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Formation of a Company

Total questions: 15

Worksheet time: 8mins

Name
Class
Date
1.

Minimum number of members to form a private company is------------

a)

2

b)

3

c)

5

d)

7

2.

Minimum number of members to form a public company is-------------

a)

5

b)

7

c)

12

d)

21

3.

Application for approval of name of a company is to be made to------------------------------

a)

SEBI

b)

Registrar of Companies

c)

Government of India

d)

Government of the State in which Company is to be registered

4.

A proposed name of Company is considered undesirable-----------------

a)

It is identical with the name of an existing company

b)

It resembles closely with the name of an existing company

c)

It is an emblem of Government of India, United Nations etc.

d)

In case of any of the above

5.

A prospectus is issued by---------------------

a)

A private company

b)

A public company seeking investment from public

c)

A public enterprise

d)

A public company

6.

It is necessary to get every company incorporated, whether private or public.

a)

True

b)

False

c)

Not sure

7.

A company cannot come into existence without:

a)

Electing Directors

b)

Getting certificate of incorporation

c)

Issuing a prospectus

d)

All of these

8.

The shares of -------- company can be freely transferable.

a)

Private company

b)

Public Company

c)

Partnership

d)

All the above

9.

Which of the following is not a major advantage of a company?

a)

Separate legal entity

b)

Continuous life

c)

Government regulations

d)

Transferable ownership rights

10.

‘A company will remain even if all its members die.” Which feature of the company does this statement signify:

a)

Perpetual Existence

b)

Professional Management

c)

Limited Liability

d)

Transfer of Interest

11.

Qualification shares are subscribed by:

a)

Directors of the company

b)

Auditors of the company

c)

Bankers of the company

d)

Employees of the company

12.

Joint Stock Company has to follow a certain specified legal procedure for

its formation. Arrange the following steps of formation in a proper order.

I. Capital subscription stages II. Promotion

III. Commencement of business IV. Incorporation

Select from the following options:

a)

III, II, I, IV

b)

II, IV, III, I

c)

IV, II, III, I

d)

II, IV, I, III

13.

Vashisht is the promoter of a company. He was in the process of making an application to a stock exchange for listing the securities. The allotment will become void if the company does not receive the permission within the stipulated time frame of

a)

Two weeks from the date of closure of subscription

b)

Ten months from the date of closure of subscription

c)

Ten weeks from the date of closure of subscription

d)

None of the above

14.

Chandramukhi purchased 250 shares of Great Company Limited, the face value of shares being ₹ 100. The company has called ₹ 80 per share till date, and all such amounts as called by company, have been paid by Chandramukhi. What is the liability of Chandramukhi now?

a)

Unlimited Liability

b)

Rs. 5000

c)

Rs. 25,000

d)

Rs. 20,000

15.

‘The documents that serve as constitution of the company’ and ‘the document that serves as doctrine of indoor management’ are as follows:

a)

Prospectus and Articles of Association respectively

b)

Memorandum and Articles of Association respectively

c)

Memorandum and Prospectus respectively

d)

None of the above.