Commerce MCQs
Topic Notes: Commerce
MCQs and preparation resources for competitive exams, covering important concepts, past papers, and detailed explanations.
Plato
- Biography: Ancient Greek philosopher (427–347 BCE), student of Socrates and teacher of Aristotle, founder of the Academy in Athens.
- Important Ideas:
- Theory of Forms
- Philosopher-King
- Ideal State
41
Under the Companies Act, which specific section mandates penalties for the failure to maintain the register of directors' shareholdings?
Answer:
307
Section 307 of the Companies Act (historically referenced in various jurisdictions) specifically requires companies to maintain a register of directors' shareholdings. Failure to comply with this statutory requirement regarding the disclosure of interests in shares or debentures by directors attracts specific penalties as prescribed by the Act.
42
Which of the following actions does not constitute an alteration of share capital under corporate law?
Answer:
Paid offpaid up capital in excess of needs of the company
Alteration of share capital typically involves changing the structure of the existing capital, such as consolidating, sub-dividing, or converting shares. Paying off capital in excess of needs is a reduction of capital, which is a distinct legal process requiring court approval or specific regulatory compliance, and is not considered a mere alteration of capital.
43
Which regulatory body oversees mergers and acquisitions of firms in India?
Answer:
Competition Commission of India
The Competition Commission of India (CCI) is the chief national competition regulator in India. It is a statutory body within the Ministry of Corporate Affairs and is responsible for enforcing the Competition Act, 2002. Its primary mandate is to prevent activities that have an appreciable adverse effect on competition in India, which includes the regulation of mergers and acquisitions.
44
Which of the following statements regarding company law and share capital are correct?
Answer:
1 and 2
Statement 1 is generally accepted in legal contexts regarding charge crystallization. Statement 2 reflects common corporate governance practices where a single director is appointed as Managing Director. Statement 3 is a standard principle of company law, as shares are distinct units while stock is a consolidated form of fully paid-up shares, allowing conversion from shares to stock but not vice versa.
45
What type of resolution is required for a company to be wound up by the Tribunal?
Answer:
special resolution
Winding up a company is a significant corporate action that fundamentally alters the entity's existence. Under corporate law, such a decision requires a special resolution, which typically necessitates a supermajority (usually 75%) of the shareholders' votes to ensure that the decision has broad support among the owners.
46
In the context of company liquidation, what is a contributory?
Answer:
a shareholder
A contributory is defined under company law as any person liable to contribute to the assets of a company in the event of its being wound up. This primarily refers to shareholders who hold partly paid-up shares, as they are obligated to pay the remaining unpaid capital.
47
Who is responsible for determining the remuneration of the auditor of a Government company, given that the auditor is appointed by the C&AG?
Answer:
The shareholders
In the case of a Government company, while the Comptroller and Auditor General (C&AG) appoints the auditor, the company's shareholders in a general meeting are typically responsible for fixing the auditor's remuneration, as per the governing corporate laws.
48
What does the term 'compulsory winding-up' refer to in corporate law?
Answer:
the Tribunal
Compulsory winding-up, also known as winding-up by the court or tribunal, occurs when a company is ordered to be liquidated by a judicial authority. This typically happens due to insolvency, failure to hold statutory meetings, or other legal violations. Unlike voluntary winding-up, which is initiated by members or creditors, compulsory winding-up is a legal mandate enforced by the Tribunal.
49
Which legal framework defines the duties and responsibilities of a company's statutory auditors?
Answer:
Companies Act, 1956
The duties of statutory auditors are mandated by the governing corporate legislation, such as the Companies Act. These laws ensure that auditors maintain independence and perform their duties in accordance with established accounting and auditing standards. While the appointment is made by the company, the scope of the auditor's legal duty is defined by statute.
50
To which regulatory authority must the Limited Liability Partnership (LLP) agreement be submitted in India?
Answer:
To Registrar
Under the Limited Liability Partnership Act, 2008, every LLP is required to file its incorporation documents and subsequent agreements with the Registrar of Companies (ROC), who acts as the designated authority for maintaining records and ensuring compliance for LLPs within their respective jurisdiction.