate veil and allowed the shareholders to benefit from the
company's actions.

d) The court concluded that the concept of lifting the corporate veil did not apply to the
given case.

Q-26 What is the legal status of ultra vires transactions?

a) They are valid and binding on the company.

b) They are voidable and can be ratified by the directors.

c) They are null and void ab initio.

d) They are considered intra vires acts.

Q-27 What can members do if a company engages in an ultra vires act?

a) They can sue the company to enforce the act.

b) They can request the directors to ratify the act.

c) They can seek an injunction to restrain the company.

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d) They have no legal recourse in such situations.

Q-28 Who can be held personally liable for diverting corporate capital to purposes alien to
the company's memorandum?

a) Shareholders

b) Employees

c) Directors

d) Members

Q-29 What is the purpose of the doctrine of indoor management?

a) To protect the company against outsiders.

b) To protect outsiders against the company.

c) To ensure compliance with procedural requirements.

d) To validate acts of directors with defective appointments.

Q-30 Which provision of the Companies Act, 2013 deals with the validity of acts of
directors?

a) Section 176

b) Section 150

c) Section 100

d) Section 50

Q-31 Who is the doctrine of indoor management primarily intended to protect?

a) Shareholders of the company

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b) Directors of the company

c) Outsiders dealing with the company

d) Government authorities regulating the company

Q-32 Which of the following scenarios allows the company to ratify the allotment of shares
made by de facto directors with mala fide intentions?

a) When the directors were not aware of their disqualification and continued to act

b) When the directors knowingly acted despite being disqualified

c) When the directors were not aware of their disqualification, but the company was aware

d) When the directors acted with good faith intentions

Q-33 In the context of borrowing money, who can invoke the doctrine of "indoor
management"?

a) The company dealing with an outsider

b) The person dealing with the company

c) The person who has failed to inquire

d) The managing director of the company

Q-34 In which of the following circumstances can an outsider dealing with a company not
claim protection under the doctrine of indoor management?

a) When the outsider had knowledge of irregularity

b) When the outsider did not consult the memorandum and articles

c) When the transaction involves forgery

d) When the person dealing with the company is negligent

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Q-35 Which of the following situations is an exception to the doctrine of indoor
management?

a) The person dealing with the company did not consult the memorandum and articles

b) The transaction involves forgery or is void/illegal ab initio

c) The person dealing with the company failed to make proper inquiries

d) The question is about the very existence of an agency

Q-36 Under the doctrine of indoor management, who is required to make proper inquiries
to ascertain the authority of an officer of the company?

a) The person dealing with the officer

b) The company itself

c) The shareholders of the company

d) The court overseeing the transaction

Q-37 In which scenario does the doctrine of indoor management not apply?

a) When a pre-condition is required to be fulfilled before the company can exercise a

particular power

b) When the question is about the very existence of an agency

c) When an officer of the company exceeds their ordinary powers

d) When the transaction involves forgery of company documents

Q-38 Which provision in the Companies Act, 2013 gives overriding force and effect to the
provisions of the Act, even if they are contrary to the memorandum, articles, or resolutions
of a company?

a) Section 6 of the Companies Act, 2013

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b) Section 176 of the Companies Act, 2013

c) Section 201 of the Companies Act, 2013

d) Section 554 of the Companies Act, 2013

Q-39 Under what circumstances can the court lift the corporate veil and treat the assets of a
company as the realisable property of the shareholder?

a) When the defendant used the corporate structure to evade customs and excise duties

b) When there is a prima facie case that the defendant controlled the company

c) When the defendant regarded the company as a family business

d) When no useful purpose would be served by involving the company in criminal

proceedings

Q-40 Which act(s) does the MCA-21 project primarily focus on for regulating the functioning
of the corporate sector in India?

a) Companies Act, 2013

b) Limited Liability Partnership Act, 2008

c) Other allied Acts and rules & regulations framed there-under

d) All of the above

(40 X 1 = 40 = Marks)

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