Chapter 27: Company Management — Online MCQ Test
COMMERCE · CLASS 12th · Tamil Nadu State Board
Practice Chapter 27: Company Management with a free chapter-wise online MCQ test.
This chapter covers: Focusing on corporate governance this chapter details director qualifications appointments removals powers duties and liabilities. Students examine Key Managerial Personnel board c....
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Chapter 27: Company Management — Important Questions & Answers
Who is primarily responsible for managing the affairs of a company?
- A. Shareholders
- B. Directors
- C. Auditors
- D. Debenture holders
Answer: B. Directors
The Board of Directors manages the affairs of the company and makes key decisions. Shareholders own the company but do not manage its daily affairs.
The Board of Directors manages the affairs of the company and makes key decisions. Shareholders own the company but do not manage its daily affairs.
The minimum number of directors required in a public company is:
- A. 1
- B. 2
- C. 3
- D. 5
Answer: C. 3
A public company must have at least three directors as per company law provisions taught in this chapter.
A public company must have at least three directors as per company law provisions taught in this chapter.
Which of the following is a qualification required for a director?
- A. Must be a member of the company
- B. Must be a natural person
- C. Must be a creditor of the company
- D. Must be a customer of the company
Answer: B. Must be a natural person
A director must be a natural person. A company or firm cannot be appointed as a director.
A director must be a natural person. A company or firm cannot be appointed as a director.
Which of the following statements about Managing Director is correct?
- A. He cannot be a director of the company
- B. He is entrusted with substantial powers of management
- C. He is elected only by debenture holders
- D. He audits the company accounts
Answer: B. He is entrusted with substantial powers of management
A Managing Director is a director with substantial powers of management and is closely involved in administration.
A Managing Director is a director with substantial powers of management and is closely involved in administration.
A board meeting is held, but one director consistently avoids attending meetings for over a year. What is the most accurate legal consequence taught in this chapter?
- A. He automatically becomes chairman
- B. He vacates his office
- C. He becomes a shareholder
- D. He is converted into a KMP
Answer: B. He vacates his office
Continuous absence from all Board meetings for 12 months leads to vacation of office. This is an important rule relating to directors’ duties and continuity.
Continuous absence from all Board meetings for 12 months leads to vacation of office. This is an important rule relating to directors’ duties and continuity.