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11th Grade > Business Studies

FORMATION OF A COMPANY MCQs

Total Questions : 30 | Page 3 of 3 pages
Question 21.


Which step precedes the allotment of shares? 


  1.     SEBI approval
  2.     Filing of Prospectus
  3.     Incorporation
  4.     Application to Stock Exchange
 Discuss Question
Answer: Option D. -> Application to Stock Exchange
:
D

Application to stock exchange precedes allotment of shares. 


Question 22.


The ___ is the legal document that a company gets on the date of its formation. 


 Discuss Question
Answer: Option D. -> Application to Stock Exchange
:

The certificate of incorporation is the legal document that a company gets on the date of its formation. 


Question 23.


When does a company interact with SEBI?


  1.     Promotion
  2.     Incorporation
  3.     Capital Subscription
  4.     None of the above
 Discuss Question
Answer: Option C. -> Capital Subscription
:
C

A company interacts with SEBI in the capital subscription stage as it is required to raise funds from the public through share subscription. SEBI ensures to protect the interest of shareholders. Thus it is necessary to get the approval of SEBI before going ahead with the capital subscription.


Question 24.


Abid wanted to start a company with the name 'Green Diet' but this name was rejected by ROC. What could be the possible reason(s) behind the rejection?


  1.     Green Diet is the name of an existing company 
  2.     The name doesn't adhere to the character limit
  3.     The name closely resembles with the name of an existing company
  4.     The name is misleading from its actual business
 Discuss Question
Answer: Option C. -> The name closely resembles with the name of an existing company
:
A, C, and D

Registrar of Companies does an in-depth research to ensure that the submitted names are not copied, resemble an existing company or misleading from the actual business. Hence, options A, C, and D are the correct options.


Question 25.


As per SEBI, what is the time period for business to apply to be listed on the stock exchange after share subscription?


  1.     10 weeks
  2.     1 week
  3.     5 weeks
  4.     No specific time period
 Discuss Question
Answer: Option A. -> 10 weeks
:
A

As per SEBI, application to be listed on stock exchange has to be done within 10 weeks of share subscription else it will be considered expired.


Question 26.


Appointment of professionals is not a compulsory function of a promoter.


  1.     True
  2.     False
  3.     The name closely resembles with the name of an existing company
  4.     The name is misleading from its actual business
 Discuss Question
Answer: Option B. -> False
:
B

It is compulsory to ensure all the documentation work goes smoothly. This can happen with a friend who is a professional or hiring a professional.


Question 27.


Identify the missing function(s) from the following functions of a promoter:


Identification of business opportunity


Feasibility studies


Name Approval


Fixing up Signatories to the MOA


  1.     Appointment of Professional
  2.     Preparation of necessary documents
  3.     Either A or B
  4.     Both A and B
 Discuss Question
Answer: Option D. -> Both A and B
:
D

The missing functions of a promoter in the given list are the appointment of professional, and preparation of necessary documents.


Question 28.


Which of the following is considered to be the 'Terms and Conditions'?


  1.     Consent of Proposed Directors
  2.     Agreement
  3.     Statutory Declaration
  4.     Receipt of Payment of fee
 Discuss Question
Answer: Option C. -> Statutory Declaration
:
C

The Statutory Declaration is the document which is considered to be the 'Terms and Conditions'.


Question 29.


Samsung decides to release a new version in Samsung Galaxy note series after studying the scope of its profitability in the long run. Name the study taken by Samsung.


  1.     Economic feasibility study
  2.     Technical feasibility study
  3.     Financial feasibility study
  4.     All of the above
 Discuss Question
Answer: Option A. -> Economic feasibility study
:
A

Samsung did an economic feasibility study to understand the profitability of the new release in the long run.


Question 30.


The ______ is a declaration that all the documents submitted and information shared is true to the best of the knowledge of the promoters.


  1.     Statutory declaration
  2.     Mandatory declaration
  3.     Signatory declaration
  4.     Shareholder declaration
 Discuss Question
Answer: Option A. -> Statutory declaration
:
A

The statutory declaration is a declaration that all the documents submitted and information shared is true to the best of the knowledge of the promoters.


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