Issue of Shares, Part-1, Accountancy, Class-XII,CBSE

1. A company has --------------.

• Separate legal entity

• Common seal

• Perpetual existence

• All of these

Answer explanation

A company has a separate legal entity, a common seal, and perpetual existence. Therefore, the correct answer is 'All of these' as it encompasses all the characteristics of a company.

2. Who among the following is considered the real owner of the company?

• Shareholders.

• Board of Directors.

• Chief Executive Officer.

• Debenture holders.

Answer explanation

Shareholders are considered the real owners of a company as they hold shares, representing ownership. The Board of Directors and CEO manage the company, while debenture holders are creditors, not owners.

3. Which among the following statements is not correct about a company?

• A company can sue and be sued in its own name.

• It comes into existence and ends only through a process of law.

• All the shareholders enjoy equal rights in a company irrespective of their holdings.

• Liability of members in a company is always limited.

Answer explanation

The statement is incorrect because shareholders' rights can vary based on their shareholdings. Not all shareholders enjoy equal rights, as voting power and dividends may differ according to the number of shares held.

4. The liability of a shareholder of a company is limited up to the ------------- of the shares held by him or her.

• Face value.

• Paid up value.

• Called up value.

• Reserve value.

Answer explanation

Liability of a shareholder is limited to the face value of the shares held. This means they are only responsible for the amount they agreed to pay for their shares, not beyond that.

5. The maximum number of shareholders in a Private Limited Company as per the Companies Act 2013 (amended) is ------.

• 50

• 20

• 100

• 200

Answer explanation

As per the Companies Act-2013 (amended), a Private Limited Company can have a maximum of 200 shareholders. This limit allows for a larger pool of investors while maintaining the private nature of the company.

6. The maximum number of members in a public company is ----------

• 100

• 200

• 500

• Unlimited.

Answer explanation

In a public company, there is no limit to the number of members. Therefore, the maximum number of members is classified as Unlimited, making it the correct choice.

7. Who among the following receives dividends at a fixed rate?

• Equity Shareholders.

• Preference Shareholders.

• Debenture holders.

• None of these.

Answer explanation

Preference Shareholders receive dividends at a fixed rate, unlike Equity Shareholders who receive variable dividends based on profits. Debenture holders receive interest, not dividends, making Preference Shareholders the correct choice.

8. Equity shares cannot be issued for the purpose of --------.

• Cash receipts.

• Purchase of Assets.

• Redemption of debenture.

• Payment of dividend.

Answer explanation

Equity shares cannot be issued for payment of dividends, as dividends are typically paid from profits, not through the issuance of new shares. The other options involve legitimate uses for issuing equity.

9. Match the items in List-I with List-II and choose the correct option from the given alternatives.

• (a) - (i), (b) - (ii), (c) - (iii)

• (a) - (ii), (b) - (iii), (c) - (i)

• (a) - (iii), (b) - (i), (c) - (ii)

• (a) - (iii), (b) - (ii), (c) - (i)

Answer explanation

The correct matches are (a) - (ii), (b) - (iii), (c) - (i) based on the relationships defined in List-I and List-II. This option accurately pairs each item according to their respective characteristics.

10. Which of the following rights do preference shareholders of a company not enjoy?

• Right to get repaid the value of shares on liquidation prior to equity shareholders.

• Right to get the dividend paid prior to equity shareholders.

• Right to get dividend at a fixed rate.

• None of these.

Answer explanation

Preference shareholders enjoy all the listed rights: repayment on liquidation before equity shareholders, receiving dividends before equity shareholders, and dividends at a fixed rate. Therefore, the correct answer is 'None of these.'