#2201

Under what conditions may a company re-issue shares that have been previously forfeited?

(a) a discount

(b) all of the above

(c) face value

(d) premium

Explanation: A company is legally permitted to re-issue forfeited shares at a premium, at par (face value), or at a discount. However, if issued at a discount, the amount of the discount must not exceed the amount previously forfeited on those specific shares, ensuring the company does not suffer a net loss on the transaction.

#2202

Under IFRS 8, under what conditions may an entity aggregate operating segments into a single reportable segment?

(a) Yes, if the operating segments share the majority of the aggregation criteria listed in this IFRS

(b) Yes, if the operating segments have similar economic characteristics

(c) All of the above

(d) Yes, if the operating segments do not meet the quantitative thresholds

Explanation: IFRS 8 allows the aggregation of operating segments if they exhibit similar economic characteristics and share similar performance profiles. Furthermore, segments that do not meet the quantitative thresholds (10% tests) can be combined if they meet the aggregation criteria. Therefore, all the provided options represent valid scenarios under which management may aggregate segments for reporting purposes.

#2203

Through which channels may a company offer its shares for sale?

(a) Self

(b) Underwriters

(c) All of the above

(d) Stock Exchange

Explanation: Companies have multiple avenues to distribute shares. They can list on a Stock Exchange for public trading, engage Underwriters to guarantee the subscription of shares, or manage the issuance process themselves through private placements or direct offers to existing shareholders. Each method serves different capital raising strategies depending on the company's size and regulatory requirements.

#2204

According to the Companies Act, from which sources may a company redeem its preference shares?

(a) Out of profits available for dividend

(b) All are correct

(c) Partially from available profits and partially from issue of new shares

(d) From the issue of new shares

Explanation: Preference shares can be redeemed using profits that would otherwise be available for dividend distribution, or by issuing fresh shares specifically for the purpose of redemption. A combination of both methods is also legally permissible under corporate law to ensure the company maintains sufficient capital adequacy.

#2205

Which financial instrument may a company issue specifically for the purpose of redeeming preference shares?

(a) equity shares

(b) debentures at premium

(c) bonds

(d) fixed deposits certificates

Explanation: According to corporate accounting standards, preference shares can be redeemed out of the proceeds of a fresh issue of shares made for that purpose. This ensures that the company's capital base remains intact. Issuing equity shares is a common method to generate the necessary liquidity for redemption while maintaining the company's solvency and compliance with legal requirements regarding share capital.

#2206

Which sources may be utilized to provide for the premium payable on the redemption of preference shares?

(a) capital reserve account

(b) securities premium account

(c) general reserve account

(d) All of these

Explanation: According to standard corporate accounting practices, the premium payable on the redemption of preference shares must be provided out of the company's profits (such as general reserves or surplus) or out of the company's share premium account. Since all listed options represent valid sources for this specific purpose under various regulatory frameworks, 'All of these' is the correct choice.

#2207

Under what specific circumstance may a company be compulsorily wound up by the Tribunal?

(a) the company does not commence its business within 6 months of its incorporation

(b) company is unable to pay its debts

(c) the company passes an ordinary resolution to this effect

(d) number of members reduced below 7 in the case of a private company

Explanation: A company is considered insolvent if it is unable to pay its debts as they fall due. This is a primary ground for compulsory winding up by the Tribunal, as it protects the interests of creditors and ensures an orderly distribution of the company's remaining assets.

#2208

According to the Competition Act, 2002, what is the mandatory waiting period in days after providing notice to the Competition Commission of India (CCI) before an enterprise may proceed with a combination?

(a) 210 days

(b) 180 days

(c) 60 days

(d) 240 days

Explanation: Under the Competition Act, 2002, enterprises proposing a combination must notify the Competition Commission of India. The Act stipulates a waiting period of 210 days from the date of notice, during which the combination cannot take effect, allowing the Commission sufficient time to investigate and assess the potential impact on market competition.

#2209

What are the recognized methods by which a company may be wound up?

(a) By the order of the court

(b) By all the above methods

(c) Under the supervision of the court

(d) Voluntarily

Explanation: A company can be wound up through various legal processes, including voluntary winding up by members or creditors, compulsory winding up by a court order, or winding up under the supervision of the court. These methods ensure that the company's affairs are settled and its assets are distributed according to legal requirements.

#2210

If a company's Articles of Association are silent regarding the interest rate on calls in arrears, what is the maximum rate directors may charge?

(a) 5.5% per annum

(b) 6% per annum

(c) 6.5% per annum

(d) 5% per annum

Explanation: Under standard corporate regulations, if the Articles of Association do not specify a rate for interest on calls in arrears, the default rate is typically set at 5% per annum. This ensures that the company is compensated for the delay in receiving capital contributions from shareholders who have failed to pay their dues on time.

#2211

At what stage of the winding-up process may a tribunal appoint an official liquidator to act in a provisional capacity?

(a) after making the winding-up order

(b) after dissolution

(c) before the statutory meeting

(d) after the presentation of petition for winding up

Explanation: A provisional liquidator is appointed to protect the company's assets from the time a winding-up petition is filed until the final winding-up order is issued. This appointment is a protective measure to ensure that the company's property is preserved and not dissipated while the court considers the petition for liquidation. It is a temporary measure that ceases once the final order is passed.

#2212

Under what conditions may the President of India remove the Chief Information Commissioner from office?

(a) Only 3 and 4

(b) Only 1 and 3

(c) All 1, 2, 3, 4

(d) Only 1 and 4

Explanation: The Chief Information Commissioner can be removed if they are adjudged insolvent, engage in paid employment outside their official duties, become physically or mentally unfit, or are found guilty of proved misbehavior or incapacity. These provisions ensure the integrity and independence of the office.

#2213

Through which channels may a Public Information Officer receive applications under transparency laws?

(a) 1, 3 and 4

(b) 1, 2 and 4

(c) 1, 2 and 3

(d) All of the above

Explanation: Public Information Officers are mandated to accept applications submitted through various formal channels, including direct hand-delivery, electronic mail, transfers from other authorities, or via Assistant Public Information Officers, to ensure accessibility.

#2214

Under the Companies Act, what is the maximum number of companies in which an individual may hold the position of a director simultaneously?

(a) 7 companies

(b) 20 companies

(c) 1 company

(d) 10 companies

Explanation: According to the Companies Act, a person is restricted from holding the office of director in more than 20 companies at any given time. This limit is designed to ensure that directors can dedicate sufficient time and attention to their duties in each organization, thereby promoting better corporate governance and accountability within the corporate sector.

#2215

What is the legal limit on the number of companies in which an individual may serve as a managing director simultaneously?

(a) 2

(b) 4

(c) 5

(d) 1

Explanation: Corporate governance regulations typically restrict the number of directorships to ensure that individuals can dedicate sufficient time and attention to their duties. Under many jurisdictions, an individual is limited to serving as a managing director for a maximum of two companies at any given time to prevent conflicts of interest and ensure effective management.

#2216

According to the Companies Act, 2013, what is the maximum number of companies in which an individual may serve as a director?

(a) No such number is fixed

(b) 20 companies

(c) 15 companies

(d) 5 companies

Explanation: Section 165 of the Companies Act, 2013, imposes a limit on the number of directorships an individual can hold simultaneously. This provision is designed to ensure that directors can devote sufficient time and attention to their duties. The Act specifies that a person cannot hold the position of director in more than 20 companies at any given time.

#2217

Under Section 151 of the Companies Act, how many directors may a listed company elect to represent 'small shareholders', defined as those holding shares with a nominal value not exceeding twenty thousand rupees?

(a) two directors elected by such small shareholders

(b) no such directors are required

(c) one director nominated by board of directors

(d) one director elected by such small shareholders

Explanation: Section 151 of the Companies Act provides a mechanism for the appointment of a small shareholders' director. A listed company may, upon notice from small shareholders, appoint one director elected by them. This provision is designed to protect the interests of minority shareholders by ensuring they have representation on the board, provided the prescribed conditions regarding the number of shareholders and their shareholding value are met.

#2218

Under what circumstances may the members of a company initiate a voluntary winding up?

(a) after seeking guidelines from RoC

(b) both A and B

(c) if the company passes a special resolution for winding up of the Company

(d) the company in general meeting passes a resolution requiring the company to be wound up voluntarily as a result of the expiry of the period of its duration, if any, fixed by its articles of association or on the occurrence of any event in respect of which the articles of association provide that the company should be dissolved

Explanation: Voluntary winding up is a process initiated by the shareholders. This can occur through a special resolution passed by the members or automatically upon the expiry of the company's fixed duration or the occurrence of a specific event stipulated in the articles of association. Both scenarios provide a legal basis for members to decide to dissolve the entity voluntarily.

#2219

BDL Ltd is preparing a cash budget for the year ending 31 March. Sales are: March Rs 60,000, April Rs 70,000, May Rs 55,000, June Rs 65,000. 40% of sales are cash. Of credit sales, 70% pay in the next month (2% discount), 27% pay in the second month, and 3% are bad debts. Calculate the cash inflow for May.

(a) Rs. 86,620

(b) Rs. 60,532

(c) Rs. 61,120

(d) Rs. 66,532

Explanation: May cash inflow includes: 40% of May sales (22,000), 70% of April credit sales (60% of 70,000 = 42,000) minus 2% discount (42,000 * 0.98 = 41,160 * 0.7 = 28,812), and 27% of March credit sales (60% of 60,000 = 36,000 * 0.27 = 9,720). Summing these: 22,000 + 28,812 + 9,720 = 60,532.

#2220

Which category of investors provides long-term capital to entrepreneurial ventures while accepting the significant risk that the project may fail?

(a) Progress

(b) Multiple

(c) Mega

(d) Venture

Explanation: Venture capital investors specialize in providing funding to startups and small businesses that exhibit high growth potential but also carry high risk. These investors are typically long-term partners who provide capital in exchange for equity, accepting the possibility of total loss if the entrepreneurial venture does not succeed.

May 2025 Current Affairs MCQs & Solutions