MCQs on Company Act Part 5

Q.1:- The Regional Director shall invite applications from persons interested in getting empanelled as mediator or conciliator every year during the month of February and update the Panel which shall be effective from:

• 1st of April of every year
• 1st of June of every year
• 1st of March of every year
• 1st of May of every year

Q.2:- Who is to decide the calendar of days of working of Tribunal in a year:

• It shall be as decided by the Chief Justice of the Supreme Court
• It shall be decided by the Central Government.
• It shall be as decided by the President of the Tribunal.
• It shall be as decided by the Chairperson of the Appellate Tribunal.

Q.3:- A party to any proceeding or appeal before the Tribunal or the Appellate Tribunal, as the case may be, may either appear in person or authorize one or more person to present his case before the Tribunal or the Appellate Tribunal, as the case may be

• Company Secretaries
• Cost Accountants/Legal practitioners
• Chartered Accountants
• All the options are correct.

Q.4:- In the case of an order against a person (other than a company) made by the Tribunal or the Appellate Tribunal, in which court, the execution of its orders shall be made:

• Where the person concerned personally works for gain.
• Where the person concerned voluntarily resides
• Where the person concerned carries on business
• All the options are correct.

Q.5:- If any officer or employee of a company wrongfully obtains possession of any property, including cash of the company he shall, be punishable with fine which shall not be less than:

• One lakh rupees but which may extend to three lakh rupees
• One lakh rupees but which may extend to ten lakh rupees
• One lakh rupees but which may extend to two lakh rupees
• One lakh rupees but which may extend to five lakh rupees

Q.6:- An eligible organisation which meets the conditions specified in rule 12 may make an application for recognition as a registered valuers organisation for asset class or classes to the authority in:

• Form B
• Form D
• Form A
• Form C

Q.7:- Who may constitute a Committee to be known as “Committee to advise on valuation matters” to make recommendations on formulation and laying down of valuation standards and policies for compliance by companies and registered valuers:

• The Insolvency and Bankruptcy Board of India
• The Ministry of Corporate Affairs
• The SEBI
• The Central Government

Q.8:- The functions of the National Financial Reporting Authority shall be:

• Monitor and enforce the compliance with accounting standards and auditing standards in such manner as may be prescribed.
• Oversee the quality of service of the professions associated with ensuring compliance with such standards, and suggest measures required for improvement in quality of services and such other related matters as may be prescribed.
• Make recommendations to the Central Government on the formulation and laying down of accounting and auditing policies and standards for adoption by companies or class of companies or their auditors, as the case may be
• All the options are correct.

Q.9:- Where professional or other misconduct is proved, the National Financial Reporting Authority, shall have the power to make order for imposing penalty of:

• Not less than Rs. 1 lakh, but which may extend to five times of the fees received, in case of individuals and not less than Rs. 10 lakh, but which may extend to ten times of the fees received, in case of firms.
• Not less than Rs. 1 lakh, but which may extend to five times of the fees received, in case of individuals and not less than Rs. 9 lakh, but which may extend to ten times of the fees received, in case of firms.
• Not less than Rs. 1 lakh, but which may extend to five times of the fees received, in case of individuals and not less than Rs. 5 lakh, but which may extend to ten times of the fees received, in case of firms.
• Not less than Rs. 1 lakh, but which may extend to five times of the fees received, in case of individuals and not less than Rs. 7 lakh, but which may extend to ten times of the fees received, in case of firms.

Q.10:- How much expenditure a company shall ensure to spend in pursuance of its Corporate Social Responsibility Policy:

• The company shall spend, in every financial year, at least 2% of the average net profits of the company made during the 2 immediately preceding financial years.
• The company shall spend, in every financial year, at least 2% of the average net profits of the company made during the 3 immediately preceding financial years.
• The company shall spend, in every financial year, at least 1% of the average net profits of the company made during the 2 immediately preceding financial years.
• The company shall spend, in every financial year, at least 2% of the average net profits of the company made during the 2 immediately preceding financial years.

Q.11:- Where any other financial information maintained outside the country is required by a director, the director shall furnish a request to the company setting out the full details of the financial information sought, the period for which such information is sought and the company shall produce such financial information to the director 'of the date of receipt of the written request.

• Within 21 fifteen days.
• Within 28 fifteen days.
• Within 7 fifteen days.
• Within 15 fifteen days.

Q.12:- Which Form is to be used for application to Central Government for extension of time for filing particulars of registration of creation 7 modification/ satisfaction of charge OR for rectification of omission or misstatement of any particular in respect of creation/ modification/ satisfaction of charge:

• CHG 8
• CHG 6
• CHG 9
• CHG 7

Q.13:- In case of unlisted companies, the duplicate share certificates shall be issued within a period of_________ and in case of listed companies such certificate shall be issued within __________, from the date of submission of complete documents with the company respectively.

• Sixty days/ three months
• One month/ thirty days
• Forty five days/ three months
• Three months/ forty five days

Q.14:- If a public company without sufficient cause refuses to register the transfer of securities within a period of thirty days from the date on which the instrument of transfer is delivered to the company, what recourse is available to the transferee:

• He may, with in a period of sixty days of such refusal or where no intimation has been received from the company, within sixty days of the delivery of the instrument of transferor intimation of transmission, appeal to the Tribunal.
• He may, within a period of ninety days of such refusal or where no intimation has been received from the company, within ninety days of the delivery of the instrument of transferor intimation of transmission, appeal to the Tribunal.
• He may, with in a period of sixty days of such refusal or where no intimation has been received from the company, within ninety days of the delivery of the instrument of transfer or intimation of transmission, appeal to the Tribunal.
• A. He may, within a period of thirty days of such refusal or where no intimation has been received from the company, within ninety days of the delivery of the instrument of transfer or intimation of transmission, appeal to the Tribunal.

Q.15:- Where a share capital of the company is divided into different classes of shares, the rights attached to the shares of any class may be varied with the consent in writing of the holders of_______ of the issued shares of that class or by means of a special resolution passed at a separate meeting of the holders of the issued shares of that class:

• not less than three-fourths
• not less than one-fourths
• not less than two-fourths
• None of the above

Q.16:- Every member of a company limited by shares and holding equity share capital therein, shall have a right to vote on every resolution placed before the company and his voting right on a poll shall be in proportion to his share in the:

• Issued share capital of the company
• Subscribed equity share capital of the company.
• Paid-up equity share capital of the company.
• Only A and C are correct

Q.17:- The securities premium account shall NOT be applied by the company:

• in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company
• towards the issue of un issued shares of the company to the members of the company as fully paid bonus shares
• in writing of the preliminary expenses in writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company
• in paying the dividend to the share holder

Q.18:- What are the prohibitions for buy-back of its own shares by a company

• No company shall, directly or indirectly, purchase its own shares or other specified securities in case such company has not complied with the provisions of sections 92, 123, 127 and section 129.
• No company shall directly or indirectly purchase its own shares or other specified securities through any subsidiary company including its own subsidiary companies.
• No company shall directly or indirectly purchase its own shares or other specified securities through any investment company or group of investment companies.
• All the options are correct.

Q.19:- The company may charge such fee as the Board thinks fit, not exceeding _________ per certificate issued on splitting or consolidation of share certificate (s) or in replacement of share certificate (s) that are defaced, mutilated, torn or old, decrepit or worn out.

• Rs. 100
• Rs. 200.
• Rs. 50
• Rs.150

Q.20:- Every preference share holder shall have a right to vote on the following resolutions:

• Any resolution for the winding up of the company
• Any resolution for the repayment or reduction of its preference share capital
• Any resolution, which directly affect the rights attached to his preference shares
• All of the above

Q.21:- Every share (except the share held by a person whose name is entered as holder of beneficial interest in such share in the records of a depository in a company having a share capital shall be distinguished by:

• Its distinctive number
• Its alfa- numeric number
• Its serial number
• Its consecutive number

Q.22:- What are the penal provisions for a company, if any default is made in complying with the provisions relating to transfer and transmission of securities:

• The company shall be punishable with tine which shall not be less than thirty- five thousand rupees but which may extend to five lakh rupees.
• The company shall be punishable with fine which shall not be less than forty thousand rupees but which may extend to five lakh rupees.
• The company shall be punishable with fine which shall not be less than fifteen thousand rupees but which may extend to five lakh rupees.
• The company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees.

Q.23:- What is the penal provision if a company or its officers makes a default in complying the requirement of Section 60 (1) Relating to the publication of authorised, subscribed and paid-up capital:

• The company shall be liable to pay a penalty of Rs.1000 and every officer of the company who is in default shall be liable to pay a penalty of Rs.500, for each default.
• The company shall be liable to pay a penalty of Rs.10000 and every officer of the company who is in default shall be liable to pay a penalty of Rs.5000, for each default.
• The company shall be liable to pay a penalty of Rs.100000 and every officer of the company who is in default shall be liable to pay a penalty of Rs.50000, for each default.
• The company shall be liable to pay a penalty of Rs.5000 and every officer of the company who is in default shall be liable to pay a penalty of Rs.10000, for each default.

Q.24:- What is NOT the essential requirement for issue of equity shares with differential rights:

• The shares with differential rights shall not exceed twenty-six percent of the total post-issue paid up equity share capital including equity shares with differential rights issued at any point of time.
• The company may issue equity shares with differential rights upon expiry of five years from the end of the financial year in which such default was made good.
• The articles of association of the company authorizes the issue of shares with differential rights.
• The issue of shares is authorized by an Special resolution passed at a general meeting of the share holders.

Q.25:- What is the penalty if a company and any officer of the company who contravenes the provisions of section 64 (1) relating to the notice to be given to Registrar for alteration of share capital:

• the company or any of its officers who contravenes the provisions of section 64(1) shall be punishable with fine which may extend to Rs.1000 for each day during which such default continues, or Rs.5 lakh rupees, whichever is less.
• The company or any of its officers who contravenes the provisions of section 64(l) shall be punishable with fine which may extend to The Rs.5000 for each day during which such default continues, or Rs.5 lakh rupees, whichever isless.
• The company or any of its officers who contravenes the provisions of section 64 (1) shall be punishable with fine which may extend to Rs.500 for each day during which such default continues, or Rs.5 lakh rupees, whichever is less.
• The company or any of its officers who contravenes the provisions of section 64 (l) shall be punishable with fine which may extend to Rs.2000 for each day during which such default continues, or Rs.5 lakh rupees, whichever is less.

Q.26:- What are the penal provisions if a person contravenes the order of the Tribunal under section 58:

• He shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.
• He shall be punishable with imprisonment for a term which shall not be less than four year but which may extend to three years and with fine which shall not be less than one lakh rupees rupees but which may extend to five
• He shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.
• He shall be punishable with imprisonment for a term which shall not be less than two years but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.

Q.27:- What are the penal provisions for officers of the company, if any default is made in complying with the provisions relating to transfer and transmission of securities:

• Every officer of the company who is in default shall be punishable with fine which shall not be less than twenty thousand rupees but which may extend to one lakh rupees
• Every officer of the company who is in default shall be punishable with fine which shall not be less than fifteen thousand rupees but which may extend to one lakh rupees.
• Every officer of the company who is in default shall be punishable with fine which shall not be less than five thousand rupees but which may extend to one lakh rupees.
• Every officer of the company who is in default shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees.

Q.28:- What recourse is available, where the holders of not less than ten percent of the issued shares of a class did not consent to variation of shareholders’ right or vote in favour of the special resolution fort the variation:

• They may apply to the Central Government to have the variation cancelled.
• They may apply to the Registrar to have the variation cancelled.
• They may apply to the Tribunal to have the variation cancelled.
• They may apply to the SEBI to have the variation cancelled

Q.29:- A duplicate certificate of shares shall NOT be issued, if such certificate:

• Has been defaced, mutilated or tom and As surrendered to the company
• Have been lost or destroyed
• Only A and B are correct
• Has been sold, but the seller has not received full consideration

Q.30:- What is the nature of shares or debentures or other interest of any member in a company:

• It shall be immovable property transferable in the manner provided by the articles of the company.
• It shall be immovable property not transferable in the manner provided by the articles of the company.
• It shall be movable property transfer able in the manner provided by the articles of the company.
• It shall be movable property not transferable.

Q.31:- How much commission a company may pay to any person in connection with the subscription to its shares:

• It shall not exceed five percent of the price at which the shares are issued or a rate, authorized by the articles, whichever is higher.
• lt shall not exceed five percent of the price at which the shares are issued or a rate authorized by the articles, whichever is less.
• It shall not two and a half five percent of the price at which the shares are issued or a rate authorized by the articles, whichever is less.
• It shall not two and a half five percent of the price at which the shares are issued or a rate authorized by the articles, whichever is higher.

Q.32:- The amount payable on application on every security shall ______________ of the nominal amount of the security or such other percentage or amount, as may be specified by the Securities and Exchange Board by making regulations in this behalf.

• not be less than 5 percent
• not be less than 10 percent
• not be less than 3 percent
• not be less than 7 percent

Q.33:- What is the ‘civil liability’ form is- statement in the prospectus:

• The company and the concerned person shall be liable to pay compensation to every person who has sustained such loss or damage and such compensation shall be shared by the company and the concerned persons.
• Only the company shall be liable to pay compensation to every person who has sustained such loss or damage.
• Only the concerned persons shall be liable to pay compensation to every person who has sustained such loss or damage
• The company and the concerned person shall be liable to pay compensation to every person who has sustained such loss or damage.

Q.34:- When a company proposing to make an offer of securities may issue a red herring prospectus:

• It may be issued before any right/ bonus issue
• It may be issued after to the issue of a prospectus.
• It may be issued prior to the issue of a prospectus.
• It may be issued any time in lieu of a prospectus.

Q.35:- Whenever a company having a share capital makes any allotment of its securities, the company shall,__________ thereafter, file with the Registrar a return of allotment in Form PAS-3, along with the fee as specified in the Companies (Registration Offices and Fees) Rules, 2014.

• Within 45 days
• Within 60 days
• Within 15 days
• Within 30 days

Q.36:- What are the conditions for issue of GDR are:

• The company shall take prior approval of its share holders by a special resolution to be passed at a general meeting.
• The depository receipts shall be issued by an overseas depository bank appointed by the company and the underlying shares shall be kept in the custody of a domestic custodian bank.
• The Board of Directors of the company intending to issue depository receipts shall pass a resolution authorizing the company to do so.
• All of above.

Q.37:- Private placement offers shall be made only to such persons whose names are recorded by the company prior to the invitation to subscribe, and that such persons shall receive the offer by name, and that a complete record of such offers shall be kept by the company in such manner as may be prescribed. In how many days the complete information about such offer shall be filed with the Registrar

• Within a period of forty five days of circulation of relevant private placement offer letter.
• Within a period of sixty days of circulation of relevant private placement offer letter.
• Within a period of thirty days of circulation of relevant private placement offer letter.
• Within a period of fifteen of circulation of relevant private placement offer letter.

Q.38:- In the case of issue of securities under private placement If the company is not able to allot the securities within 60 days from the date of receipt of the application money, it shall repay the application money to the subscribers within fifteen days from the date of completion of sixty days and if the company fail store pay the application money within the afore said period, it shall be liable to repay that money with interest. What shall be the rate of interest:

• 12% p.a.
• 18% p.a.
• 24% p.a.
• 06% p.a.

Q.39:- What is quantum of penalty in case of any default under section 39 (3) or 39(4):

• The company and its officer who is in default shall be liable to a penalty, for each default, of one thousand rupees for each day during which such default continues or one lakh rupees, whichever is less.
• The company and its officer who is in default shall be liable to a penalty, for each default, of one thousand rupees for each day during which such default continues or one lakh rupees, whichever is higher.
• Only the company is in default shall be liable to a penalty, for each default, of one thousand rupees for each day during which such default continues or one lakh rupees, whichever is less.
• Only the officer (s) of the company, who is in default shall be liable to a penalty, for each default, of one thousand rupees for each day during which such default continues or one lakh rupees, whichever is less.

Q.40:- If the stated minimum amount has not been subscribed and the sum payable on application is not received _________from the date of issue of he prospectus, or such other period as may be specified by the Securities and Exchange Board, the amount received under shall be returned within such time and manner as may be prescribed

• within a period of 30 days
• within a period of 40 days
• within a period of 10 days
• within a period of 20 days

Q.41:- Allotment of any securities of a company offered to the public for subscription shall be made provided:

• The minimum amount as decided by the Board of Directors has been subscribed and the sums payable on application for the amount so stated have been paid to and received by the company.
• The minimum amount as prescribed by the Stock Exchange (s) has been subscribed and the sums payable on application for the amount so stated have been paid to and received by the company.
• The minimum amount as decided by the share holders in the General Meetings has been subscribed and the sums payable on application for the amount so stated have been paid to and received by the company.
• The amount stated in the prospectus as the minimum amount has been subscribed and the sums payable on application for the amount so stated have been paid to and received by the company.

Q.42:- Where any notice, advertisement or other official publication, or any business letter, bill head or letter paper of a company contains a statement of the amount of the authorized capital of the company, such notice, advertisement or other official publication, or such letter, bill head or letter paper shall also contain a statement, in an equally prominent position and in equally conspicuous characters, of the following:

• The amount of the subscribed capital'
• The amount of paid-up capital
• The amount for feited and re-issued capital
• Only A and B are correct

Q.43:- Where a company redeems any redeemable preference shares the company shall file a notice in the prescribed form with the Registrar within a period of thirty days of such alteration or increase or redemption, as the case may be, along with an altered memorandum. Which of the following form is to be used for this purpose:

• SH6
• SH8
• SH5
• SH7

Q.44:- The provisions of the Companies (Share Capital and Debentures) Rules, 2014 shall apply to:

• Listed companies so far as they do not contradictor conflict with any other regulation framed in this regard by the Securities and Exchange Board of India.
• All unlisted public companies
• All private companies
• All of the above

Q.45:- In which Form the aj deposit just deed shall be executed atleast seven days before issuing the circular or circular in the form of advertisement:

• Form DPT-3
• Form DPT-1
• Form DPT-4
• Form DPT-2

Q.46:- Every company shall keep a register of charges in Form No.CHG.7 and enter there in particulars of all the charges registered with the Registrar on any of the property, assets or undertaking of the company and the particulars of any property acquired subject to a charge as well as particulars of any modification of a charge and satisfaction of charge.

• At its Registered Office
• At its Head Office
• At its Corporate Office
• At its Branch Office

Q.47:- Which Form is to be used for registration of creation, modification of charge (other than debentures):

• CHG 7
• CHG 9
• CHG 5
• CHG 1

Q.48:- In which Form a listed company shall file a return in the with the Registrar with respect to change in the number of shares held by promoters and top ten shareholders of such company:

• MGT 11
• MGT10
• MGT 8
• MGT 9

Q.49:- Every annual general meeting shall be called during business hours: What are the business hours:

• Between 10 a.m. and 7 p.m.
• Between 11 a.m. and 8 p.m.
• Between 8 a.m. and 5 p.m.
• Between 9 a.m. and 6 p.m.

Q.50:- When the Board of Directors of a company, having a share capital, can call the extra ordinary general meeting of the shareholders:

• The Board shall at the requisition made by such number of members who hold on the date of requisition, not less than l/20th of the authorized share capital of the company as on that date carries the right of voting.
• The Board shall at the requisition made by such number of members who hold on the date of requisition, not less than l/20th of the paid-up share capital of the company as on that date carries the right of voting.
• The Board shall at the requisition made by such number of members who hold on the date of requisition, not less than one-tenth of the authorized share capital of the company as on that date carries the right of voting.
• The Board shall at the requisition made by such number of members who hold on the date of requisition, not less than one-tenth of the paid-up share capital of the company as on that date carries the right of voting.