Chapter Exam

Chapter 27: Company Management — Online MCQ Test

Q: Who is primarily responsible for managing the affairs of a company?

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.

Q: The minimum number of directors required in a public company is:

Answer: C. 3 — A public company must have at least three directors as per company law provisions taught in this chapter.

Q: Which of the following is a qualification required for a director?

Answer: B. Must be a natural person — A director must be a natural person. A company or firm cannot be appointed as a director.

Q: 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?

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.

COMMERCE · CLASS 12th · Tamil Nadu State Board

Practice Chapter 27: Company Management with a free chapter-wise online MCQ test for Tamil Nadu State Board CLASS 12th COMMERCE. 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.... AI-generated questions from basic to board-exam level, with instant results and explanations.

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Chapter 27: Company Management — Important Questions & Answers (FAQ)

Frequently asked questions from Tamil Nadu State Board CLASS 12th COMMERCE — Chapter 27: Company Management, with answers and explanations. These are sample questions; the exam has its own separate question set.

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 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.

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.

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 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.

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Chapter 26: Companies Act 2013

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Chapter 28: Company Secretary