Tag: formation and promotion of a company

Questions Related to formation and promotion of a company

A body of elected representatives of shareholders of a company is called ______________.
business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

  1. Board of Directors

  2. Managing Directors

  3. Secretary

  4. None of these

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Correct Option: A
Explanation:
Shareholders elect a team of members that represent the interests of shareholders and manages the company on behalf of the shareholders. They collectively form the Board of Directors which is headed by the Chairman or Chairperson.
Managing Director is the key managerial personnel of a company who represents the company and takes relevant and crucial decisions for the company. Managing Director is granted with powers to manage, by the Board.
Company Secretary is also a key managerial personnel of a company who is a link between the Board of Directors, shareholders, and government/regulatory authorities. He/She ensures that the procedures are followed and reviewed regularly, besides providing guidance on the responsibilities of Directors and Chairman.
The auditors are appointed for a period of _______at a time.
business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

  1. one year

  2. two years

  3. three years

  4. four years

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Correct Option: A
Explanation:

According to Section 139 of the Companies Act 2013, every Company shall at the First Annual General Meeting appoint an Individual or firm as an Auditor who shall hold office from the conclusion of this meeting until the conclusion of sixth Annual general Meeting.

A person who is qualified to carry out audit work of a company is called _____________.
business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

  1. Auditor

  2. Secretary

  3. Director

  4. None of these

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Correct Option: A
Explanation:
1.An auditor is the person who prepares an independent report for the shareholders of the company. He/She is given the powers to audit the books of accounts of the company. A person shall be eligible for appointment as an auditor of a company only if he is a Chartered Accountant.
2.Company Secretary is also a key managerial personnel of a company who is a link between the Board of Directors, shareholders, and government/regulatory authorities. He/She ensures that the procedures are followed and reviewed regularly, besides providing guidance on the responsibilities of Directors and Chairman.
3.Director is the managerial personnel of a company who represents the company and takes relevant and crucial decisions for the company.

The Registrar of Companies is appointed by the _________.

business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

  1. State Government

  2. Central Government

  3. Local Government

  4. None of these

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Correct Option: B
Explanation:

The Registrar of Companies is appointed by Central Government with the power vested under Section 396 of the Companies Act 2013 the Central Government registrar and additional, joint, deputy, and assistant registrars for various states and union territories in India. Apart from the primary companies incorporated in the respective states and the union territories, Registrar of Companies is also responsible for ensuring that the companies comply with statutory requirements under the said Act .

An auditor has the right to communicate the audit results to _______.

business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

  1. employers

  2. some other auditor

  3. company

  4. a and c

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Correct Option: C
Explanation:

An auditor is the person who does the audit of the company. He makes the financial statements of the company. He communicates the audit results tot he company so that the company may know about the frauds and errors in the statement.

DIN is a unique identification number for _______.

business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

  1. existing director of the company

  2. person intending to become director of the company

  3. existing Chairman of the company

  4. both a and b

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Correct Option: D
Explanation:

DIN is an unique identification number given to an existing or a potential director of any company which is incorporated. Hence, DIN is a unique identification number for existing director of the company and person intending to become director of the company.

Company is defined under which section of the companies act?

business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

  1. Section 3(1)

  2. Section 4(2)

  3. Section 2(4)

  4. Section 1(3)

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Correct Option: A
Explanation:

The company is defined under which section 3(1). 

Management of a business organization should be on compulsory basis in the hands of ________.

business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

  1. shareholders

  2. workers

  3. both a and b

  4. none of the above

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Correct Option: A
Explanation:

Shareholders are the owners of the business. They look over all the operations of the business. They are simply managers of the business. Hence, the management of a business organization should be on compulsory basis in the hands of shareholders.

Maximum number of partners in case of non-banking business is _____.

business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

  1. 100

  2. 20

  3. 30

  4. 40

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Correct Option: A

For several reasons, it is important to determine whether or not a person is a promoter. Which one of the following reasons is not valid?

business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

  1. Promoters owe fiduciary duties to the unformed company.

  2. Promoters are subject to certain provisions contained in the Companies Act.

  3. Promoters may be liable for acts entered into on behalf of the unformed company.

  4. Promoters who sign their name on behalf of an unformed company can face criminal liability if the company is not subsequently fully incorporated.

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Correct Option: D
Explanation:

Promoter means a person—

 (a) who has been named as such in a prospectus or is identified by the Company in the annual return referred to in section 92; or
 (b) who has control over the affairs of the Company, directly or indirectly whether as a shareholder, director or otherwise; or

 (c) in accordance with whose advice, directions or instructions the Board of Directors of the Company is accustomed to act
 (d) Promoters owe fiduciary duties to the unformed company.
 (e) Promoters may be liable for acts entered into on behalf of the unformed company.