Tag: promotion and formation of a company

Questions Related to promotion and formation of a company

The Company Law Board has set up ________ regional offices.

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. four

  2. six

  3. seven

  4. eight

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Correct Option: B
Explanation:

The Company Law Board has set up six regional offices across the country to regulate different regions.

Every company has it's own Articles of Association. 
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. True

  2. False

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Correct Option: B
Explanation:
(i) Articles of Association states the rules and regulations of a company. 
(ii) It is framed for internal management of the company. 
(iii) It deals with the rights of the members of company. 
(iv) Articles are subordinate to the Memorandum of Association. 
(v) It states the relationship between the company and its members, staff, etc. (vi) Articles of Association defines how the business of the company should be carried on. 
(vii) Articles of Association are governed by Memorandum of Association. 
(viii) The Articles of Association being an important document is required to be filed with the Registrar of Companies. 
(ix) The preparation and filing of Articles of Association is compulsory in case of Private Limited Company by guarantee and an Unlimited Company. 

Who is the head of Company Law Board?

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. Chairman

  2. President

  3. Governor

  4. None of these

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Correct Option: A
Explanation:

Chairman is the head of the company law board. Hon'ble Chief Justice Shri Mahesh Mittal Kumar is the Chairman at present. 

Write a word or a term or a phrase which can substitute the statement:
The authority that has right to issue incorporation certificate to the company.

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. An official liquidator

  2. Regional Director

  3. Registrar of Companies

  4. None of these

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Correct Option: C
Explanation:

The Registrar of Companies (ROC) is an office under the Indian Ministry of Corporate Affairs that deals with administration of the Companies Act 1956 and Companies Act, 2013. There are currently 22 Registrars of Companies (ROC) operating from offices in all major states of India

Select the correct option given below :

Remuneration paid to the Managing Director shall not exceed ___ of the net profit.

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. 5 %

  2. 10 %

  3. 11 %

  4. 15%

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Correct Option: A
Explanation:

Managerial Persons covered are Managing Director, Whole-time  Director, Part time Directors and managers who shall be paid remuneration subject to and in accordance with provisions of Section 197 of the Companies Act, 2013. As compared to various sections and chapters viz section 198, 309, etc of Companies Act, 1956 which deals with Managerial remunerations separately, the new Act has solved this issue by consolidating all provisions under a single provision of 197. According to  Companies Act, 2013 remuneration paid to the managing director shall not be exceed 5% of the net profit. 

The policies of a company are framed 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. Secretary

  2. Managing Director

  3. Board of Directors

  4. None of these

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Correct Option: C
Explanation:

The policies of a company are framed by the Board of Directors. The board of directors have a very defined role and responsibilities within the business organisation. The board has the responsibility of developing a governance system for a business i.e they make the policies of the organisation.

The maximum term at a time for appointment of managing director is _________ year. 
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. two

  2. three

  3. five

  4. six

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Correct Option: C
Explanation:

The maximum term for the appointment of a director is five year. An independent director can be appointed for a period of consecutive five years. Such directors can be re appointed after passing a special resolution by the board for a period of another five years.

The persons or the body of the persons appointed to inspect the books of accounts of the company are called _______ of a company.

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. Directors

  2. Secretary

  3. Auditors

  4. None of these

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Correct Option: C
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 shall be qualified to be appointed as an auditor of a Company only if he is a Chartered Accountant. Such an auditor is given with the powers to inspect the accounts of the company to make sure that the financial statements give a true and fair few of the transactions.

A person who is purchases share of the 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. Manager

  2. Secretary

  3. Shareholder

  4. Director

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Correct Option: C
Explanation:

Shareholder is a person that owns shares of a company. They can be equity shareholders or preference shareholders. A person who purchases share of he company is called a shareholder.

One who acts as a manager and as a Director is 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. Board of directors

  2. Secretary

  3. Managing Director

  4. None of these

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Correct Option: C
Explanation:
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.
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.
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.