TỔNG HỢP CÂU HỎI

TRẮC NGHIỆM MÔN

CORPORATION LAW
(CÓ ĐÁP ÁN CHI
TIẾT) NĂM 2022
Question 1

Which one of the following is an unincorporated organisation?

a) General partnership.
b) Limited liability partnership.
c) Public limited company.
d) Private limited company.
Question 2

The maximum number of persons who are legally allowed to operate in a partnership
is:
a) 2
b) 20
c) There is no legal limit
d) 100
Question 3

A partner who is entitled to a share of the profits from a partnership is known as:
a) A salaried partner.
b) A managing partner.
c) An equity partner.
d) A limited liability partner.
Question 4

The Partnership Act 1890 section 24 sets out rights of partners (in default of their own
agreement). Which one of the following is not included in section 24?
a) The right to take part in the management of the business.
b) The right to a salary.
c) The right to share equally in the capital and profits of the business.
 d) The right to be indemnified by the firm for any liabilities incurred or
payments made in the course of the firm's business.
Question 5

Limited liability partnerships were introduced by which Act of Parliament?

a) Limited Partnership Act 1907.
b) Limited Liability Partnership Act 2000.
c) Partnership Act 2000.
d) Companies Act 2006.
Question 6

Which one of the following statements about limited liability partnerships (LLPs) is
incorrect?
a) An LLP has a legal personality separate from that of its members.
b) The liability of each partner in an LLP is limited.
c) Members of an LLP are taxed as partners.
d) A limited company can convert to an LLP.
Question 7

Which of the following is not a method of creating a company?

a) A written agreement made by the directors.
b) Registration under the Companies Act 2006.
c) Act of Parliament.
d) Grant of Royal Charter.
Question 8

A Community Interest Company (CIC) can be set up as which of the following?

a) A private company limited by guarantee only.

 b) A private company limited by shares or a private company limited by
guarantee only.
c) A private or public company limited by shares or a private company
limited by guarantee.
d) None of the above, it is a type of partnership.
Question 9

Sparkle Ltd is a private limited company limited by shares. It has one director. How
many shareholders does the law require it to maintain?

a) One provided it is a different person from the director.

b) Five.
c) Two.
d) One which can be the same person as the director.
Question 10

An organisation running a business has the following attributes: the assets belong to
the organisation, it can create a floating charge over its assets, change in membership
does not alter its existence, and members cannot transfer their interests to others. What
type of organisation is it?
a) A private limited company
b) A limited liability partnership
c) A general partnerships
d) A public limited company
Question 1

Persons who take the procedural steps to set up a company and who make business
preparations for the company are known as:
a) Directors.
b) Shareholders.
 c) Registrars.
d) Promoters.
Question 2

Joe and Jamel wish to form a new company, which of the following documents must
be lodged with the Registrar of Companies?
1) Memorandum of Association.
2) An application for registration.
3) A statement of compliance.
4) The appropriate fee.
a) 1, 2 and 4
b) 1,2,3, and 4
c) 1,3, and 4
d) 2 and 4
Question 3

Under the Companies Act 2006 the document that states the subscribers wish to form a
company and have agreed to become members of that company is called:
a) The Company Articles.
b) The Statement of Compliance.
c) The Memorandum of Association.
d) The Company Guarantee.
Question 4

What is the internet registry for '.uk' domain names?

a) Companies House.
b) Nominet UK.
c) Dot.com UK.
d) Internet Registration UK.
Question 5

Companies set up under the provisions of the Companies Act 2006 have one major
constitutional document called:
a) The Company Constitution.
b) The Memorandum of Association.
c) The Articles of Association.
d) The Object Clause.
Question 6

Will a court permit an alteration of a company's articles to be enforced if the alteration

is to give the company the power to expel shareholders?
a) Yes, there are no restrictions on expelling shareholders.
b) Yes, provided there is a good reason and it is for the benefit of the
company as a whole.
c) No, the Company's Act 2006 does not permit a shareholder to be
expelled from a company.
d) No, the common law does not permit a shareholder to be expelled from
a company.
Question 7

Which one of the following statements relating to debentures is incorrect?

a) Debenture stock is transferable.
b) A company may not purchase its own debentures.
c) A debenture holder is a creditor of the company.
d) A debenture is the written document issued by a company setting out
the terms of a loan.
Question 8

Which one of the following is not a right of a shareholder?

 a) To receive a dividend declared by the company
b) To attend and vote a meetings
c) To receive the company's accounts
d) To manage company affairs
Question 9

Shares issued with special rights attached to them are known as:
a) Ordinary shares
b) Preference shares
c) Rightsshares
d) Debenture shares
Question 10

What are redeemable shares?

a) Shares that cannot be transferred on the stock market.
b) Shares kept by a company to be sold at a later date.
c) Shares which when issued carry a right by the company to buy them
back.
d) Shares that carry rights in preference to other shares.
Question 1

Which one of the following statements is incorrect?

a) The statutory minimum age of a director is 18.
b) There is no statutory maximum age for directors.
c) .A public limited company must have at least two directors.
d) There are no legal qualifications necessary for being a director.
Question 2
 What is the legal minimum number of directors for a private limited company?
a) 1
b) 2
c) 5
d) 20
Question 3

What is a shadow director?

a) A director who does not attend Board meetings
b) A person who is not appointed as a director but whose directions or
instructions the directors of a company follow.
c) A person appointed to attend Board meetings and vote in place of a
director.
d) A director who has recently retired from the Board. .
Question 4

A shareholder who wishes to make a proposal that that a director is dismissed must
give the company 'special notice' of their proposal prior to the meeting. How many
days notice is required for special notice?
a) 7
b) 14
c) 28
d) 42
Question 5

Which Act gives the court power to disqualify someone from being a director if they
have been guilty of fraudulent trading or have been participating in wrongful trading?
a) Fraudulent Trading Act 2006
b) Companies Act 2006
 c) Insolvency Act 1986
d) Company Directors Disqualification Act 1986
Question 6

Which one of the following statements is correct?

a) A company can never have unrestricted objects.
b) Where a director acts without authority from the Board of Directors, all
transactions entered into with third parties will be void.
c) Where a director acts outside or beyond the powers given to him by the
company, all transactions entered into with third parties acting in good faith will
be voidable by the company.
d) Where a director acts outside or beyond the powers given to him by the
company, all transactions entered into with third parties acting in good faith are
deemed to be free of any limitations under the company's constitution.
Question 7

The Companies Act 2006 ss171-177 imposes various duties on directors. Which of the
following is not imposed by the Act?
a) To promote the success of the company.
b) To attend the minimum of two Board meetings annually.
c) To exercise independent judgment.
d) To exercise reasonable skill care and diligence.
Question 8

Where court action is taken against a director for breach of duty any compensation
awarded by the court is payable to:
a) The Board of Directors.
b) The shareholders.
c) The company.
 d) The creditors.
Question 9

In order to be a company secretary of a private limited company what qualifications

must you have?
a) A qualified UK lawyer.
b) A qualified Accountant
c) You need no qualifications.
d) Have been a secretary of a public company for at least three years out
of the last five.
Question 10

Which one of the following statements is not correct?

a) It is a criminal offence for anyone to knowingly or recklessly give an

auditor misleading, false or deceptive information.
b) An auditor has the duty to audit a company's accounts, and to report to
the shareholders on whether the accounts give a true and fair view of the
financial position of the company and have been properly prepared in
accordance with the Companies Act 2006.
c) The auditor cannot be an officer or employee of the company or in
partnership with someone who is an officer or employee of the company.
d) An Auditor cannot be removed before the expiry of his term of office.
Question 1

Decisions passed by shareholders are known as:

a) Resolutions.
b) Provisions.
c) Articles.
 d) Memorandums.
Question 2

Which one of the following statements is incorrect?

a) Notice of meetings must be given to every member and every director.
b) All companies must hold annual general meetings.
c) Directors and secretaries of public companies that fail to hold an annual
general meeting are liable to a fine.
d) The directors of a company can be required to hold a general meeting
by the company's auditors if the auditors intend to resign.
Question 3

Which of the following meetings are all shareholders invited to?

1) annual general meeting.
2) general meeting.
3) class meeting.
4) board meeting.
a) 1 only.
b) 1 and 2 only.
c) 1, 2, and 3 only.
d) 1, 2, 3, and 4.
Question 4

What is meant by voting by poll?

a) Where each shareholder or his proxy present at the meeting, has one
vote irrespective of the number of shares they hold.
b) Where each shareholder has the right to vote in writing.
c) Where the chairman of the meeting casts the final vote.
 d) Where each shareholder or their proxies present at the meeting use as
many votes as their shareholding allows them.
Question 5

What percentage of shareholders is needed to pass special resolution?

a) It must be unanimous.
b) Not less than 90%.
c) Not less than 75%.
d) More than 50%.
Question 6

Which one of the following statements is correct?

a) Where a written resolution is proposed a copy of the resolution must
always be sent by post to every shareholder.
b) Written resolutions can only be proposed by directors.
c) Written resolution can only be proposed by shareholders.
d) Public companies cannot pass written resolutions.
Question 7

What is a derivative claim?

a) A claim brought by a company against one of its directors for
negligence., default or breach of duty or breach of trust.
b) A claim brought by minority shareholders on the grounds that they have
been unfairly treated by the majority of shareholders.
c) Where a shareholder, in place of the company, brings a claim against a
director of the company for negligence, default or breach of duty or breach of
trust.
d) A petition to have the company wound up.
Question 8

How is voluntary liquidation of a company commenced?

a) By a Court Order.
b) By an ordinary resolution of shareholders.
c) By a special resolution of shareholders.
d) By a decision of the Board of Directors.
Question 9

Where an individual uses price-sensitive information, which has not been made public,
relating to the present or future value of company securities for his own profit it is
called:
a) Wrongful trading.
b) Fraudulent trading.
c) Insider dealing.
d) Market abuse.
Question 10

Where on winding up it is discovered that a company has been trading and at the time
the director or directors knew or ought to have known that there was no reasonable
prospect of the company avoiding insolvent liquidation it is known as:
a) Wrongful trading.
b) Fraudulent trading.
c) Illegal dealing.
d) Market abuse.
1. The most important document of a company is its __________.
A. prospectus.
B. annual report.
C. memorandum of association .
D. articles of association .
ANSWER: C
2. The rules and regulations for the internal management of a company are contained in
its_______.
A. prospectus .
B. annual report .
C. memorandum of association .
D. articles of association .
ANSWER: D
3. Mark out the document that need not be prepared and registered with the registrar of
companies in public limited companies.
A. statutory declaration
B. memorandum of association .
C. articles of association .
D. d. directors undertakings to take up and pay for qualification shares.
ANSWER: C
4. The union government may appoint such number of directors in a company as it may
deem
necessary
A. at its own initiative .
B. on the application of least 100 members of the company .
C. on the application of members holding at least 10% voting rights.
D. any of the above .
ANSWER: D
5. A director’s election takes place in a general meeting through a separated Resolution
passed
by a _______ majority.
A. single.
B. two-thirds.
C. three-fourths.
D. five-sixths .
ANSWER: A
6. Which of the following is beyond the powers of the board of directors?
A. To issue debentures.
B. To make loans.
C. To remit the payment of any debt due by a director.
D. to issue prospectus.
ANSWER: C
7. The minimum subscription is to be received within ______days of the offer.
A. 30.
B. 60.
C. 120.
D. 150.
ANSWER: C
8. The private company requires conversion of a public company into a __________.
A. an ordinary resolution .
B. a special resolution
C. a special resolution and union governments approval
D. a special resolution and company law board approval
ANSWER: C
9. A share certificate once issued by the company binds it in two ways, namely by
estoppel as
to title and ___________.
A. by estoppel as to payment.
B. by estoppel as to profit.
C. by estoppel as to dividend.
D. none
ANSWER: A
10. Share capital of a company means __________.
A. equity share capital .
B. preference share capital
C. equity and preference share capital .
D. equity and preference share capital and debentures.
ANSWER: C
11. A shareholder in a company___________.
A. can be its debentureholder
B. cannot be its debentureholder
C. alone can become its debentureholder
D. must also become its debentureholder within a year of being a shareholder.
ANSWER: A
12. The dividend on preference capital is paid_____________.
A. whenever there are profits
B. only if there are profits.
C. even if there are no profits.
D. only when the directors recommend it .
ANSWER: D
Ques. Transmission is effected by
(a) Sale
(b) Death
(c) Insolvency
(d) Both (b) & (c)
Ans. (d)
Ques. Deposits should issued with in ___ weeks from the date of receipt of money.
(a) 2
(b) 4
(c) 6
(d) 8
Ans. (d)
Ques. There is no need to held statutory meeting in case of Government company?
(a) Yes
(b) No
Ans. (a)
Ques. Public company can allot shares without receiving minimum subscription?
(a) Yes
(b) No
Ans. (b)
Ques. For every special resolution passed the form attached should be
(a) Form no.32
(b) Form no. 18
(c) Form no.23
(d) None of these
Ans. (c)
Related: Fundamental of Accounting Question Bank
Ques. If minimum subscription is not received application money should be refunded
with in ____ days
(a) 20
(b) 25
(c) 30
(d) 10
Ans. (d)
Ques. Information memorandum + shelf prospectus together constitutes_____
(a) Memorandum
(b) Articles
(c) Prospectus
(d) None of the above
Ans. (c)
Ques. In the event of appointing a proxy joint holders shall sign the proxy form
(a) Singularly
(b) Jointly
(c) None of the above
(d) both (a) & (b)
Ans. (b)
Ques. Balance in securities premium A/c should be utilized for declaring dividends.
(a) Yes
(b) No
Ans. (b)
Ques. In case of alternation of AOA to deletion or insertion of provisions defining
private company shall be passed by resolution through postal ballot.
(a) Yes
(b) No
Ans. (a)
Ques. Minimum number of members in case of private company is
(a) 1
(b) 2
(c) 3
(d) 4
Ans. (b)
Ques. Maximum no .of members in case of public company is
(a) 0
(b) unlimited
(c) 50
(d) 100
Ans. (b)
Related: Cubes and Dice (Non Verbal Reasoning)
Ques. The liability of members if company is limited by guarantee.
(a) Unpaid value of shares
(b) Guarantee amount
(c) Unlimited liability
(d) None of the above
Ans. (b)
Ques. Which one of the following has a right to claim compensation for any loss due
to mis-statement in prospectus
(a) Purchasing shares in Primary Market
(b) Secondary Market
(c) Subscribers to memo
(d) All the above
Ans. (a)
Ques. Is a document showing title
(a) Share certificate
(b) Share warrant
|(c) Both (a) & ((b)
(d) None of the above
Ans. (c)
Ques. Extension of time limit is possible only in which of the following?
(a) Shares
(b) Debentures
(c) Both (a) & (b)
(d) None of the above
Ans. (b)
Ques. ______ years of imprisonment will be imposed in case of issue of prospectus
with untrue statements
(a) 1
(b) 2
(c) 3
(d) 4
Ans. (b)
Ques. The liability of members if company is limited by shares
(a) Unpaid value of shares
(b) Guarantee amount
(c) Unlimited liability
(d) None of the above
Ans. (a)
Ques. In case of a company going for public issue premium can be declared by BOD.
(a) Yes
(b) No
Ans. (b)
Ques. If the permission has not been granted or not applied for permission for listing
through stock
exchange. The allotment of shares will be void in case of public company
(a) Yes
(b) No
Ans. (a)
Ques. Forfeiture can be made only if it is authorized by ______
(a) AOA
(b) MOA
(c) ROC
(d) C.G
Ans. (b)
Ques. Name of the member is struck off from the register in case of____________
(a) Issue of share certificate
(b) Share warrant
(c) Forfeiture
(d) None of the above
Ans. (b)
Ques. If the company has not received permission for listing from stock exchange and
repayment of amount delayed by more than 8 days the minimum interest should be
paid is
(a) 4%
(b) 3%
(c) 2%
(d) none of these
Ans. (a)
Ques. A company can become a members of another company if it is so authorized
by______
(a) MOA
(b) AOA
(c) Both (a) & (b)
(d) None of the above
Ans. (a)
Ques. Validity period of information memorandum is___________
(a) 1 year
(b) 2 years
(c) 3 years
(d) 4 years
Ans. (a)
Related: Mercantile Law Questions
Ques. Liability of a member in case of a private company is
(a) Limited
(b) Unlimited
(c) Both (a) or (b)
(d) None of the above
Ans. (c)
Ques. Generally Company liability is
(a) Limited
(b) Unlimited
(c) Situation does not arise
Ans. (a)
Ques. Can private company go for public issue?
(a) Yes
(b) No
Ans. (b)
Ques. Can a company sign on behalf of a person in memorandum and articles
(a) Yes
(b) No
Ans. (a)
Ques. X, is a director of X Company and X is also a director of Y Company this
means X Co. and Y Co. both are same
(a) True
(b) False
Ans. (b)
Ques. Members of a company can enter contract with the company
(a) True
(b) False
Ans. (a)
Related: Compound interest questions
Ques. Can a Minor be a subscriber
(a) Yes
(b) No
Ans. (b)
Ques. Can private company accept deposits from the public?
(a) Yes
(b) No
Ans. (b)
Ques. Generally partnership firm liability is
(a) Limited
(b) Unlimited
(c) Situation does not arise
Ans. (b)
Ques. Central Government permission is required in case of_____ conversion____
(a) Private to public
(b) Public to private
(c) Both (a) or (b)
(d) None of the above
Ans. (b)
Ques. How many members should sign the MOA in case of private
company_____________
(a) 1
(b) 2
(c) 3
(d) 4
Ans. (b)
Ques. In case minimum subscription is not received and refund is delayed____ % of
interest to be paid by the company.
(a) 5
(b) 6
(c) 7
(d) 8
Ans. (b)
Related: Trigonometry questions
Ques. Paying back of capital is called
(a) Redemption
(b) Conversion
(c) Participation
(d) None
Ans. (a)
Ques. Proxies cannot vote on_________
(a) Show of hands
(b) Poll
(c) Both (a) & (b)
(d) None of the above
Ans. (a)
Ques. Share holders are
(a) Owners
(b) Creditors
(c) Debtors
(d) None of the above
Ans. (a)
Ques. Minimum number of members in case of public company
(a) 1
(b) 2
(c) 5
(d) 7
Ans. (d)
Ques. Maximum no. of persons in case of partnership banking business ___________
(a) 10
(b) 20
(c) 30
(d) 5
Ans. (a)
Ques. Minimum no. of Directors in case of private company is __________
(a) 1
(b) 2
(c) 3
(d) 4
Ans. (b)
 Related: Mensuration Questions and Answers
Ques. If the company failed to refund application money with in 130 days from the
date of issue of
prospectus on non-receipt of minimum subscription who will be personally liable.
(a) Company
(b) Directors
(c) Shareholders
(d) None of these
Ans. (b)
Ques. Can the partners enter into the contract with the firm?
(a) Yes
(b) No
Ans. (b)
Ques. X Company is holding majority of shares in Y company. Will X and Y
companies will be the same.
(a) Yes
(b) No
Ans. (b)
Ques. A company is named as govt. company if it is holds_________ % of paid up
share capital
(a) more than 30
(b) more than 40
(c) more than 50
(d) None
Ans. (c)
Ques. Contribution shall be made by the employer is ____________ of basic wages
and D.A allowance and retaining
(a) 12%
(b) 10%
(c) 15%
(d) None of these
Ans. (a)
Related: Quantitative Aptitude Questions
Ques. In addition to the contribution employer has to pay ____ % of wages as
inspection charges
(a) 0.19%
(b) 0.18%
(c) 0.17%
(d) None of these
Ans. (b)
Ques. _______ % of shares should be held by a company in another company so as to
become subsidiary
(a) more than 50
(b) more than 40
(c) more than 30
(d) more than 20
Ans. (a)
Ques. In case of Non -Profit making Companies books of accounts are required to be
preserved for _____ years
(a) 2
(b) 4
(c) 6
(d) 8
Ans. (b)
Ques. Accepting of deposits from public in case of private company is
(a) Prohibited
(b) Restricted
(c) Acceptable
(d) None of these
Ans. (a)
Ques. XYZ Co, is having 10% share capital held by another Public Company and 35%
held by Central
Government and 55% held by people then that Company is
(a) Government Company
(b) Private Company
(c) Public Company
(d) None of these
Ans. (c)
Ques. XYZ Co, is having 15% share capital held by X Company and 50% held by
Central Government and 10% held by State Government and 25% held by other
people then that company will be
(a) Government Company
(b) Private Company
(c) Public Company
(d) None of these
Ans. (a)
Ques. Sec.25 Companies should pay stamp duty for registering MOA and AOA.
(a) Yes
(b) No
Ans. (b)
Related: flags of European countries
Ques. XYZ Co. is a holding of XZ Pvt. Company. XZ Co. issued deferred shares. The
issue is valid or void
(a) Valid
(b) Void
(c) Situation does not arise
Ans. (b)
Ques. Stamp duty on registration of the company is payable based
on____________ capital.
(a) Nominal
(b) Authorized
(c) Both (a) & (b)
(d) None
Ans. (c)
Ques. ____ are the shares issued by the company to it employees or directors for
consideration other than cash
(a) Bonus
(b) Sweat
(c) Right
(d) None of the above
Ans. (b)
Ques. ________ resolution should be passed by the company to offer shares to
outsiders
(a) Special resolution
(b) Ordinary resolution
(c) C.G
(d) None of the above
Ans. (a)
Ques. For reducing its share capital it should give notice to whom?
(a) Debtors
(b) Creditors
(c) Both (a) & (b)
(d) None of the above
Ans. (b)
Ques. NCLT came into force instead of company Law Board from
(a) June 4 th
(b) May 4 th
(c) June 5 th
(d) None of these
Ans. (a)
Ques. How many members should sign the MOA in case of public company________
(a) 1
(b) 3
(c) 5
(d) 7
Ans. (d)
Ques. Private company can start business only after getting certificate of
(a) Incorporation
(b) Commencement of business
(c) None of these
Ans. (a)
Ques. The doctrine of indoor management is an_________ to the doctrine of
constructive notice
(a) Exception
(b) Extension
(c) Alternative
(d) None of the above
Ans. (b)
Ques. In how many days did the company have its registered office after incorporation
(a) 10
(b) 20
(c) 30
(d) 40
Ans. (c)
Related: Food trivia questions
Ques. Signature of memorandum and articles should be done by ______ number of
persons in case of public company
(a) 7
(b) 5
(c) 4
(d) None of these
Ans. (a)
Ques. MOA should be in form_______ in case of company limited by guarantee not
having share
capital
(a) Table A
(b) Table B
(c) Table C
(d) Table D
Ans. (c)
Ques. In the MOA there are 6 classes. We can alter all clauses expect one clause.
What is that clause?
(a) Objects clause
(b) Name clause
(c) Association clause
(d) None of these
Ans. (c)
Ques. If any body wants to file a case against the company they should file at what
place _____
(a) Company
(b) Registered Office
(c) BOD
(d) Books of accounts
Ans. (b)
Ques. conceives the idea of the business
(a) Promoters
(b) Directors
(c) Auditors
(d) None of the above
Ans. (a)