Professional Documents
Culture Documents
CH 8
CH 8
CH 8
Question Paper
Instructions:
Properly mention test number and page number on your answer sheet, Try to upload sheets in
arranged manner.
In case of multiple choice questions, mention option number only Working notes are
compulsory wherever required in support of your solution
Do not copy any solution from any material. Attempt as much as you know to fairly judge your
performance.
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Q-1: What are divisible profits?
a) Shareholders
b) Board of Directors
c) Auditors
d) Company Secretary
a) Only when the company has generated profits till the quarter preceding the declaration
b) Only when the board of directors recommends it
c) Only during the period from the closure of the financial year till the annual general meeting
d) Only when the directors are satisfied that profits are available for distribution
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Q-5: Who determines the amount of dividend payable to shareholders?
a) Shareholders
b) Board of Directors
c) Auditors
d) Company Secretary
a) Only when the company has generated profits till the quarter preceding the declaration
b) Only when the board of directors recommends it
c) Only during the period from the closure of the financial year till the annual general meeting
d) Only when the directors are satisfied that profits are available for distribution
a) Shareholder demands
b) Legal and contractual restrictions
c) Board of Directors' preferences
d) External market conditions
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Q-9: Why is the cash position and liquidity of a company important in paying dividends?
Q-10: Can dividend declaration be subject to the approval of financial institutions or banks?
Q-11: When does the legal liability for the payment of dividend arise?
Q-12: Can the directors modify or withdraw their recommendation for the payment of
dividend?
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Q-13: What is the procedure followed for transferring shares to the Investor Education and
Protection Fund (IEPF) Authority?
a) The shares are physically transferred to the IEPF Authority's DEMAT Account.
b) The shares are transferred to the IEPF Authority as per the process of transmission of shares.
c) The shares are sold and the proceeds are transferred to the IEPF Authority.
d) The shares are transferred to the IEPF Authority, and an application can be filed to claim
them back.
Q-14: What is the significant difference between shares transferred to the IEPF Authority under
sub-section (9) and shares transferred under Section 124?
a) Shares transferred under sub-section (9) cannot be claimed back, while shares transferred
under Section 124 can be claimed back.
b) Shares transferred under sub-section (9) can be claimed back, while shares transferred
under Section 124 cannot be claimed back.
c) Both shares transferred under sub-section (9) and shares transferred under Section 124
cannot be claimed back.
d) Both shares transferred under sub-section (9) and shares transferred under Section 124 can
be claimed back.
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Q-16: What is the role of a company after the declaration of dividend regarding the unpaid or
unclaimed dividend?
a) The company becomes the beneficial owner of the unpaid or unclaimed dividend amount.
b) The company must transfer the unpaid or unclaimed dividend amount to a special account.
c) The company should distribute the unpaid or unclaimed dividend to its employees.
d) The company must declare the unpaid or unclaimed dividend as its profit.
Q-17: What should a company do after declaring dividend out of reserves due to inadequacy or
absence of profits?
Q-18: How many days in advance should a company issue written notices for the Annual
General Meeting where the dividend will be declared?
a) 5 days
b) 21 days
c) 30 days
d) 45 days
Q-19: What is the effective date of the Secretarial Standard on Dividend (SS-3)?
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d) 1st January 2021
Q-20: Which of the following is NOT applicable to listed companies in relation to the provisions
of SS-3?
Q-23: How is the term "distribution" defined in the UK Companies Act, 2006?
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c) The allotment of bonus shares to existing shareholders
d) The redemption or purchase of shares by the company
a) Limited Return
b) Patronage Bonus
c) Surplus Income
d) Dividend
Q-25: What is the usual treatment of dividend distribution in companies limited by guarantee?
Q-26: Which of the following sources can be used by a company to declare dividend?
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c) Default in repayment of term loan to a bank or financial institution
d) All of the above
Q-30: Who has the primary entitlement to receive dividend according to the Companies Act,
2013?
a) Beneficial owner
b) Registered shareholder
c) Company
d) Income Tax Department
Q-31: Can payments made directly to a beneficial owner be considered as "deemed dividend"
under the Income Tax Act, 1961?
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a) Yes, in all cases
b) Yes, if the beneficial owner's name appears in the register of shareholders
c) No, payments made to beneficial owners cannot be deemed as dividend
d) No, only registered shareholders can receive deemed dividend
Q-33: Which of the following modes of payment is NOT allowed for the payment of dividend?
a) One month
b) Three months
c) Six months
d) One year
Q-35: Which of the following is NOT a source of funds credited to the Investor Education and
Protection Fund (IEPF) under Section 125 of the Companies Act, 2013?
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a) Donations given by State Governments
b) Amount transferred from the general revenue account of the Central Government
c) Interest received from investments made from the Fund
d) Sale proceeds of fractional shares arising out of the issuance of bonus shares
Q-36: Which of the following is NOT a purpose of the Investor Education and Protection Fund
Authority?
Q-37: Which of the following statements about the transfer of shares to the Investor Education
and Protection Fund (IEPF) is NOT true?
a) Shares in respect of which dividend has not been paid or claimed for seven consecutive years
shall be transferred to the IEPF.
b) The shares transferred to the IEPF will be credited to a DEMAT Account opened by the
Authority within 30 days.
c) If the beneficial owner has encashed any dividend warrant or had dividend amount credited
to their bank account during the last seven years, the shares will not be required to be
transferred to the Fund.
d) The transfer of shares by companies to the Fund is considered as transmission of shares, and
the procedure for transmission of shares shall be followed.
Q-38: What is the significant difference between shares transferred to the Investor Education
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and Protection Fund (IEPF) under Section 124 and shares transferred under sub-section (9) of
Section 90?
a) Shares transferred under Section 124 can be claimed back from the IEPF Authority, while
shares transferred under sub-section (9) cannot be claimed back.
b) Shares transferred under Section 124 have their voting rights frozen, while shares
transferred under sub-section (9) do not have any impact on voting rights.
c) Shares transferred under Section 124 are credited to a DEMAT Account of the IEPF
Authority, while shares transferred under sub-section (9) are not held in DEMAT form.
d) Shares transferred under Section 124 are subject to the SEBI (SAST) Regulations, 2011, while
shares transferred under sub-section (9) are exempt from such regulations.
Q-39: How long should a company preserve dividend cheques or warrants returned by banks,
including those that are defaced, torn, or decrepit?
a) The preservation period should be eight years from the date of the instrument.
b) The preservation period should be the specified period mentioned in the undertaking given
to the Bank.
c) The preservation period should be the longer of the specified period or eight years from the
date of the instrument.
d) The preservation period should be determined by the policy approved by the Board.
a) Dividends are allocated equally to all shareholders, regardless of the type and class of shares
held.
b) Dividends are allocated on a pro-rata basis according to the type and class of shares held.
c) Dividends are allocated first to preference shareholders and then to other shareholders.
d) Dividends are allocated based on the terms and conditions of the issue of each share.
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(40 X 1 = 40 = Marks)
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