Unit 3: Formation of Company as per Companies Act 2013 — Online MCQ Test
COMMERCE & ACCOUNTANCY · CLASS 11 INTERMEDIATE 1 YEAR · Telangana State Board
Practice Unit 3: Formation of Company as per Companies Act 2013 with a free chapter-wise online MCQ test.
This chapter covers: Focusing on corporate legal requirements this chapter covers promotion stage incorporation steps capital subscription promoter roles Memorandum of Association Articles of Associati....
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Unit 3: Formation of Company as per Companies Act 2013 — Important Questions & Answers
Who is known as the person who takes initiative to form a company and conceives the idea of the business?
- A. Promoter
- B. Director
- C. Shareholder
- D. Auditor
Answer: A. Promoter
A promoter is the person who conceives the idea of forming a company and takes steps to bring it into existence.
A promoter is the person who conceives the idea of forming a company and takes steps to bring it into existence.
The document that contains the fundamental conditions on which a company is incorporated is called:
- A. Articles of Association
- B. Memorandum of Association
- C. Prospectus
- D. Share Certificate
Answer: B. Memorandum of Association
The Memorandum of Association states the basic constitution and scope of a company.
The Memorandum of Association states the basic constitution and scope of a company.
Which document lays down the internal rules and regulations for the management of a company?
- A. Memorandum of Association
- B. Articles of Association
- C. Certificate of Incorporation
- D. Prospectus
Answer: B. Articles of Association
The Articles of Association contain rules regarding internal management, duties, and powers within the company.
The Articles of Association contain rules regarding internal management, duties, and powers within the company.
A company issues a prospectus with misleading information. Which outcome is most likely?
- A. It increases the company’s legal immunity
- B. Investors may be induced to subscribe on false grounds
- C. The company automatically becomes a partnership
- D. The Memorandum becomes invalid immediately
Answer: B. Investors may be induced to subscribe on false grounds
Misleading statements in a prospectus can affect investor decisions and may lead to legal consequences.
Misleading statements in a prospectus can affect investor decisions and may lead to legal consequences.
Which of the following is the best reason why Articles of Association are subordinate to the Memorandum of Association?
- A. Articles can override the company's basic objects
- B. Memorandum defines the external framework, while Articles govern internal management
- C. Articles are issued by the government, but Memorandum is private
- D. Memorandum is optional, but Articles are compulsory
Answer: B. Memorandum defines the external framework, while Articles govern internal management
The Memorandum sets the company's fundamental scope and constitution, while Articles regulate internal affairs and must remain within the Memorandum.
The Memorandum sets the company's fundamental scope and constitution, while Articles regulate internal affairs and must remain within the Memorandum.