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Question Paper

CS Executive- Company Law & Practice Duration: 40

Details: Test-5 (Ch- 5) Marks: 40

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Q-1. Which of the following statements about voting rights in a company is correct?

a) Preference shareholders have equal voting rights as equity shareholders.

b) The voting right of a shareholder on a poll is determined by the number of shares they
hold.

c) Advance payment of unpaid share capital confers additional voting rights.

d) Shareholders cannot vote on matters directly affecting the rights attached to preference
share capital.

Q-2. Under what circumstances do preference shareholders have the right to vote on all
resolutions placed before the company?

a) If they hold a majority of the paid-up preference share capital.

b) If the company is considering a resolution for winding up.

c) If the dividend in respect of their class of preference shares has not been paid for two
years or more.

d) If they have the approval of equity shareholders.

Q-3. What does Section 62 of the Companies Act, 2013 provide regarding shareholders' pre-
emptive rights?

a) Shareholders have the right to renounce their shares and sell them to any interested
party.

b) Shareholders have the right to purchase additional shares at a discounted price.

c) Shareholders have the right to maintain their proportionate ownership in the company
when further shares are issued.

d) Shareholders have the right to veto any further issue of share capital by the company.

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Q-4. Which of the following rights can be exercised individually by a member of a company?

a) Right to attend meetings of shareholders

b) Right to appoint directors

c) Right to share the surplus assets on winding up

d) Right to make application collectively to the Tribunal for relief in cases of oppression and
mismanagement

Q-5. Which document can a member receive from the company?

a) Register of Charges and instrument of charges

b) Report of the Cost Auditor

c) Notices of the general meetings

d) Register of directors and key managerial personnel and their shareholding

Q-6. Which right allows a member to exercise voting rights at shareholders' meetings
through a representative?

a) Right to transfer shares

b) Right to attend meetings of the shareholders

c) Right to resist an increase in liability without consent

d) Right to appoint directors

Q-7. Which right allows a member to file a lawsuit or take action in case of any misleading
statement or omission in the prospectus?

a) Right to transfer shares

b) Right to receive copies of financial statements

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c) Right to file class action suits before the Tribunal

d) Right to share the surplus assets on winding up

Q-8. According to Section 2(55) of the Companies Act, 2013, who would be deemed a
member of a company?

a) Only the subscribers to the memorandum of the company

b) Only those who agree in writing to become members and have their names entered in
the register of members

c) Only those who hold shares of the company and have their names entered as beneficial
owners in the records of a depository

d) All of the above

Q-9. How can a person acquire membership of a company according to Section 2(55) of the
Companies Act, 2013?

a) Only by subscribing to the Memorandum of Association (MOA)

b) Only by holding shares of a company and having their name entered as a beneficial owner
in the records of a depository

c) By subscribing to the MOA or agreeing in writing to become a member through allotment,

transfer, transmission, or estoppel

d) By entering their name in the register of members of the company

Q-10. According to the Department of Company Affairs (now MCA), why is an article for
expulsion of a member by the Board of Directors considered illegal and void?

a) It contradicts the provisions of the Companies Act relating to the rights of a member in a
company.

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b) It infringes upon the powers of the Central Government as an appellate authority.

c) It goes against the powers of the Court under relevant sections of the Companies Act.

d) All of the above.

Q-11. According to the Companies Act, 2013, when should entries in the Register of
Members be made after the approval of share allotment or transfer?

a) Within 7 days after the annual general meeting of the company

b) Within 7 days after the resolution is passed by the Board of Directors or its committee
approving the allotment or transfer

c) Within 30 days after the share allotment or transfer

d) Within 14 days after the register of members is updated

Q-12. Where should the Register of Members be maintained by a company?

a) At the registered office of the company only

b) At any other place within the city, town, or village where the registered office is situated

c) At any place in India where more than one-tenth of the total members reside

d) At any location decided by the Board of Directors without any restriction

Q-13. When should entries explaining changes in the status of a member or debenture
holder be made in the respective register?

a) Within 30 days from the occurrence of the change

b) Within 7 days from the occurrence of the change

c) Within 15 days from the occurrence of the change

d) Within 60 days from the occurrence of the change

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Q-14. Within what time frame should the particulars of pledge, charge, lien, or
hypothecation created by the promoters in respect of any securities of a listed company be
entered in the register?

a) Within 7 days from the creation of the pledge, charge, lien, or hypothecation

b) Within 30 days from the creation of the pledge, charge, lien, or hypothecation

c) Within 15 days from the creation of the pledge, charge, lien, or hypothecation

d) Within 60 days from the creation of the pledge, charge, lien, or hypothecation

Q-15. Where should a company's registers and copies of the annual return be kept
according to Section 94(1) of the Companies Act, 2013?

a) At the office of the Registrar of Companies

b) At any place within the city, town, or village in which the registered office is situated

c) At the place of business of the company's auditor

d) At the residence of the company's directors

Q-16. According to Section 95 of the Companies Act, 2013, the registers, their indices, and
copies of annual returns maintained under sections 88 and 94 are considered as:

a) Definitive evidence of any matter directed or authorized by the company's directors.

b) Secondary evidence that needs to be corroborated by other sources.

c) Prima facie evidence of any matter directed or authorized by or under the Companies Act.

d) Inadmissible evidence in legal proceedings.

Q-17. According to Rule 7 of the Companies (Management and Administration) Rules, 2014,
a foreign register maintained by a company outside India shall be deemed as:

a) Independent of the principal register of members.

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b) A part of the company's principal register of members.

c) Separate from the register of debenture holders.

d) Not applicable for maintaining beneficial owners' information.

Q-18. What is the requirement for a company regarding a foreign register under Rule 7?

a) The company must submit a notice of the opening of a foreign register within 15 days.

b) The company must keep a duplicate register of every foreign register at its registered
office in India.

c) The company must obtain prior approval from the Registrar for maintaining a foreign
register.

d) The company must advertise the closure of the foreign register in at least two
newspapers.

Q-19. Under the Companies Act, which authority has the power to appoint an inspector to
investigate and report on the ownership of a company?

a) Securities and Exchange Board of India (SEBI)

b) Reserve Bank of India (RBI)

c) Central Government

d) National Company Law Tribunal (NCLT)

Q-20. When should a person who is listed as the registered owner of shares in a company
but does not hold the beneficial interest in those shares file a declaration with the
company?

a) Within 15 days from the date of entering their name in the register of members

b) Within 30 days from the date of entering their name in the register of members

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c) Within 45 days from the date of entering their name in the register of members

d) Within 60 days from the date of entering their name in the register of members

Q-21. Who is required to file a declaration disclosing their beneficial interest in shares of a
company not registered in their name?

a) Registered owner

b) Company secretary

c) Auditor

d) Beneficial owner

Q-22. When should an individual who is a significant beneficial owner in a reporting

company file an initial disclosure?

a) Within 30 days of acquiring significant beneficial ownership

b) Within 60 days of acquiring significant beneficial ownership

c) Within 90 days of acquiring significant beneficial ownership

d) Within 120 days of acquiring significant beneficial ownership

Q-23. What are the consequences of non-reporting under Section 90(5) of the Companies
Act, 2013?

a) Imposition of financial penalty

b) Suspension of voting rights and dividend distribution

c) Cancellation of shares in question

d) Appointment of an external auditor for investigation

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Q-24. What is the consequence if no application for relaxation or lifting of restrictions is
filed within one year from the date of the order issued by the Tribunal?

a) The shares will be transferred to the Investor Education and Protection Fund (IEPF)
without any restrictions.

b) The shares will be canceled and rendered invalid.

c) The shares will be transferred to the reporting company.

d) The shares will be auctioned to the highest bidder.

Q-25. Which of the following details should be included in the register of significant
beneficial owners according to Rule 5 of the Companies (Significant Beneficial Owners)
Rules, 2018?

a) Date of incorporation

b) Details of shareholding in other companies

c) Annual revenue of the company

d) Educational qualifications of the individual

Q-26. If an SBO (Significant Beneficial Owner) fails to make a declaration as required by

Section 90(10), what penalty may be imposed?

a) Rs.50,000

b) Rs.1 Lakh

c) Rs.2 Lakhs

d) Rs.5 Lakhs

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Q-27. If a company fails to maintain the register under Section 90(2) and file information
under Section 90(4), or fails to take necessary steps under sub-section 90(4A) and denies
inspection, who may be held responsible for the violation?

a) Significant Beneficial Owner (SBO)

b) Officer of the company who is in default

c) Person declaring Beneficial interest

d) Registrar of Companies

Q-28. Which of the following rights allows shareholders to collectively apply to the Board for
relief in cases of oppression or mismanagement?

a) Right to requisition an Extraordinary General Meeting

b) Right to determine company policy

c) Right to exercise control over the management of the company

d) Right to submit to the will of the majority

Q-29. What is the minimum threshold required for shareholders to make a valid requisition
to the Board for calling an Extraordinary General Meeting?

a) Not less than one-fifth of the total number of members

b) Not less than one-tenth of the total number of members

c) Not less than one hundred members or one-tenth of the total number of members,
whichever is less

d) Not less than one-tenth of the issued share capital of the company

Q-30 The concept of 'control' under the 2013 Act includes the right to:

a) Appoint a minority of directors

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b) Control the management or policy decisions of the company

c) Protect minority shareholders in the event of a change in control

d) Safeguard investment or the interests of the investors

Q-31. How does the interpretation of 'control' under the Takeover Code impact the
negotiation of shareholder agreements?

a) It strengthens the position of minority shareholders

b) It limits the rights and powers of investors in the company

c) It provides clarity in the negotiation of affirmative voting rights

d) It creates uncertainty in the negotiation of shareholder agreements

Q-32. Which of the following statements about shareholders' agreements is true based on
the given information?

a) Shareholders' agreements are legally binding regulations of the company.

b) Shareholders' agreements are primarily used in public companies.

c) Shareholders' agreements are created to define shareholders' rights and obligations.

d) Shareholders' agreements are mandatory requirements under the Companies Act.

Q-33. In a company limited by shares, the liability of each member extends to:

a) The full nominal value of the shares they hold

b) The debts of the company contracted during their membership

c) A sum specified in the liability clause of the memorandum of association

d) The balance when called upon to pay by the liquidator of the company

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Q-34. How are the powers divided between the Board of Directors and the shareholders in a
company?

a) The Board of Directors has supreme authority over all company decisions.

b) Shareholders have exclusive authority over all company decisions.

c) The Board of Directors and shareholders each have their respective powers and
responsibilities.

d) Shareholders have limited power and authority in company governance.

Q-35. Under what circumstances can the rights attached to a class of shares be varied in a
company?

a) With the consent of the majority of shareholders

b) With the sanction of a special resolution passed by all shareholders

c) With the consent in writing of not less than three-fourths of the issued shares of that class

d) Only if provision for variation is contained in the Memorandum of Association

Q-36. What is the effect of a valid nomination made by a holder of securities under Section
72 of the Act?

a) The nominee becomes the sole owner of the securities upon the death of the holder.

b) The nominee has the right to manage the securities on behalf of the holder.

c) The nominee becomes entitled to all the rights in the securities upon the death of the
holder, excluding all other persons.

d) The nomination is automatically cancelled upon the death of the holder.

Q-37. According to Rule 19 of the Companies (Share Capital and debentures) Rules, 2014,
what is the time limit for recording a request for nomination by a company?

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a) 1 month from the date of receipt of the nomination form.

b) 2 months from the date of receipt of the duly filled and signed nomination form.

c) 3 months from the date of receipt of the nomination form.

d) 6 months from the date of receipt of the duly filled and signed nomination form.

Q-38. What happens if a person nominated as a nominee becomes entitled to securities

upon the death of the holder but fails to comply with a notice requiring them to elect to be
registered or transfer the securities?

a) The nominee loses all rights and benefits associated with the securities.

b) The nominee is given an additional 90 days to comply with the notice.

c) The company is required to transfer the securities to another eligible person.

d) The company withholds payment of dividends or interests until the requirements of the
notice are complied with.

Q-39. Which of the following individuals would qualify as a member of a reporting company
based on the given information?

a) An individual who is a Chief Executive Officer of a pooled investment vehicle.

b) An individual who is a Chief Financial Officer of a pooled investment vehicle.

c) An individual who is a Chief Executive Officer of a manufacturing company.

d) An individual who is a Chief Investment Officer of a retail bank.

Q-40. In which country are shareholders' agreements generally enforceable regardless of

whether they have been incorporated in the articles of association of the company?

a) England

b) India

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c) United States

d) Both England and the United States

(40 X 1 = 40 = Marks)

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