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11th Grade > Business Studies

FORMATION OF A COMPANY MCQs

Total Questions : 30 | Page 1 of 3 pages
Question 1.


The rules and regulations regarding internal management are known as ____ and come under ____.


  1.     Doctrine of indoor management under AOA
  2.     Doctrine of indoor management under MOA
  3.     Procedures under AOA
  4.     Procedures under MOA
 Discuss Question
Answer: Option A. -> Doctrine of indoor management under AOA
:
A

It is seen in the AOA where the rules and regulations regarding the internal management are also known as the doctrine of indoor management.


Question 2.


Companies hire ____ to circulate the prospectus to the public.


  1.     Brokers
  2.     Underwriters
  3.     Board of Directors
  4.     None of the above
 Discuss Question
Answer: Option A. -> Brokers
:
A

Companies hire brokers to circulate the prospectus to the public.


Question 3.


The Statutory Declaration is to be signed by ____.


  1.     Chartered Accountant or a Company Secretary or a Cost Accountant
  2.     One of the directors
  3.     Either A or B
  4.     Both A and B
 Discuss Question
Answer: Option D. -> Both A and B
:
D

The Statutory Declaration is to be signed by a Chartered Accountant or a Company Secretary or a Cost Accountant and one of the directors.


Question 4.


Identification of business opportunity refers to producing a new product or service only. 


  1.     True
  2.     False
  3.     Either A or B
  4.     Both A and B
 Discuss Question
Answer: Option B. -> False
:
B

Identification of business opportunity refers to producing a new product or service, or an already existing product through a different channel.


Question 5.


Which is the main document of a company?


  1.     MOA
  2.     AOA
  3.     Either A or B
  4.     Neither A nor B
 Discuss Question
Answer: Option A. -> MOA
:
A

Memorandum of Association (MOA) is the main document of a company. It defines the objectives of the company.


Question 6.


Private companies cannot raise funds from the public.


  1.     True
  2.     False
  3.     Board of Directors
  4.     None of the above
 Discuss Question
Answer: Option A. -> True
:
A

Private companies cannot raise funds from the public unlike public companies.


Question 7.


A private company mentions Pvt. Ltd after its name, what does a public company mention?


  1.     So and So Company Ltd.
  2.     So and So Company Pub. Ltd.
  3.     So and So Company 
  4.     None of the above
 Discuss Question
Answer: Option A. -> So and So Company Ltd.
:
A

A private company needs to mention 'Pvt. Ltd' after its name and a public company mentions only 'Ltd'.


Question 8.


Which of the following step involves the formation of a company as a separate legal entity?


  1.     Promotion
  2.     Commencement
  3.     Incorporation
  4.     Subscription of capital
 Discuss Question
Answer: Option C. -> Incorporation
:
C

Incorporation is the stage which forms a company as a separate legal entity. 


Question 9.


Which represents the right order for the formation of a public company?


1. Capital Subscription
2. Promotion
3. Incorporation
  1.     1-2-3
  2.     3-2-1
  3.     2-3-1
  4.     2-1-3
 Discuss Question
Answer: Option C. -> 2-3-1
:
C

Formation of a public company takes place in the order of promotion, corporation followed by capital subscription.


Question 10.


A company has 2 lakh shares of which Abid owns 1.5 lakh shares and his friend Basu owns 50,000 shares. This is mentioned in which clause of the MOA?


  1.     Capital clause
  2.     Objects clause
  3.     Liability clause
  4.     None of the above
 Discuss Question
Answer: Option A. -> Capital clause
:
A

This is mentioned in the capital clause of the MOA.


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