Company law unit 1 part2

Which of the following best describes the Companies Act 2013?

• An act that regulates banking operations in India

• An act that regulates the incorporation, responsibilities, and dissolution of companies in India

• An act that governs employment laws in India

• An act that deals with taxation in India

Definition of a Company Under the Companies Act 2013, a company is defined as:

• A partnership between individuals

• A legal entity formed by individuals to operate a business

• A non-profit organization

• A government agency

Which characteristic of a company implies it has a continuous existence independent of its members?

• 3. Limited Liability

• 3. Perpetual Succession

• 3. Transferability of Shares

• 3. Separate Property

The liability of the members of a company is limited to:

• 3. The amount unpaid on their shares

• 3. The total assets of the company

• 3. Their personal assets

• 3. The company's debts

Which characteristic allows a company to own property in its own name?

• 3. Separate Legal Entity

• 3. Limited Liability

• 3. Separate Property

• 3. Perpetual Succession

Lifting or Piercing the Corporate Veil Lifting or piercing the corporate veil refers to:

• 6. )Increasing the number of shareholders

• 6. Ignoring the separate legal entity of the company

• 6. Issuing new shares to the public

• 6. Merging two companies

In which scenario might a court decide to lift the corporate veil?

• 6. • When the company is making significant profits

• • When shareholders want to sell their shares

• • When the company is used for fraudulent purposes

• • When the company changes its name

Company Distinguished from Partnership and Limited Liability Partnerships (LLPs) One major difference between a company and a partnership is:

• 8. Companies have limited liability, while partnerships have unlimited liability

• 8. Partnerships have limited liability, while companies have unlimited liability

• 8. Both have the same liability structure

• 8. Only partnerships can own property

Which of the following is a key feature of a Limited Liability Partnership (LLP)?

• 8. Unlimited liability for all partners

• 8. Separate legal entity status

• 8. No need to register with the government

• 8. Limited transferability of interest

In a partnership, the profits and losses are shared:

• 8. According to the number of partners

• 8. Equally, unless otherwise agreed

• 8. Based on the number of shares

• 8. Only by the managing partner