1. Under which Act are companies in India currently governed?
A. Companies Act, 2013
B. Companies Act, 1956
C. Indian Contract Act, 1872
D. Partnership Act, 1932
Companies in India are currently governed by the Companies Act, 2013.
2. What is the legal status of a company as per the Companies Act, 2013?
A. A private entity owned by members
B. A juristic person created by law with a perpetual succession
C. A government organization
D. A non-legal entity
A company, as per the Companies Act, 2013, is a juristic person created by law with perpetual succession and a common seal distinct from its members.
3. According to Section 11 of the Companies Act, 2013, how many members in a banking business require registration under the Act?
A. More than 10 members
B. More than 15 members
C. More than 20 members
D. More than 5 members
Section 11 of the Companies Act, 2013, requires that any association or partnership in banking business with more than 10 members must be registered under the Act.
4. What happens to an association or partnership in a non-banking business with more than 20 members that is not registered under the Companies Act, 2013?
A. It will be fined
B. It will be taxed at a higher rate
C. It will be exempted from registration
D. It will be considered illegal
An association or partnership in a non-banking business with more than 20 members that is not registered under the Companies Act, 2013, is considered illegal.
5. Which documents outline the business, objects, and rules governing a company's management as per the Companies Act, 2013?
A. Memorandum of Association and Articles of Association
B. Shareholder Agreement and Bylaws
C. Company Charter and Code of Conduct
D. Annual Report and Financial Statement
The business, objects, and rules governing a company's management are outlined in the Memorandum of Association and Articles of Association as per the Companies Act, 2013.
6. Rahul and his friends started a small banking business with 12 members in total. They have not registered their business under the Companies Act, 2013. What legal implication does this have?
A. The business will operate as a sole proprietorship
B. The business will be taxed at a higher rate
C. The business will be considered illegal
D. The business can operate legally without registration
As per Section 11 of the Companies Act, 2013, any banking business with more than 10 members must be registered under the Act. Rahul's business, with 12 members, will be considered illegal if not registered.
7. A company called "Eco Green Ltd." has 25 members who manage an eco-friendly product business. They have not registered their business under the Companies Act, 2013. What is the legal status of this company?
A. The company is operating illegally
B. The company is considered a partnership firm
C. The company can apply for registration at any time
D. The company will be fined but can continue operating
According to Section 11 of the Companies Act, 2013, any business with more than 20 members must be registered. Since "Eco Green Ltd." has 25 members and is not registered, it is operating illegally.
8. Priya wants to start a business with her friend and is considering setting it up as a company. They decide to draft documents outlining the company's objectives, management rules, and business scope. What documents should Priya and her friend prepare?
A. Memorandum of Association and Articles of Association
B. Partnership Deed and Company Charter
C. Shareholder Agreement and Bylaws
D. Business License and Tax Registration Certificate
Priya and her friend should prepare a Memorandum of Association and Articles of Association, which outline the company's objectives, management rules, and business scope.
9. Sanjay's tech startup has grown rapidly, and he now has 22 members in the company. The company is not yet registered under the Companies Act, 2013. What should Sanjay do to comply with the law?
A. He should reduce the number of members to below 20
B. He should register the company under the Companies Act, 2013
C. He should register the company as a partnership firm
D. He can continue without registration since it is a small business
Since Sanjay's company has more than 20 members, he must register the company under the Companies Act, 2013, to comply with the law.
10. A company called "Innovate Solutions Ltd." has detailed its business scope, management rules, and objectives in two key documents. These documents help guide the company's operations. What are these documents called?
A. Memorandum of Association and Articles of Association
B. Business Plan and Mission Statement
C. Shareholder Agreement and Employee Handbook
D. Corporate Charter and Financial Plan
"Innovate Solutions Ltd." uses the Memorandum of Association and Articles of Association to guide its operations, defining its business scope, management rules, and objectives.
11. What is the consequence if a company fails to register a charge created on its property or undertaking within the prescribed 30-day period?
A. The charge becomes void against the liquidator and creditors of the company
B. The company will be fined but the charge remains valid
C. The charge is automatically registered after the 30-day period
D. The charge must be re-created and re-registered
According to Section 125 of the Companies Act, 2013, if a charge is not registered within the 30-day period, it becomes void against the liquidator and creditors of the company.
12. A company has created an equitable mortgage by depositing title deeds for one of its properties. Does this require registration under Section 125 of the Companies Act, 2013?
A. Yes, because an equitable mortgage requires registration even without an instrument evidencing the charge
B. No, because no formal instrument is involved
C. Yes, but only if the mortgage amount exceeds a certain limit
D. No, equitable mortgages are exempt from registration
Equitable mortgages, created by depositing title deeds, require registration under Section 125 of the Companies Act, 2013, even if no formal instrument is involved.
13. A company has pledged some movable assets as security for a loan. Does this pledge require registration under the Companies Act, 2013?
A. Yes, all pledges of assets require registration
B. No, a pledge of movables does not require registration
C. Yes, but only if the value of the assets exceeds a certain threshold
D. No, only immovable property pledges require registration
A pledge of movable assets does not require registration under the Companies Act, 2013.
14. A company creates a charge on its property and files the necessary details with the Registrar of Companies after 40 days. What will be the status of this charge?
A. The charge is valid and enforceable
B. The charge must be re-registered within an additional grace period
C. The charge is void against the liquidator and creditors of the company
D. The charge will be considered valid only after paying a penalty
If a charge is not registered within the prescribed 30-day period, it becomes void against the liquidator and creditors of the company, regardless of when the registration occurs.
15. A company has filed the registration of a charge created on its property within the 30-day period. What does this ensure?
A. The charge is valid and enforceable against all parties, including the liquidator and creditors
B. The company is exempt from any future registration requirements
C. The company can create similar charges without additional registration
D. The charge can be transferred to another company without re-registration
Filing the registration of a charge within the 30-day period ensures that the charge is valid and enforceable against all parties, including the liquidator and creditors.
16. What must be immediately changed in a company's letterhead, bills, or other official communications after any update in details?
A. Full name, address of the registered office, Corporate Identity Number (CIN), telephone number, fax number, email ID, and website address (if any)
B. Only the Corporate Identity Number (CIN) and registered office address
C. Only the company name and website address
D. Only the telephone number and email ID
Companies must update their letterhead, bills, and other official communications with any changes in their full name, address, CIN, telephone number, fax number, email ID, and website address (if applicable).
17. Which type of company is defined as having only one member and at least one director, with no requirement to hold an AGM?
A. Public Company
B. One Person Company (OPC)
C. Private Company
D. Limited Liability Partnership (LLP)
A One Person Company (OPC) is a type of private company with only one member and at least one director. It is not required to hold an Annual General Meeting (AGM).
18. What are the conditions under which an existing private company can convert into a One Person Company (OPC)?
A. The company must have at least Rs 1 crore in paid-up capital
B. The company must have a paid-up capital of up to Rs 50 lakhs and a turnover of up to Rs 2 crores
C. The company must have at least 2 directors and a maximum of 50 shareholders
D. The company must have a turnover exceeding Rs 5 crores
An existing private company can convert into a One Person Company (OPC) if it has a paid-up capital of up to Rs 50 lakhs and a turnover of up to Rs 2 crores.
19. What is the requirement for a company to appoint a woman director according to the Companies Act?
A. The company must be listed, or a public company with a paid-up capital of Rs 100 crores or more, or a public company with a turnover of Rs 300 crores or more
B. The company must be a private company with more than 100 employees
C. The company must have more than 10 directors
D. The company must have a net profit exceeding Rs 500 crores
Every listed company, or public company with a paid-up capital of Rs 100 crores or more, or a turnover of Rs 300 crores or more, is required to have at least one woman director.
20. What is the residency requirement for a director under the Companies Act, 2013?
A. The director must have stayed in India for a total period of 182 days or more in the previous calendar year.
B. The director must have stayed in India for at least 150 days in the previous financial year.
C. The director must be an Indian citizen residing in India for the last 2 years.
D. The director must have stayed in India for at least 90 days in the current financial year.
According to the Companies Act, 2013, every company must have a director who has stayed in India for a total period of 182 days or more in the previous calendar year.
21. What is the mandatory accounting year for companies as per the Companies Act, 2013?
A. 1st January - 31st December
B. 1st April - 31st March
C. 1st July - 30th June
D. 1st October - 30th September
Every company must follow a uniform accounting year from 1st April to 31st March as per the Companies Act, 2013.
22. Which of the following is NOT allowed under the Companies Act, 2013 regarding loans to directors?
A. The company cannot advance any loan, guarantee, or security to any director, the director of the holding company, his partner, or his relative.
B. The company can advance loans to directors if approved by the board of directors.
C. The company can provide guarantees to bodies corporate where the director has no control over the voting power.
D. The company can advance loans to firms where the director's relative is a partner, but only with shareholder approval.
The Companies Act, 2013 prohibits companies from advancing loans, guarantees, or securities to any director, director of the holding company, his partner, his relative, or any firm or private limited company in which the director has significant control.
23. What is Table F in the context of the Companies Act, 2013?
A. It is the standard set of Articles of Association that a company may adopt with necessary changes.
B. It is a set of guidelines for financial reporting by companies.
C. It refers to the standard format for filing annual returns.
D. It is the code of conduct for directors of a company.
Table F is the standard set of Articles of Association that a company may adopt, with relevant changes to suit the requirements of the company.
24. What must all existing directors have as per the Companies Act, 2013?
A. A valid PAN card
B. A Director Identification Number (DIN) allotted by the central government
C. A bank account in the company’s name
D. A digital signature certificate
All existing directors must have a Director Identification Number (DIN) allotted by the central government. Those who already have a DIN need not take any further action.
25. What is the mandatory financial year that companies must follow as per the Companies Act, 2013?
A. 1st April - 31st March
B. 1st January - 31st December
C. 1st July - 30th June
D. 1st October - 30th September
Under the Companies Act, 2013, all companies are required to follow a uniform financial year from 1st April to 31st March.
26. For how many years can a listed company appoint a firm of auditors as per the Companies Act, 2013?
A. 10 years
B. 5 years
C. 7 years
D. 3 years
According to the Companies Act, 2013, a listed company can appoint a firm of auditors for a maximum period of 10 years.
27. What is the purpose of the National Financial Reporting Authority (NFRA) as per the Companies Act, 2013?
A. To oversee the tax practices of companies in India
B. To regulate and enforce accounting and auditing standards
C. To manage the financial investments of the government
D. To conduct forensic audits of listed companies
The National Financial Reporting Authority (NFRA) is established to regulate and enforce accounting and auditing standards in India.
