We have compiled NCERT MCQ Questions for Class 11 Business Studies Chapter 7 Formation of a Company with Answers Pdf free download. MCQ Questions for Class 11 Business Studies with Answers were prepared according to the latest question paper pattern. Practicing these Formation of a Company Class 11 Business Studies MCQs Questions with Answers really effective to improve your basics and learn all the key concepts.
Formation of a Company Class 11 MCQs Questions with Answers
Question 1.
Preliminary Contracts are
(a) binding on the Company
(b) binding on the Company, if ratified after incorporation
(c) binding on the Company, after incorporation
(d) not binding on the Company
Answer
Answer: (d) Not binding on the Company
Question 2.
A proposed name of Company is considered undesirable if
(a) It is identical with the name of an existing company
(b) It resembles closely with the name of an existing company
(c) It is an emblem of Government of India, United Nations etc.
(d) In case of any of the above
Answer
Answer: (d) In case of any of the above
Question 3.
The company needs to obtain prior permision from central government when it changes the address of its registered office from
(a) one city to another city
(b) with in the same city
(c) one state to another
(d) one country to another country
Answer
Answer: (c) one state to another
Question 4.
Powers, rights, remuneration, qualification and duties of directors are discussed clearly in
(a) Memorandum of Association
(b) Articles of Association
(c) Prospectus
(d) none of the above
Answer
Answer: (b) Articles of Association
Question 5.
_____________ share capital has priority both in repayment of dividend as well as capital.
(a) Equity
(b) non preference
(c) Preference
(d) all of the above
Answer
Answer: (c) Preference
Question 6.
The Prospectus must be issued to the public within ______________ days of its date
(a) 30
(b) 60
(c) 90
(d) 100
Answer
Answer: (c) 90
Question 7.
___________ cannot give invitation to the public to subscribe for any shares in or debentures of the company
(a) Subsidiary company
(b) Statutory Company
(c) Private company
(d) Registered company
Answer
Answer: (c) Private company
Question 8.
The shares of a _______________ company can be freely transferable
(a) Private ltd
(b) Public ltd
(c) Partnership
(d) all of the above
Answer
Answer: (b) Public ltd
Question 9.
Which of the following clause of Memorandum of Association cannot be altered
(a) Name
(b) Object
(c) situation
(d) liability
Answer
Answer: (d) liability
Question 10.
The company will be considered as separate person and different from its members from the date (when the) _____________
(a) start of business
(b) Apply for registration
(c) receive incorporation certificate
(d) mentioned in certificate
Answer
Answer: (d) mentioned in certificate
Question 11.
A statement of nominal capital must be given at the time of incorporation by the company when the share capital is less than
(a) 50 Lakh
(b) 1 crore
(c) 10 Lakh
(d) 25 Lakh
Answer
Answer: (d) 25 Lakh
Question 12.
The application for registration of a company should be presented to the _______________ of the state appointed under Companies Act 1956
(a) Controller
(b) registrar
(c) Governor
(d) registration officer
Answer
Answer: (b) registrar
Question 13.
Preliminary Contracts are signed
(a) Before the incorporation
(b) After incorporation but before capital subscription
(c) After incorporation but before commencement of business
(d) After commencement of business
Answer
Answer: (a) Before the incorporation
Question 14.
Application for approval of name of a company is to be made to
(a) SEBI
(b) Registrar of Companies
(c) Government of India
(d) Government of the State in which Company is to be registered
Answer
Answer: (b) Registrar of Companies
Question 15.
Private company prohibits any invitation or acceptance of deposits from persons other than its ___________
(a) Members
(b) directors
(c) Partners
(d) banks
Answer
Answer: (a) Members
Question 16.
For example Par value is Rs10 and it is issued at Rs15 then Rs5 is the ___________ amount
(a) Profit
(b) Market value
(c) dividend
(d) premium
Answer
Answer: (d) premium
Question 17.
The dividend payable to ___________ share holders is payable on fixed figure or percent
(a) Equity
(b) non preference
(c) Preference
(d) all of the above
Answer
Answer: (c) Preference
Question 18.
If the company can make arrangements for raising the capital privately so that pubic appeal is unnecessary, the company is required to prepare a _________________
(a) Prospectus
(b) statement in lieu of Prospectus
(c) certificate of Prospectus
(d) none of the above
Answer
Answer: (b) statement in lieu of Prospectus
Question 19.
A private company means a company which has a minimum paid up capital of Rs.————-
(a) 1,00,000
(b) 5,00,000
(c) 50,00,000
(d) none of the above
Answer
Answer: (b) 5,00,000
Question 20.
The liability of the members of the company can be limited by
(a) Share
(b) Guarantee
(c) Both a & b
(d) Neither a nor b
Answer
Answer: (c) Both a & b
Question 21.
If a company is instructed to change its name which resembles the name of an existing company then the company can change the name by
(a) Passing a special resolution
(b) obtaining permission from central government
(c) Passing an ordinary resolution
(d) Both a & b
Answer
Answer: (c) Passing an ordinary resolution
Question 22.
The articles of association needs to be signed by
(a) all proposed directors
(b) registrar
(c) subscribers of memorandum
(d) none of the above
Answer
Answer: (c) subscribers of memorandum
Question 23.
Among the following which documents are not mandatory to be submitted to the registrar along with incorporation application by a private company.
(a) Address of Registered office & undertaking
(b) Undertaking and statement of capital
(c) statement of capital & list of directors
(d) list of directors and statement of capital
Answer
Answer: (a) Address of Registered office & undertaking
Question 24.
The application for registration of a company should be presented to the registrar of the state in which the _______________ of the company is to be situated
(a) Manufacturing plant
(b) first branch
(c) business office
(d) any of the above.
Answer
Answer: (c) business office
Question 25.
Stages in the formation of a public company are in the following order
(a) Promotion, Commencement of Business, Incorporation, Capital Subscription
(b) Incorporation, Capital Subscription. Commencement of Business, Promotion
(c) Promotion, Incorporation, Capital Subscription, Commencement of Business
(d) Capital Subscription, Promotion, Incorporation, Commencement of Business
Answer
Answer: (c) Promotion, Incorporation, Capital Subscription, Commencement of Business
Question 26.
Minimum number of members to form a public company is
(a) 5
(b) 7
(c) 12
(d) 21
Answer
Answer: (b) 7
Question 27.
A person cannot hold directorship in more than ____ public companies
(a) 3
(b) 10
(c) 20
(d) 7
Answer
Answer: (c) 20
Question 28.
__________ means the total amount of called up capital on the shares issued and subscribed by the shareholders on capital account.
(a) Called-up capital
(b) subscribed capital
(c) nominal capital
(d) Paid-up capital
Answer
Answer: (a) Called-up capital
Question 29.
Par value of shares means the __________ value of the shares
(a) Actual
(b) face
(c) Market
(d) dividend
Answer
Answer: (b) face
Question 30.
A copy of the ________________ must accompany each from of application for shares offered to the public.
(a) Memorandum of association
(b) Prospectus
(c) Articles of association
(d) None of the above
Answer
Answer: (b) Prospectus
Question 31.
A private company means a company which has a minimum paid up capital of Rs.————-
(a) 1,00,000
(b) 5,00,000
(c) 50,00,000
(d) none of the above
Answer
Answer: (a) 1,00,000
Question 32.
“Men may come and men may go but the company exist”- this explains which characteristics of the company as per companies Act 1956
(a) Separate legal entity
(b) Perpetual Succession
(c) Capacity to sue
(d) None of the above
Answer
Answer: (b) Perpetual Succession
Question 33.
Which of the following is not a clause of memorandum of association
(a) situation
(b) capital
(c) subscription
(d) directors
Answer
Answer: (d) directors
Question 34.
The certificate of capital will be issued by
(a) Registrar of companies Act
(b) Controller of companies Act.
(c) Registrar of capital issues
(d) controller of capital issues
Answer
Answer: (d) controller of capital issues
Question 35.
The address of the registered office of the company must be notified to the registrar within _________ days of registration, if it is not done at the time of incorporation
(a) 15
(b) 30
(c) 60
(d) 45
Answer
Answer: (b) 30
Question 36.
Minimum number of members required to apply for incorporation certificate in a public ltd company is
(a) 3
(b) 2
(c) 7
(d) 50
Answer
Answer: (c) 7
Question 37.
A prospectus is issued by
(a) A private company
(b) A public company seeking investment from public
(c) A public enterprise
(d) A public company
Answer
Answer: (b) A public company seeking investment from public
Question 38.
Minimum number of members to form a private company is
(a) 2
(b) 3
(c) 5
(d) 7
Answer
Answer: (a) 2
Question 39.
A company is known as the _______company of another company if it has control over that other company.
(a) subsidiary
(b) holding
(c) controlling
(d) statutory
Answer
Answer: (b) holding
Question 40.
__________ means the total amount of called up share capital which is actually paid to the company by the members
(a) nominal capital
(b) reserve capital
(c) called up capital
(d) Paid-up capital
Answer
Answer: (d) Paid-up capital
Question 41.
_______________ capital means the sum mentioned in the capital clause of Memorandum of Association
(a) Full capital
(b) Maximum capital
(c) share capital
(d) Nominal Capital
Answer
Answer: (d) Nominal Capital
Question 42.
A Government Company means any company in which not less than 51% of the paid-up share capital is held by
(a) Central Government
(b) State government
(c) Both a & b
(d) Neither a nor b
Answer
Answer: (c) Both a & b
Question 43.
_________ are the company created by special act of the legislature
(a) Registered company
(b) Public Ltd Company
(c) Private ltd company
(d) Statutory company
Answer
Answer: (d) Statutory company
Question 44.
When the registered office of a company is changed within a city then it has to be intimated to the registrar within ________ days of such change
(a) 60
(b) 45
(c) 30
(d) 7
Answer
Answer: (c) 30
Question 45.
Number of clauses in Memorandum of Association is
(a) 5
(b) 6
(c) 7
(d) 8
Answer
Answer: (b) 6
Question 46.
If the proposed nominal capital is more than 25 lakh at the time of incorporation then the company needs to submit ________________ along with the application
(a) statement of capital
(b) certificate of incorporation
(c) certificate of capital
(d) certificate of incorporation
Answer
Answer: (c) certificate of capital
Question 47.
Number of documents to be submitted, by a public ltd company, to the registrar while applying for incorporation of the company is
(a) 3
(b) 2
(c) 7
(d) 50
Answer
Answer: (c) 7
Question 48.
Section 12 of Companies Act 1956, deals with
(a) Incorporation
(b) Share capital
(c) Number of Directors
(d) Share holders
Answer
Answer: (a) Incorporation
True or False
1. It is necessary to get every company incorporated, whether private or public.
Answer
Answer: True
2. A private company can commence business after incorporation.
Answer
Answer: True
3. A company can ratify preliminary contracts after incorporation.
Answer
Answer: False
4. ‘Articles of Association’ is the main document of a company.
Answer
Answer: False
5. A provisional contract is signed by promoters before the incorporation of the company.
Answer
Answer: False
6. Statement in lieu of prospectus can be filed by a public company going for a public issue.
Answer
Answer: True
7. Experts who help promoters in the promotion of a company are also called promoters.
Answer
Answer: False
8. If a company is registered on the basis of fictitious names, its incorporation is invalid.
Answer
Answer: False
9. Every company must file Articles of Association.
Answer
Answer: Flase
10. If a company suffers heavy issues and its assets are not enough to pay off its liabilities, the balance can be recovered from the private assets of its members.
Answer
Answer: False
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