Formation of a Company MCQs with Answers

Question-1. Minimum number of members to form a private company is

1. 2
2. 3
3. 5
4. 7

Question-2. A person cannot hold directorship in more than ____ public companies

1. 3
2. 10
3. 20
4. 7

Question-3. Minimum number of members required to apply for incorporation certificate in a public ltd company is

1. 3
2. 2
3. 7
4. 50

Question-4. Number of documents to be submitted, by a public ltd company, to the registrar while applying for incorporation of the company is

1. 3
2. 2
3. 7
4. 50

Question-5. Number of clauses in Memorandum of Association is

1. 5
2. 6
3. 7
4. 8

Question-6. The address of the registered office of the company must be notified to the registrar within _________ days of registration, if it is not done at the time of incorporation

1. 15
2. 30
3. 60
4. 45

Question-7. The Prospectus must be issued to the public within ______________ days of its date

1. 30
2. 60
3. 90
4. 100

Question-8. When the registered office of a company is changed within a city then it has to be intimated to the registrar within ________ days of such change

1. 60
2. 45
3. 30
4. 7

Question-9. A private company means a company which has a minimum paid up capital of Rs._________________

1. 100000
2. 500000
3. 5000000
4. none of the above

Question-10. A statement of nominal capital must be given at the time of incorporation by the company when the share capital is less than

1. 50 Lakh
2. 1 crore
3. 10 Lakh
4. 25 Lakh

Question-11. A prospectus is issued by

1. A private company
2. A public company seeking investment from public
3. A public enterprise
4. A public company

Question-12. Par value of shares means the __________ value of the shares

1. Actual
2. face
3. Market
4. dividend

Question-13. Among the following which documents are not mandatory to be submitted to the registrar along with incorporation application by a private company.

1. Address of Registered office & undertaking
2. Undertaking and statement of capital
3. statement of capital & list of directors
4. list of directors and statement of capital

Question-14. The articles of association needs to be signed by

1. all proposed directors
2. registrar
3. subscribers of memorandum
4. none of the above

Question-15. Preliminary Contracts are signed

1. Before the incorporation
2. After incorporation but before capital subscription
3. After incorporation but before commencement of business
4. After commencement of business

Question-16. Preliminary Contracts are

1. binding on the Company
2. binding on the Company, if ratified after incorporation
3. binding on the Company, after incorporation
4. not binding on the Company

Question-17. __________ means the total amount of called up capital on the shares issued and subscribed by the shareholders on capital account.

1. Called-up capital
2. subscribed capital
3. nominal capital
4. Paid-up capital

Question-18. A Government Company means any company in which not less than 51% of the paid-up share capital is held by

1. Central Government
2. State government
3. Both a & b
4. Neither a nor b

Question-19. The application for registration of a company should be presented to the _______________ of the state appointed under Companies Act 1956

1. Controller
2. registrar
3. Governor
4. registration officer

Question-20. _____________ share capital has priority both in repayment of dividend as well as capital.

1. Equity
2. non preference
3. Preference
4. all of the above

Question-21. The dividend payable to ___________ share holders is payable on fixed figure or percent

1. Equity
2. non preference
3. Preference
4. all of the above

Question-22. _______________ capital means the sum mentioned in the capital clause of Memorandum of Association

1. Full capital
2. Maximum capital
3. share capital
4. Nominal Capital

Question-23. Section 12 of Companies Act 1956, deals with

1. Incorporation
2. Share capital
3. Number of Directors
4. Share holders

Question-24. A proposed name of Company is considered undesirable if

1. It is identical with the name of an existing company
2. It resembles closely with the name of an existing company
3. It is an emblem of Government of India, United Nations etc.
4. In case of any of the above

Question-25. The application for registration of a company should be presented to the registrar of the state in which the _______________ of the company is to be situated

1. Manufacturing plant
2. first branch
3. business office
4. any of the above.

Question-26. Private company prohibits any invitation or acceptance of deposits from persons other than its ___________

1. Members
2. directors
3. Partners
4. banks

Question-27. A copy of the ________________ must accompany each from of application for shares offered to the public.

1. Memorandum of association
2. Prospectus
3. Articles of association
4. None of the above

Question-28. Powers, rights, remuneration, qualification and duties of directors are discussed clearly in

1. Memorandum of Association
2. Articles of Association
3. Prospectus
4. none of the above

Question-29. Which of the following clause of Memorandum of Association cannot be altered

1. Name
2. Object
3. situation
4. liability

Question-30. __________ means the total amount of called up share capital which is actually paid to the company by the members

1. nominal capital
2. reserve capital
3. called up capital
4. Paid-up capital

Question-31. The company needs to obtain prior permision from central government when it changes the address of its registered office from

1. one city to another city
2. with in the same city
3. one state to another
4. one country to another country

Question-32. If a company is instructed to change its name which resembles the name of an existing company then the company can change the name by

1. Passing a special resolution
2. obtaining permission from central government
3. Passing an ordinary resolution
4. Both a & b

Question-33. The shares of a _______________ company can be freely transferable

1. Private ltd
2. Public ltd
3. Partnership
4. all of the above

Question-34. For example Par value is Rs10 and it is issued at Rs15 then Rs5 is the ___________ amount

1. Profit
2. Market value
3. dividend
4. premium

Question-35. Stages in the formation of a public company are in the following order

1. Promotion, Commencement of Business, Incorporation, Capital Subscription
2. Incorporation, Capital Subscription. Commencement of Business, Promotion
3. Promotion, Incorporation, Capital Subscription, Commencement of Business
4. Capital Subscription, Promotion, Incorporation, Commencement of Business

Question-36. If the company can make arrangements for raising the capital privately so that pubic appeal is unnecessary, the company is required to prepare a _________________

1. Prospectus
2. statement in lieu of Prospectus
3. certificate of Prospectus
4. none of the above

Question-37. _________ are the company created by special act of the legislature

1. Registered company
2. Public Ltd Company
3. Private ltd company
4. Statutory company

Question-38. The certificate of capital will be issued by

1. Registrar of companies Act
2. Controller of companies Act.
3. Registrar of capital issues
4. controller of capital issues

Question-39. Application for approval of name of a company is to be made to

1. SEBI
2. Registrar of Companies
3. Government of India
4. Government of the State in which Company is to be registered

Question-40. “Men may come and men may go but the company exist”- this explains which characteristics of the company as per companies Act 1956

1. Separate legal entity
2. Perpetual Succession
3. Capacity to sue
4. None of the above

Question-41. The liability of the members of the company can be limited by

1. Share
2. Guarantee
3. Both a & b
4. Neither a nor b

Question-42. Which of the following is not a clause of memorandum of association

1. situation
2. capital
3. subscription
4. directors

Question-43. The company will be considered as separate person and different from its members from the date (when the) _____________

1. start of business
2. Apply for registration
3. receive incorporation certificate
4. mentioned in certificate

Question-44. If the proposed nominal capital is more than 25 lakh at the time of incorporation then the company needs to submit ________________ along with the application

1. statement of capital
2. certificate of incorporation
3. certificate of capital
4. certificate of incorporation

Question-45. A company is known as the _______company of another company if it has control over that other company.

1. subsidiary
2. holding
3. controlling
4. statutory

Question-46. ___________ cannot give invitation to the public to subscribe for any shares in or debentures of the company

1. Subsidiary company
2. Statutory Company
3. Private company
4. Registered company