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UNIT 1

Total questions: 65

Worksheet time: 37mins

Name
Class
Date
1.
Though a company is an artificial legal person, it can act only through _______ agency
a)
Legal
b)
Artificial
c)
Human & Animal
d)
Human
2.
Since a company is an artificial legal person, existence of its members _______ effect the existence of the company
a)
will
b)
will not
c)
None
d)
Depends
3.
Which among the below is not a feature of a company?
a)
Common seal
b)
Limited liability
c)
Artificial legal person
d)
None of the above
4.
Corporate veil theory protects _______ from _______
a)
Company, Members
b)
Members, Outsiders
c)
Members, Company
d)
Comapny, Outsiders
5.
Who can lift the corporate veil?
a)
anyone
b)
BOD
c)
members
d)
Law
6.
A company is formed to act as an agent of another company. But such formed company is not a subsidiary. Now, the corporate veil ______ be lifted.
a)
will
b)
never
c)
may
d)
can
7.
In case of a company incorporated to breach contracts and do fraud with its fraudulent creditor, the corporate veil _____ be lifted.
a)
can not
b)
can
c)
can never
d)
will not
8.
In a company limited by guarantee, the guarantee has to be paid by the members upon _____
a)
When liability arises
b)
Upon Incorporation
c)
Upon winding up
d)
None
9.
As per government rules a person can work as a labour for maximum 6 hours a day in a company. MNC company where workers worked for 10 hours, opened a subsidiary company and showed that employees worked only for 5 hours in one company. Can the law pierce the corporate veil?
a)
Yes
b)
No
c)
Depends
d)
None
10.
Public company is any company which is not
a)
Private
b)
OPC
c)
Small
d)
All of the above
11.
OPC is _______ a private company
a)
never
b)
always
c)
sometimes
d)
None of the above
12.
For a small company, paid up capital and turnover of immediately preceeding year ______ be more than _____ and _____ respectivley.
a)
must, 2 crore, 20 crore
b)
must not, 50 lakhs, 2 crore
c)
Must not, 2 crore, 20 crore
d)
None of the above
13.
Minimum number of members in a private company is _____ and one in ______
a)
2, small company
b)
2, OPC
c)
3, OPC
d)
None of the above
14.
One person company has been introduced to encourage
a)
entrepreneurship
b)
corporatization of business
c)
Both
d)
None of the above
15.
Shares are freely transferable in
a)
Public Company
b)
Private Compnay
c)
One Person Company
d)
All
16.
For a government company, government must be holding ______ of stake.
a)
> 51%
b)
> 20%
c)
> 50%
d)
any rate
17.
A foreign company must have offline business in India to be valid.
a)
true
b)
false
c)
Both partially
d)
None of the above
18.
Dormant company is a _______ company
a)
Public
b)
Private
c)
Inactive
d)
All of the above
19.
Registration of a company is _____
a)
Compulsory
b)
Oprional
c)
Can be done as and when required
d)
All
20.
The person responsible for registration of a company is ____
a)
Promoter
b)
Director
c)
Shareholder
d)
All
21.
Sec 8 Company can use ____
a)
club
b)
chambers of commerce
c)
Foundation
d)
All
22.
All the documents filed must be maintained at the _____
a)
Head Office
b)
Branch Office
c)
Registered Office
d)
Any of the above
23.
Number of compulsory clauses in MOA are ____
a)
5
b)
7
c)
6
d)
4
24.
Which of the following is compulsory to write in MOA?
a)
Authorised capital
b)
Registered capital
c)
Nominal capital
d)
All of the above
25.
The MOA must be signed in the presence of _____ witness.
a)
atleast 1
b)
maximum 2
c)
n number
d)
doesn't matter
26.
For the Doctrine of constructive notice to apply, it is mandatory that the person must read it.
a)
Absolutely right
b)
Utter false
c)
Depends on person
d)
Depends on MOA
27.
____________ protects the company from insiders.
a)
Doctrine of Constructive Notice
b)
Prime Minister
c)
Corporate veil
d)
Law
28.
Doctrine of Constructive Notice protects the _______ from _______.
a)
outsiders, company
b)
company, creditors
c)
company, income tax
d)
company, outsiders
29.
_________ is an exception to Doctrine of Constructive Notice.
a)
Indoor management
b)
Doctrine of Indoor Management
c)
Constitution
d)
Corporate Veil
30.
Third party _____ know all the matters of the company.
a)
can
b)
must
c)
can not
d)
should
31.
________ protects third party against company.
a)
Doctrine of Constructive Notice
b)
Doctrine of Indoor Management
c)
Both
d)
None
32.
Which of the following are exceptions to Doctrine of Indoor Management?
a)
Notice of irregularity
b)
Suspicion of irregularity
c)
Forgery
d)
All
33.

In case of a company is limited by _____________, the liability of its members is limited to the unpaid amount of shares they hold.

a)

Shares

b)

Guarantee

c)

Directors

d)

Shareholders

34.

In the case of a company is limited by shares, the liability of its members is limited to ____________________.

a)

the amount of each members' contribution towards the assets of the company.

b)

the unpaid amount of shares they hold

c)

the entire liability of the company

d)

All of the above

35.

In the case of a company is limited by guarantee, the liability of its members is limited to ____________________.

a)

the amount of each members' contribution towards the assets of the company.

b)

the unpaid amount of shares they hold

c)

the entire liability of the company

d)

All of the above

36.

Which of the following details is not included in the Memorandum of a company?

a)

Registered office address

b)

Objects of the company

c)

Liability of various members of the company

d)

Shares of the shareholders

37.

A _____ is a legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise.

a)

affiliate

b)

company

c)

subsidiary

d)

corporation

38.

A Company has been formed to undertake the business of making designer shoes. This objective of the company would be found in which of the following documents ?

a)

Certificate of incorporation

b)

MOA

c)

Directors certificate of commencement of business

d)

AOA

39.

Which of the following is/are important content(s)/clauses(s) in the MOA of a company ?

a)

Name of the company

b)

Place of business of the company

c)

Objects of the company

d)

Share capital of the company

e)

All ofthe above

40.

The name of a company can be changed by____.

a)

an ordinary resolution

b)

a special resolution

c)

the approval of the union government

d)

a special resolution and with the approval of the central government

41.

The ____defines a companys relations with the outside world.

a)

prospectus

b)

memorandum of association

c)

articles of association

d)

statement in lieu of prospectus

42.

What acts as a shield between a company and its members ?

(a)  

43.

company incorporated by the act of the parliament is :

a)

Statutory Company

b)

Private Company

c)

Chartered Company

d)

Government Company

44.

The process of organizing and planning the the finances of business enterprise under the corporate form is called

a)

Prospectus

b)

Promotion

c)

Directors

45.

Which company turnover should not exceed 2 crore?

a)

One person company

b)

Small company

c)

Subsidiary company

d)

Associate company

46.

LIC is an example of

a)

Statutory company

b)

Registered company

c)

Public company

d)

None of the above

47.

East India Company was an example of

a)

Foreign company

b)

Chartered company

c)

Public company

48.

Identify the type of form of business organisation

a)

Joint Stock Company

b)

Joint Hindu Family

c)

Cooperative Society

d)

Partnership

49.

What type of agreement is used to form a partnership business?

a)

Written agreement

b)

Oral agreement

c)

Written or oral agreement

d)

None of them

50.

The two forms of business ownership with unlimited liability are:

a)

Sole trader

b)

Public company

c)

Partnership

d)

Private company

51.

What is a form of business ownership in which 2 or more people jointly owns a business

a)

Sole Proprietorship

b)

Company

c)

Partnerships

52.

Which of the following is an advantage of a partnership?

a)

Unlimited liability

b)

Arguments

c)

Shared responsibility

53.

This type of organization is a legal entity separate from its owners.

a)

Partnership

b)

Sole Proprietorship

c)

Corporation

54.

Advantage of this business is that owner keeps all the profit and is his own boss

a)

Partnership

b)

Sole proprietorship

c)

Corporation

d)

Franchise

55.
One advantage of a partnership is that there are more sources of capital available than in a sole proprietorship.
a)
True
b)
False
56.
-Owned by a single owner
-No separation between owner and business
-Unlimited personal liability
a)
Corporation
b)
Limited Liability Company
c)
Partnership
d)
Sole Proprietorship
57.

A business in which all partners share in both responsibility and liability

a)

Limited partnership

b)

Limited liability partnership

c)

General partnership

d)

Articles of partnership

58.

A general partner in an LLP...

a)

Does not have any authority over business decisions but still maintains partnership rights based on their percentage interest in the company

b)

Is a designated professional qualified to perform duties assigned by limited partners and often has no stake or liability in the partnership

c)

Is protected from liabilities affecting the partnership arising from other partners in the partnership, due to no fault of their own

d)

Is jointly and severally liable for the partnership as any partner would be in a general partnership

59.

Whether partnership Law applies to LLP

a)

Yes

b)

No

60.

State which of the statement is correct under the Limited Liability Partnership Act, 2008-

a)

All partners have unlimited liability

b)

All partners have limited liability

61.

Every Limited Liability Partnership as per the Limited Liability Partnership Act, 2008 shall have at least two Designated Partners (DPs) who are individuals and

a)

at least one among them shall be resident in India

b)

both of them shall belong to one family residing in India

c)

both of them should be non-resident Indians (NRIs)

d)

both of them should belong to a single country outside India.

62.

A Limited Liability Partnership firm shall have at least …. partners

a)

2

b)

3

c)

5

d)

7

63.

Whether the LLP Act is applicable to any specific services like professional services regulated by Statutes?

a)

No. Any two or more persons associating for carrying on a lawful business with a view to profit may set up an LLP.

b)

Yes. This Act is specifically related to formation of legal structure relating to professional services

64.

Whether a body corporate may be a partner of an LLP?

a)

Yes

b)

No

65.

Whether foreigners can incorporate LLP?

a)

yes

b)

no

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