The Companies Act, 2013 – MCQ on Business Law with Answers

Students should practice The Companies Act, 2013 – CA Foundation Business Law MCQ Questions with Answers based on the latest syllabus.

The Companies Act, 2013 – Business Law MCQ Questions with Answers

1. In which case the principle of corporate veil was ignored by the courts:
(a) Determination of character of the company
(b) For protection of revenue of the Government
(c) For prevention of fraud or improper conduct
(d) All of these
Answer:
(d) All of these

2. A company is incorporated in India, but all its members are the Americans. Such company is:
(a) An Indian company
(b) An American company
(c) An illegal association
(d) A government company
Answer:
(a) An Indian company

3. A company cannot be treated as a citizen, yet it has its:
(a) Nationality
(b) Domicile
(c) Residence
(d) All of these
Answer:
(d) All of these

The Companies Act, 2013 – MCQ on Business Law with Answers

4. Which of the following is called the charter of a company?
(a) Prospectus
(b) Articles of Association
(c) Memorandum
(d) Certificate of Incorporation
Answer:
(c) Memorandum

5. Which of the following tables in Schedule I of the Act does not contain any prescribed form of Memorandum?
(a) F
(b) B
(c) E
(d) D
Answer:
(a) F

6. How many fundamentals clauses are contained in the Memorandum of a company?
(a) 4
(b) 5
(c) 6
(d) 7
Answer:
(c) 6

7. Under the Registered office clause, a company has to give the name of the:
(a) Town
(b) Village
(c) District
(d) State
Answer:
(d) State

8. Acts done by a company ‘beyond its powers’ are termed:
(a) Intra vires
(b) illegal
(c) ultra vires
(d) none of these.
Answer:
(c) ultra vires

9. The regulations contained in which of the following Tables are also called ‘articles’:
(a) A
(b) B
(c) C
(d) none of these.
Answer:
(d) none of these.

10. Articles of Association are the regulator of the behaviour of:
(a) Creditors
(b) Directors and officers
(c) Suppliers
(d) Outside public
Answer:
(b) Directors and officers

The Companies Act, 2013 – MCQ on Business Law with Answers

11. Articles of Association are subordinate to:
(a) Prospectus
(b) Board of Directors
(c) Memorandum and Companies Act
(d) None of these
Answer:
(c) Memorandum and Companies Act

12. Which of the following documents contains bye- laws that govern the internal management of a company:
(a) Memorandum
(b) Articles
(c) Prospectus
(d) All of these
Answer:
(c) Prospectus

13. Registration of Articles of Association is compulsory for which of the following companies:
(a) Unlimited companies
(b) Companies limited by guarantee
(c) Private companies limited by shares
(d) All of these
Answer:
(d) All of these

14. Which of the following companies may or may not frame (register) their articles of association
(a) Unlimited companies
(b) Private companies limited by shares
(c) Companies limited by guarantee
(d) None, all has to have its own articles.
Answer:
(d) None, all has to have its own articles.

15. The Articles of association must be signed by:
(a) All the directors
(b) All the promoters
(c) The auditors
(d) All the subscribers of the memorandum
Answer:
(d) All the subscribers of the memorandum

16. Which of the following is the necessary condition in case of the Articles of a company:
(a) Be printed
(b) Be divided into paragraphs numbered consecutively
(c) Be signed by each subscriber of the Memorandum
(d) All of these.
Answer:
(d) All of these.

17. Memorandum and Articles of a company are:
(a) Private documents
(b) Public documents
(c) Government documents
(d) All of the above
Answer:
(b) Public documents

18. Under the doctrine or rule of ‘constructive notice’ which of the following persons are presumed to have read the Memorandum and the Articles:
(a) Members
(b) Directors
(c) Outsiders
(d) Officers of the company
Answer:
(c) Outsiders

19. The benefit of the Doctrine of Indoor Management is available only to the:
(a) Directors
(b) Shareholders
(c) Officers of the company
(d) Outsiders
Answer:
(d) Outsiders

The Companies Act, 2013 – MCQ on Business Law with Answers

State Whether The Following are True or False:

  1. ‘Patel & Co.’ is a company in the eyes of the law.
  2. A company has its own distinct entity.
  3. If the members composing a company die or dissociate themselves from the company, such company gets annihilated along with.
  4. The creditors of a company can sue its members for the debts of the company.
  5. A company being an artificial person cannot own property and cannot sue or be sued.
  6. A private company need not have its own Articles.
  7. A company limited by guarantee cannot have share capital.
  8. A company that does not hold more than 50% of total share capital of another company, may still be a holding company of that another one.
  9. A Government company is that company of which all the share are held by the Government.
  10. A licenced company can be registered with limited liability without adding the word ‘Limited’ to its name.
  11. A ‘one-man company’ is a legal entity in the eyes of the law.
  12. Memorandum is the basic document facilitating the incorporation of a company.
  13. It is not necessary for a company to mention the actual address of its registered office in the Memorandum.
  14. The domicile and nationality of a company are determined on the basis of its registered office.
  15. The acts ultra vires the directors are null and void and therefore cannot be ratified by the shareholders.
  16. The transactions ultras vires the Memorandum can be ratified by the unanimous consent of all the shareholders.
  17. Articles are rules framed for governing the internal affairs of the company.
  18. Articles are bye-laws for the general administration of a company.
  19. Memorandum is subsidiary to articles.
  20. No form has been prescribed for the articles of companies in the Act.
  21. Memorandum and articles bind the company to its members, and also each member to the company inter se.
  22. Memorandum and articles are public documents open to public inspection.
  23. An outsider dealing with a company is presumed to have knowledge of the provisions of its memorandum and articles.
  24. An outsider dealings with a company has a rights to assume that its internal management has no irregularity.

Answer:

  1. False
  2. True
  3. False
  4. False
  5. False
  6. False
  7. False
  8. True
  9. False
  10. True
  11. True
  12. True
  13. True
  14. True
  15. False
  16. False
  17. True
  18. True
  19. False
  20. False
  21. True
  22. True
  23. True
  24. True

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