Tag: elements of business

Questions Related to elements of business

State whether the following statement are True or False:
A group of elected/appointed representatives of shareholders who manage a company are called the board of directors.

elements of business classification of human activities characteristics of business activities economic and non-economic activities human activities - commercial and non-commercial activities

  1. True

  2. False

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Correct Option: A
Explanation:

True , board of directors are a group of elected officials who are representatives of the shareholders and take the management decisions on their behalf.

State  the following statement is True of False:

Directors are the owners of the company.

elements of business classification of human activities characteristics of business activities economic and non-economic activities human activities - commercial and non-commercial activities

  1. True

  2. False

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Correct Option: B
Explanation:

Stockholders own shares in companies, which makes them collective owners. They elect a board of directors to lead their companies and look out for their investment interests. Boards have a legal responsibility to govern on behalf of the stockholders and help companies prosper.

State  the following statement is True of False:

A share warrant holder is the member of the company.

elements of business classification of human activities characteristics of business activities economic and non-economic activities human activities - commercial and non-commercial activities

  1. True

  2. False

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Correct Option: B
Explanation:

This Statements is False , due to the following reasons:

(i) A share warrant is a document that gives the holder, the right to buy share at a fixed price at a given future date.

(ii) A member is a person whose name appears in the Register of Members. He may not necessarily be shareholder or a share warrant holder of the company.

(iii) A share warrant is a documents title of share. A person holding share warrant becomes the owner of the shares mentioned in the documents.

(iv) A share warrant  holder is a shareholder of the company. However he is not a member as name does not appear in the register of members.

State  the following statement is True of False:

A Managing Director is appointed for a period of 5 years.

elements of business classification of human activities characteristics of business activities economic and non-economic activities human activities - commercial and non-commercial activities

  1. True

  2. False

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Correct Option: A
Explanation:

True.

A Managing Director is someone who is responsible for the daily operations of the company, organization or corporate division. 
As a  member of senior management, the managing director the managing director is also expected to keep a company solvent and to promote expansion and innovation within the industry. Managing Director is appointed for a period of five years.

State  the following statement is True of False:

An auditor prepares the books of account. 

elements of business classification of human activities characteristics of business activities economic and non-economic activities human activities - commercial and non-commercial activities

  1. True

  2. False

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Correct Option: B
Explanation:

This Statements is False because of the following reasons:


(i) An auditor is a person who checks the accounts prepared by a company.
(ii) An auditors must be a chartered accountant in additions to his normal qualification.

(iii) The auditors has a right to correct and alter the accounts prepared by a company.
(iv) He has also a right to make alterations in the method of accounting.
(v) It is also his duty to state, whether or not the balance sheet and the profit and loss a/c indicate a true and fair view on the state of company affairs at the end of the financial year and are in agreement with the books of account and returns.
(vi) An accountant is in charge of the account and cash department of the company.
(vii) He has to maintain accurately the different book of account and registers as per the provisions in the Companies Act,1956.
(viii) he is answerable to the Board as regards the over all working of his department.
(ix) It is the accountant who prepares the books of account and not the auditor.

State the following statement is True or False:
A person who gives guarantee of raising minimum subscription is an underwriter.

elements of business classification of human activities characteristics of business activities economic and non-economic activities human activities - commercial and non-commercial activities

  1. True

  2. False

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Correct Option: A
Explanation:

True, underwriting is an act of guarantee by an organisation or an individual for the sale of certain minimum amount of shares and debentures issued by a public limited company . Underwriting acts as a guarantee against danger of not receiving minimum subscription . In absence of underwriting agreement , there will always be uncertainty of subscription of shares . The guarantee of the underwriters removes the uncertainity. 

The winding up proceedings of a company are conducted by the official liquidator.

elements of business classification of human activities characteristics of business activities economic and non-economic activities human activities - commercial and non-commercial activities

  1. True

  2. False

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Correct Option: A
Explanation:

True.

An official liquidator is the person responsible for the winding up proceedings of a company at the time of liquidation of the company.

State  the following statement is True of False:

The Company Secretary is the member of the company.

elements of business classification of human activities characteristics of business activities economic and non-economic activities human activities - commercial and non-commercial activities

  1. True

  2. False

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Correct Option: A
Explanation:

True. 

The company secretary is the member of the company as he is responsible for the efficiency administration of the company.
A company secretary is an important organ of a company who performs various ministerial and administrative duties. It is mandatory for every company having a paid up share capital of 5 crore or more to appoint full-time company secretary who is member of Institute of company secretaries of India.

The chairman must be present within 15 minutes from the scheduled time of the meeting.
elements of business classification of human activities characteristics of business activities economic and non-economic activities human activities - commercial and non-commercial activities

  1. True

  2. False

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Correct Option: A
Explanation:

The chairman should be present within the 15 minutes from the schedule of the meeting . in case of his absence a director should take the charge of the meeting present in the meeting shall choose one of their member to be chairperson of the meeting

Proxy must be a member of the company.

elements of business classification of human activities characteristics of business activities economic and non-economic activities human activities - commercial and non-commercial activities

  1. True

  2. False

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Correct Option: B
Explanation:

This statements is a  False due to the following reasons:

(i) Proxy is a person appointed by a member of a public company to attend and vote on his behalf in the General Meeting.
(ii) The representative of an absent member is called proxy.
(iii)proxy is an instrument by which the appointment of a person is made i.e. proxy form atleast 48 hours before the meeting.
(iv) According to the provision of the Act a notice convening meeting must state that a member  entitled to attend and vote at a meeting is entitled to appoint a proxy to attend and vote instead of himself and proxy need not be a member.
(v) A proxy is not authorised to speak at meeting.
So a proxy need not be a member of the company.