Tag: basis of classification of business activities

Questions Related to basis of classification of business activities

The first general meeting of the company is the statutory meeting.
elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

  1. True

  2. False

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Correct Option: A
Explanation:

Statutory meeting is the first meeting of the shareholders of the company. it must not be held only once in a lifetime of a company . Hence the first general meeting of the company is the statutory meeting. 

Select the correct option:

______ is the proposal put before the meeting for discussion and decision.

elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

  1. Resolution

  2. Motion

  3. Amendment

  4. All of above

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Correct Option: B
Explanation:

A motion is a topic or subject proposed as a basis of dis­cussion. Since a member at a meeting formally introduces or moves a subject for discussion it is called a motion. With the permission of the chairman a motion is moved by an individual. He ‘secures the floor’, addresses the chairman and makes a short speech in support of the motion.

Immediately after that another member stands up and ‘seconds’ it. A motion when seconded is called a proposal and it is before the meeting. If no one seconds a motion, it ‘falls to the ground’ and no discussion takes place on it. A formal motion like ‘point of order’ or a motion by the chairman does not require seconding.

Minimum number of members to remain present for a valid meeting is the quorum.
elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

  1. True

  2. False

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Correct Option: A
Explanation:

True, the minimum number of members to remain present for a valid meeting is the quorum. It is the minimum acceptable level of individuals with a vested interest in a company needed to make the proceedings of the meeting valid.

Meeting must be duly convened and properly constituted.
elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

  1. True

  2. False

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Correct Option: A
Explanation:

True, the general meeting is under the control of the chairman , who must concentrate on the punctilious conduct of the meeting. 

It is vital that the general meeting must be properly convened, constituted and conducted.T
he administrative arrangement for a meeting should be carefully planned.


Agenda is useful to the chairman of the meeting.
elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

  1. True

  2. False

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Correct Option: A
Explanation:

This statement is a True due to the following reasons : 

(i) Agenda means a list of items to be done at the meeting. 
(ii) It enables the meeting to discuss the business matters clearly, explicitly and without omission.
(iii) It is a programme of the meeting. 
(iv) It is prepared by the secretary in consultation with the chairman. 
(v) It is a guideline to the chairman of meeting. 
(vi) It enables the chairman to conduct the business of the meeting in an orderly manner. 
(vii) Routine matters which can be discussed and decided in less times are arranged first in the serial order, after that special business or time consuming matters.
(viii) This makes easy for the chairman to go through it and discuss on the matters. 
(ix) As the agenda is sent before the meeting, the members present can think over the items. 
(x) Members can prepare themselves for the meeting and actively participate in the meeting.

List of things to be done at the meeting is the agenda.
elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

  1. True

  2. False

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Correct Option: A
Explanation:

True, an agenda is the list of meeting activities in the order in which they are to be taken up , beginning with the call to order and ending with adjournment. It usually includes one or more specific items of business to be acted upon.

The directors are agents, trustees and managing partners of a company.
elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

  1. True

  2. False

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Correct Option: A
Explanation:

True, Directors are appointed or elected member who has the responsibility for determining and implementing the company's policies . They are agents, trustees and managing partners of a company. 

All resolutions must be registered with registrar of Companies. 

elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

  1. True

  2. False

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Correct Option: B
Explanation:
Section 192 of Companies Act, 1956, talks about "Registration of certain resolutions and agreements."

(1) A copy of every resolution (together with a copy of the statement of material facts annexed under section 173 to the notice of the meeting in which such resolution has been passed) or agreement to which this section applies shall, within thirty days after the passing or making thereof, be printed or typewritten and duly certified under the signature of an officer of the company and filed with the Registrar who shall record the same.

(2) Where articles have been registered, a copy of every resolution referred to in sub-section (1) which has the effect of altering the articles and a copy of every agreement referred to in that sub-section for the time being in force shall be embodied in or annexed to every copy of the articles issued after the passing of the resolution or the making of the agreement.

(3) Where articles have not been registered, a printed copy of every resolution or agreement referred to in sub-section (1) shall be forwarded to any member at his request, on payment of one rupee.

(4) This section shall apply to

(a) special resolutions ;

(b) resolutions which have been agreed to by all the members of a company, but which, if not so agreed to, would not have been effective for their purpose unless they had been passed as special resolutions ;

(c) any resolution of the Board of directors of a company or agreement executed by a company, relating to the appointment, re-appointment or renewal of the appointment, or variation of the terms of appointment, of a managing director ;

(e) resolutions or agreements which have been agreed to by all the members of any class of shareholders but which, if not so agreed to, would not have been effective for their purpose unless they had been passed by some particular majority or otherwise in some particular manner ; and all resolutions or agreements which effectively bind all the members of any class of shareholders though not agreed to by all those members ;

(ee) resolutions passed by a company

(i) according consent to the exercise by its Board of directors of any of the powers under clause (a), clause (d) and clause (e) of sub-section (1) of section 293 ;

(ii) approving the appointment of sole selling agents under section 294 or section 294AA ;

(f) resolutions requiring a company to be wound up voluntarily passed in pursuance of sub-section (1) of section 484 ; and

(g) copies of the terms and conditions of appointment of a sole selling agent appointed under section 294 or of a sole selling agent or other person appointed under section 294AA.

(5) If default is made in complying with sub-section (1), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to two hundred rupees for every day during which the default continues.

(6) If default is made in complying with sub-section (2) or (3), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to one hundred rupees for each copy in respect of which default is made.

(7) For the purposes of sub-sections (5) and (6), the liquidator of a company shall be deemed to be an officer of the company.

State the following statement is True or False:

Under Companies Act,1956 a director need not disclose  information to the board about his directorship in other companies.

elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

  1. True

  2. False

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Correct Option: B
Explanation:

This statements is False because of the following reasons:

(i) Under section 275 of the Companies Act,1956 a person cannot hold offices as a directors in more than 15 companies at the same time.

(ii) If a director holds office as a directors in more than fifteen companies at the same time , he shall be punishable with a fine extending upto Rs 5,000/- for each directorship in excess of 15 companies.

(iii) Under section 159 of the Companies Act,1956,every company has to file Annual Returns to the Registrar of Companies.

(iv) All details of the directors have to be stand in the Annual Return.

(v) For this, the secretary has to collect this information from every directors of the company.

(vi) Therefore, every director is required to disclosed details of information of other companies in which they act as directors. 
However some of the provisions are amended according to Companies Act,2013.

State the following statement is True or False:

A director must acquire qualification shares within three months from the date of being appointed as a director in a company.

elements of business fundamentals of business activities characteristics of vocational activities basis of classification of business activities classification of business

  1. True

  2. False

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Correct Option: B
Explanation:

This statement is False, due to the following reasons:

(i) The directors occupy a very important position in the company management.
(ii) They are elected representatives of the shareholder.
(iii) Directors are responsible for decision making , policy farming  and determination of plans.
(iv) Directions exercise their powers and authorities collectively as a' Board'.
(v) Under Section 270 of the Companies Act 1956, every person  who desire to become a director of the company must purchase qualification shares within a period of 2 months from the date of his appointed.
(vi) However, the nominal value of such share should not exceed Rs.5,000/- 
(vii) The secretary has to correspond in this connection.
(ix) Whenever a Director is appointed,it is the duty of the Secretary to remind him that he has to purchase the qualification share and inform the company accordingly.
So, the Director has to purchase qualification shares within two months and not three months,from the date of his appointment.