Free MCQs
Company Law, 2013 MCQs Set-1
16 min read
Download Company Law Set-1 MCQs PDF
1. The Companies Act, 2013 is:
a. Act No. 25 of 2013
b. Act No. 18 of 2013
c. Act No. 15 of 2012
d. Act No. 21 of 2013
2. The Companies Act, 2013 received assent on:
a. 15th August, 2013
b. 26th January, 2013
c. 29th August, 2013
d. 1st April, 2014
3. The Companies Act, 2013 was enacted in the ______ Year of the Republic of India.
a. Sixtieth
b. Sixty-second
c. Sixty-third
d. Sixty-fourth
4. The Companies Act, 2013 was enacted by:
a. Supreme Court
b. Parliament
c. SEBI
d. Central Vigilance Commission
5. The object of the Companies Act, 2013 is:
a. To consolidate and amend the law relating to companies
b. To regulate criminal procedure
c. To govern partnership firms
d. To regulate banking transactions only
6. The short title of the Act is:
a. Indian Companies Code, 2013
b. Corporate Regulation Act, 2013
c. Companies Act, 2013
d. Company Governance Act, 2013
7. The Companies Act, 2013 consists of:
a. 450 Sections and 25 Chapters
b. 470 Sections and 29 Chapters
c. 480 Sections and 30 Chapters
d. 500 Sections and 32 Chapters
8. The Companies Act, 2013 extends to:
a. Whole of Asia
b. Whole of India
c. Union Territories only
d. States only
9. Which provision of the Companies Act, 2013 came into force at once?
a. Entire Act
b. Section 1 only
c. Section 135 only
d. Section 149 only
10. Remaining provisions of the Companies Act, 2013 come into force on dates appointed by:
a. Supreme Court
b. Parliament
c. Central Government by notification in Official Gazette
d. SEBI
11. Different dates may be appointed for:
a. Different provisions of the Act
b. Different directors
c. Different shareholders
d. Different courts
12. The Companies Act, 2013 applies to companies incorporated:
a. Only under Companies Act, 2013
b. Only under previous company law
c. Under this Act or any previous company law
d. Outside India only
13. The Companies Act, 2013 applies to insurance companies except where inconsistent with:
a. Insurance Act, 1938
b. IRDA Act, 1999
c. Both A and B
d. RBI Act
14. The Companies Act, 2013 applies to banking companies except where inconsistent with:
a. Reserve Bank of India Act
b. Banking Regulation Act, 1949
c. Negotiable Instruments Act
d. FEMA
15. The Companies Act, 2013 applies to companies engaged in generation or supply of electricity except where inconsistent with:
a. Electricity Act, 2003
b. Electricity Board Rules only
c. Environment Protection Act
d. SEBI Act
16. Central Government may specify applicability of Companies Act to certain body corporates by:
a. Circular
b. Resolution
c. Notification
d. Ordinance
17. “Appellate Tribunal” is defined under:
a. Section 2(4)
b. Section 2(5)
c. Section 2(20)
d. Section 2(90)
18. “Appellate Tribunal” means:
a. National Company Law Tribunal
b. Securities Appellate Tribunal
c. National Company Law Appellate Tribunal
d. Debt Recovery Tribunal
19. National Company Law Appellate Tribunal is constituted under:
a. Section 408
b. Section 410
c. Section 149
d. Section 270
20. “Articles” is defined under:
a. Section 2(4)
b. Section 2(5)
c. Section 2(20)
d. Section 2(56)
21. “Articles” means the articles of association of a company as originally framed or:
a. Dissolved
b. Altered from time to time
c. Converted into memorandum
d. Registered abroad
22. “Company” is defined under:
a. Section 2(20)
b. Section 2(42)
c. Section 2(54)
d. Section 2(69)
23. “Company” means a company incorporated under:
a. This Act only
b. Previous company law only
c. This Act or any previous company law
d. Foreign law only
24. “Foreign company” is defined under:
a. Section 2(20)
b. Section 2(42)
c. Section 2(47)
d. Section 2(90)
25. A foreign company means a company incorporated:
a. In India
b. Outside India
c. Under special Act only
d. By State Government only
26. A foreign company must have:
a. No place of business in India
b. Place of business in India
c. Registered office in India compulsorily
d. Indian shareholders only
27. “Independent director” is defined under:
a. Section 2(42)
b. Section 2(47)
c. Section 2(54)
d. Section 2(69)
28. “Independent director” refers to director under:
a. Section 149(6)
b. Section 135
c. Section 96
d. Section 270
29. “Managing director” is defined under:
a. Section 2(47)
b. Section 2(54)
c. Section 2(56)
d. Section 2(69)
30. A managing director is entrusted with:
a. Judicial powers
b. Audit powers
c. Substantial powers of management
d. Legislative powers
31. “Memorandum” is defined under:
a. Section 2(54)
b. Section 2(56)
c. Section 2(69)
d. Section 2(90)
32. “Promoter” is defined under:
a. Section 2(47)
b. Section 2(54)
c. Section 2(69)
d. Section 2(90)
33. A promoter includes a person named as such in:
a. Memorandum
b. Prospectus
c. Articles
d. Share certificate
34. A promoter includes a person who has control over affairs of company:
a. Directly or indirectly
b. Through court only
c. Through Registrar only
d. Through auditors only
35. A person in accordance with whose advice the Board is accustomed to act may be treated as:
a. Auditor
b. Promoter
c. Liquidator
d. Creditor
36. A person acting merely in professional capacity shall:
a. Be treated as promoter
b. Not be treated as promoter
c. Become managing director
d. Become contributory
37. “Tribunal” means:
a. National Company Law Appellate Tribunal
b. Securities Appellate Tribunal
c. National Company Law Tribunal
d. Supreme Court
38. National Company Law Tribunal is constituted under:
a. Section 408
b. Section 410
c. Section 149
d. Section 270
39. “Winding up” is defined under:
a. Section 2(90)
b. Section 2(94A)
c. Section 270
d. Section 272
40. “Winding up” includes liquidation under:
a. Banking Regulation Act, 1949
b. SEBI Act
c. Insolvency and Bankruptcy Code, 2016
d. Insurance Act, 1938
41. Corporate legal personality means:
a. Company and members are the same person
b. Company has no legal existence
c. Company is a separate legal entity distinct from its members
d. Company exists only during the life of shareholders
42. Which of the following is regarded as the first feature of corporate personality?
a. Common seal
b. Perpetual succession
c. Independent corporate existence
d. Transferability of shares
43. The case which established the principle of separate legal entity is:
a. Foss v Harbottle
b. Ashbury Railway Carriage Co. v Riche
c. Donoghue v Stevenson
d. Salomon v Salomon & Co. Ltd.
44. In Salomon v Salomon & Co. Ltd., it was held that:
a. Company has no legal personality
b. Shareholders and company are the same
c. Company is a separate legal person
d. Directors are owners of company assets
45. One effect of independent corporate existence is that:
a. Company property belongs to shareholders personally
b. Company cannot sue or be sued
c. Company can hold property in its own name
d. Directors become owners of company debts
46. Which of the following is the second feature of corporate personality?
a. Perpetual succession
b. Limited liability of members
c. Common seal
d. Transferability of shares
47. The principle of limited liability means:
a. Members have unlimited personal liability
b. Company has no liability
c. Liability of members is limited
d. Directors are never liable
48. Which of the following is described as an exceptional feature of corporate personality?
a. Designed seal
b. Share warrant
c. Perpetual succession
d. Share certificate
49. Perpetual succession means:
a. Company depends upon life of members
b. Company continues despite changes in membership
c. Company ends on resignation of directors
d. Company has temporary existence
50. A company has the capacity:
a. Only to sue
b. Only to be sued
c. Neither to sue nor be sued
d. To sue and to be sued
51. The doctrine of lifting of corporate veil is an exception to:
a. Doctrine of indoor management
b. Separate legal entity of company
c. Doctrine of ultra vires
d. Constructive notice
52. The concept of corporate veil was primarily established in:
a. Foss v Harbottle
b. Ashbury Railway Carriage Co. v Riche
c. Salomon v Salomon & Co. Ltd.
d. Royal British Bank v Turquand
53. Lifting of corporate veil means:
a. Dissolution of company
b. Ignoring the separate legal personality of company
c. Transfer of company property
d. Conversion of company into partnership
54. The corporate veil may be lifted on:
a. Judicial grounds only
b. Statutory grounds only
c. Both judicial and statutory grounds
d. Contractual grounds only
55. Which of the following is not a judicial ground for lifting corporate veil?
a. Prevention of fraud
b. Tax evasion
c. Agency or trust
d. Perpetual succession
56. Under the statutory exception relating to reduction in membership, the corporate veil may be lifted when:
a. Profits are reduced
b. Number of members falls below the statutory minimum
c. Share capital increases
d. Directors resign
57. Under the Companies Act, liability for debts of the company may arise if the number of members falls below:
a. 7 in private company and 2 in public company
b. 5 in public company and 3 in private company
c. 7 in public company and 2 in private company
d. 10 in public company and 5 in private company
58. The case of Lee v Lee’s Air Farming Ltd. is associated with:
a. Doctrine of ultra vires
b. Separate legal entity of company
c. Prospectus liability
d. Indoor management
59. In Lee v Lee’s Air Farming Ltd., the court recognized that:
a. Company and member are identical
b. Directors cannot be employees
c. A company has separate legal personality from its members
d. Shareholders are personally liable
60. Gilford Motor Co. Ltd. v Horne is a landmark case relating to:
a. Transfer of shares
b. Perpetual succession
c. Lifting of corporate veil
d. Prospectus
61. In Gilford Motor Co. Ltd. v Horne, the corporate veil was lifted to prevent:
a. Tax payment
b. Fraud or improper conduct
c. Share transfer
d. Winding up
62. The case of Associated Rubber Industry v Associated Rubber Industry is connected with:
a. Avoidance of welfare legislation
b. Transferability of shares
c. Misleading prospectus
d. Share warrant
63. On the basis of incorporation, companies may be classified into:
a. Private and public companies
b. Statutory and foreign companies
c. Statutory companies and registered companies
d. Guarantee and unlimited companies
64. Which of the following is an example of a statutory company?
a. Partnership firm
b. One Person Company
c. RBI
d. Private tuition firm
65. Registered companies are incorporated under:
a. Indian Penal Code
b. Transfer of Property Act
c. Special resolution only
d. Companies Act, 2013 or previous company law
66. Companies incorporated with ROC fall under the category of:
a. Statutory companies
b. Registered companies
c. Unlimited associations
d. Foreign companies
67. On the basis of liability, companies may be classified into:
a. Public and private companies
b. Registered and statutory companies
c. Unlimited companies, companies limited by guarantee and companies limited by shares
d. Government and foreign companies
68. In an unlimited liability company:
a. Members have no liability
b. Liability of members is unlimited
c. Liability is limited by shares only
d. Liability is limited by guarantee only
69. In unlimited liability companies, members are liable for company debts:
a. In proportion to their respective interest in the company
b. Only during incorporation
c. Only for one year
d. Only with court permission
70. In a company limited by guarantee, liability of members is limited to:
a. Amount unpaid on shares
b. Total company debts
c. Amount undertaken in memorandum to contribute on winding up
d. Amount fixed by directors
71. The liability in a company limited by guarantee arises in the event of:
a. Incorporation
b. Transfer of shares
c. Board meeting
d. Winding up
72. In a company limited by shares, liability of members is limited to:
a. Amount unpaid on shares held by them
b. Amount mentioned by directors
c. Total company assets
d. Unlimited personal assets
73. On the basis of registration and number of members, companies are classified into:
a. Statutory and registered companies
b. Private company, public company and One Person Company
c. Foreign and government companies
d. Holding and subsidiary companies
74. Section 3(1) of the Companies Act, 2013 provides for formation of company for:
a. Illegal purpose
b. Religious purpose only
c. Any lawful purpose
d. Charitable purpose only
75. A public company may be formed by:
a. One person
b. Two or more persons
c. Seven or more persons
d. Five persons only
76. A private company may be formed by:
a. Two or more persons
b. Seven or more persons
c. One hundred persons
d. One person only
77. One Person Company may be formed by:
a. Two persons
b. Seven persons
c. Five persons
d. One person
78. According to the content, One Person Company is to be formed as:
a. Public limited
b. Private limited
c. Unlimited company
d. Statutory company
79. Which of the following is not a basis of classification mentioned in the content?
a. Basis of incorporation
b. Basis of liability
c. Basis of registration and number of members
d. Basis of nationality
80. Companies incorporated under previous company law are known as:
a. Unregistered companies
b. Statutory companies
c. Registered companies
d. Foreign companies
81. A private company is what Americans call:
a. Public corporation
b. Close corporation
c. Statutory corporation
d. Foreign corporation
82. A private company is defined under:
a. Section 2(45) of the Companies Act, 2013
b. Section 3(1) of the Companies Act, 2013
c. Section 2(68) of the Companies Act, 2013
d. Section 149 of the Companies Act, 2013
83. A private company must restrict:
a. Right to vote
b. Right to dividend
c. Right to transfer its shares
d. Right to appoint directors
84. Under Section 2(68), the maximum number of members in a private company is:
a. 50
b. 100
c. 200
d. 500
85. In case of a private company, the limit of two hundred members does not apply to:
a. Public company
b. One Person Company
c. Statutory company
d. Government company
86. Where two or more persons hold shares jointly in a private company, they shall be treated as:
a. Two members
b. Three members
c. Separate shareholders
d. A single member
87. Persons in the employment of the company are:
a. Included in number of members
b. Not included in number of members
c. Counted as debenture holders
d. Treated as directors
88. Former employees who became members during employment and continued thereafter shall:
a. Be excluded from number of members
b. Be treated as public shareholders
c. Be counted twice
d. Lose membership
89. A private company prohibits invitation to the public to subscribe for:
a. Loans
b. Deposits only
c. Any securities of the company
d. Company meetings
90. Which of the following is not a characteristic of a private company?
a. Restriction on transfer of shares
b. Prohibition on public invitation for securities
c. Unlimited number of members
d. Maximum limit of two hundred members
91. A private company is required to have:
a. Minimum paid-up share capital as prescribed
b. Minimum turnover only
c. Minimum profit every year
d. Minimum dividend declaration
92. A public company is defined under:
a. Section 2(68)
b. Section 2(71)
c. Section 3(1)
d. Section 149
93. A public company means a company which:
a. Is a private company
b. Has only one member
c. Has unlimited liability only
d. Is not a private company
94. A public company must have:
a. Minimum paid-up share capital as may be prescribed
b. Minimum ten directors
c. Minimum turnover prescribed
d. Minimum profit every year
95. A subsidiary company of a company which is not a private company shall be deemed to be:
a. Foreign company
b. Private company
c. Public company
d. Statutory company
96. A subsidiary company may still be deemed a public company even if:
a. It has no directors
b. It has unlimited liability
c. It is not registered
d. It continues to be a private company in its articles
97. Which of the following is correct regarding a public company?
a. It is not a private company
b. It is defined under Section 2(68)
c. It must always be a subsidiary
d. It cannot have share capital
98. The proviso to Section 2(71) relates to:
a. One Person Company
b. Transfer of shares
c. Misleading prospectus
d. Holding and subsidiary companies
99. A company which is a subsidiary of a company not being a private company shall be deemed to be:
a. Private company only
b. One Person Company
c. Unregistered association
d. Public company
100. Conversion of a private company into a public company may be done by:
a. Alteration of articles
b. Winding up
c. Issue of debentures
d. Transfer of shares
101. Conversion by choice is effected under:
a. Section 2(68)
b. Section 14(1)
c. Section 3(1)
d. Section 149
102. Under Section 14(1), a company may alter its articles by:
a. Ordinary resolution
b. Board resolution
c. Special resolution
d. Unanimous resolution only
103. Alteration of articles may result in conversion of:
a. Only private company into public company
b. Only public company into private company
c. Foreign company into statutory company
d. Private company into public company or public company into private company
104. Conversion by default takes place when:
a. Company changes its name
b. Company violates compulsory provisions under Section 2(68)
c. Company issues bonus shares
d. Company appoints additional directors
105. A company violating the compulsory provisions of Section 2(68) shall be treated as:
a. Government company
b. Statutory company
c. Not being a private company
d. Foreign company
106. If a private company alters its articles so that they no longer include required restrictions and limitations, it shall:
a. Remain a private company
b. Be dissolved automatically
c. Become a dormant company
d. Cease to be a private company
107. Conversion of a public company into a private company requires approval of:
a. Registrar
b. Supreme Court
c. Central Government
d. SEBI
108. Every alteration of articles under Section 14 and order approving alteration shall be filed with:
a. Central Government
b. Registrar
c. Tribunal only
d. Stock Exchange
109. The altered articles and order approving alteration must be filed within:
a. Seven days
b. Thirty days
c. Fifteen days
d. Sixty days
110. An alteration registered under Section 14(2) shall be valid as if:
a. It were originally in the articles
b. It were passed by directors only
c. It were approved by creditors
d. It were part of memorandum only
111. One Person Company is defined under:
a. Section 2(68)
b. Section 2(71)
c. Section 2(62)
d. Section 3(1)
112. Under Section 3(1)(c), a company may be formed by:
a. Seven persons as a public company
b. Two or more persons as a private company
c. One person as a One Person Company
d. Ten persons as an unlimited company
113. A One Person Company may be formed for:
a. Illegal purpose
b. Any lawful purpose
c. Religious purpose only
d. Charitable purpose only
114. A One Person Company is to be formed as:
a. Public company
b. Statutory company
c. Unlimited company
d. Private company
115. For incorporation of a One Person Company, the subscriber shall:
a. Subscribe his name to the memorandum
b. Obtain approval from SEBI
c. Hold statutory meeting first
d. Appoint minimum three directors
116. The memorandum of a One Person Company shall indicate:
a. Name of auditor
b. Name of another person with prior written consent
c. Name of creditor
d. Name of all directors
117. The person named in the memorandum of a One Person Company shall become member in the event of:
a. Transfer of shares
b. Increase of capital
c. Death or incapacity to contract of subscriber
d. Conversion into public company
118. The written consent of the person named in the memorandum shall be filed with:
a. Stock Exchange
b. Tribunal
c. Central Government
d. Registrar
119. The written consent of the nominated person is required:
a. After winding up
b. At the time of incorporation
c. After annual general meeting
d. After issue of shares
120. The nominated person in a One Person Company may:
a. Transfer the company immediately
b. Withdraw his consent in prescribed manner
c. Dissolve the company directly
d. Appoint directors compulsorily
121. The concept of small company was introduced under:
a. Companies Act, 1956
b. Partnership Act
c. Companies Act, 2013
d. Limited Liability Partnership Act
122. The concept of small company was recommended by:
a. Sachar Committee
b. J.J. Irani Committee
c. Bhabha Committee
d. Naresh Chandra Committee
123. Small company is defined under:
a. Section 2(68)
b. Section 2(71)
c. Section 2(62)
d. Section 2(85)
124. A small company means a company other than:
a. Private company
b. Public company
c. Section 8 company
d. Holding company
125. The paid-up share capital of a small company shall not exceed:
a. Fifty lakh rupees or prescribed higher amount not exceeding ten crore rupees
b. One hundred crore rupees
c. Two crore rupees only
d. No prescribed limit
126. The turnover of a small company shall be determined as per:
a. Balance sheet
b. Articles of association
c. Profit and loss account for immediately preceding financial year
d. Board resolution
127. The turnover of a small company shall not exceed:
a. Ten crore rupees
b. Two crore rupees or prescribed higher amount not exceeding one hundred crore rupees
c. Fifty lakh rupees only
d. Unlimited amount
128. Which of the following is excluded from the definition of small company?
a. Private company
b. One Person Company
c. Holding company
d. Registered company