LAW MCQ DArshan Khare

Chapter 1 Directors: Appointment & Qualifications
Chapter 1: Appointment & 1.1
Qualification of Directors
1. Who can be director?
a. Association of b. Body c. Any person d. None of the
Persons Corporate above
2. What is the minimum number of directors required in Private Company?

a. 1 b. 3 c. 2 d. 4
3. What is the minimum number of directors required in Public Company?

a. 2 b. 7 c. 3 d. 15
4. What is the maximum number of directors mentioned under Act for a Private Company?
a. 10 b. 7 c. 15 d. No restriction
5. What is the maximum number of directors mentioned under Act for a Public Company?
a. 50 b. 7 c. 15 d. No restriction
6. Can the maximum number of Directors be increased beyond the maximum permissible limit?
a. No b. Yes, GM-OR c. Yes, GM-SR d. Yes, GM-UR
7. MTPC, a Government Company seeks to increase the maximum number of directors. Which resolution is
required to be passed?
a. GM-SR b. BM-OR c. GM-UR d. GM-OR
8. Appointment of woman Directors is mandatory for following companies:

a. Listed Companies b. Public c. Public Companies with d. (a) or (c)
Companies with PUC ≥ PUC ≥ 100 Cr. or
10 Cr. or Turnover ≥ Turnover ≥ 300 Cr.
300 Cr.
9. Casual Vacancy of a woman director shall be filled by ……………..

a. GM-OR b. EGM c. GM-SR d. BM-OR
10. Casual Vacancy of a woman director shall be filled by BOD not later than ……………..
a. Immediate BM b. 3 months c. (a) or (b), Whichever d. (a) or (b),
is earlier Whichever is later
11. As per section 149(3), atleast 1 resident director who has stayed in India for …… on board is mandatory.
a. not less than 182 days in b. not less than 182 c. not less than 182 days d. not less than 182
previous calendar year. days in current in current FY days in previous FY
calendar year.
12. AOA of a company can provide a number lower than the statutory maximum limit of number of
directors by revising AOA by passing ……..
a. GM-UR b. GM-SR c. GM-OR d. BM-OR
© CA Darshan D. Khare
13. AOA of a company can provide a number lower than the statutory minimum limit of number of directors
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by revising AOA by passing ……..
a. GM-SR b. GM-OR c. GM-UR d. None of the above
14. AOA of a company can provide a number lower than the ................. and the same can be revised by
passing GM-SR.
a. statutory minimum b. statutory c. Both of the above d. None of the above
limit maximum limit
15. If there is a single casual vacancy at a place of woman director then casual vacancy shall be filled by ……..
a. a woman only b. male or c. any person d. all of above
female
16. On being appointed as director, he shall file Form......... with Company.

a. DIR-12 b. DIR-2 c. DIR-8 d. DIR-1
17. On appointment of director Company shall file which form with the ROC?
18. What is the time limit for filing DIR-12?

a. 30 days b. 1 month c. 60 days d. 180 days
19. What is the time limit for filing DIR-12 by a Specified IFSC Public Company?
a. 30 days b. 1 month c. 2 months d. 60 days
20. What is the minimum number of Independent Directors required in a Listed Public Company as per Sec
149(4)?
a. Min 2 IDs b. Min 1/3rd of c. Min 1 ID d.Min 2/3rd of total Directors
total Directors
21. Who shall mandatorily appoint Independent Directors?

a. Listed b. Public Company having: c.(a) and d. None of the above
Public Company PUC ≥ Rs. 10 Cr.; or (b)
Turnover ≥ Rs. 100 Cr.; or Outstanding Loans,
Debentures & Deposits ≥ Rs. 50 Cr.
22. Every Independent Director shall declare that he meets the criteria of independence in:
i. a. 1st BM after b. declare in 1st BM after c. 1st BM of every year d. All of the above
appointment change in circumstances
affecting independence
23. What is the term of appointment of an Independent Director?

a. 3 consecutive years b. 5 consecutive c. Indefinite d. As decided by
years BOD
24. Independent Director may hold office for …..

a. 3 consecutive b. 1 term with 3 c. Not more than 2 d. Not more than 2
terms years gap before next consecutive terms consecutive terms
with a gap of 3 years at all
at least before 3rd
term
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25. On completion of 2 terms, an Independent Director can get appointed as ID only after a gap of.......
a. 2 years b. 3 years c. 5 years d. 10 years
26. To be eligible for being reappointed, an Independent Director shall not be associated with the Company
in any manner for a period of ………..
27. Independent Director means a director other than ……..

a. Managing Director b. Whole Time c. Nominee Director d. All of the above
Director
28. Who shall be eligible to be appointed as Independent Director?

a. Not a promoter of b. Not related to c. Not related to d. All of above
Company, Holding, Promoter of Company, Director of Company,
Subsidiary or Associate Holding, Subsidiary or Holding, Subsidiary or
Company Associate Company Associate Company
29. Who shall be eligible to be appointed as Independent Director?

a. Not a promoter of b. Not related to c. Not a promoter of d. (b) and (c)
Holding, Subsidiary or Promoter or Director Company, Holding,
Associate Company of Company, Holding, Subsidiary or
Subsidiary or Associate Associate Company
Company
30. Who shall NOT be eligible for being appointed as Independent Director?
a. Promoter of b. Related to c. Related to Director d. All of above
Company, Holding, Subsidiary Promoter of Company, of Company, Holding,
or Associate Company Holding, Subsidiary or Subsidiary or
Associate Company Associate Company
31. Who shall not be eligible for being appointed as Independent Director?
a. Has or had no b. Has or had no c. Has or had no d. Has or had no
pecuniary relation pecuniary relation pecuniary pecuniary relation
(including remuneration or (other than relation (other (including
transaction > 10% of his remuneration or than remuneration or
total income) transaction > 10% of remuneration or transaction > 2% of his
his total income) transaction > 2% total income)
of his total
income)
32. A director to be appointed as Independent Director, has or had no pecuniary relation (other than
remuneration) > 10% of his total income or amount prescribed by CG with the Company or its Holding,
Subsidiary, Associate Co., promoter or director:
a. during the 3 b. during the 2 c. during the d. None of the above
immediately preceding FYs immediately preceding immediately
or during Current Financial FYs or during Current preceding FY or
Year (CFY). Financial Year (CFY). during Current
Financial Year
(CFY).
33. Mr. X, son-in-law of Mr. A (Promoter of Associate Company PQR Ltd.) seeks to be appointed as
Independent Director of LMN Pvt. Ltd. Can he be so appointed?
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a. Yes b. No c. Yes, GM-SR d. Yes, GM-UR
34. Mr. Rohan has a pecuniary relationship with PQR Ltd. to the tune of Rs. 2 Lacs (Including remuneration
of Rs. 1 lac). His total income is 10 Lacs. Can he be appointed as an Independent Director of XYZ Ltd.
(Subsidiary of PQR Ltd.)
35. Mr. Raman, a relative of Ms. Sadhana who is indebted to the Company, wants to be appointed as an ID.
Can he be so appointed?
36. Mr. Mahesh and Mr. Somesh are relatives. Mr. Somesh has a pecuniary relationship with PQR Ltd. to the
tune of Rs. 6 Lacs (Including remuneration of remuneration of Rs. 4 lac). His total income is 10 Lacs. Can
Mr. Mahesh be appointed as an Independent Director of XYZ Ltd. (Subsidiary of PQR Ltd.)?
37. Ms. Kajol is a relative of Mr. Ketan. PQR Ltd. is the subsidiary Company of ABC Ltd. Mr. Ketan has given a
guarantee to the Director of ABC Ltd. Can Ms. Kajol be appointed as an Independent Director?
38. Ms. Kajol is a relative of Mr. Ketan. PQR Ltd. is the Holding Company of ABC Ltd. Mr. Ketan has given a
guarantee to the Director of ABC Ltd. Can Ms. Kajol be appointed as an Independent Director?
39. Ms. Kajol is a relative of Mr. Ketan. PQR Ltd. is the subsidiary Company of ABC Ltd. Mr. Ketan had given
a guarantee to the Director of ABC Ltd on 20th Dec 2016. Can Ms. Kajol be appointed as an Independent
Director on 21st Dec 2018?
a. Yes b. No c.Yes, GM-SR d. Yes, GM-UR
40. Ms. Kajol is a relative of Mr. Ketan. PQR Ltd. is the subsidiary Company of ABC Ltd. Mr. Ketan had given
a guarantee to the Promoter of ABC Ltd on 20th Dec 2016. Can Ms. Kajol be appointed as an
Independent Director on 21st Dec 2018?
a. Yes b. No c. Yes, GM-SR d.Yes, GM-UR
41. HGK Ltd. seeks to appoint Mr. Ram as Independent Director. Mr. Sham brother of Mr. Ram is a deemed
Director of a Section 8 Company which holds 6% of the voting power of HGK Ltd. Can Mr. Ram be so
appointed?
a. Yes b. No c. Yes, GM-SR d.Yes, GM-UR
42. Casual Vacancy of an Independent director shall be filled by ……………..

a. GM-OR b. EGM c. GM-SR d. BM-OR
43. Casual Vacancy of an Independent director shall be filled by BOD not later than ……………..
a. Immediate BM b. 3 c. Earlier of (a) or (b) d. Later of (a) or (b)
months
44. Shareholders of PQR Ltd. seek to appoint Small Shareholder’s Director. What is the eligibility criterion of
these shareholders’ to apply?
a. Holding shares of ≤ b. Holding shares of ≤ c. Holding shares of ≤ d. None of the
Rs. 20,000 Paid-up value Rs. 20,000 Market value Rs. 20,000 face above
value
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45. KLM Ltd. unlisted, seek to appoint Small Shareholder’s Director. How can they do so if the small
shareholders have not applied for the same?
a. Suo-motu, BM-OR b. Suo-motu, c. Cannot be done d.Take prior CG approval
GM-OR
46. HGK Ltd. appointed Mr. Ram as Small shareholder’s Director. Mr. Sham brother of Mr. Ram, Director of
a Section 8 Company receives 32% of its receipts from HGK Ltd. Can Mr. Ram continue as a Small
shareholder’s Director?
a. Yes b. No, because he c. Can continue by taking approval d. None of the
loses his independence from Company above.
47. HGK Ltd. appointed Mr. Ram as Small shareholder’s Director. Mr. Sham brother of Mr. Ram is the
Director of a Section 8 Company which receives 32% of its income from HGK Ltd. Can Mr. Ram continue
as a Small shareholder’s Director?
a. Yes b. No, because he c. Can continue by taking approval d.None of the
loses his independence from Company above.
48. PQR Ltd. to which appointment of Independent Director is applicable ceases to fulfill the conditions of
applicability for 3 consecutive years; compliance with this section is …………..
a. not required until it again b. still c.is decided by the Company d. None of
meets any of the condition required based on the circumstances the above
49. Mr. X, ID of KKJ Ltd. was already in receipt of remuneration and reimbursement of expense. The
Company is proposing to pay profit related commission and offer stock option of shares to incentivize
him for his excellent contribution in the year. Is the proposal valid?
a. Company can only b. Company can only c. Both are d.None of the both are
offer stock options pay profit linked commission allowed allowed.
50. Acts conducted by the Company were ultra vires to the AOA and MOA of the Company. Will the ID be
held responsible?
a. Yes, held primarily b. Held responsible only if the acts c. Held responsible d. None of the
responsible occurred within his knowledge and based on the above
his consent or terms of
connivance. appointment.
51. Mr. Kaushik holding position as Independent Director of PQR Ltd. contravened the provisions of Sec
149(6). What is the consequence of such contravention?
a. Needs to vacate b. Can continue c. Can be removed d. (b) or (c)
office as NED u/s 169
52. Ms. Lata was an Independent Director of XYZ Ltd. in the year ended 2014. Now, after a gap of 4 years
i.e. in the year 2018 Company seeks to reappoint her again. Will the appointment be valid? If yes, how
can the appointment be made?
a. No, b. Yes, by c. Yes, by passing GM-OR as d. Not possible for an
Reappointment of an ID is passing GM- it’s not a re-appointment indefinite period
possible after a cooling SR but fresh appt. GM-SR is for
period of 5 years. reappointment
53. Mr. Soham was appointed as a small shareholder’s director of XYZ Limited, which is in the business of
Oil refining. Subsequently, A Limited and B Limited have also appointed him as small shareholder’s
director. A is engaged in the manufacture of stationeries whereas B in the business of manufacturing
bearings. Are these appointments valid?

a. Both appointments b. Both c. Appointment in only d. Appointment in only A
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are invalid appointments are one of either of them is Ltd. is valid.
valid valid.
54. Mr. Soham was appointed as a small shareholder’s director of XYZ Limited, which is in the business of Oil
drilling ,refining and marketing. Subsequently, A Limited and B Limited have also appointed him as small
shareholder’s director. A is engaged in the business of Oil Refining too whereas B in the business
of manufacturing oil rig equipments. Are these appointments valid?
a. Both appointments b. Appointment in only c. . Appointment in only B d. Appointment in
are invalid one of either of them Ltd. is valid. only A Ltd. is valid.
is valid.
55. A Small Shareholder’s Director needs to vacate office if he:

a. Incurs disqualification b. Attracts c. Ceases to be d. All of the e. (a) or (b)
u/s 164 sec 167 independent above
56. First Directors of a Company shall be appointed in the following manner:

1. based on manner provided in AOA
2. all subscribers to the MOA who are individuals shall be deemed to be directors
3. whose name is mentioned in the AOA
Which of the following is a correct sequence to follow in appointment of First Directors?
a. 2,1,3 b. 3,1,2 c. 1,2,3 3,2,1
57. Ms. Simple appointed as First director of Company Basic Ltd. wishes to know her tenure as First
Director.
a. 5 years b. 3 c. Until next d. Until appointment of directors in GM
years AGM
58. DFG Ltd. appoints its Directors in GM however they wish to know if any director can be appointed at
BOD meeting. Which of the following Director can be in BM?
a. Additional b. Alternate c. Nominee d. Casual Vacancy e. All of the
Director-161(1) Director-161(2) Director-161(3) Director-161(4) above.
59. A person cannot act as director until he files his consent with ROC in Form No. DIR-2 within 30 days of
appointment. However, exception to following is given to
a. Director of Government b. Director of Sec 8 Company. c. First d. All of the
company Director above
60. A and B were appointed as first directors on 8th April, 2018 in Sun Glass Ltd. Thereafter, C, D and E were
appointed as directors on 10th July 2018 and F, G and H were also appointed as directors on 11th August
2018 in the company. In the next AGM of the company, A and B were proposed to be retired by rotation
and re-appointed as directors. Is the proposal for retirement by rotation and re-appointment of
A and B valid?
a. No, they can retire b. A and B c. A and B can both d. None of the above
but not be reappointed. cannot be rotated as retire by rotation
they were First and be
Directors of the reappointed.
Company.
61. In the situation above, if resolution for A’s retirement and re-appointment was passed. However,
before the resolution for B’s could be taken up for consideration, the meeting was adjourned. In the
adjourned meeting also, the said resolution could not be taken up and the meeting was ended without
passing the resolution for B’s retirement and reappointment. What will be the status of B as a director in
the company?
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a. B shall vacate b. B need c. B will get d. B will get automatically re-
office automatically not vacate automatically appointed provided he didn’t
office if he re-appointed express his unwillingness to
follows certain continue as director and also does
conditions not fit in the other exceptions.
62. A company on the Board consisting of the following:

a. Mr. Independent, Mr. Archie as nominees from two Public Financial Institutions.
b. Mr. X, Mr. Y, Mr. Z appointed at the 2nd AGM.
c. Mr. A, Mr. B appointed at the 3rd AGM.
d. Mr. Addition was appointed as additional director subsequent to 3rd AGM.
e. Mr. Casual was appointed as director in place of Mr. Soul who died and was earlier appointed
during the 3rd AGM.
f. Mr. Excellent was appointed as Managing Director for 5 years w.e.f. 2nd AGM.
g. Mr. One More was appointed as additional Director soon after appointment of Mr. Addition.
List out in order, who shall be vacating the office at the 4th AGM of the company.
a. Mr. Addition, b. Any 2 from c.Mr. Addition, Mr. One d. Any 2 from Mr. X, Mr.
Mr. One More, 2 from Mr. X, Mr. Y & More, 2 from Mr. X, Mr. Y & Y & Mr. Z and Mr.
Mr. X, Mr. Y & Mr. Z and Mr. Z and Mr. Mr. Z and Mr. Casual on the Casual on the day Mr.
Mr. Casual. Casual. day Mr. Soul would have Soul would have
retired. retired.
63. ABC Company Ltd. in its First General Meeting appointed 6 Directors whose period of office is liable to
be determined by rotation. Will it make any difference, if ABC Company Ltd. does not carry on business
for Profit?
a. Sec 8 companies b. Sec 8 c. Retirement shall be as per d. None of the
are exempted. companies are not terms of agreement. above.
exempted.
64. Mr. PQR has been appointed as Additional Director on the Board of Meghna Ltd. on 12th January, 2016.
Mr. PQR has filed his consent to Act as a Director only with the company. Is the appointment valid?
a. Yes, as consent b. No, Filing of c. Yes, as filing of consent d. None of
with Company is consent with ROC is with ROC is not the above
paramount for assuming mandatory to assume mandatory for Additional
office. office. Director
65. A company XYZ Ltd. has 8 directors including 1 Additional Director, 1 Casual Vacancy Director, 1 Small
Shareholder’s Director. Calculate number of Directors to be rotated.
a. 4 b. 6 c. 1 d. None of the above
66. Mr. Chetan, an Executive Director is rotated after 3 years of his 5 year tenure and retires & vacates
office as NED. Explain his position in the Company.
a. Can continue as ED b. Cannot c. Can continue as d. None of the above
continue as ED employee
67. In the same situation as above, if he reappointed as NED, what will be his position?.
a. May continue as b. May continue as c. May continue as ED for 2 d. None of
NED for 3 years ED for 3 years years and as NED for 1 year the above.
68. Company seeks to appoint Mr. X, a retiring director. Under which section can the same be done?
a. Sec 160 b. Sec 152(7) c. 152(1) d. Any of the above
1.8 69. Under sec 160, any person who wants himself to be appointed or a member wants to nominate any
person shall apply at registered office of company with fees of Rs. 1 lakh or higher amount as may be
prescribed. FUD Ltd, receives an application for appointment of 1 director by members, 2 recommended
by Nomination and Remuneration Committee constituted u/s 178 including 1 Independent Director.
What is the total amount deposited with Company on such application?
a. INR 3 Lakhs b. INR 2 Lakhs c. INR 1 Lakh d. Nil
70. Company XYZ Ltd. seeks to appoint an Additional Director on account of increase in work load. Which of
the following ways can be opted for his appointment?
a. AOA gives power then b. If AOA is silent then GM-OR c. Both a. and b. d. Neither a. or
BM-OR can be passed to grant power and BM-OR to b.
make the appointment
71. RWD Ltd. a Listed Company, in its AOA empowers the Board of Directors to appoint Additional Director.
The Board of Directors, therefore, appoints Mr. Raj as the additional director. It was noticed that the
proposal to appoint Mr. Raj as a director on the Company’s Board was rejected by the members at the
company’s AGM just before his eventual appointment by BOD as Additional Director. Whether Mr. Raj’s
appointment as additional director by the Board of Directors is valid?
a. Power to b. The appointment of c. If the AOA provides d. If the AOA provides
appoint additional Mr. Raj as Additional for authority of BOD for authority of GM
director vests with Director by the Board of for appointment of for appointment of
the BOD and hence Directors is not valid as he Additional Directors, Additional Directors,
Mr. Raj can be was earlier rejected by the then same cannot then same cannot
appointed. members. be objected. be objected.
72. PQR Ltd appointed Ms. Smita as an Additional Director. Till when can she hold directorship?
a. Terms of b. Next AGM c. Date on which AGM d. (b) or (c) whichever is
appointment. should have been held earlier.
73. PQR Ltd appointed Ms. Smita as an Additional Director by passing a resolution by circulation. Is the
appointment valid?
a. Valid b. Valid after c. Invalid d. If AOA provides for appointment by resolution by
ratification circulation, then the same is valid.
74. AOA of XYZ Ltd. specifies a maximum of 12 directors. There are 12 directors on Board. The Company
seeks to appoint Mr. Sinha as Additional Director. Can the same be done?
a. Additional Director b. Additional c. Additional Director is counted in d. None
is not counted in Maximum Director is counted Maximum number of directors but of the
number of directors, hence in Maximum number since Act provides a maximum of above
valid. of directors, hence 15 directors, hence appointment is
invalid. valid.
75. Board of PQR Ltd. seeks to appoint Mr. L as Alternate Director of Mr. S, an Independent Director. What
is the basic requirement?
a. Shall not be an b. The individual so proposed c. Board can d. All of above
Individual rejected by the shall also be eligible to be appoint only if
Company appointed as Independent AOA gives
Director. power.
76. Mr. Ketan, director of OIL Ltd. absents himself for a period more than 12 months with notice. Hence the
Company decides on appointing an Alternate Director. However, CS of the Company is of the opinion
that an Alternate Director cannot be appointed hence the position shall be filled in by a Casual Vacancy
Director. Is the contention of the CS correct?

a. Yes, a Casual b. No, since the director c. Based on the circumstances and the d. Any of
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vacancy director has given notice of intention of Director to return to his the
needs to be absence an Alternate position, the same can be decided on a above
appointed.(>12 mths) Director can be case to case basis.
appointed.
77. LYF Ltd. appoints Mr. Naren as a Casual Vacancy Director in its Board Meeting complying and in
accordance with the provisions of the Act. The members suggest that appointment of Mr. Naren is
invalid as their approval wasn’t taken. Comment.
a. Approval of b. The members’ c. The members’ d. The members’
members is not contention is correct contention is correct contention is correct
required as Act gives and appointment of and appointment of and appointment of
right to the Board for Casual Vacancy Casual Vacancy Casual Vacancy
appointment of Casual Director needs Director needs Director needs
Vacancy Director. ratification at the next ratification at the ratification at the
AGM by passing GM- next AGM by passing next GM by passing
OR. GM-SR. GM-SR.
78. ZNMD Ltd. appointed an Alternate Director and a Casual Vacancy Director by passing resolution by
circulation. Comment.
a. Alternate b. Casual Vacancy c. Both Casual Vacancy d.Both Casual Vacancy
Director cannot be Director cannot be Director and Director and
appointed by passing appointed by passing Alternate Director Alternate Director
resolution by circulation, resolution by can be appointed by cannot be appointed
however, Casual Vacancy circulation, however, passing resolution by passing resolution
Director can be. Alternate Director can by circulation. by circulation.
be.
79. Mr. Sam, a Director of DCH Ltd. dies in a casualty. However, the Company in its Board meeting decides
not to fill the casual vacancy. Is it valid?
a. It is at b. BOD can decide not c. BOD can decide not to fill d. It is at the Company’s
Board’s volition to fill the position of casual the position of casual volition whether or
not to appoint a vacancy by passing a vacancy by passing a not to appoint a
Casual Vacancy resolution with that regard. resolution with that Casual Vacancy
Director. Such decision shall be regard. Such decision Director and not with
approved by a GM-OR. shall be approved by a the Board.
GM-SR.
80. Which of the following persons can be appointed as a Director of a company in 2019:
a. Mr. Amar, who has huge personal liabilities far in excess of his Assets and Properties, has applied to
the court for adjudicating him as an insolvent and such application is pending.
b. Mr. Bakshi, who was caught red-handed in a shop lifting case two years ago, was convicted by a
court and sentenced to imprisonment for a period of eight weeks.
c. Mrs. Chetana, a Former Bank Executive, was convicted by a court eight years ago for embezzlement
of funds and sentenced to imprisonment for a period of one year.
d. Mr. Dhiraj is a Director of DLT Limited, which has not filed its Annual Returns pertaining to the
Annual General Meetings held in the calendar years 2011, 2012 and 2013.
a. Mr. Amar & Mr. b. Mr. Bakshi & c. Mrs. Chetana & d. Mr. Dhiraj & Mrs.
Dhiraj Mrs, Chetana Mr. Amar Chetana
81. Mr. Suresh is a Director of ABC Ltd., XYZ Ltd. and PQR Ltd. ABC Ltd. did not file annual accounts for the
year ended 31st March, 2002 and failed to pay interest on loans taken from a public financial institution
from 1st Jan, 2002 onwards and also failed to repay the matured deposits on due date from 1st April,
2002 onwards. Mr. Suresh is proposed to be appointed as additional director of Manyata Ltd. on 1st
June, 2003. Comment.
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a. Mr. Suresh can be b. Mr. Suresh c. Mr. Suresh cannot d. Mr. Suresh cannot
appointed as Additional can be appointed as be appointed as be appointed as
Director for Manyata Ltd. Additional Director for Additional Director Additional Director
but cannot continue with Manyata Ltd. but for Manyata Ltd. for Manyata Ltd. and
ABC Ltd., XYZ and PQR Ltd. cannot continue with and cannot continue cannot continue
XYZ and PQR Ltd. with ABC Ltd., XYZ with XYZ and PQR
and PQR Ltd. Ltd.
82. RML Ltd. issued shares of the nominal value of Rs. 10 per share, out of which Rs. 5 was payable on
application and balance Rs. 5 was payable on call. The call money was invited by the Board of Directors
but some shareholders, including a non–executive director, failed to pay the same within the prescribed
period. Will the Non-Executive Director be disqualified from his position and will he have to vacate?
a. If call is not paid within 1 b. If the call is not paid within c. If the call is not paid d. None of
year from the last date fixed for the 182 days from the last within 6 months from the
payment of the call, he shall vacate date fixed for the payment the last date fixed for above
the office of director held by him. of the call, he shall vacate the payment of the
the office of director held call, he shall vacate
by him. the office of director
held by him.
83. LIT Ltd., having a paid up capital of Rs. 120 Cr in the financial year 2017-18 appoints Ms. Juliet as the
women director on 1st March 2018. She already holds directorship in twelve companies including 10
public companies.
a. As she was already a director in b. She can either choose c. Can take d. (a) or [(b)
ten public companies, her appointment between the companies in up & (c)]
in LIT Limited is not valid as it will lead to which she wishes to directors
her directorship in 11 public companies. continue to hold the office of hip in LIT
director and resign her office Ltd.
as director in the other
remaining companies.
84. Ms. Juliet holds directorship in eight public companies including managing directorship in 2 companies
and directorship in 6 companies. In addition, she intends to take up independent directorship in 3
subsidiary companies of LIT Limited. Is the position valid?
a. As she was already a b. As she was already a c.She can either choose d. [(a) or
director in 8 public director in 8 public between the (b)] &
companies, her appointment companies, her appointment companies in which (c)
in LIT Limited is not valid as it in LIT Limited is not valid as it she wishes to continue
will lead to her directorship will lead to her directorship in to hold the office of
in 14 public companies. 11 public companies. She can director and resign her
however take directorship in office as director in
any 2 of the 3 companies the other remaining
proposed. companies.
85. XYZ Ltd. is Whole Owned Subsidiary of Government Company. The members of XYZ Ltd. applied for
inspection of Register of Directors maintained u/s 170. Company seeks your advice.
a. Sec 171 gives the b. If the members ask for c. Both d. Sec 171 is not applicable
right to Members for inspection of register in (a) to Whole Owned
inspection of register. Business Hours the and Subsidiary of Government
same is permitted. (b) Company
86. Rama Ltd appointed Mr. Rahul as an Additional Director by passing a resolution by circulation. Is the
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appointment valid?
a. Valid b. Invalid c. Valid after d. If AOA provides for appointment by
ratification resolution by circulation, then the same is
valid.
87. AOA of ZNMD Ltd. specifies a maximum of 18 directors. There are 18 directors on Board. The
Company seeks to appoint Mr. Adinath as Additional Director. Can the same be done?
a. Additional Director is b. Additional Director c. Additional Director is d. None of
not counted in Maximum is counted in counted in Maximum the above
number of directors, hence Maximum number number of directors but
valid. of directors, hence since Act provides a
invalid. maximum of 15 directors,
hence appointment is valid.
88. PQR Ltd appointed Ms. Smita as an Additional Director by passing a resolution by circulation. Is the
appointment valid?
a. If AOA provides for appointment by b. Invalid c. Valid d. Valid after
resolution by circulation, then the ratification
same is valid.
89. Mr. Kaushik holding position as Independent Director of PQR Ltd. contravened the provisions of Sec
149(6). What is the consequence of such contravention?
a. Needs to vacate b. Can continue as c. Can be removed u/s 169 d. (b) or (c)
office NED
90. KHL Ltd. appointed Ms. Shruthi as Woman Director. Mr. Sham brother of Ms. Shruthi is the Director of
a Section 8 Company which receives 32% of its income from KHL Ltd. Can Ms. Shruthi continue as a
Woman Director?
a. Yes b. No, because she c. Can continue by taking approval d. None of the
loses her independence from Company above.
91. A person cannot act as director until he files his consent with ROC in Form No. DIR-2 within 30 days of
appointment. However, exception to following is given to
a. Director of Government b. Director of Sec 8 c. First Director d. All of the
company Company. above
92. Board of Karawan Ltd. seeks to appoint Mr. Karan as Alternate Director of Mr. Kiran, an Independent
Director. What is the basic requirement?
a. Shall not be an b. The individual so c. Board can d. All of above
Individual rejected by the proposed shall also be appoint only if
Company eligible to be appointed as AOA gives
Independent Director. power.
93. Acts conducted by the Company were ultra vires to the AOA and MOA of the Company. Will the ID be
held responsible?
a. Held responsible b. Yes, held c. Held responsible only if the d. None of the
based on the terms of primarily acts occurred within his above
appointment. responsible knowledge and his consent
or connivance.
94. Mr. Peter, director of NOCIL Ltd. absents himself for a period more than 12 months with notice. Hence
the Company decides on appointing an Alternate Director. However, CS of the Company is of the
opinion that an Alternate Director cannot be appointed hence the position shall be filled in by a Casual
1.12
Vacancy Director. Is the contention of the CS correct?
a. Yes, a Casual vacancy b. No, since the c. Based on the d. Any of the
director needs to be director has given circumstances and the above
appointed. Since its over notice of absence an intention of Director to
12 mnths Alternate Director can return to his position, the
be appointed. same can be decided on a
case to case basis.
95. First Directors of a Company shall be appointed in the following manner:

1. based on manner provided in AOA
2. whose name is mentioned in the AOA
3. all subscribers to the MOA who are individuals shall be deemed to be directors
Which of the following is a correct sequence to follow in appointment of First Directors?
a. 2,1,3 b. 3,1,2 c. 1,2,3 d. 3,2,1
96. Rahi Ltd. intends to appoint Mr. Tahir as a director. After a few days they start considering appointing
Ms. Naina as a director. The Company appoints both of them by passing a singular GM-OR. Few members
who did not vote in the favour of them questioned their appointment. Is their contention
correct?
a. Contention b. Contention of c. Contention of the d. Contention of the
of the members is the members is correct members is correct as members is correct as
not correct as GM- as two or more two or more directors two or more directors
OR is validly directors can be should be appointed can be appointed by
passed. appointed by passing by passing only a GM- passing one GM-OR
only a GM-SR. UR. only after passing one
GM-UR to that effect.
97. Rahi Ltd. intends to appoint Mr. Tahir as a director. After a few days they start considering appointing
Ms. Naina as a director. The Company appoints both of them by passing a singular GM-OR. The
appointment of the directors or the acts conducted by them was not challenged by any member. Does
it make the appointment valid?
a. The appointment is b. The appointment c. The d. The appointment
invalid and until the default is is void and until appointment is and acts are valid
shown acts will be considered to the default is valid, as not until known to the
be valid. shown acts will be challenged. Company.
considered to be
valid.
98. Rahi Ltd., is a wholly owned Government Company, intends to appoint Mr. Tahir as a director. After a
few days they start considering appointing Ms. Naina as a director. The Company appoints both of them
by passing a singular GM-OR . Few members who did not vote in the favour of them questioned
their appointment. Is their contention correct?
a. Contention b. Contention of the members is c. Contention of the members d. None of
of the members is correct as two or more directors is correct as two or more the
not correct as GM- can be appointed by passing one directors should be above.
OR is validly passed. GM-OR only after passing one appointed by passing only a
GM-UR to that effect. GM-UR.
99. Swapna Ltd. wants to adopt the method of Proportional Representation for appointment of its
directors. Its seeks to know the minimum number of directors it shall appoint by this method. Advise.
a. 2/3rd directors b. 1/3rd directors c. Majority d. Minimum 2/3rd directors
directors
100. Mr. Lucky was appointed by proportional representation in HUL Ltd in March 2015. Up till what date
1.13
can he hold the position?
a. Feb 2020 b. Feb 2025 c. Feb 2018 d. Until next AGM
101. Mr. Unfortunate was appointed by proportional representation in HUL Ltd in March 2015. However, he
met with an accident in Jan 2017 and there was a casual vacancy at his place. Who can fill the casual
vacancy position?
a. BOD shall appoint b. BOD shall appoint c. BOD shall d. Shall be appointed by
subject to approval at next subject to approval appoint subject to GM-OR.
AGM. at next GM. approval at next
AGM by GM-OR.
102. On adoption of sec 163 on Proportional Representation, which of the following sections shall not
apply?
a. Sec 160 b. Sec 152(6) c. Sec 152(7) d. All of the above
103. Mr. Genius has committed a crime involving moral turpitude and has been sentenced to imprisonment
in March 2015 for 7 years and 6 months. In the month of July 2020, he seeks to be appointed as
director in Prima Ltd. Can he be so appointed?
a. Yes, since b. No, since the c. No, since he is d. No, since he is sentenced
5 years has been offence involves sentenced to an to an imprisonment for a
lapsed from the moral turpitude he imprisonment for a period exceeding 7 years
date of becomes disqualified period exceeding 7 years he becomes disqualified
conviction. for a lifetime. he becomes disqualified until the end of
for a lifetime. imprisonment.
104. Mr. Lucky holds shares of XYZ Ltd. However, he has not paid any calls in respect of any shares of the
company held by him and five months have passed from the last day fixed for the payment of calls. Can
he be so appointed as director?
a. Can be appointed b. Can be c. Cannot be d. None of the above
as 12 months have not appointed as 6 months appointed as 3
lapsed from the call date. have not lapsed from months have
the call date. lapsed from the
call date.
105. Mr. Hardik is Director of KP Limited, who has not filed the company annual return pertaining to the
annual general meeting held in the calendar years 2016, 2017 and 2018. Is Mr. Hardik disqualified from
acting as director?
a. Disqualified b. Disqualified c. Shall continue in defaulting company d. None
from continuing as from being appointed until default is made good and of the
Director in KP Ltd. as Director in disqualified from being appointed as above
companies other Director in companies other than KP Ltd .
than KP Ltd for 5 for 5 years
years.
106. Mr. Great has committed a crime involving moral turpitude and has been sentenced to imprisonment
in March 2015 for 2 years and 6 months. In the month of July 2020, he seeks to be appointed as
director in Prima Ltd. Can he be so appointed?
a. Yes, since 5 b. No, since the c. Yes, since d. None of the
years has been lapsed offence involves moral imprisonment is for a above. 5 years
from the date of turpitude he becomes period less than 3 not elapsed from
conviction. disqualified for a lifetime. years. date of expiry of
sentence
1.14
107. As per sec 160 notice to be appointed as a Director shall be submitted to a Company with the deposit
of ………
a. Rs. 10,000 b. Rs. 25,000 c. 50,000 d. Rs. 1,00,000
108. Which of the following companies’ limit of maximum 15 directors and their increase in limit by special
resolution is not applicable?
a. Government b. Sec 8 c. Both of the d. None of the above
Company Company above
109. Within what period shall DIR-12 be filed in case of a Specified IFSC Company?
a. 90 days. b. 15 days. c. 60 days d. 30 days.
110. Which form shall be filed for application of DIN?

a. DIR-1 b. DIR-3 c. DIR – 3A d. DIR - 2
111. What is the validity of an allotted DIN?

a. Lifetime b. 15 years c. 20 years d. Until qualified otherwise
112. Mr. Sumit has been allotted a DIN. What is his responsibility on allotment of such DIN?
a. Intimate Central b. Intimate company or all c. Intimate d. All of the
Government companies wherein he is a Registrar of above
director Companies
113. Who shall submit the particulars of the DIN and to whom?
a. DIN cell of the b. Central c. Director to Company d. None of the
Ministry to Registrar Government to and by Company to above
Registrar Registrar
114. Casual Vacancy Director appointed under sec 161(4) shall hold office up to
a. Next b. Period c. Date up to which director in whose d. Tenure for which he
AGM of 5 years place he is appointed would have has been appointed.
held office if it had not been
vacated
115. Mr. Ramesh committed an offence w.r.t. sec 188 on 1st Jan 2015 and was disqualified to act as a
Director. When can he be qualified to act as Director?
a. From Jan 2018 b. From Jan 2020 c. From Jan d. Disqualified for lifetime
2016
116. Loan Ltd. did not file its Annual Return for a continuous period of 3 years from 2014-15 to 2016-17. Mr.
D was appointed as a Director in 2017, will he be disqualified to act as a director?
a. Yes, since not filing Annual b. No, since c. No, he will continue to d. Yes, until
Return for a continuous period of he was appointed be qualified only for a the
3 years is a company level default after the period of 6 months from default is
u/s 164. defaulting periods. the date of made
appointment. good.
117. LMN Pvt. Ltd. seeks to provide additional disqualification criteria in its Articles of Association over and
above those mentioned in Sec 164. Can it do so?

a. No, additional b. Yes, c. Yes, additional d. Yes, additional
1.15
disqualification criteria additional disqualification criteria disqualification criteria
can be provided. disqualification can be mentioned in the can be mentioned in
criteria can be AOA of a Private the AOA of a Private
mentioned in the Company on fulfillment Company
AOA of a of certain conditions.
Company
118. Mr. Great, director of NEXA Private Ltd. has committed a crime involving moral turpitude and has been
sentenced to imprisonment in March 2015 for 2 years and 6 months. When shall he vacate his office?
a. By April 2015 (30 days from b. Immediately c. By June d. None of the
conviction if no appeal made) 2015 above
119. Mr. Great, director of NEXA Private Ltd. has committed a crime involving moral turpitude and has been
sentenced to imprisonment in March 2015 for 2 years and 6 months. When shall he vacate his office if
he has filed an appeal within 30 days?
a. Within a month b. Within 3 c. Immediately d. None of the above
from the date of disposal months from the date
of appeal of disposal of appeal
120. Mr. Silver, director of Instruments Private Ltd. has committed a crime involving moral turpitude and
has been sentenced to imprisonment in March 2015 for 2 years and 6 months. When shall he vacate
his office if he has filed an appeal within 30 days?
a. Within 7 days from b. Within 3 c. Immediately d. None of the above
the date of disposal of months from the date
appeal of disposal of appeal
121. Mr. Gold director of Ornaments Private Ltd. has committed a crime involving moral turpitude and has
been sentenced to imprisonment in March 2015 for 2 years and 6 months. When shall he vacate his
office if he has filed a further appeal within 7 days?
a. Within 7 days from the date b. On disposal of c. Immediately d. None of the
of disposal of further appeal further appeal on above
conviction
122. Loan Ltd. did not file its Annual Return for a continuous period of 2 years from 2014-15 to 2015-
16. Mr. D, was appointed as a Director on nomination of CG in 2016, will he be disqualified to act
as a director?
a. Yes, since not filing b. No, since c. No, he will continue to d. None of the
Annual Return for a he was appointed be qualified only for a above appointed
continuous period of 3 after the period of 6 months from by the CG
years is a company level defaulting the date of nomination
default u/s 164. periods. appointment.
123. LMN Ltd. is Whole Owned Subsidiary of Government Company. The members of LMN Ltd. applied for
inspection of Register of Directors maintained u/s 170. Company seeks your advice.
a. Sec 171 gives the b. If the members ask c. Both d. Sec 171 is not applicable to
right to Members for for inspection of register in (a) Whole Owned Subsidiary
inspection of register. Business Hours the same is and of Government Company
permitted. (b)
124. Mr. Snehil, a director of LMN Ltd. assigned his office to his son when he went on a vacation abroad for
1 week. Is the act of the director valid?
a. Yes b. No c. Allowed if approval from GM is d. None of the above

sought
1.16
125. Maximum no. of Public Companies in which a person can be Director:

a. 8 b. 10 c. 12 d. 20
126. Which of the following shall not be included in calculating Directorships:

a. Directorship of b. Alternate c. Casual Vacancy d. Additional
Dormant Company Directorships Directorships Directorships
127. Maximum no. of Directorships for all forms of Companies (excluding exceptions as per Act) shall be:
a. 10 b. 12 c. 18 d. 20
128. Private Company which is a Holding Company of Public Company shall be calculated as:
a. Public Company b. Private Company c. Not calculated at d. None of these
all
129. Private Company which is a Subsidiary Company of Public Company shall be calculated as:
a. Public Company b. Private Company c. Not calculated at d. None of these
all
130. A lesser no. of Maximum Directorships that a Director of its Company can have shall be notified by that
Company through:
a. GM-OR b. GM-SR c. BM-OR d. BM-SR
131. For every day of default, the Director holding more than the Statutory Maximum number of
Directorships shall be liable to pay:
a. 1000 b. 5000 c. 10000 d. 15000
132. Director who exceeds the maximum number of Directorships shall notify his wish to continue as
Director to:
a. Co. in which he wishes to continue b. Registrar c. Both d. Tribunal/CG
133. Director resignation from excess Directorships shall be valid w.e.f:

a. Dispatch thereof b. Receipt thereof c. On Co’s d. Latest of a. b. & c.
by Co. confirmation
134. Director who makes undue gain or involves in a situation with conflict of interest or takes action
without reasonable and due care or without exercise of proper judgement or diligence shall be
punishable with:
a. Fine : 1-5 Lakh b. Fine : 2-5 Lakh c. Fine : 5-10 Lakh d. Fine : upto 20
Lakh
135. Will the Director who makes undue gain in the aforesaid case have other liabilities apart from fine:
a. Yes, shall be b. Yes, shall be c. Yes, shall be required d. None of these
required to pay amount required to pay amount to pay amount equal
equal to gain made to equal to twice the gain to thrice the gain
Company made to Company made to Company
136. Directorships which the Director shall leave in case the Maximum No of Directorships is exceeded shall
be :
a. Intimated by b. He/ She himself c. Company may d. Intimated by CG

Registrar to him shall decide pass resolution
telling Director 1.17
137. A Director who fails to attend all Board Meetings for a period of 12 months without leave of absence
shall be:
a. Disqualified u/s b. Vacate Office u/s c. Shall not be d. All of these
164 167 eligible for re-
appointment
138. A Director who fails to attend all Board Meetings for a period of 12 months with leave of absence shall
be:
appointment
139. Contravention of sec 184 by Director shall result in:

a. Disqualified u/s 164 b. Vacate c. Shall not be eligible for re- d. All of
Office u/s 167 appointment these
140. A Director who is removed from office u/s 169 shall:

appointment
141. If the Director is holding such Directorship by virtue of his employment at certain position in the
Company or its Holding or Subsidiary etc: then if that position is lost , the Director shall :
appointment
142. A person who knowingly functions as a Director after vacation from the Directorship u/s 169 shall be
punishable with:
a. Imprisonment: 1 year b. Imprisonment c. Imprisonment: d. Imprisonment: 1 year
Or Fine: 1 to 5 Lakh :2 year 6 mts Or Fine: 5 to 10 Lakh
Or Both Or Fine: 5 to 10 Lakh Or Fine: upto 1 Or Both
Or Both Lakh
Or Both
143. Where all Directors of a Company vacated office due to order of Tribunal /Court disqualifying them,
the Directors shall be appointed by:
a. Promoters b. CG c. First a. then b. d. First b. then a.
144. What shall be the tenure of office of the aforementioned Director(s):

a. CG b. Next AGM where c. Next GM where new d. Upto next GM whether
determined new Directors shall Directors shall be or not appointments
tenure be appointed appointed are made thereat
145. Private company may:

a. Provide additional grounds b. Cancel grounds for c. Increase the threshold of d. None
for Vacation other than Vacation mentioned imprisonment period
mentioned u/s 167 u/s 167 attracting vacation from
>6 months to >12months

1.18
146. Mr. Snail, a director of LMN Ltd. assigned his office to his son when he went on a vacation abroad for 1
week. Is the act of the director valid? What repercussions will he face?
a. No, Fine Rs. b. Yes, valid c. No, Fine Rs. 1 Lac – Rs. 5 d. None of the
10,000 – Rs. 50,000. Lac. above
147. A Director can resign :

a. In Writing b. Orally c. By absenting from d. Only a. and b.
BM
148. The BOD shall have following duty on receipt of resignation of Director:
a. Intimate registrar and b. Fact of such resignation to be laid at c. Both d. None
post on website immediately following GM in Directors’ Report
149. Is it incumbent upon the Director to report to Registrar on resigning from Directorship?
a. Yes, mandatorily b. No, he may do so c. Yes, only if the d. None of these
under Companies Act, but not necessarily Company has
2013 required to failed to report
the same
150. Form for intimation to be used by the Company to notify Registrar of resignation of Director:
151. Form for intimation to be used by the Director to notify Registrar of resignation of Director:
152. Period within which the Company shall inform Registrar about Directors resignation :
a. 7 days from date b. 14 days from c. 30 days from date d. 45 days from date
of notice of resignation date of notice of of notice of of notice of
resignation resignation resignation
153. Period within which the Director may inform Registrar about his/her resignation :
a. 7 days from date b. 14 days from c. 30 days from date d. 45 days from date
of resignation date of resignation of resignation of resignation
154. Documents to be submitted to Registrar by Director when intimating of his/her resignation:

a. Copy of b. Reasons for c. Form prescribed d. All of these
Resignation resignation
155. Type of resolution required to remove Director ( other than exceptional cases) :
156. Which of the following Directors shall not be removed by virtue of a GM-OR:
a. Director appointed by b. Directors appointed by c. Independent Director d. All of
Tribunal u/s 242 Proportional Representation reappointed for 2nd thes
u/s 163 term u/s 149(10) e
157. Which resolution shall be passed for removal of Independent Director reappointed for 2nd term u/s
149(10)
158. Tenure of office of a Director appointed to fill vacancy of a removed Director shall be:
1.19
a. Upto next b. Upto c. Upto the end of predecessors d. As per Registrar
GM next AGM tenure order
159. Which notice shall be given to convene meeting to transact business of removal of Director u/s 169:
a. Ordinary Notice b. Special Notice c. First a. then b. d. First b. then a.
160. Which notice shall be given to transact business to appoint a Director in place of a removed Director
u/s 169 :
a. Ordinary Notice b. Special Notice c. First a. then b. d. First b. then a.
161. Can a removed Directors vacancy be filled at the same meeting wherein the removal took place?
a. Yes, if b. Yes, in ordinary c. Yes, but Special Notice is d. No, power rests
Special Notice course of business required only for removal with CG/Tribunal
was given without any special not filling vacancy thereby
notice made
162. Vacancy created by removal of Director, if not filled by the Company may be filled by?
a. BM as Casual b. CG c. Registrar d. Company at a compulsorily re-convened
Vacancy meeting
163. Particulars of Directors & KMP and their shareholding shall be filled with Registrar:
a. 30 days from appointment of b. 30 days of change c. Both d. Both, but within
Director & KMP made therein 60 days not 30.
164. Particulars of Directors & KMP and their shareholding shall be filled with Registrar in Form:
165. Mr. Mukesh, a director of LMN Ltd. assigned his office to his son when he went on a vacation abroad
for 1 week. Is the act of the director valid? What repercussions will he face?
a. No, Fine Rs. 10,000 – Rs. b. Yes, valid c. No, Fine Rs. 1 Lac d. None of the above
50,000. – Rs. 5 Lac.
Answers
Q. Option No. / Reason

No.
1. d ( Only Individuals can be Directors, ‘Person’ does not mean individual)
2. C
3. C
4. C
5. C
6. C
7. d (Maximum limit of directors can be extended by passing GM-SR (Exemption to Government
Companies i.e. GM-OR is sufficient.)
8. C
9. D
10. d ( as question asks the latest that the appointment can be made i.e. NOT ATER THAN)
11. c (AMENDMENT: from ‘previous calendar year’ to ‘current financial year’)
12. b ( Law does not have a specific requirement, whatever provisions to modify AOA are required are applied,
Law states type of resolution to raise the Maximum lmit)
1.20
13. D
14. B
15. A
16. B
17. A
18. A
19. D
20. B
21. C
22. D
23. B
24. C
25. B
26. B
27. D
28. D
29. D
30. D
31. B
32. B
33. B
34. a
(Has or had no pecuniary relation (other than remuneration) > 10% of his total income or amount
prescribed by CG with the Company or its Holding, Subsidiary, Associate Co., promoter or director
during the 2 immediately preceding FYs or during Current Financial Year (CFY))
35. B
36. a ( exceeds 10 %)
37. b ( Guarantee given to Holding Co’s Director)
38. a ( Guarantee to subsidiary Co’s Director)
39. b (Guarantee to Holding Co’s Director within FY 16-17 i.e. within 2 IPFY of CY 18-19)
40. b (Guarantee to Promoter irrespective of Holding Co or Subsidiary, within FY 16-17 i.e. within 2 IPFY of
CY 18-19)
41. b (himself or through relatives holds more than 2 % of total voting rights)
42. d
43. D
44. C
45. c (as KLM Ltd. the appointees are not Listed)
46. d. (u/s149(6)(iv))
47. d. (u/s149(6)(iv))
48. A
49. B
50. B
51. D
52. C
53. c (Max 2 such positions can be held)
54. c (Max 2 such positions can be held, also such position(SSD) cant be held in competing business)
55. D
56. B
57. D
58. E
59. D
60. C
61. D
62. C
63. B 1.21
64. B
65. a ( SSD, Additional Director not to be calculated, of the remaining 6, 2/3rd is rotational i.e.4)
66. B
67. C
68. B
69. C
70. C
71. B
72. D
73. A
74. B
75. D
76. A
77. B
78. B
79. B
80. B
81. D
82. C
83. D
84. B
85. D
86. A
87. B
88. C
89. D
90. b (To be appointed as Independent Director: one who neither himself nor any of his relatives is a CEO or
Director (including deemed director) of any Sec 8 Co. that receives 25% or more of its receipts from the
co., any of its promoters, directors or its holding, subsidiary or associate co. or that holds 2% or more of
the total voting power of the co.)
91. D
92. D
93. C
94. A
95. A
96. D
97. B
98. d. Wholly owned Govt. Co is not covered
99. D
100 C
101 C
102 D
103 C
104 B
105 C
106 D
107 D
108 C
109 C
110 B
111 A
112 B
113 C
1.22
114 C
115 B
116 B
117 C
118 A
119 D
120 A
121 B
122 D
123 D
124 b (As per sec 166 any director shall not assign his office. Any such assignment shall be void.)
125 B
126 A
127 D
128 A
129 A
130 B
131 B
132 C
133 A
134 A
135 A
136 B
137 B
138 B
139 B
140 B
141 B
142 A
143 C
144 C
145 A
146 C
147 A
148 C
149 B
150 D
151 C
152 C
153 C
154 D
155 A
156 D
157 B
158 C
159 b
160 b
161 a
162 a
163 c
164 d
165 c
1.23
Chapter 2 Directors: Board Meetings & Its Powers
Chapter 2:Board Meetings 2.1
& Its powers

1. ‘A. Ltd incorporated in 2011, held Board meetings between 1st January 2016 to 31st December 2017 on
the following dates:
28th February 2016, 20th June 2016, 10th October 2016, 1st February, 2017, 31st March, 2017, 25th July,
2017, 20th November, 2017. Is there a violation of Sec 173 and if so for which year.
a. Violation in 2016 b. Violation in 2017 c. No Violation d. Both 2016 & 2017
28th February 2016, 20th June 2016, 10th October 2016, 1st February, 2017, 31st March, 2017, 25th July,
2017, 20th November, 2017.
Director Wiseman says that there has been no violation of Sec 173.
Director Dumbman says that there is a violation of sec 173.
Director Lostman says that if TWO Board Meetings are not held within 31st March 2018; violation will
occur.
Who is correct?
a. Wiseman b. Dumbman c. Lostman d. None
2nd January 2016, 28th April 2016, 1st August 2016, 1st October, 2016, 1st December 2016
Many of the Directors refrained from attending the Meeting on 1st December claiming that it was illegal
as the Sec 173 required only 4 meetings mandatorily in a year. Is the BM held on 1 st December 2016
Invalid?
a. Yes, 1/12/2016 is b. No, 1/12/2016 is a c. No, since 4 d. No, as Board Meeting is
not a legal BM, as legal BM as 4 meetings are to be held after 3 years of
th
it’s the 5 meetings are the calculated in FY 16- incorporation hence 5 BM
meeting. minimum number of 17, it’s a valid are permitted.
BM stipulated. meeting.
4. The following is an extract of balance sheet of a Company on 31stJan , 2016:

Equity Shareholding (FV Rs 10/-) : Rs. 10 lakhs, Liabilities: Rs. 2 lakhs, Profits: 3 lakhs
Assets: Rs. 15 lakhs, Bank A/c Rs. 1 lakh, Debtors 5 lakhs, Other Assets (incl. Fixed Assets) 9 lakhs
The Company incorporated on 1st Jan 2016. As the Balance Sheet shows the company got off to some
good business, and in order to avoid any noncompliance penalty of Companies Act, 2013, Mr. Heavy,
who is one of the 3 Directors holding 100000 shares and deeply involved in the business felt the need
to seek a professional advice on the BM provisions under Companies Act, 2013. Mr. Not Heavy, a fellow
Director on the Board of the Company suggested your name for the same:
What would be your advise to them on 31st Jan 2016 regarding BM provision.
a. Min 4 BM to be held b. Min 4 BM to be held in c. Min 4 BM in a Financial d. Min 2 BM at interval
in a Calendar year a Financial Year at Year at interval not not less than 90
at interval not interval not exceeding days and atleast 1
exceeding 120 exceeding 120 days 90 days between BM in every half of
days between between consecutive consecutive BM and the calendar year
consecutive BM. BM. atleast 1 BM per
Quarter
5. Federation of Indian Chambers of Commerce and Industry (FICCI)’s, (Sec 8 Co’s) President Elect Mr.
Chapter 2 Directors: Board Meetings & Its powers
Somanytaking over from President Mr. Shah seeks your advise as to the BM provisions applicable to
his organisation. Kindly suggest the procedure to be followed.
2.2
a. Min 4 BM to be b. Min 4 BM to be held in a c. Min 4 BM in a d. 1 BM in every 6
held in a Financial Year at interval Financial Year at calendar year
Calendar year at not exceeding interval not
interval not 120 days between exceeding 90 days
exceeding 120 consecutive BM. between
days between consecutive BM and
consecutive BM. atleast 1 BM per
Quarter
6. A OPC with 2 or more Directors shall be required to hold a First Board Meeting u/s 173(1) :
a. Within 30 b. Within 60 c. No First BM required u/s d. No First BM required u/s
days of days of 173(1) if atleast 1 BM held 173(1) if atleast 1 BM held
Incorporation Incorporation every half calendar year at every quarter of the calendar
interval not less year at interval not
than 90 days between less than 60 days between
consecutive BM’s consecutive BM’s
7. A small company shall be required to hold a First Board Meeting u/s 173(1) :
a. Within 30 b. Within 60 c. No First BM required u/s d. No First BM required u/s 173(1)
days of days of 173(1) if atleast 1 BM if atleast 1 BM held every
Incorporation Incorporation held every half calendar quarter of the calendar year at
year at interval not interval not less than 60 days
less than between consecutive BM’s
90 days between
consecutive BM’s
8. An OPC with 1 Director shall be required to hold a First Board Meeting u/s 173(1) :
a. Within 30 b. Within 60 days c. No First BM d. No First BM required u/s 173(1) if
days of of required u/s atleast 4 BM held every calendar
Incorporation Incorporation 173(1 )at all year at interval not exceeding 120
days between consecutive BM’s
9. A Dormant company shall be required to hold a First Board Meeting u/s 173(1) :
a. Within 30 b. Within 60 days c. No First BM required u/s d. No First BM required u/s
days of of 173(1) if atleast 1 BM held 173(1) if atleast 1 BM held
Incorporation Incorporation every half calendar year at every quarter of the calendar
interval not less than year at interval not
90 days between less than 60 days between
consecutive BM’s consecutive BM’s
10. A OPC with 2 or more Directors shall be required to hold which of the following minimum number of
Board Meeting u/s 173(1) :
a. Min 4 BM to be held b. Min 4 BM to be held c. Atleast 1 BM held d. Atleast 1 BM held every
in a Calendar year in a Financial year at every half calendar quarter of calendar year
at interval not interval not year at interval not at interval not less than
exceeding 120 exceeding 120 days less than 90 days 60 days between
days between between between consecutive BM’s
consecutive BM consecutive BM consecutive BM’s
11. The following Directors have the respective views on the delivery of Notice of BM:
Mr A. The Notice should be delivered either by hand OR by post OR by electronic means
Mr B The Notice should be delivered by hand AND by post AND by electronic means
Mr C The Notice should be delivered by the preferred mode of delivery of the recipient Director
Which of the aforementioned Directors have the right opinion: 2.3
a. Mr A b. Mr B c. Mr C d. None
12. For a BM dealing with non-urgent matters notice of the BM shall be given atleast before :
a. 7 days b. 14 days c. 21 days d. 28 days
13. When Directors participate through Audio Visual means what are its pre requisites:
a. It should record b. It should record and c. It should recognize d. All of these
the Directors’ store the proceedings the participant
participation of the meeting Director
14. The water pipeline of a reputed hotel company ruptured due to accidental damage. Immediate bids
were obtained from repair contractors; a heavy financial outlay was expected. The BM needs to be
called urgently to select a contractor or else the business suffers loss of reputation and payment of
compensation to clients. Can an urgent BM be held without any Notice being given?
a. Yes b. No c. Yes, but ratify the same at d. Yes, but Independent Directors need
the BM to be present
15. The water pipeline of a reputed hotel company ruptured due to accidental damage. Immediate bids
were obtained from repair contractors; a heavy financial outlay was expected. The BM needs to be
called urgently to select a contractor or else the business suffers loss of reputation and payment of
compensation to clients. Can an urgent BM be held with a shorter Notice being given?
a.Yes b.No c. Notice for a shorter period can be d. Yes, BM can be held without notice also
given and Independent Director (if but Independent Director (if any) shall
any) shall be present at BM OR ratify be present at BM OR ratify the decisions
the decisions taken thereat by taken thereat by circulation.
circulation.
16. Mr. A, a Director of ABC Ltd recently had a housewarming ceremony at which all BOD members,
Secretary & Employees of the ABC Ltd were invited and in attendance. For the next BOD meeting the
Company sent a notice at the address of his newly opened house and not at registered address in
company’s records (which was his old house). This was done in foresight that the notice would not make
it to him had it been sent at the registered address. Is the treatment proper and in line with
Companies Act?
a. Yes, since the newly b. No, since the c. Yes, the invite for house d. As per Companies Act
opened house is house is not the warming is akin to an the Director whose
indirectly brought to address application for change in address for delivery is
attention of the Co’s registered with registered address in doubt, shall be
records the company served
notice only by hand
17. An OPC with 2 or more Directors shall be required to give 7 days’ notice for BM :
a. True b. False c. Notice provisions are deemed complied with if d. OPC is not required to
1 BM every half calendar year is held and gap conduct BM as it is only
between 2 consecutive BM is not less led by One Person.
than 90 days
18. Failure to give BM Notice shall result in following Penalty to the defaulting Officer of the Company:
a. Rs. 25000/- b. Rs. 25000/- + Rs. 100/- c. Rs. 10000/- d. Rs. 10000/- + Rs 100/- every day
for every day default the default continues
continues
19. BM was called for an urgent matter required to be deliberated, what are the requirements for such a
2.4
BM:
a. An Independent b. An Independent c. If the Company has d. Notice calling such a

Director (if any) Director (if any) shall be Independent BM shall be signed by
shall be the present at such meeting Directors , only they Independent
Chairman of such OR atleast ratify the can vote on such Directors only
a meeting decisions made thereat urgent matters
through circulation
20. What provisions pertaining to BM are applicable to Specified IFSC public Company:
a. Such company b. Such company shall hold c. Such company shall d. Such company shall
shall hold First BM First BM within 60 days hold First BM within hold First BM within
within 30 days of of Incorporation and 1 30 days of 60 days of
Incorporation and BM in each half of Incorporation and 1 Incorporation and 1
1 BM in each half calendar year BM in each quarter BM in each quarter of
of calendar year of calendar year calendar year
21. What modes of attendance are available to a Director attending a BM

a.In person b. Video Conference c. Prescribed Audio Visual means d. All of these
22. Mr. A attending his daughter’s destination wedding joined a BM via Video Conferencing:
At this meeting discussion was done regarding financial budgets and approval of the Financial
Statement. Presence at BM via Video Conferencing is not permissible for which of these matters?
a. Discussion for b. Approval of annual c. Both are d. Both are not
budgets are not Financial Statement is permissible permissible
permissible not permissible
23. Mr. A attending his daughter’s destination wedding joined a BM via Video Conferencing:
At this meeting discussion was done regarding wide range of financial budgets and approval of the
Board’s Report. Presence at BM via Video Conferencing is not permissible for which of these matters?
a. Discussion for budgets b. Approval of Board’s c. Both are d. Both are not
are not permissible Report is not permissible permissible permissible
24. Notice was received by Mr. Traveller, Director of Wanderlust Ltd. for BM to be held on 15th of the month.
On that day Mr. Traveller was to travel to New York and hence couldn’t be able to attend the meeting.
Mr. Stationary told Mr. Traveller not to worry as the Companies Act, permits attendance through Video
Conferencing as well:
At the meeting that ensued following matters were discussed:
I. Payment of Bonuses
II. Selection of Transport Contractors
III. Approval of Quarterly Financial Statements for Stock Exchange compliances
In light of gravity of the decisions taken thereat, is the attendance of Mr. Traveller through Electronic
mode valid under Companies Act
a. Yes for all matters b. No for all matters c. Yes for I & II only d. No for I & II only
25. What shall be Quorum in case No. of Directors is 12:

a. 3. b. 4. c. 9. d. 2
26. What shall be Quorum in case No. of Directors is 13:

a. 3. b. 4. c. 5. d. 2
27. A. Ltd had 9 Directors on its Board. A Board Meeting was convened on 15 th of the month. On that day,
7 of the Directors were on visit to a Regional Conference. The meeting was conducted by the remaining
two and a letter jointly signed by the 7 absentee member Directors was obtained as a No- Objection for 2.5
lack of Quorum.
Is the BM legal if absentee Directors waive Quorum in writing ?
a. No, as Quorum is fixed by b. Yes, Quorum can be c. Yes, Quorum is a just a d. Yes, provided
the Act and cannot be reduced if over 2/3rd guiding principle and Independent
reduced by Co (only specific Directors can be waived by Directors
businesses can be done consent to do so written declaration unanimously
when Quorum falls) approve the
same
28. In a 3-person Board, with Mr. A, Mr. B, Miss C as the Directors, 3 resolutions were to be passed, but
following Directors were Interested therein:
Resolution Interested Directors
I Mr A
II Mr B & Miss C
III Miss C
On which Resolution the Board doesn’t hold a Quorum
a. I & III b. II c. None d. All
29. ‘The First Step’ Ltd engages in selling souvenirs made by juvenile inmates and using the surpluses
thereof only to impart vocational education to juveniles in jails, it is incorporated under special
provisions applicable to Social Welfare entities under Companies Act and seeks advise in following case:
A BM was called on 28th June, at the meeting Directors for District No..1 , 4, & 6 were in attendance. But
the Directors for remaining 13 other districts could not make it in time. There is one Director for each
district . Is the quorum at the meeting valid?
a. No as 6 Directors b. No as the requisite c. Yes as 2 Directors are d. A single Director can

are minimum quorum is 4 minimum Quorum in form Quorum in
Quorum in above members or more given case above case
case
30. A meeting is convened on 19th of January, due to lack of Quorum it stands postponed to which of the
following days?
a. 25th January – b. 26th January - Republic c. 27th January - d. 28th January - First
Friday Day of India Sunday working day of the week
31. Out of the 3 Directors on the Board of A Ltd. Mr A passed away and Mr B tendered his resignation before
the BM scheduled for 15th of the month. At such a meeting Mr. C being the sole Director could no way
achieve the Quorum and as such made business decision by passing resolutions himself. The
Shareholders were displeased at such single handed approval system. Will the resolutions passed
stand?
a. Yes, as there is b. Yes, but only if c. No, as the Companies d. Yes, as the BM was already
no way to the Act only allows notified before the events of
achieve the resolutions continuing director/s retirement and death took
mandatory 2 passed are to act in order to place, hence decisions taken
person assented to by restore Quorum or call thereat are legally binding
Quorum the GM of Shareholders
Shareholders
32. Mr A. Director of A.Ltd is also the sole proprietor of Alpha Traders who are the leading supplier of Raw
Material to Supersonic Traders. Supersonic is expecting to receive an order from A Ltd. The BM
convened to grant this order has Mr. A present thereat. Is he an Interested Director?
2.6
a. Yes, as he is b. Yes, as he is owner c. No, as he is a mere d. No, since Mr. A is a sole
indirectly to of an entity other supplier to proprietor and as such has
benefit from a than Supersonic, not an immunity from provisions
better financial Directorship of A owner/partner of Interested Directors
position of Ltd therein.
Supersonic
33. Mr A. Director of A.Ltd is also the partner in Alpha Traders. Mr. B. his partner in Alpha Traders is also a
partner in Supersonic Traders. Supersonic is expecting to receive an order from A Ltd. The BM
convened to grant this order has Mr. A present thereat. Is he an Interested Director?
a. Yes, as he is b. Yes, as he is within c. No, as he is a mere d. No, since Mr. A is a partner
financially two partner to Mr. B (who is of Mr. B , and as such the
related with a degrees of separately a partner in partnership assumes a
partner of the separation from Supersonic different legal status and
beneficiary of the bidder i.e. Traders), and not an hence immune to
the resolution. Supersonic owner/partner provisions of Interested
himself. Directors
34. What provision of Quorum is applicable to OPC with more than 1 Director:
a. Quorum 2 or b. 25% or 8 c. No Quorum required d. No Quorum required at BM of
1/3rd members for OPC in this case OPC
35. Mr A. Director of A.Ltd is also the partner in Alpha Traders. Alpha Traders is expecting to receive an
order from A Ltd. The BM convened to grant this order has Mr. A present thereat. As an Interested
Director can he participate?
a. Yes, as an interested b. Yes, but only on c. No, Interested Directors d. Yes, but such action
director is required disclosing are not allowed to vote shall be ratified by
not to vote only if he is interest in matters pertaining to Independent
a “Director “ in outside entities where Directors’ Committee
benefiting they are owners.
“Company”
36. Mr A. Director of A. Pvt Ltd is also the partner in Alpha Traders. Alpha Traders is expecting to receive
an order from A Pvt Ltd. The BM convened to grant this order has Mr. A present thereat. As an
Interested Director can he participate?
a. Yes, as an interested b. Yes, but only on c. No, Interested d. Yes, but such action
director is required not disclosing Directors are not shall be ratified by
to vote only if he is a interest allowed to vote in Independent
“Director “ in benefiting matters pertaining to Directors’
“Company” outside entities Committee
where they are
owners.
37. How many Directors are required for making request that a resolution circulated for approval shall
instead be passed by convening BM:
a.1/3rd or more b. 2/3rd or more c. Minimum 2 d. 1/2 or more
38. Which of the following is correct: The resolution passed by circulation

a. Shall be noted at b. Shall be noted at the c. Shall be noted at d.Shall be noted at the
the next BM and immediate next GM the next BM but immediate next GM held
made part of held by the company not recorded in by the company and
minutes thereof and made part of Minutes ratified by shareholders

minutes thereof
2.7
39. NTPC Ltd. (NSE: NTPC) engaged in retail business has a paid up share Capital of 5.5 crore, with total
outstanding liabilities incl. loans and debentures) of 11 crores. It made a turnover of 50 crores . Is it
required to appoint an Audit Committee?
a. Yes, as it has b. Yes, as it has liabilities c. Yes, as its share d. Yes, as it is a Listed
turnover over over minimum limit capital is over Public Company
minimum limit minimum limit
40. Of the 4 Directors on the Audit Committee of A. Ltd. 2 are illiterate and 2 are Chartered Accountants.
This is done so as to bring about inclusivity of opinions. Is the constitution valid under Companies Act?
a. Yes, atleast 50% b. Yes, as the education c. No, as majority are d. No, as Companies Act
are able to read is no criteria for required to read requires all Audit
and understand selecting Directors and Committee members to be
financial for Audit Committee understand financially literate
statements financial
statements
41. Artisans , a sec 8 company is required to form a Audit Committee . It appoints 5 member Directors,
only 2 of whom are Independent. Is this a valid constitution of the Audit Committee?
a. No, as more than b. No, as more than 3/4th c. Yes , as the d. Yes, as the provisions are
50 percent shall be shall be Independent, minimum criteria relaxed for a sec 8
Independent and any fraction shall of 2 Independent company, exempting
Directors be counted as 1 Directors is need for majority
fulfilled Independent Director
42. The Audit Committee of Arc Ltd. requested the CA firm engaged in audit of Arc Ltd. to produce its
Auditor’s Report as per terms of reference of such Committee with the BOD. The CA firm outright
declined saying that the Audit Committee was overstepping its limits. Is the view of the CA Firm proper
as per Act?
a. Yes, as the CA Firm is b.No, as the Audit c. No, as the Audit d. Yes , as the right over
answerable to BOD and Committee is given Committee is sole documentation of the
not to a delegated such right under authority for all Audit records solely lies
authority e.g. Audit Companies Act, communications with the auditor.
Committee 2013. with auditors
43. The auditor of Arc Ltd. attended the meeting of Audit Committee thereof. He made a statement about
certain pressing matters about Internal Control weaknesses. In the ensuing resolution of the Board ,
regarding the fortification of Internal Control through digital means, the auditor claimed he had a
special right to vote under Companies Act, as he is the expert on that subject. Is he entitled to vote?
a.Yes, Audit Committee is b. No, the Auditor has no c. Yes, Audit d. Yes, Auditor can cast
required to allow auditor right under Companies Committee is a vote, but only if
to vote on matters Act to vote at such formed by there is a tie in the
towards which he has meeting, but has right default with the number of votes
made statements to make statement Auditor as a
in Committee meeting thereat. member
44. Medking Ltd. is required to have vigil mechanism and has an existing Audit Committee. Mr. A is a
member of this Audit Committee and Chairperson. Besides, he is a consultant to Goodmeds Ltd., who
supply raw material to Medking Ltd. Mr. Truthful an employee in the testing department found the
supplies of Goodmeds to be substandard and accused Mr. A of accepting kickbacks. And brought this to
notice of the higher-ups. After no response to his complaint he approached the Audit Committee.
Mr. A who is also the Chairman of Audit Committee participated in the ensuing discussions.
Can Mr A participate in such business of Audit Committee despite the apparent conflicts of interest?
a.No, as the Companies Act b. Yes, provided that such c. None of these.
2.8
requires a person having resolutions passed as a result
conflict of interest to recuse of deliberations are further
himself from deliberations on ratified at Board
those matters Meeting
45. Failure of a Company to enforce a proper vigil mechanism u/s 177(9) can result in fine of :
a. 1 lakh to 5 b. 5 lakh to 10 lakh c.10 lakh to 15 d. 5 lakh + 1000/- for every
lakh lakh continuing day without vigil
mechanism
46. Defaulting officer of a Company who fails to enforce a proper vigil mechanism u/s 177(9) can be u/s
178(8) :
a.Imprisoned for upto 1 year OR b.Imprisoned for upto 6 months c. Fine from d.None of
Fined from 25000 to 100000 OR OR Fined upto 10000 10000 to these
Both OR Both 50000
47. Bosch Ltd {NSE:Bosch} is a listed public company having PUC of 5 crores, turnover of 50 crore and
aggregate borrowing and debt of 50 crores:
Will it be required to form a Nomination and Remuneration Committee?
a.Yes, as the PUC b.Yes, as the c. Yes, as aggregate d. Yes as all listed public companies
is above 1 crore turnover is borrowings are equal to require to have a Nomination
above 10 or exceed 50 crores and Remuneration
crores Committee
48. Bosch Ltd is an unlisted public company having PUC of 15 crores, turnover of 50 crore and aggregate
borrowing and debt of 50 crores:
Will it be required to form a Nomination and Remuneration Committee?
a. Yes, as the PUC is b.Yes, as the c. Yes, as aggregate d. Yes as all unlisted
above 10 crore turnover is borrowings are equal to or companies require to have
above 10 exceed 50 crores a Nomination and
crores Remuneration Committee
49. A Nomination and Remuneration Committee has 4 member Directors including the Chairperson of
BOD. All of whom are non-executive and 2 are Independent Directors. Is the constitution proper? If
not, why?
a. Yes , the b. No, as the number of c. No, as the number of d. No, as the minimum
constitution is Independent non-executive number of member
proper Directors shall be a Directors shall be less Directors for a NRC is 5
majority, which it is than 3.
not
50. A certain company has Nomination and Remuneration Committee consisting 4 member Directors
including the Chairperson of Company. Of which 3 are non-executive and 2 amongst them are
Independent Directors. Chairperson of Company (only executive member) is elected as the Chair of
the NRC. Is the constitution proper?
a. No, as the no of b. No, as the number of c. No, as the Chairperson of d. Yes, the
Executive directors Independent Directors Company can’t be Chair constitution is
is insufficient is insufficient of NRC in line with
Companies Act.
51. Would it be permissible for Chairperson of Company to Chair the NRC in the above case if such person
was a non-executive Director?
2.9
a. Yes, as Non- b. No, as Chairperson of Company c. No, as the number of d. Yes, as a
executive is prohibited to be Chair of NRC Executive Directors NRC is
Chairperson of irrespective of whether would fall to zero, required to
Company can be a executive or non- executive which is below have only
Chair of NRC minimum prescribed Non-
executive
Directors
52. A 4 person Stakeholders Relationship Committee was formed by Prakash Ltd having 1001
Shareholders.
The 4 members were highly qualified Executive Directors. Amongst them a Director was named
Chairman. Is this a validly constituted SRC, if not, why?
a. Yes, the SRC is b. No, the SRC is not validly c. No, the SRC d. No, the SRC is
validly constituted as there is failure Chairman is invalid, invalid as it consists
constituted to maintain minimum no. of as the post can be members already
Non-Executive Members on held only by Non- serving on
SRC executive Director BOD.
53. Failure of a Company to constitute a proper Nomination & Remuneration Committee can result in fine
of :
a. 1 lakh to 5 lakh b. 5 lakh to 10 lakh c.10 lakh to 15 d. 5 lakh + 1000/- for every
lakh continuing day without NRC
54. Defaulting officer of a Company which fails to constitute a proper NRC can be :
a. Imprisoned for upto 1 year b.Imprisoned for upto 6 months c. No Imprisonment. d.None
OR Fined from 25000 to OR Fined upto 10000 OR Both Fine from 10000 to of
100000 OR Both 50000 these
55. The BOD at the BM approved a contract to Arc Builders. The said contractor was having less than 2 years
11 months of Building experience in Infra projects at that point. At the ensuing General meeting 3 months
later, the Company added a regulation that only Contractors with more than 3 years of Builiding
experience shall be hired . Arc Builders’ contract was rescinded as a result retrospectively, as the GM
was of the opinion that Shareholders can undo decisions made by BOD, and can provide
retrospective ratification or revocation. Is the treatment correct.
a. No, the BOD’s decisions cannot b. Yes, the Shareholders at c. No, the Shareholders cannot
be retrospectively rescinded by GM are true owners of the rescind the contract as on the
GM of shareholders as they Company and can do ratify relevant date of GM the Arc
were valid on the day they as well as rescind a Builders have requisite
were made contract retrospectively experience
56. Good People, a Sec 8 Company, wanted to pass a resolution through circulation on the matter of
investing of the Company’s funds in select Government securities. Can the Sec 8 Company pass such a
resolution through Circulation?
a. Yes, it is b. No, as the Companies Act c. No, as the Sec 8 d. Yes, but the
specifically prohibits specifically Companies are Securities can only
covered in the passing circular resolution prohibited to be Government
Companies Act. on above matter pass resolutions Guaranteed
by circulation securities
57. Bahd People, a Sec 8 Company, wanted to pass a resolution through circulation on the matter of giving
security towards loan borrowed by it. Can the Sec 8 Company pass such resolution through Circulation?
a. Yes, it is b. No, as the Companies Act c. No, as the Sec 8 d. Yes, but only if the
2.10
specifically prohibits specifically Companies are value of security
covered in the passing circular resolution prohibited to pass does not exceed
Companies Act. on above matter any resolutions by Rs. 1 lakh
circulation
58. BOD of A. Ltd wanted to delegate the power of borrowing monies to the Managing Director. Is this a
proper delegation of power?
a. Yes, as such b. No, as a c. No, as the decision of d. Yes, provided the
delegation is delegated borrowing monies is a matter upper limit of
allowed under authority (i.e. that the Companies Act borrowings shall not
Companies Act. BOD ) cannot mandates to be passed by BOD exceed Rs. 1 lakh
further delegate only
59. A. Ltd wanted to make contribution to Topi Kamal Haath Party, a political party. The BOD delegated the
same to a select Committee formed entirely of Independent Directors. Is the delegation proper?
a.Yes , as the Committee b. No, as resolution for c. No, as such d. No, Political
is fully Independent as political Contributions resolution is to be Contributions are
stipulated by are to be made only at passed at BOD in a banned to be made
Companies Act GM of shareholder convened BM only w.e.f. FY 2017
60. Can the powers of the Board u/s 179(3) be restricted by Shareholders in GM?
a. Yes, the shareholders b. No, the powers of c. Yes, but only the 3 d. Yes, only if the
have a right to put the Board bestowed specific cases as BOD has no
restriction on the under 179(3) are mentioned under Independent
Board’s exercise of absolute and can’t be Sec 179(3) (d) (e) and Directors
powers u/s 179(3) restricted by Co (f) appointed
thereto
61. Board of A Ltd wishes to exercise the power to sell its whole undertaking in Ab Ltd its subsidiary.
A. Ltd’s total net worth as per the preceding financial year audited Balance Sheet was 100 crores.
The Investment in Ab Ltd was 30 Crores only. The exercise of such power was done after consent
of the Company through ordinary resolution. Is the treatment correct?
a. No, as the b. No, as the c. Yes, as the d. Yes, as the Company
Company shall be Company shall be Company shall be shall be required to
required to provide required to provide required to provide provide consent by
consent by Special consent by Special consent by Ordinary Resolution
Resolution as the Resolution as the Ordinary irrespective of %age
total investment total investment Resolution as the of investment
exceeds 20 % net exceeds 15 % net total investment is
worth. worth less than 40 % net
worth
62. Board of A Ltd exercised the power to sell its whole undertaking in Ab Ltd (its subsidiary). A Ltd’s
total net worth as per the preceding financial year audited Balance Sheet was 100 crores. The
Investment in Ab Ltd was 15 Crores only. The exercise of such power was through consent of the
Company through ordinary resolution. Is the treatment correct.
a. No, as the b. No, as the c. Yes, as the Company d. Yes, as the Company
Company shall Company shall be shall be required to shall be required to
be required to required to provide provide consent by provide consent by
provide consent by Special Special Resolution Ordinary Resolution in
consent by Resolution as the only when total all cases.
Special total investment investment in
Resolution exceeds 10 % net undertaking exceeds

irrespective of worth 20 % net worth
the % age. 2.11
63. Board of A Ltd exercised the power to sell its whole undertaking in Ab Ltd its subsidiary. A Ltd’s
total income for the previous financial year was 100 crores. The income share contributed by Ab
Ltd was 30 Crores only. The exercise of such power was through consent of the Company
through ordinary resolution. Is the treatment correct.
a. No, as the b. No, as the Company c. Yes, as the d. Yes, as the
Company shall be shall be required to Company shall be Company shall be
required to provide provide consent by required to provide required to
consent by Special Special Resolution consent by Ordinary provide consent
Resolution as Ab as Ab Ltd’s share in Resolution as Ab by Ordinary
Ltd’s share in total total income exceeds Ltd’s share in total Resolution in all
income exceeds 20 15 % income is less than cases
%. 40 %
total income for the previous financial year was 100 crores. The income contributed by Ab Ltd
was 15 Crores only. The exercise of such power was through a consent of the Company through
ordinary resolution. Is the treatment correct.
a. No, as the b. Yes, as the c. Yes, as the d. Yes, as the
Company shall be Company shall be Company shall be Company shall be
required to provide required to provide required to provide required to
consent by Special consent by Special consent by Ordinary provide consent
Resolution in all Resolution only if Resolution as Ab by Ordinary
such cases Ab Ltd’s share in Ltd’s share in total Resolution in all
total income exceeds income is less than cases
20 % 40 %
65. Board of A Ltd exercised the power to invest in trust securities the proceeds of compensation
received as a result of merger/amalgamation. The exercise of such power was through consent
of the Company through ordinary resolution. Is the treatment correct?
a. No, as the b. No, as the Company c. Yes, as the d. No, as such a decision
Company shall shall be required to Company shall lies entirely with
be prohibited to provide consent by be required to Company at GM and
invest such sums Special Resolution provide consent can’t be delegated to
as per the as the same is by Ordinary BOD in any form
Companies Act stipulated in Resolution in all
Companies Act such cases
66. Board of A Ltd exercised the power to remit (ignore) repayment of debt due from Director. The
exercise of such power was through consent of the Company through ordinary resolution. Is the
treatment correct?
a. No, as the b. No, as the c. Yes, as the same d. No, as such a decision lies
Company shall Company shall be is exempted entirely with Company at
be prohibited required to provide from Special GM and can’t be delegated
to remit such consent by Special Resolution under to BOD in any form
sums as per Resolution as the the Companies
the Companies same is stipulated Act 2013
Act in Companies Act
67. What penal provisions befall a Director who has not disclosed interest u/s 184
a. Imprison : <= 1 b.Imprison : <= 6 c. Imprison: <= 1 yr d. Imprison: <= 6 mt Fine

yr mt Fine : <=1 lakh : 50000-1 lakh or Both
2.12
Fine : 1-2 lakh Fine : 1-2 lakh Or Both
Or Both Or Both
68. Mr. A was interested in a contract. He was a Director of A.Ltd. The interest was not disclosed.
On prospective discovery of his interest the Director, the BOD wanted to annul the contract.
Can it do so?
a. Yes, the b. Yes, the contract is c. No, the contract d. Yes, the contract is
contract is voidable by the cannot be voided voidable and the Company
voidable at the party in which the on a technicality shall bear all costs that
option of the Director has and the outsiders may have unduly befallen
Company interest, failing are protected by on the other party as a
which the Director Doctrine of result of voiding
shall indemnify Indoor
Management
69. A. Ltd’s extract of financial statements is as follows :

Paid-Up Capital and Free Reserves 100 Crores. Sec Premium 10 crores
Money Borrowed 50 crores (includes 10 crores temporary loan repayable within 6 months).
Money proposed to be borrowed 60 crores.
An ordinary resolution at the GM is passed to approve such additional borrowing.
Is the treatment correct.
a. Yes, as aggregate of b. No, as Sp c. Yes, as all d. Yes, as the money to
money borrowed and to Resolution is borrowing of be borrowed is less
be borrowed does not required for all money requires than 3/4ths of the
exceed PUC + FR+SP, the times when consent by total PUC+FR
hence does not require money is Ordinary
Sp Resolution borrowed Resolution
70. In the above question would the treatment be correct if the Money proposed to be borrowed was
70 crores instead of 60 crores
a. Yes, as the aggregate of money borrowed b. No, as the aggregate of money
and to be borrowed would not exceed borrowed and to be borrowed would
PUC + FR+SP, hence won’t require Sp exceed prescribed limit hence require
Resolution. Thereby current treatment Sp Resolution. Thereby current
would stand treatment would be wrong
71. In question No. 69 would the treatment be correct if the Money proposed to be borrowed was 71
crores instead of 60 crores
a.No, as the aggregate of money borrowed b. No, the same treatment would stand
and to be borrowed would exceed PUC +
FR+SP, hence consent by Sp Resolution
72. In question No. 69 would the treatment be correct if Money Borrowed previously (i.e.50 crores)
had temporary loans component of 20 crores instead of 10.
a. Yes, as in that case b. No, as the aggregate c. Yes, as in d. No, as in any case a Special
the aggregate of of the Money any case the resolution would have
money borrowed borrowed and to be ordinary been required
and to be borrowed would be resolution is
borrowed won’t equal to or exceed required
exceed PUC + PUC + FR +SP
FR+SP
2.13
total net worth as per the preceding financial year audited Balance Sheet was 100 crores. The
Investment in Ab Ltd was 30 Crores only. The exercise of such power was through consent of
the Company through special resolution. The limits for the sale of investment were not explicitly
mentioned in GM-SR. Is the treatment correct.
a. Yes, the b. No, as in addition to c. Yes, as the d. Yes, as the BOD is at
requirement of a the Special Resolution limits are liberty to define the
Special what is also required is notified for financial limits within
Resolution is the the mention of the different which to exercise the
sole criteria as limits of funds class of power
per the Act Companies
by the
Companies
Act, 2013
74. Board of A Ltd exercised the power to sell its whole undertaking in Ab Ltd its subsidiary through
a consent of the Company vide an ordinary resolution. Later it was discovered in 4 months that
the situation warranted a special resolution. Owing to the same, the title of the purchaser of the
undertaking was brought into question. Is the treatment correct.
a. Yes, the title of b. No, as the title of c. Yes, as the d.No, as any suit for this
the purchaser is the purchaser is free decision taken sale transaction is time
invalid if the from any defect in relates to sale of barred as per the Statute
Company fails to procedure of undertaking of Limitations applicable
provide a special approval provided hence the same is to such case
resolution where the purchaser has void ab initio and
needed under made purchase in doctrine of
Companies Act good faith indoor
management
doesn’t protect
outsiders
75. Board of Adarsh (Pvt) Ltd sold its undertaking as defined in explanation to Sec 180(1)(a). The
Company at the GM objected to such an exercise of power calling it to be a wrongful as it was
without approval of Company through Special Resolution as required for sale of undertaking u/s
180(1)(a) of Companies Act, 2013. Owing to the same, the title of the purchaser of the
undertaking was brought into question. Is the treatment correct.
a. Yes, the title of b. No, as the title of the c. Yes, as the decision d.No as these
the purchaser is purchaser is free from taken relates to sale provisions are N.A.
invalid if the any defect in of undertaking and to Adarsh
Company fails to procedure of approval the same is void ab
provide a special provided the initio and doctrine
resolution where purchaser has made of indoor
needed under purchase in good faith management
Companies Act as per section 180 doesn’t protect
outsiders
76. A Ltd seeks to make contribution to Charitable funds of 5 lakh in FY 2017-18. The Board
approved such a resolution without consent of Company at GM. In light of the given extract
for the 3 immediately preceding FY, is the treatment correct?
FY Net Profits (in lakhs)
FY 2014-15 50
FY 2015-16 150
FY 2016-17 100
a. Yes, as for b. No, as the c. Yes, as the d. No, as the amount is

Charitable fund Companies Act, amount does equal to or exceeds 5 %
2.14
contribution no 2013 prohibits not exceed 5% of the Avg N.P.of 3
consent of Charitable fund of the Avg. IPFY and hence needs
Company is contribution with or N.P of 3 IPFY approval of Company at
required without consent no approval of GM
Co at GM
needed
77. Would the treatment be correct in the above case change if instead of net profit of 50 Lakhs in
FY 2014-15 the company made net profit of 40 Lakhs.
a. Yes, as for b. No, as the c. Yes, as the d. No, as the amount is
Charitable Companies Act, amount does equal to or exceeds 5 %
fund 2013 prohibits not exceed 5% of the Avg N.P.of 3
contribution Charitable fund of the Avg. N.P IPFY and hence needs
no consent of contribution with or of 2 IPFY no approval of Company at
Company is without consent approval of Co GM
required at GM needed
78. A Ltd. with turnover of 100 lakhs Contributed 10 Lakh to the Flower Hand Broom Political
Party. The contribution was consented through a BOD resolution . Some members of the
Company objected that Company’s consent for the same shall have been obtained. Is the
Contribution valid in light of Companies Act, 2013
a. Yes, the b. No, the contribution is c. Yes, the d. No, the
contribution is not valid as the contribution is contribution is
valid as no consent Company’s consent at valid as the Act invalid as there can
of the Company at GM is required if the does not be no contribution
GM is required if amount of contribution require the to any Political
amount is <= 10% is >= 10% of Turnover Company’s Party
of Turnover consent but
only the BOD
resolution
approving the
same
79. Would the contribution be valid if in question no 78 A Ltd was a Company in which CG or SG
or partly both held more than 51 % shareholding?
a. Yes, as Government b. No, since the c.Yes, as the d. No, as in case of
Company is not Companies Act, Act allows Government
prohibited to make any 2013 expressly Governme Companies , Company’s
political contributions as prohibits such a nt to make approval in GM is
the Government itself contribution to be contributio required.
owns the Company made n upto 20
% of the
turnover
80. Would the contribution be valid in question no. 78 if A Ltd was incorporated 364 days before
making such a contribution.
a. No, as company is b. No, as company is c. Yes, as the d. Yes, as the Company
in existence for less in existence for less contribution is has completed 180 days
than 1 FY it is than 3 FY it is independent as stipulated in the
prohibited to make prohibited to make of the time for Companies Act, 2013
any political any political which the
contributions contributions Company has
been in
existence
2.15
81. Would contribution be valid in question no. 78 if A Ltd made contribution through Cash or
Cheque which was not crossed.
a. Yes, as contribution b.No, as account c. Yes, as the amount d. No, as the amount is
to political party payee is <= 10% of the >= 10% of the
does not necessarily instruments are turnover of the turnover of the
have to be in necessary as Company the use Company, hence the
account payee stipulated in of Account payee use of Account payee
instrument Companies Act instruments is not instruments is
mandatory mandatory
82. A. Ltd. Made contribution to political parties as follows:

1. Flower Hand Broom(FHB) Party Rs. 100000/-
2. Advertisement in the ‘Socialist’ a pamphlet being issued at rallies by FHB Party Rs 10000/-.
3. Advertisement in ‘Social Soldier’ a brochure chronicling left-leaning seminars, printed by Mr.
Leftist, whose philosophies glorify FHB Party . Rs 5000/-.
The P&L discloses the Contribution to political parties u/s 182 as Rs 100000/- and
Advertisement as 15000/- . Is the disclosure in line with Sec 182 of Companies Act?
a. Yes, as only direct b. No, as the c. No, as the d. No, as all the amount
contributions to Contribution in Contribution in shall be mandatorily
political parties are 1. and 2. above 1. 2. and 3. classified as
covered in Sec 182 are covered in above are Advertisement
Sec 182 so covered in Sec Expenditure as stipulated
amount shall be 182 so amount by Companies Act, 2013
110000/- shall be
115000/-
83. A. Ltd made a contribution of Rs 100000/- to political party but did not follow the Sec 182 of
Companies Act 2013. What shall be the punishment for such contravention imposed on the
company?
a. 5x the amount b.10x the amount c. 15x the d. No penalty on the Co.
amount
84. In the above case, what shall be the punishment labelled onto the defaulting officers of the
company?
a. Imprisonment : upto b.Imprisonment : c. Imprisonment d. Imprisonment : upto 1
1 year. Fine : 5x the upto 6 months. : upto 2 years. year. Fine : 10x the
amount Fine : 5x the Fine : 10x the amount
amount amount
85. A. Ltd sought to contribute to the National Defence Fund an amount at 6 % of the average net
profits of 3 years immediately preceding the FY. There is a debate as to who is the proper
authority to approve such a resolution. Who is the proper authority?
a. The BOD b. The person or authority c. The Co. d. All of these
exercising powers of the in GM
BOD
86. Mr. Good a Director of A. Ltd. Has developed an interest in a previously approved contract
which at the time of approval he was not interested in. The Director is of the opinion that he is
not liable to any further reporting duty since he has disclosed interest at the time of original
approval. But the BOD takes a contrary view. Who is correct?
a. Mr. Good is b. BOD’s view is c. Mr. Good is d. BOD’s view is correct

correct as his correct as any required to disclose only if Mr. Good had
2.16
view is similar change in the the interest only voted in favour of the
to the interest is to be once he has made interested party in the
Companies disclosed forthwith any financial gains, original resolution
Act, 2013 or at earliest next mere gaining of an
BM interest doesn’t
require disclosure
87. What form is prescribed under Rule 9 of Companies (Meetings of Board and its Powers) Rules,
2014 for disclosure of interest of Directors and their shareholding?
a. MBP-1 b.MBP-2 c. MBP-3 d. MBP-4
88. Mr. Executive a Director of A Ltd. was appointed to that Directorship in July 2017. At the time
the flaw in the appointment procedure was not noticed. Mr. Executive voted in many
resolutions. In September the auditors brought to the notice of the BOD the flaw in
appointment. The BOD were of the opinion that the resolutions to which Mr. Executive had
assented shall be invalid by the fact that Mr. Executive was himself invalidly appointed. Is the
view off the BOD correct?
a. Yes, as per the b. No, as per the c. Yes, BOD is d. No, BOD is incorrect
Companies Act, Companies Act, 2013, correct as the wrongfully
2013 all the discovery of any however a appointed Director
resolutions flaw in the Company in shall be required to
assented to by a appointment of GM can ratify make good the losses
Director whose d Director shall not the same and if any, but all
appointment was repudiate the validity validate such resolutions shall stand
invalid shall stan of resolutions made decisions if it
void until such flaw was chooses
noticed
89. What is the position in law of resolutions (if any) voted upon by the aforesaid Director in Q No
88 after the flaw was notified to the BOD?
a. Those b. The resolutions c. The Co.at a GM d. The resolutions shall be
resolutions shall passed shall not convened within studied by expert
stand as the flaw stand as the 3 months shall committee of the BOD of
is presumed to Companies Act ratify the same which such Director shall
have been explicitly states not be a part
ignored so
90. A. Ltd purchased lands in the name of the Director who held more than 75 percent of all shares
of the Company. The Company virtually belongs to the Director and so the property is held in
name of the Director, but bought and paid for by the Company. One member objected to this.
What is the position of the Companies Act, 2013 on this issue?
a. The Company can b.The company can c. The company d. The Company can
hold land property in hold all securities in can neither hold all forms of
name of any other any other persons hold land assets in the name of
person without name, but land property or its Executive
restriction property is securities in Directors
prohibited any other
persons name
91. Would your answer in the above case differ if instead of land it was shares in a subsidiary
company and the Director was a nominee thereto , and such holding in Directors’ name was
solely so that the number of members are maintained above Statutory limits
a. Yes, as the same is b. No, as there is no

explicitly covered in specific distinction
Companies Act,2013 made 2.17
92. Mr. A a Director purchased FloorTiles from the Marble Floor Ltd. He holds Directorship in
Marble Floor Ltd. The company extended credit to the Director which was not a policy of the
Company. The Auditors raised question saying that this was not permitted in the Companies
Act. Which of the following is correct
a. The Director is in violation b.The Company is c. There is no d. There is no
of the Companies Act as in violation of the prohibition on trade violation of
no Director is allowed to Companies Act as between the Director Co’s Act
deal with the Company no sale is allowed and Company but
wherein he is Director to be done to the credit arrangement is
Director prohibited as a loan
93. What shall be the penal provisions attracted by the defaulting Company in Q No 92
a. Fine : 1-5 Lakhs b. Fine : 5-25 Lakhs c. Fine : 1 d. No penalty
Lakh
94. A Ltd. Held shares as a beneficial owner but the shares were in name of the Depository. A
register as required by law u/s 187 of Companies Act 2013 to enumerate details of such
holdings was not maintained. What are the penal provisions for the same?
a. Fine : 25000-25 lakh b.Fine: 25000- 5 c. Fine: 25000- 1 d.Fine: 25000-50000
lakh lakh
95. What Form is prescribed for the maintenance of Register as stated above in Q No 94 as per
Rule 14 of the Companies ( Meetings of Board and its Powers) Rules , 2014?
a. Imprison : <= 1 b. Imprison : <= 6 c. Imprison: <= 1 d. Imprison: <= 6 mt Fine :
yr mt yr Fine : 25000- 25000-50000
Fine : 25000-1 Fine : 25000-1 50000 Or Both Or Both
lakh lakh
Or Both Or Both
96. Mr. Pro provides tax related advice to the Board of A Ltd which a company with turnover of 5
crores. He does practice also as a Tax consultant. A transaction of leasing of property is sought to
be undertaken by the Company with Mr Pro for 1 crore. The Board wants this to be approved by
the Company as Mr. Pro is a related party in their estimation. Is the treatment valid?
a. Yes Mr. Pro is a b.No, Mr. Pro is not a c. Yes, Mr.Pro is d. No, Mr. Pro is a
related party as related party as the a related party professional and as such not
the BOD is fields of Tax as Tax covered under Companies
accustomed to consultancy and consulting can Act as related person on
Act on his land leasing are not be associated whose orders the BOD acts,
directions the same even with land since he does so in
though the BOD leasing as ways professional capacity
acts on his to evade tax
directions
97. Register for Contracts and Arrangements entered into with Related Parties and those in which
Director are Interested shall be maintained in Form:?
a. MBP-1 b. MBP-2 c. MBP-3 d. MBP-4
98. Mr. A a member of A Ltd wanted to inspect the contract of service / memorandum of terms of
appointment of the employment of M.D. / W.T.D of A Ltd. He was informed that such a record
was not maintained. What are the penal provisions applicable to the Company
a. Fine: 25000 b. Fine: 50000 c. Fine: 75000 d. Fine: 100000
2.18
99. In the above case, what are penal provisions applicable to the officers of the Company
a. Fine: 5000 b. Fine: 10000 c. Fine: 15000 d. Fine: 20000
100 Will your answer for Q 98 change if the Company was a Private Company rather than a Public
. Company
a. Yes, the Fine for b. Yes, the Fine for c. Yes, as d. No, as no distinction
Private Company Private Company provisions are is made under Act for
shall be half the shall be twice the Not Applicable Public and Private
fines notified for fines notified for to the Private Company
Public Company Public Company Company
Answers
Question Answer (Reason wherever needed)
1 a. As only 3 BM are held
2 b. There is violation of Sec 173 hence Mr. Dumbman is right. Mr. Lostman’s contention that
2 BM held before 31/3/18 would rectify the situation is wrong as the BM are counted for a
Calendar Year and not Financial Year.
3 b.
4 d. The provisions applicable to an OPC shall be applicable as one Director (Mr. Heavy)
holds whole shareholding. Also the BM cannot be dispensed with as it is not an OPC with
single Director, but more than 1 Director.
5 d. Applicable provisions of Sec 8 Company
6 c. OPC shall be in compliance of provisions of Sec 173 ( which specifies the First BM
requirements) if it holds 1 BM in each half of calendar year atleast 90 days apart
7 c. Same reasons as above are applicable to the Small Company also
8 c. Nothing contained in Sec 173 (which specifies the First BM requirements) shall apply to
an OPC with One Director only. Hence First BM not applicable to OPC with one Director.
9 c. Dormant Company BM are based on principles similar to 6 above
10 c. OPC shall be in compliance of provisions of Sec 173 ( which specifies the Minimum
number of BM requirements) if it holds 1 BM in each half of calendar year atleast 90 days
apart
11 a. Delivery of notice to be done only once in any of the 3 means prescribed.
12 a.
13 d.
14 b. Since the Act prescribes a notice of LESS THAN 7 days in case of Urgent BM, but
nevertheless Notice is necessary.
15 c.
16 b.
17 c. Point d. is not correct as OPC though owned by One Person can appoint more than one
Directors, as is the case in Question
18 a.
19 b.
20 B
21 D
22 b. Approval of only Annual Financial Statement is not permissible , other periodic FS can be
approved
23 B
2.19
24 a. Quarterly not Annual Financial Statements are approved .
25 b. 1/3rd comes to 4
26 c. 1/3rd comes to 4.33 which shall be made to 5
27 a.
28 b.
29 b. As total directors is 16 (13+3) the Quorum is 8 or 25% (i.e. 4) w.e.l as it is a Sec 8 Co. as
per information from the Question
30 d. As 26th is a national holiday and 27th is a Sunday, the adjourned meeting shall be held on
Monday.
31 c.
32 c. Ownership is crucial criteria for “interest” u/s 184
33 c. Direct ownership is crucial criteria for “interest” u/s 184
34 c. Provisions of Quorum do not apply to OPC with 1 Director.
35 c.
36 b. As it is a Private Company. In Public Company this won’t be possible
37 a.
38 A
39 d. As it is listed public company on NSE it has to have an Audit Committee
40 c.
41 d.
42 b.
43 b.
44 a.
45 a. u/s 178(8)
46 a. u/s 178(8)
47 d.
48 A
49 a. As non executive directors are more than 3 and ATLEAST half are Independent
50 c.
51 b.
52 c.
53 a. u/s 178(8)
54 a. u/s 178(8)
55 a. Sec 179(2) states the same
56 a. Sec 179(3) (d)/(e)/(f) gives specific exception to Sec 8 Company
57 a. Sec 179(3) (d)/(e)/(f) gives specific exception to Sec 8 Company
58 a. Proviso to Sec 179(3) gives specific exception to Sec 8 Company
59 c. Covered under Sec 179(3)(k): additional matters prescribed
60 a. Sec 179(4)
61 a. Ab Ltd is an “undertaking” as the Investment therein(i.e. 30 crores) exceeds the 20% of
Co’s Net worth (20%*100 crores). So u/s 180(1)(a) GM-SR is required .
62 c. Ab Ltd is not an “undertaking” as the Investment therein (i.e. 15 crores) does not exceed
20% of Co’s Net worth (20%*100 crores). So u/s 180(1)(a) GM-SR is not required .
63 a. Ab Ltd is an “undertaking” as the Income therefrom(i.e. 30 crores) exceeds the 20% of
Co’s total income (20%*100 crores). So u/s 180(1)(a) GM-SR is required
64 b. Ab Ltd is not an “undertaking” as the Income therefrom (i.e. 15 crores) does not exceed
20% of Co’s total income (20%*100 crores). So u/s 180(1)(a) GM-SR is not required
65 b. Sec 180(1)(b)
66 b. Sec 180(1)(d)
67 c. Sec 184(4)
2.20
68 a. Sec 184(3)
69 a. PUC+FR+SP=110; Money(borrowed +to be borrowed - temporary loans)=50+60-

10=100
Since 110>=100, no consent vide Special Resolution needed.
10=110
10=111
Since 110<111, consent vide Special Resolution needed.
20=101
73 a. Special Resolution is required as ‘undertaking’ is sold u/s 180(1)(a). Requirement of
mentioning monetary limit in GM-SR applies to 180(1)(c)
74 b. Section 180(3)
75 d. Sec 180 N.A. to Pvt. Co.
76 c. Contribution(i.e. 5 lakhs)<= 5% of AvgNP of 3 Prev FY (i.e. 5%*{(50+150+100)/3}).
77 d. Contribution(i.e. 5 lakhs)> 5% of AvgNP of 3 Prev FY (i.e. 5%*{(40+150+100)/3}).
78 c.
79 b. Sec 182 does not apply to GovtCo’s as is the case in given Question
80 b.
81 b.
82 c.
83 a.
84 b.
85 d.
86 b.
87 a.
88 b. Sec 176
89 b. Proviso to Sec 176
90 c. Exception in 187(2) exist, but option c reflects general rule in Sec 187
91 a. Proviso to 187(1)
92 c.
93 b.
94 a. Sec 187(4)
95 b. Sec 187(4)
96 d.
97 d.
98 a. Sec 190(3)
99 a. Sec 190(3)
100 c. Sec 190(4)
Chapter 3 Directors: Appointment & Remuneration of Managerial Person
Chapter 3: Appointment & 3.1
Remuneration of Managerial Personnel
1. PQR Ltd. appointed Mr. Sachin as their Managing Director. They now seek to appoint Mr. Karthik as their
Manager. Can they do so?
A. Yes, Sec 196 provides B. No, as Sec 196 provides C. Appointment of MD, Manager D.None of
about appointment of that Company shall not and Whole Time Director will the
MD, Manager and appoint MD and Manager depend on the Articles of the above.
Whole Time Director. at the same time. Company.
Whole Time Director. Can they do so?
A. Yes, Sec 196 B. No, as Sec 196 C. Appointment of MD, D.Yes, under Sec 196 there is
provides about provides that Manager and Whole no restriction on
appointment of Company shall not Time Director will appointment of Whole Time
MD, Manager appoint MD and depend on the Director along with
and Whole Time Whole Time Director Articles of the Managing Director or
Director. at the same time. Company. Manager.
Managing Director. Can they do so?
A. Yes, Sec 196 B. No, as Sec 196 C. Yes, under Sec D. Appointment of MD, Manager
provides about provides that 196 there is no and Whole Time Director will
appointment of Company shall restriction on depend on the Articles of the
MD, Manager and not appoint MD appointment of Company.
Whole Time and Manager at Managing
Director. the same time. Director along
with Managing
Director.
4. PQR Ltd. appointed Mr. Sachin as their Manager. They now seek to appoint Mr. Karthik as their Whole
Time Director. Can they do so?
A. Yes, Sec 196 B. No, as Sec 196 provides C. Appointment of D. Yes, under Sec 196 there is
provides about that Company shall not MD, Manager and no restriction on
appointment of appoint Manager and Whole Time appointment of Whole Time
MD, Manager Whole Time Director at Director will Director along with
and Whole Time the same time. depend on the Managing Director or
Director. Articles of the Manager.
Company.
5. PQR Ltd. appointed Mr. Sachin as their Manager. They now seek to appoint Mr. Karthik as their Manager.
Can they do so?
A. Yes, Sec 196 B. No, as Sec 196 C. Appointment of D.Yes, under Sec 196 there is
provides about provides that MD, Manager and no restriction on
appointment of Company shall not Whole Time appointment of Manager
MD, Manager and appoint Manager Director will along with Manager
Whole Time and Whole Time depend on the
Director. Director at the Articles of the
same time. Company.
Chapter 3 Directors: Appointment & Remuneration of managerial Person
6. XYZ Ltd. wants to appoint Mr. Mickey aged 62 years as their Managing Director. What resolution is
3.2
required to appoint Mr. Mickey?
A. GM-SR, as Mr. Mickey is B. GM-OR, as Mr. C. GM-SR and Approval of the CG. D. None of
above 60 years of age. Mickey is less the
than 70 years above
of age.
7. XYZ Ltd. wants to appoint Mr. Mickey aged 72 years as their Managing Director. What resolution is
required to appoint Mr. Mickey?
A. GM-OR B. GM-SR, as Mr. Mickey is more C. Prior approval of CG D. (b) or (a) & (c)
than 70 years of age.
8. Sec 196(2)(4)(5) shall not apply to

A. Small Companies B. Private Companies C. Dormant Companies D. Government
Companies
9. In JBL ltd, Mr. X is the only Executive Director wants to draw Rs 500,000 as remuneration from profit of Rs
50 lacs. How much maximum remuneration is allowed?
a. 5,00,000 b. 5,50,000 c. 6,00,000 d. 6,60,000
10.. In JBL Ltd, Mr. X & Y are Executive Directors wants to draw Rs 500,000 as remuneration from profit of Rs
50lacs. How much maximum remuneration is allowed together?
A. 5,00,000 B. 5,50,000 C. 6,00,000 D. 6,60,000
11.. In JBL Ltd, Mr. X is Non-Executive Director wants to draw Rs 500,000 as a remuneration from profit of Rs
50lacs in the absence of executive director. How much maximum remuneration is allowed to Mr. X?
a. 5,000 b. 50,000 c. 500,000 d. 1,50,000
12 In JBL Ltd, Mr. X is the only Non-Executive Director wants to draw Rs 200,000 as a remuneration from profit
of Rs 50lacs where Mr. Y who is executive director. How much maximum remuneration is allowed to Mr. X?
A. 150000 B. 50,000 C. 350000 D. None of the above
13.. In JBL Ltd, Mr. X is the only Non Executive Director wants to draw Rs 200,000 as a remuneration from loss
of Rs 50lacs where Mr. Y who is executive director. How much maximum remuneration is allowed to Mr. X
without obtaining shareholders approval?
a. 5000 b. 150000 c. 200000 d. No
remuneratio
n
14. PRV Ltd wants to pay remuneration more than above mentioned limits of Part B of Schedule II, it can do so
after
A. BM- OR B. GM- OR C. GM-SR D. GM-SR and
CG approval
15. As per Section 196(4) approval of shareholder is mandatory for appointment of MD/WTD in Public Limited
Company? If Company fail to get approval of shareholders then whether work/act done by MD/WTD
during Board Meeting to general Meeting shall be valid or invalid?
A. Valid B. Invalid C. Void D. As per Section 196(5) where an appointment of a managing
director, whole-time director or manager is not approved by
the company at a general meeting, any act done by him
before such approval shall not be deemed to be invalid.
16. As per Section 197, which persons shall be include in limit of 11% Remuneration? 3.3
A. Directors and B. Whole-Time Director C. Manager D. All of the
Managing Director above
17. Whether Section 197 & Schedule V applicable to Private Limited Company?
a. Yes b. No
18. Key managerial personnel in relation to a company means
A. The Chief Executive B. The company C. The whole time D. All of

Officer or the secretary director the
managing director or above
the manager
19 Managing Director as a director is entrusted with ---- of the affairs of the company
A. Substantial powers of B. very less powers of C. 50 % powers of D. 75% powers of
the management the management management management
20 Whole time director includes a director in the whole time employment of the company
A. TRUE B. FALSE
21 ABC Ltd. wants to appoint Mr. MD as managing director of the company for life. Is the action of company is
in lines with the provisions of the companies act, 2013?
A. YES B. No
22 Mr. Young will be completing 21 years of his age on 1 June 2018. DEF Ltd. wants to appoint him as
managing director of the company on 30 May 2018. Is the action of company is in lines with the provisions
of the companies act, 2013
A. Yes B. No
23 Where an appointment of the Managing Director is not approved by the company at a general meeting,
any act done by him before such approval shall be deemed to be valid
A. TRUE B. FALSE
24 Can a company appoint or employ at the same time a managing director and a manager
A. YES B. NO
25 Crore Ltd is a public company having paid up share capital of Rs 12 crore. According to Rule 8 of the
Companies Rules 2014 , what compliance is to be done?
A. Authorized B. Share holder C. Underwriter D. Whole time key managerial

Authority personnel
26 If the office of any KMP is vacated, the resulting vacancy shall be filled by the Board at a meeting of the
Board within a period of---------- from the date of such vacancy
A. 6 MTHS B. 3 MTHS C. 1 MONTHS
27 Red Ltd. contravenes the provisions of section 203. What is the penalty for the company contravening the
provisions of this section
3.4
A. Fine shall not be B. Fine shall not be less C. Fine shall not be D. Fine shall not be less than
less than Rs 1 lakh than Rs 1 lakh but less than Rs 1 Rs 50000 but which mat
but which mat which mat extend to lakh but which extend to Rs. 5 lakhs
extend to Rs. 3 Rs. 2 lakhs mat extend to
lakhs Rs. 5 lakhs
28 Red Ltd. contravenes the provisions of section 203. What is the penalty for the director and KMP
contravening the provisions of this section?
A. Fine extending Rs B. Fine extending Rs C. Fine extending Rs 5000 D. Fine extending Rs

5000 and Rs 1000 50000 and Rs 100 for and Rs 100 for every day 50000 and Rs
for every day during every day during during which 1000 for every day
which which contravention contravention continues during which
contravention continues contravention
continues continues
29 What are the functions of the Company Secretary

A. To ensure that company complies B. To assist the Board in the C. A or B D. A and
with the applicable secretarial conduct of the affairs of B
standards the company
30 If in any financial year, a company has no profits or its profits are inadequate , the company shall not pay
by way of remuneration any sum exclusive of sitting fees to its directors, including any managing or whole
time director or manager except in accordance with the provisions of Schedule V
A. TRUE B. FALSE
31 The Remuneration payable to the directors of a company shall be determined in accordance with and
subject to the provisions of this section , either
A. Memorandum of B. Income Tax C. Articles of Association D. Any of

Association Gazette the
Above
32 The company shall waive the recovery of any sum refundable to it under sub section 9unless permitted by
the CG
A. TRUE B. FALSE
33 It shall disclose in the Board’s Report the --------------------and such other details as may be prescribed
A. Educational B. Income tax paid C. ratio of the remuneration D. GST Payable by the Key
qualification of the by the Directors of each director to the managerial Personnel
Director’s Children median employee’s
remuneration
34 Where any insurance is taken by a company on behalf of its Managing Director for indemnifying any
liability in respect of any negligence for which they may be guilty in relation to the company , the premium
paid on such insurance -------- as part of the remuneration payable to any such personnel
A. shall Be treated B. shall not be treated
3.5
35 Following companies are required to conduct secretarial audit
A. Every public company having paid up B. Every public company C. A and B D. A or B
share capital of Rs 50 crore or more having turnover of Rs
250 crore or more
36 An expatriate managerial person shall be eligible to the following perquisites which shall not be included in
the computation of the ceiling on remuneration specified in section II or section III
A. Children’s B. Leave travel C. Holiday passage for children staying D. All of the
education concession outside India or family staying abroad above
allowance
37 The total managerial remuneration payable to the directors and manager in respect of any financial year
shall not exceed ------- of the company for that financial year
A. 6 % of net profits of B. 11% of net profits of C. 6% of paid up D. 11% of paid up share
the company for the company for that share capital of capital of the company
that financial year financial year the company for for that financial year
that financial
year
38 In continuation of the above question, what conditions are to be complied to exceed the remuneration as
above?
A. Company in Board B. Company in Extra C. Company in D. Company in general

meeting with approval ordinary general general meeting meeting with approval of
of CG subject to meeting with approval with approval of CG subject to provisions of
provisions of Schedule of CG subject to Court subject to Schedule V
V provisions of Schedule provisions of
V Schedule IV
39 If there is one MD/WTD/Manager what is the remuneration payable to them

A)Shall not exceed 11% of net B)Shall not exceed 5% of C)Shall not exceed 10% D)Shall not exceed 8%
profits of the company for net profits of the of net profits of the of net profits of the
that financial year company for that company for that company for that
financial year financial year financial year
40 If there is more than one MD/WTD/Manager taken together what is the remuneration payable to them?
A)Shall not exceed 5% of net B)Shall not exceed 11% C)Shall not exceed 17% D)Shall not exceed 10%
profits of the company for of net profits of the of net profits of the of net profits of the
that financial year company for that company for that company for that
financial year financial year financial year
41 The total managerial remuneration payable to the director whois neither a managing director nor a whole
time director in respect of any financial year shall not exceed -------- of the company for that financial year
A. 1 % of the net B. 10 % of the net profits if C. 11 % of the net D. 7 % of the net

profits if the the company has profits if the profits if the
3.6
company has employed a MD or WTD company has company has
employed a MD or or manager employed a MD or employed a MD or
WTD or manager WTD or manager WTD or manager
42 The total remuneration payable to the directors who are neither managing director nor whole time
director in respect of any financial year shall not exceed --------of the company for that financial year if
there is no MD /WTD
A. 10 % of the net profits B. 5 % of the net C. 3 % of the net D. 11 % of the net

profits profits profits
43 Body Builders ltd wants to appoint Mr. S aged 71 years as a managing director of the company because of
his proven ability to convert sick companies into profitable ones . Can he be appointed as per the
provisions of the Companies Act, 2013
A. Yes, by the passing of B. Yes, by C. Yes, by the passing of D. Yes, by the passing of
ordinary resolution and the special resolution special resolution and the
the explanatory passing and the explanatory explanatory statement
statement annexed to the of statement annexed annexed to the notice
notice shall indicate the special to the notice shall shall indicate the
justification for resoluti not require to justification for appointing
appointing such person
on indicate the such person.
justification for
appointing such
person.
44 Sick Ltd. is not doing well and also incurring losses. The effective capital of the company is Rs 20 crores. Mr.
D is the managing director of the company. Advise the company about the quantum of remuneration
payable to him.
A)Maximum managerial B)Maximum managerial C)Maximum managerial D)Maximum managerial

remuneration Rs. 168 Lakh remuneration Rs. 60 lakh remuneration Rs. 50 lakh remuneration Rs. 94
lakh
45 In addition to the above question, can the managerial remuneration be paid above the maximum limit
specified above
A. No B. Yes, if a special Yes, if an ordinary resolution is passed in this
resolution is passed regard
in this regard
46 Fever Ltd. is not doing well and also incurring losses. The effective capital of the company is Rs 260 crores.
Mr. D is the managing director of the company. Advise the company about the quantum of maximum
remuneration payable to him
A. Rs 2408000 B. Rs 26010000 C. Rs 24050000 D. Rs 24010000
47 Remuneration to a non executive director may be paid only if the company has made profits
A. True B. False
3.7
48 Healthy Ltd. is not doing well and also incurring losses. The effective capital of the company is Rs 200
crores. The company wants to make payment of commission of 6% of the net profits per annum to the
ordinary directors of the company.
Advise whether the company can do so
A. Yes , only with the B. No C. Yes , only with the
approval of the approval Board meeting
members in general
meeting
49 Is the “ Security premium account” added in the computation of effective capital of the company?
A. no B. yes
50 The effective capital shall be calculated as on the last day of the financial year preceding the financial year
in which the appointment of the managerial person is made.
A. True B. False
51 As per Rule 4 of the Companies Rules, 2014 maximum sitting fees payable to a director is Rs. 100000 for
every meeting of the board or any committee of the Board.
A. False B. True
52 Sitting fees payable to non executive directors is increased from Rs 40000 to Rs 60000 per meeting.
Examine whether the increase is in accordance with the Companies Act, 2018
A. Yes B. No
53 Mr. T is a soft skills trainer, appointed by P ltd. as its non executive ordinary director and it wants to pay
him fee, on case to case basis, for training done with trainees at the training center. Whether payment of
such fee to him would amount to payment of managerial remuneration to a director subject to any
restriction under the Companies Act, 2013
A.Yes B. No
54 Mr. H was appointed as Managing Director of Good Luck ltd. for a period of 5 years with effect from 1 April
2013 on a salary of Rs. 12 lakhs per annum with other perquisites. BOD terminated his services from 1
March 2016. State how much compensation is to be paid to Mr. H.
A. Rs 12 lakhs B. Rs. 18 Lakhs C. Rs 24 D. Rs 25 Lakhs
Lakhs
55 Rich Ltd. wants to pay Rs. 150000 as sitting fees to the directors of the company. The company wants to
include the above clause in its articles of association . You are required to advise the company about the
validity of such clause
A. Valid B. Not valid
56 The amount of sitting fees received by Mr X , a director exceeds Rs 100,000 . What is to be done now
A. Mr. X shall refund to the B. The company shall waive
company such excess recovery of such excess
amount amount
3.8
57 The payment of remuneration as per Schedule V is possible only if the company has not made any default
in repayment of any of its debts or debentures or interest payable thereon for a continuous period of ----- in
the preceding financial year before the date of appointment of such managerial person
A. 12 months B. 6 months C. 3 months D. 30 days
58 If the office of any whole time KMP is vacated , the resulting vacancy shall be filled up by the Board at a
meeting of the Board within a period of 9 months from the date of such vacancy
A. true B. false
59 List Ltd is a listed company. As per the Rule 8 of the Companies Rules 2014 every listed company shall
have---------
A. Chartered Accountant B. President C. Whole time key managerial

personnel
60 Mr. M was appointed as a MD of XYZ Ltd for a period of 5 years from 1 january2013 . His services were
terminated from 1 August 2014 by paying compensation for the loss of office as prescribed. Later, it was
found that Mr. M was involved in many corrupt practices in company during his tenure of office. After
investigation he was found guilty. Advice the company whether the compensation paid to him can be
recovered
A. Yes B. No
61 Mr. Y, an ordinary director of the company was removed by the company before the expiry of his term. Mr
Y demanded compensation from the company for loss of office. Advise whether the company is liable to
pay compensation to Mr. Y
A. Yes B. No
62 Mr. J a director was being paid remuneration in excess of the prescribed limit. On scrutiny of the accounts it
was found that company has paid to Mr. J a total sum of Rs. 1.20 lakhs in excess of the remuneration
sanctioned. Can Mr. J keep the excess remuneration so received?
A. Yes B. No
63. n addition to the above question, under what conditions waiver of excess compensation can be done?
A. If on an application to CG, CG permits the B. Waiver can be done in general meeting
waiver
64. As per Schedule V , a company having effective capital of Rs. 100 crore or more , but less than Rs. 250 crore
may pay to its managerial person , a maximum remuneration of Rs. 120 lakh per year
A. TRUE B.
Answers
FALSE
1. B 2. D 3. C 4. D 5. D 6. B
7. D 8. D 9. B 10. A 11. D 12. B
13. D 14. C 15. D 16. D 17. B 18. D
19. A 20. A 21. B 22. B 23. A 24. B

(no appointment for a term (no company shall appoint a person as MD or WTD or
exceeding 5 years at a time) manager who is below the age of 21 years) 3.9
25. D 26. A 27. C 28. D 29. D 30. A
(every listed company and every other public company having paid
up share capital of Rs 10 crore or more shall have whole time key
managerial personnel)
31. C 32. B 33. C 34. B 35. D 36. D
37. B 38. D 39. B 40. D 41. A 42. C
43. D 44. A 45. B 46. D 47. A 48. A
(the limits shall be doubled if the (Rs. 120 lakhs plus 0.01% of the effective
resolution passed by the shareholders is share capital in excess of Rs. 250 crores)
a special resolution)
49. B 50. A 51. B 52. A 53. B 54. D
(Services (According to section 202 of the Companies Act, 2013 compensation can be
rendered paid only to a Managing director, whole time director and Manger. Amount
by him are of compensation cannot exceed the remuneration which he would have earned
of a if he would have been in the office for the unexpired term of his office or 3
professiona years whichever is shorter)
l nature)
55. B 56. A 57. D 58. B 59. C 60. B
61. B 62. B 63. A 64. B
(The compensation cannot be paid to an (The company cannot waive
ordinary director) the recovery of excess
remuneration)
Chapter 4 Inspection & Investigation
Chapter 4: Inspection & 4.1
Investigation
1. The -------------- may by written notice call on the company to produce for his inspection books of accounts,
papers and explanations as he may require, at such place and at such time as he may specify in the notice.
A. CBDT
B. Registrar
C. Director of company
D. Adjudicating authority
2. The ------------------ may, if it is satisfied that the circumstances so warrant, direct inspection of book and
papers of a company by an inspector appointed by it for such purpose.
A. State Government
B. Registrar
C. CBDT
D. Central Government
3.Celebrations Company was directed by the Central Government to provide information of some of its sales
transactions and produce documents related to sales and purchases. Under section 206 of the Companies
Act,2013 a company is required to furnish information and produce documents as ordered by Central
Government. But Celebrations Company fails to do so. What is the course of action now?
A. Every officer of the company who is in default shall be liable with Imprisonment
B. Every officer of the company and the Company who is in default shall be punishable with Fine
C. All of the above
D. None of the above
4. What is the quantum of punishment for the above mentioned case?

A. Fine upto Rs50000 and additional fine upto Rs.500 per day in the case of continuing failure
B. Fine upto Rs100000 and additional fine upto Rs.500 per day in the case of continuing failure
C. Fine upto Rs5000 and additional fine upto Rs.500 per day in the case of continuing failure
D. Fine upto Rs500000 and additional fine upto Rs.500 per day in the case of continuing failure
5. The Registrar may by a written notice, require a company to furnish in writing such information and
explanation within such reasonable time as may be specified in the notice.
A. True B. False
6. Flowers Company deals in Purses Business. During the enquiry it was found that they use duplicate leather
and sell them in the name of original leather thereby increasing the cost of the products. Thus they do fraudulent
business. Where the business of a company has been or is being carried on for a fraudulent purpose every officer
of the company who is in default shall be punishable for fraud in the manner as provided in section---
A. 477 B. 407 C. 744 D. 447
7. The Central Government may having regard to the circumstances by order authorise any ------------------to
carry out the inspection of books of account of a company or class of companies
A. Regulatory Authority
B. Adjudicating Authority
C. Statutory Authority (section 206(6))
D. Registrar
8. On the receipt of notice from the registrar requiring furnishing of information or documents, it shall be the
duty of the company and its officers to-
4.2 A. furnish such information or explanation
B. produce the documents to the registrar
C. All of the above
9. Under what circumstances the Registrar shall inform the company of the allegations made against it by a
written order?
A. The business of a company is being carried on for a fraudulent or unlawful purpose
B. The Business of a company is not in compliance with the provisions of this Act
C. The grievances of investors of the company are not being addressed
D. All of the above
10. The Registrar or inspector making an inspection or inquiry shall have all the powers as are vested in a civil
court under the Code of Civil Procedure ,1908.
A. True B. False
11. During the course of inspection by the Registrar, he wants to place marks of identification in such books in
token of the inspection having been made.
A. False B. True
12. The Statutory Authority wants to carry out the inspection of books of account of company. what is the pre
requisite for such inspection?
A. Authorisation by Central Government’s order
B. Statutory Authority can’t do such inspection
C. Authorisation by Inspector’s order.
13. It shall be the duty of every director to render all assistance to the Registrar or inspector in connection with
inspection of books of account and other books and papers under section 206.
A. True B. False
14. The Registrar was carrying out the inspection of books of account of ABC Company. During such inspection
the Registrar wanted to make copies of books of account and other books and papers. The officers of the
company refused to do so. Does the action of Officers of ABC Company was correct?
A. Yes B. No
15. Does the Registrar have the powers to summon and enforce the attendance of persons and examining them
on oath?
A. No B. Yes
16. What is the punishment to the director or officer of the company if they disobey the direction issued by the
Registrar under section 207?
A. Imprisonment upto 1 year
B. Fine, which shall not be less than Rs.25000 but which may extend to Rs 100000
C. A and B
D. A or B
17. Who is liable for punishment for contravention under section 206?
A. Company
B. Every officer of the company who is in default
C. A and B
D. A or B
18. Who is liable for punishment for contravention under section 207?
A. Company
B. Every officer of the company who is in default
C. A and B 4.3
D. Any of the Above
19. Mr. Sinful is a director of Sin Company. During the process of Inspection, it was found out by the Registrar
that Mr. Sinful has convicted an offence under section 207. What appropriate action is to be taken against him?
A. Vacate his office
B. Disqualified from holding any office in any company
C.A and B
D. A or B
20. ABC Company filed annual return for 2016-2017. On scrutiny of documents filed by ABC Company the
Registrar is of the opinion that any further information or explanation related to the company is necessary. By a
written notice the Registrar required the company to furnish in writing such explanation. The Registrar inspected
the books of account of ABC company under section 207. What is the duty of Registrar now?
A. To seize the books of accounts and submit to the Central Government
B. To submit a report in writing to the Central Government
C.To submit a report in writing to the Income tax Department
D. to seize the books and submit report to the Central Government
21. The Registrar submitted a report under section 208. In the report he included recommendation that further
investigation into the affairs of the company is necessary.
Is The Registrar authorised to do so?
A. Yes B No
22. The Registrar believes that the books and papers of DAY Company are likely to be destroyed by the company.
He believes so because he received complaint from a group of creditors of the DAY Company. As soon as the
Registrar received the complaint, he entered and searched the premises of DAY company. The Registrar even
seized the books and papers as he considered necessary. Advice.
A. The Registrar’s action is valid.
B. The Registrar can do so only after obtaining an order from the Special Court
C. The Registrar can do so suo moto
23. The Registrar believes that the books and papers of Sunshine Company are likely to be destroyed by the
company on complaint received by him. The Registrar entered and searched the premises of Sunshine company
after obtaining an order from the Special Court. The Registrar seized the books and papers as he considered
necessary on 1 August 2017. On 5 February 2018, the Sunshine company asked the Registrar to return them the
books of account back. But the Registrar refused to do so.Advice.
A. The Registrar shall return seized books of account within 90 days of such seizure
B. The Registrar shall return seized books of account within 60 days of such seizure
C.The Registrar shall return seized books of account within 180 days of such seizure
D. The Registrar shall return seized books of account within 45 days of such seizure
24. Can Central Government order an investigation into the affairs of the company in public interest?
A. Yes B. No
25. In what circumstances can Central Government order an investigation into the affairs of the company?
A. In public interest
B. On the receipt of the report from the Registrar under section 208
C. On intimation of a special resolution passed by a company that the affairs of the company ought to be
investigated.
D. All of the above
26. The Central Government shall order an investigation of the affairs of a company if the Tribunal makes an
order that an investigation into the affairs of the company is required.
4.4 A. True B. False
27.The Serious Fraud Investigation Office shall be headed by a -----------

A. Director B. Member C. Inspector D. Central Government
28.The Director shall be an officer not below the rank of a Joint Secretary to the Government of India having
knowledge and experience in dealing with matters relating to corporate affairs.
A. Correct B. Incorrect
29. The Central Government shall appoint a Director in the Serious Fraud Investigation Office by issue of a -------
-------
A. Circular
B. Notice
C. Notification
D. Order
30. The Registrar received complaint from the shareholders of the company that Bloom Company is trying to
defraud its creditors. Upon investigation by the Registrar, it was found out that the allegation was true. On
submitting the report to the Central Government by The Registrar, Central Government is of the opinion that the
further investigation is to be carried out. Thus, Central Government Orders Serious Fraud Investigation Office to
investigate into the affairs of the said company. State whether the action of Central Government is Correct or
not.
31. On what grounds, Central Government can order Investigation by SFIO?

A. In the Public interest
B. On receipt of a report of the Registrar under section 208
C. On intimation of a Special Resolution by a company that its affairs are required to be investigated
D. All of the above
32. Where any case has been assigned by the Central Government to the SFIO for investigation under this Act,
then other investigating agencies of Central Government shall proceed with the investigation as before.
A. True B. False
33. Establishment of SFIO by Central Government and Investigation into the affairs of company by SFIO are
guided by ----------- of the Companies Act, 2013 respectively
A. Section 211 and Section 212
B.Section 201 and Section 202
C.Section 210 and Section 211
D.Section 211 and Section 210
34. The investigation officer of SFIO shall have powers of ------ under section 217
A. Member
B. Director
C. Experts
D. Inspector
35. The special court shall not take cognizance of any offence except upon complaint in writing made by –
A. The Director
B. Any officer of the Central Government authorized by general or special order in writing in this behalf
C. Serious Fraud Investigation office
D. Any of the Above
36. SFIO will not have power to arrest in respect of certain offences which are punishable for fraud provided in
section 447 and such person.
A. True B. False 4.5
37. A Company passes ordinary resolution that the affairs of the company ought to be investigated and intimates
to the Central Government.
A. True B. False
38. Complaint was received by the Central Government on intimation of a special resolution passed by a
company that its affairs are required to be investigated. SFIO was authorised by the Central Government to
investigate into the affairs of the said company. What is the course of action by SFIO?
A. On completion of the investigation, SFIO will submit report to the Central Government
B. SFIO will issue arrest order to the officers in default of the company
C. Both of the above
39. Big company deals in manufacturing of Laptops. Complaint was received by the Central Government on
intimation of a special resolution passed by Big Company that its affairs are required to be investigated. The
turnover of the company is more than Rs.50 Crore and upto Rs. 200 Crore. Advice
A. Since the turnover is not so large, Central Government refuses to carry out investigation
B. Central Government believes that the Laptop Companies require investigation by Cybercrime
Department
C. The Central Government may demand security Rs 15000 for payment of the costs and expenses of the
investigation.
40. Is the security amount demanded by the Central Government refundable?
A. Yes, if the investigation results in prosecution
B. No
41. WINNERS Company is owned by two brothers namely, Mr. Rahil and Mr. Sahil. But since last 6 months, some
of the employees and members have noticed some disputes between the two brothers which is resulting in
disturbance of the working of company. They have complaint Central Government to investigate on matters
relating to the company. The Central Government appoints inspectors to investigate and report on matters
relating to the company----
A. who are or have been financially interested in the success or failure, whether real or apparent of the
company
B. who are or have been able to control or materially influence the policy of the company
C. None of the above
D. A or B
42. Under section 217(3) the inspector shall not keep in his custody any books and papers produced under the
provisions of this section for more than ------------ days
A. 30 B.60 C. 90 D.180
43. Proceeding of investigation is going on against Mr. S who is officer in default of SS Company. An inspector
appointed by the Central Government is doing investigation. He wants to examine on oath Mr. S under section
217 of the Companies Act 2013. Comment whether can he do so.
A. No, examining on oath does not comes under his powers
B. Yes, with prior approval of the Central Government
44. Proceeding of investigation is going on against Mr. S who is officer in default of SS Company. An inspector
appointed by the Central Government is doing investigation. He wants to examine on oath Mr. S under section
212 of the Companies Act 2013. Comment whether can he do so.
A. No, examining on oath does not comes under his powers
B. Yes, with prior approval of the Director, Serious Fraud Investigation Officer
4.6 45. Proceeding of investigation is going on against Mr. T who is officer in default of TT Company. An inspector
appointed by the Central Government is doing investigation. He ordered Mr. T to produce such books and papers
which are relevant for the purposes of his investigation. But Mr. T refuses to do so.
What action can be taken against Mr.T?
A. Imprisonment upto 1 year and fine, which shall not be less than Rs. 25000 but which may extend to Rs
1 Lakh
B. Imprisonment upto 2 years and fine, which shall not be less than Rs. 25000 but which may extend to Rs
1 Lakh
C. Imprisonment upto 1 year and fine, which shall not be less than Rs. 20000 but which may extend to Rs
1 Lakh
D. Imprisonment upto 1 year and fine, which shall not be less than Rs. 2500 but which may extend to Rs 1
Lakh
46. While an inspector was examining Mr. D on oath, the inspector was taking the notes of examination in
writing to which Mr. D objected.
Advice whether the objection taken by Mr. D was correct?
A. Yes B. No
47. Under section 218, if a person fails without reasonable cause or refuses to produce to an inspector he shall
be punishable with-
A. Imprisonment upto 6 months, Fine not less than RS 20000 upto RS 1 Lakh, fine upto Rs 2000 for every
day after the first during which the failure or refusal continues.
B. Imprisonment upto 6 months, Fine not less than RS 35000 upto RS 1 Lakh, fine upto Rs 2000 for every
C. Imprisonment upto 6 months, Fine not less than RS 25000 upto RS 1 Lakh, fine upto Rs 200 for every
D. Imprisonment upto 6 months, Fine not less than RS 25000 upto RS 1 Lakh, fine upto Rs 2000 for every
48. Bee Company deals in manufacturing of Shoes. During the course of investigation of Bee company Inspector
believes that evidence may be available in a country outside India because Bee company has a manufacturing
unit in this country also. Inspector makes an application to the competent court in India that he believes that
evidence may be available in a country outside India. What will Indian court do?
A. Issue a letter of request to a court in such country to forward all the evidence collected to the court in
India which had issued such letter of request.
B. Issue a letter of request to a court in such country to ban the manufacturing unit
C. Issue a letter of request to a court in such country to arrest such officer in default of such company
within prescribed time limit.
D. None of the above.
49. Laugh Ltd is a company which wants to suspend Mr.Y , the admin manager of the company during the
pendency of the investigation conducted as per the provisions of the Companies Act, 2013. Can the Company do
so?
A. Yes, the company shall make an application to the Tribunal
B. Yes, no need to make an application to the Tribunal
C. No
50. Try Ltd is a company which wants to suspend Mr. Y , the admin manager of the company during the pendency
of the investigation conducted as per the provisions of the Companies Act, 2013. The company approached the
Tribunal on 1 January 2018 for the proposed action. The company on 13 February 2018 passed an order of
suspension without waiting for the orders from Tribunal.
Comment whether action done by company is correct.
A. Correct
B. Incorrect
4.7
51. Fry Ltd is a company which wants to suspend Mr. Y , the admin manager of the company during the pendency
of the investigation conducted as per the provisions of the Companies Act, 2013. The company approached the
Tribunal on 30 January 2018 for the proposed action. The company on 13 February 2018 passed an order of
suspension without waiting for the orders from Tribunal.
Comment whether action done by company is correct.
A. Correct
B. Incorrect
52.The Registrar received complaint from the shareholders of the company that R Ltd. is trying to defraud its
creditors. Upon investigation by the Registrar, it was found out that the allegation was true. On submitting the
report to the Central Government by The Registrar, Central Government is of the opinion that the further
investigation is to be carried out. After carrying out Further Investigation, the Inspector considers it necessary to
investigate the affairs of the R Ltd’s subsidiary company. Does the Inspector have the power to do so?
A. Yes, after obtaining prior approval of the Central Government
B. Yes, No need to obtain Prior approval of the Central Government
C. No
53. The Registrar received complaint from the shareholders of the company that K Ltd. is trying to defraud its
creditors. Upon investigation by the Registrar, it was found out that the allegation was true. On submitting the
report to the Central Government by The Registrar, Central Government is of the opinion that the further
investigation is to be carried out. After carrying out Further Investigation, the Inspector considers it necessary to
investigate the affairs of the KLtd’sholding company. The Inspector proceeded to investigate the Holding
Company of K ltd... Does the Inspector have the power to do so under the provisions of the Companies Act,2013?
A.Yes, after obtaining prior approval of the Central Government
B. Yes, no need to obtain Prior approval of the Central Government
C. No
54. Investigation proceeding under the provisions of the Companies Act,2013 is being carried out against Fishy
Ltd. During the investigation, The Tribunal has a reasonable ground to believe that the removal, transfer or
disposal of funds is likely to take place in a manner that is prejudicial to the interests of the company. So, the
Tribunal made an order under section 221 of Companies Act,2013 that the removal, transfer or disposal of funds
shall not take place for some time. For how much maximum period the assets shall be freeze by the Tribunal?
A. 1 Year
B. 180 days
C. 6 Months
D. 3 years
55. In addition to the above case, what if the company transfers funds in contravention of order of the Tribunal?
What shall be fine to the Company and the officer in default?
A. Company=Fine not less than Rs.1 Lakh but which may extend to Rs.25 lakh; Officer in default=
imprisonment upto 2 years, or with fine not less than Rs. 50000 but which may extend to Rs. 5 Lakh , or
with both
B. Company=Fine not less than Rs.1 Lakh but which may extend to Rs.25 lakh; Officer in default=
imprisonment upto 3 years, or with fine not less than Rs. 50000 but which may extend to Rs. 5 Lakh , or
with both
C. Company=Fine not less than Rs.1 Lakh but which may extend to Rs.25 lakh; Officer in default=
imprisonment upto2 years, or with fine not less than Rs. 5000 but which may extend to Rs. 5 Lakh , or with
both
D. Company=Fine not less than Rs.1 Lakh but which may extend to Rs.25 lakh; Officer in default=
imprisonment upto2 years, or with fine not less than Rs. 500 but which may extend to Rs. 5 Lakh , or with
4.8 both
56. The Tribunal during the course of proceeding of investigation found out that the minority shareholders of
the Dull Ltd. are being cornered by the Company. It appears to the Tribunal that an order of restrictions upon
securities is required which may not exceed ---------. The Contravention of the order of the Tribunal attracts------
------ to the company and to the officers in default.
A. 3 years; fine; fine and/or imprisonment
B.2 years; fine; fine and/or imprisonment
C. 3 years; fine; fine
D. 3 years; fine; fine and imprisonment
57. If, from an inspector’s report it appears to the Central Government that any person is guilty of any offence
for which he is criminally liable, the Central Government may -------- such person for the offence.
A. suspend
B. prosecute
C. impose a fine
58. After perusal of the inspector’s report it appears to the Central Government that a company is liable to be
wound up under this Act, it may cause to be presented to the Tribunal,
A. A petition for the winding up of the Company on the ground that it Is just and equitable that it should
be wound up
B. A petition for the restructuring of the Company on the ground that it Is just and equitable that it should
be restructured
C. A petition for the merger of the Company on the ground that it Is just and equitable that it should be
merged
59. Mr G, a director of Good Ltd has taken undue advantage due to a fraud taken place in the company. The
inspector found out about this during the investigation proceeding carried out by him. The report made by
inspector to the Central Government stated this fact. The Central Government files an application to the Tribunal
for holding Mr. G personally liable without any limitation of liability. Mr. G objects.
Advice whether Action of Central Government is correct or not.
60. Who shall bear the expenses of Investigation under the provisions of the Companies Act, 2013?
A. Any person who has filed complaint to do the investigation as per the provisions of the Act.
B. Any person who is convicted on a prosecution instituted, to such extent as may be specified by the
court
C. Central Government out of Investors Education and Protection Fund
61. Tubelight ltd. Passed a special resolution for voluntary winding up of the company since they are suffering
losses for quite some time now. Meanwhile, complaint was made to the Tribunal to carry out proceeding of
investigation of the company because the affairs of the company are prejudicial to the interest of the
shareholders. In this situation, advise whether investigation may be initiated against the company under the
provisions of the Companies Act,2013.
A. Central Government may make such an order of Investigation
B. Central Government cannot make such an order of Investigation
62. Mr. Vakil is a legal advisor of T Ltd. The Registrar of companies, Bangluru, issues an order to Mr. Vakil to
disclose and furnish a copy of communication made by him to the T Ltd. Examine whether the Registrar can call
for the said document from Mr. Vakil.
A. Yes B. No
A legal adviser shall not be bound to disclose to the Tribunal, Central government Registrar or Inspector,
any communication made to him except the name and address of his client. Section 227 4.9
63. Are the provisions of the Companies Act, 2013 with respect to inquiry, Inspection and investigation apply to
foreign companies?
A. Yes (Section 228) B. No
64. The Board of directors of Party Ltd. have reasons to believe that some of the business activities of the
company are against the interests of the company and its members. They want the inspection of the affairs of
the company to be carried out. They filed a complaint to the Tribunal by passing a resolution. Advise which
resolution is required to be passed by the company?
A. Ordinary Resolution B. Special Resolution (Section 210)
65. An inspector was appointed under section 210 of the Act to investigate the affairs of the public company. Mr
W, human resource manager of the company wants to know whether he is entitled to any protection against
dismissal by the company, if he discloses the misdeeds during the course of examination by the inspector.
A. Entitled to protection under section 218 of the Companies act, 2013
B. No such protection under section 218 of the Companies act,2013
66. In addition to the above question, what if company is not satisfied with the order of the Tribunal?
A. It can file appeal to the Appellate Tribunal within 30 days
B. It has to accept the order as passed.
C. None of the above
67. A group of creditors of the XYZ Company made a complaint to the Registrar stating that the Directors of the
company is involved in falsification and destruction of books of account. They demanded to seize the books and
records of the company. Can the Registrar exercise such powers?
A. Yes B. NO
68. Where an investigation is ordered by the Central Government in pursuance of clause (b) of sub-section (1) of
section 210, or in pursuance of an order made by the Tribunal under section 213, the Central Government may
before appointing an inspector under subsection (3) of section 210 or clause (b) of section 213, require the
applicant to give such security------------------ as may be prescribed, as it may think fit, for payment of the costs
and expenses of the investigation and such security shall be refunded to the applicant if the investigation results
in prosecution
A. Not exceeding 20000 Rs.
B. Not less than 25000 Rs.
C. Not exceeding 25000 Rs.
D. Not less than 20000 Rs
69. The Serious Fraud Investigation Office shall be headed by a Director and consist of such number of experts
from the following fields to be appointed by the Central Government from amongst persons of ability, integrity
and experience in:
A. Corporate affairs
B.Taxation
C.Forensic audit
D. Any of the above
70. Firm, body corporate or other association shall be appointed as an inspector.

A. True B. False
71. Some creditors of S. Ltd approached you to guide them to apply to the tribunal for seeking an order for
conducting an investigation into the affairs of the company due to the fact that the business of the company is
being with intention to defraud its creditors. How a person not being a member of the company can apply to
the tribunal to seek an order for conducting an investigation into the affairs of the company?
4.10 A. Filing of an application by any other person
B. Any other person cannot file application
72. How much deposit amount is to be paid to the Central Government for the company having
annual turnover more than Rs 50 crore and upto 200 crore?
A. Rs 25000
B. Rs.10000
C. Rs. 15000
73. Who are the eligible members who can seek an order of investigation into the affairs of the company
having share capital?
A. i)100 members orii)one or more member holding 10% of total voting power,whichever is higher
B. i)10 members orii)one or more member holding 10% of total voting power, whichever is lower
C. i)100 members orii)one or more member holding 10% of total voting power, whichever is lower
74. The application to the tribunal for seeking an order of investigation into the affairs of the company need
not be supported by evidence to show that an investigation is necessary
A. True B. False
75. Investigation proceeding is going on against Mr. H who is an employee of Horse Ltd. The company wants to
terminate the employee on the grounds that investigation is going on against him under the provisions of the
Companies Act, 2013. They have filed an application to the tribunal for approval of termination. Company has
not received any reply upto 30 days from the application made. What is the course of action of the Horse Ltd.
now?
A. Wait for again 30 days extended
B. Consider as deemed approval by the Tribunal
C. Make an application to the Central Government
76. Investigation proceeding is going on against Mr. H who is an employee of Horse Ltd. The company wants to
terminate the employee on the grounds that investigation is going on against him under the provisions of the
Companies Act, 2013. They have filed an application to the tribunal for approval of termination. Company has
received reply within 30 days from the application made. Thus the Company terminated Mr. H. What is the
remedy available to Mr. H?
A. Make an application to the Central Government
B. No remedy available.
C. Appeal to appellate tribunal within 30 days
D. File complaint against Horse Limited within 30 days
77. Complaint was filed to the Tribunal against Last Ltd. company having share capital by members of the
company. The company was carrying out operations with intent to defraud its creditors. Out of total 250
members of the company 125 members filed the complaint. The total share capital of the company is 10000000
Rs. State whether the complaint made by the member were eligible to make the complaint.
A. Yes B. No
78. Where complaint is made by the eligible members to carry out investigation, the Tribunal should be
satisfied about the circumstances exist---
A. That the company was formed for fraudulent or unlawful purpose
B. That the company was carrying operations to do social service
C. That the company was doing political publicity
79. Along with eligible member’s criteria which one more criteria is needed to be fulfilled by the members?
A. The members should be educated
B. The members should attach relevant a copy of sections of the Companies Act, 2013 with the
Application
C. The application should be enclosed with the details of members like name. Education, address 4.11
D. The application needs to be supported by the evidence
80. Every person who is arrested by the Director, Additional Director of Serious Fraud Investigation Office shall
within ------ be taken to a Judicial Magistrate having jurisdiction
A. 12 Hours
B. 24 Hours
C. 7 days
D. immediately
81. How much deposit amount is to be paid with the application to the Central Government for the company
having turnover upto 50 Crore Rs.?
A. Rs. 25000
B. Rs 20000
C. Rs 10000
D. Rs 15000
82. A group of Shareholders of Friends Ltd. holding 20 % voting power have filed a complaint to the Tribunal for
investigation of affairs of the company because they believe that the affairs of the company are being carried
out to defraud its creditors. The company is having share capital. The Application is supported by the evidence.
Out of total 325 members 100 members filed the complaint. State the validity of the complaint made.
A. The application fulfils the requirement of section 213 and is therefore valid.
B. The Application does not fulfil the requirement of section 213 and is therefore invalid
C.
83. A group of Shareholders of Friends Ltd have filed a complaint to the Tribunal for investigation of affairs of
the company because they believe that the affairs of the company are being carried out to defraud its creditors.
The company is not having share capital. The Application is supported by the evidence.
84. A group of Shareholders of Fundays Ltd have filed a complaint to the Tribunal for investigation of affairs of
the company because they believe that the affairs of the company are being carried out to defraud its creditors.
The company is not having share capital. The Application is supported by the evidence.
85. The inspector considers it necessary to investigate any person who has been the company’s managing
director only after obtaining prior approval of---
A. State Government
B. Central Government
C. The Registrar
D. The Tribunal
Answers
1. B 2. D 3. B 4. B 5. A 6. D
7. C 8. C 9. D 10. A 11. B 12. A
13. A 14. B 15. B 16. C 17. C 18. B
19. C 20. B 21. A 22. B 23. C 24. A
25. D 26. A 27. A 28. A 29. C 30. A
31. D 32. B 33. A 34. D 35. D 36. B
37. B 38. A 39. C 40. A 41. D 42. D

4.12 (Special resolution is
required(Section
210))
43. B 44. B 45. A 46. B 47. 48. A
D
49. A 50. A 51. B 52. A 53. A 54. D
(If the company does (If the company does
not receive any not receive any
objection of the objection of the
Tribunal within 30 Tribunal within 30
days the company days the company
may proceed to may proceed to take
take the
the proposed proposed action).
action).
55. B 56. A 57. B 58. A 59. A 60. B
61. A 62. B 63. A 64. B 65. A (Company should give intimation 66. A
of proposed action to the Tribunal and
if no
reply is received within 30 days
proposed action can be taken).
67. A 68. C 69. D 70. B 71. A 72. C
(Sectio
n 215)
73. C 74. B 75. B 76. C 77. A 78. A
(The members eligible to make complaint
are-
i) 100 members or
ii) one or more member holding 10% of
total
voting power, whichever is lower)
79. D 80. B 81. C 82. A 83. A 84. B
(In case of a company (In case of a company
having no share capital having no share capital
,1/5th of the total ,1/5th of the total number
number of members of members are eligible to
are eligible to make an make an application to
application to the the Tribunal).
Tribunal)
85. B
Chapter 5 Compromise, Arrangement & Amalgamation
Chapter 5: Compromise, Arrangement & Amalgamation 5.1
1. A . Ltd and B. Ltd decided to enter into an Amalgamation to form a new company AB Ltd. Which Company is the transferor company?
A. A Ltd. B. B. Ltd. C. A. Ltd & B. Ltd. D. AB. Ltd
2. Which Company in the above case is the transferee Company?

A. A Ltd. B. B. Ltd. C. A. Ltd & B. Ltd. D. AB. Ltd
3. A. Ltd. was amalgamated into a new Company called AB Ltd. 90% of the shareholders of A. Ltd holding 10 % shares were also the Shareholders in AB
Ltd. Was
this a :
A. Amalgamation in Nature of Merger B. Amalgamation in Nature of Purchase C. Both of these D. None of these
4. Would the answer change if the remaining 10% were a part of the new co AB Ltd instead of the90%? If so, what would be the answer.
A. Yes it would be Amalgamation in Nature of B. Yes, it would be both (Merger and C. Yes, it would be neither D. No change would occur
Merger Purchase) (Merger nor Purchase)
5. A. Ltd got amalgamated into AB Ltd. All the assets were transferred from A Ltd to AB Ltd. Furniture were not transferred as they were sold and the money
from
sale was transferred to Shareholders of A Ltd. Was this a:
6. A Ltd was amalgamated into AB Ltd. AB Ltd had held 100 % shares in AC Ltd. Both AB Ltd and AC Ltd held 10000 shares apiece in A Ltd. before the
amalgamation took place. A Ltd had 100000 issued shares in total before amalgamation and 70000 shares therein were held by B Ltd who also later became
shareholder in AB Ltd under amalgamation. But the shareholders apart from B Ltd. (and excluding AB Ltd. and AC. Ltd) holding 10000 shares did not
become shareholders in the
new AB. Ltd. Assuming all other conditions for Amalgamation in the nature of merger are fulfilled , would this be:
7. If in the above case B Ltd held 75000 share instead of 70000 and the balance shareholders (excluding AB Ltd and AC Ltd) held merely 5000 shares, would
the
amalgamation be :
8. A Ltd was to be amalgamated in AB Ltd. Equity Shareholders holding 90 % shareholding value in A. Ltd. were to be shareholders in AB Ltd. as well. Their
dues
would be settled by AB Ltd. by issue of equity shares in AB Ltd. and Rs. 2000/- worth of coupons per shareholder to be used at retail outlets of AB Ltd. Balance in
fractions, if any, shall be settled by Cash. Considering all other conditions for amalgamation in Nature of Merger are settled would this be:
5.2
9. After the terms of amalgamation were finalised the Book Values of assets appeared differently in the Books of the transferee. All other conditions were satisfied as
needed for the amalgamation to be classified as amalgamation in the nature of merger. Is this:
10. After the terms of amalgamation were finalised the Book Values of assets appeared differently in the Books of the transferee as the accounting policies followed
were shifted from SLM to WDV method of Depreciation. All other conditions were satisfied as needed for the amalgamation to be classified as amalgamation in
the nature of merger. Is this:
11. A meeting of the creditors and any class thereof and the Company was called by the Tribunal. The terms of the scheme of Compromise and arrangement were to
be discussed thereat. The total value of the Creditors was 93 lakhs. Out of which creditors of Rs 86 lakhs 49 thousand communicated by affidavit their
confirmation to the terms of scheme of Compromise and Arrangement. Can the tribunal dispose off the requirement of Creditors’ meeting?
A. Yes, as the Companies Act provides B. No, the requirement of a meeting C. No, as the value of Creditors exceeds 50 D. No, since 100 % of the Creditors
for the waiving of a meeting if >= is absolute and under no Lakhs, the Companies Act provides have not assented to the terms of
90 % of the Creditors agree and circumstance can such a compulsory meeting even though a C&A the same cannot be waived
confirm vide requirement be excused with as majority of Creditors assent to the C&A off without meeting
affidavit to the terms of C&A per the Companies Act, 2013 terms
12. The Company had total Equity Shareholding of 100 lakhs. Outstanding Debt stood at 50 Lakhs as per latest audited BS. The notice asking for vote on the adoption
of C&A terms was sent out. Mr. A holding 5 Lakhs of the total Shareholding was against the terms and chose to object. But was dissuaded to do so as he did not
hold proper levels of shareholding. Is this treatment proper?
A. Yes, since the right to object B. No, since the Shareholder can C. Yes, since the right to object shall D. Yes, since the objection shall be allowed
shall exclusively lie with the object irrespective of the be available to Shareholders only where there is >= 50% of
creditor. The Shareholders holding in the equity of the having holding >= 10 % of total eq shareholders of eq shareholding
cannot object Company shareholding only providing assent to the same
13. The Company had total Equity Shareholding of 100 lakhs . Outstanding Debt stood at 50 Lakhs as per latest audited BS. The notice asking for vote on the adoption
of C&A terms was sent out. Mr. A holding 2 Lakhs of the total debt was against the terms and chose to object. But was dissuaded to do so as he did not hold
proper levels of debt. Is this treatment proper?
A. Yes, since the right to object shall B. No, since the creditor can C. Yes, since the right to object shall D. Yes, since the objection shall be
exclusively lie with the object irrespective of the be available to creditors having debt allowed only where there is >= 50% of
shareholder. The Creditors cannot holding in the debt of the >= 5 % of total company’s debt only creditors of company’s debt providing
5.3
object Company assent to the same
14. In the scheme of acquisition of shares or any class of shares in a company (transferor company) to another company (transferee company) needs approval of
of the shares within the time period of of making offer by the transferee company
A. 3/4th shareholders in value, 120 day B. 9/10th shareholders, 120 day C. 9/10th shareholders in value , 4 months D. 90% shareholders, 120 day
15. The C&A terms were acceptable to be fair to both the Creditors and the Company. The auditors refused certificate objecting that the same are not in accordance
with A.S u/s 133. The Tribunal :
A. Can pass order sanctioning C&A on its B. Cannot pass the order sanctioning the C&A C. Is bound legally to accept the D. Refers the case to
own without auditor’s certificate on its own without auditor’s certificate auditor’s version of C&A such as to the Court.
meet its requirement .
16. After order of the Tribunal to call upon a meeting of Creditors / Members or class thereof; the “Supplementary Accounting Statement“ shall be required when FY
of the merging Co has concluded :
A. 3 months before the meeting to B. 4 months before the meeting to C. 6 months before the meeting to D. 9 months before the meeting to
approve scheme is summoned approve scheme is summoned approve scheme is summoned approve scheme is summoned
17. Non-compliance with Sec 232 pertaining to the procedure of merger shall result to the (transferor/transferee) company in:
A. Fine: 1-5 Lakhs B. Fine: 1-10 Lakhs C. Fine: 5-25 Lakhs D. Fine:1-25 Lakhs
18 Non-compliance with Sec 232 pertaining to the procedure of merger shall result to the officer of every (transferor/transferee) Company in:
A. Imprisonment: <=1yr B. Imprisonment: C. Imprisonment: <=1yr D. Imprisonment: <=6mt
Or Fine: 1-5 Lakhs <=6mt Or Fine: 1-3 Lakhs Or Fine: 1-3 Lakhs
Or Both Or Fine: 1-5 Lakhs Or Both Or Both
Or Both
19. Which of the following is not circulated at the Meeting called by the Tribunal of the Company and it’s Creditors/ Members and class thereof:
A. Draft of proposed terms B. Valuation report of the C. Explanatory statement on D. Statement of compliance of scheme as certified by
of the scheme expert impact of the compromise CA/CS/Cost Accountant
adopted by Directors
20. In case when a acquirer or group of persons become majority holder b holding 90 % of issued eq share capital: then an offer to the Company of the intention to
buy the remaining equity shares shall be made at:
5.4
A. Value determined by B. Face Value of share as C. Last registered transfer price D. At nominal value of Rs.1
the registered valuer originally issued adjusted of an equity share of the
for inflation Company
21. The amount as determined above shall be disbursed within :

A. 30 days B. 60 days C. 90 days D. 120 days
22. Mr. Prakash who was a minority shareholder, was offered a price for purchase of his shares by the majority. The same was disbursed within the stipulated time as
per the Act. However, Mr. Prakash was out of town, and returned only after 2 months of the stipulated deadline. Will he be able to receive the amount. If yes,
upto what period?
A. Yes, upto 6 months B. Yes, upto 9 months C. Yes, upto 1 year D. No, it’s time barred
23. A Director failed to issue circular to registrar for registration but issued the same to the members of transferor Company u/s 235. What shall be penal provisions
applicable to such Director?
A. Fine: 10000-1 lakh B. Fine: 25000-5 lakh C. Fine: 1-5 lakh D. Fine: 25000- 1 lakh
24. Mr. A who should’ve received shares in ABC Ltd. of his deceased kin through transmission, had failed to receive the same. Lately KSE Ltd. made acquisition of
majority of 91% of issued equity shareholding of ABC Ltd. KSE Ltd later intimated the Company the willingness to acquire fully all shares. But Mr. A had no
indication of the same. The period of 1 year as statutorily required for maintaining the deposit expired. At 1 year after such expiry Mr. A got aware of his
shareholding and decided to make offer for sale. What is the maximum time for making such offer?
A. 3 years from date of B. 2 years from date of C. 30 months from date of D. 18 months from date of majority acuisition
majority acquisition majority acquisition majority acquisition
25 What are the modes by which monies may be settled in case a Foreign Transferor Company amalgamates with an Indian Transferee Company
A. Cash only B. Depository Receipts only C. Both of a & b wholly or in part D. Only through GOI Bonds
26. How long shall the Books of the Amalgamated Company be maintained:
A. 5 years B. 8 years C. At Company’s discretion D. On CG’s permission
27. Mr. A. Director of A. Ltd. failed to file requisite submissions of A. Ltd with the registrar. Later A. Ltd. was amalgamated and a new Co named B Ltd was started. The
failure to file submissions of A Ltd came to light in due course. Mr A was sought to be fined for his shortcomings. Mr. A in his defence says that now that A Ltd is
not in existence the submission of documents is a trivial and not with legal standing. Does the Companies Act rule in favour of Mr. A
A. Yes, since the Amalgamated B. Yes, as soon as the amalgamated Company C. No, the Companies Act D. No, the tacit understanding is that the
5.5
Company is now struck off ceases to exist the compliance proceedings specifically makes the officer in proceedings shall be now continued
there is no way to proceed against it cease to exist This is done for default liable for wrongful against the Amalgamating Company
with penalizing violations saving time and resource of Ministry actions done in a Amalgamated and the old officers are not
Thereof Co liable
28 In case of compromise arrangement of the company u/s 230(1) of 2013 Act there is meeting between ---- ?
A. Company & its creditors Co. B. Company & its C. Company & its agents Co. D. Company & its creditor Co. & members
& debtors outsider Co. & sellers & its purchaser
29. Arrangement u/s 230 includes ------ ?

A. Reorganization of B. Appointment of new C. Making a subsidiary D. Dealing with some new project
share capital director
30 Any people who have made application shall disclose to tribunal in form
A. NCLT 1 B. CAA 1 C. NCLT 6 D. CAA 4
31. Which of the following points shall be included in affidavit NCLT 6?

A. Latest financial position B. Reduction of share capital, if C. Valuation report in respect of shares, D. All of the above
of the Company any property & assets by value
32. Creditor’s responsibility statement should be given in form

A. CAA4 B. CAA5 C. CAA1 D. CAA7
33. Scheme of corporate debt restructuring can be executed only of consented by?
A. 25% creditors M. No B. 75% creditors in value C. 75% creditors M no D. 25% creditors in value
34. Notice of meeting pursuant to order of tribunal u/s 230(3) shall be sent to all creditors, members, debenture holders in form -------?
A. CAA 4 B. CAA C. CAA 2 D. CAA 6
35. Notice accompanied by scheme of compromise or arrangement shall disclose following actual except --------- ?
A. Details of order of B. Date of meeting at which scheme was C. Explanatory statement disclosing details of D. Reduction of share capital
tribunal approved the scheme
5.6
36. Notice sent u/s 230(4) provides that voting can be done either through postal ballot or with proxies with of receipt of such notice
A. 6 months B. 45 days C. 1 month D. 3 month
37. Objection for such compromise or arrangement be made for the person having outstanding debt amounting to not less than--------------
A. 10% of outstanding debt B. 20% of outstanding debt C. 5% of outstanding debt D. 25% of outstanding debt
38. The time limit to vote to the adoption of compromise or arrangement is from the receipt of such notice and can be voted it either themselves or
through proxies or through
A. 30 days, e-voting B. 1 month, postal ballot C. 30 days, postal ballot D. 1 month, e-voting
39. When Tribunal is satisfied that the compromise or arrangement cannot be implemented and company is unable to pay its debt the Tribunal will…………
A. Cancel such scheme B. Finance such company C. File case against the Company D. Order winding up
40. When CG is satisfied that 2 or more companies should amalgamate in ----------- interest, CG shall amalgamate those companies is provided in section of Companies
Act, 2013
A. 240 B. 237 C. 233 D. 235
41. When registrar refuses registration of offer of scheme the aggrieved party file appeal to tribunal in Form------------ with affidavit---------
A. NCLT 2, NCLT 6 B. NCLT 9, NCLT 6 C. NCLT 7, NCLT 5 D. NCLT 1, NCLT 3
42. Liability in respect of offences committed under this act shall not anyway continue after such merger, amalgamation, acquisition? True or false
A. False B. True C. Partly true D. Partly false
43. Majority voting u/s 235 is?

A. 75% in value B. 90% in value C. 100% in total D. 25% in value
44. Transferee Company u/s 235 shall give notice to dissenting share holders in Form
A. CAA 4 B. CAA 14 C. CAA5 D. CAA1
45. Valuation for listed Companies for purchase of minority shareholding be done according to
A. Fair price of shares B. Methodological format C. As decided by SEBI D. Highest price during paid 12 mths
5.7
46. Majority shareholders shall deposit amount of value of shares acquired by them in separate bank A/c for atleast ------------ for payment to minority.
A. 6 months B. 10 months C. 1 year D. 3 yr
47. In the scheme of merger and amalgamation of ABC Ltd. and XYZ Ltd., the valuation of former company was done on the basis of Book Value method while the
valuation of second company was done on the basis of average market price method. The Regional director opposed the case saying that the method of valuation
for pricing of the shares shall be same. Decide on the above whether this valid or not?
A. The tribunal shall reject the scheme on the ground that RD has B. The valuation of shares are carried by professionals and hence unless there is some
contended on the valuation of the shares fraud or mala fide intention involved, the scheme can be approved by the Tribunal
48. Notice of proposed scheme inviting objects or suggestion from registrar or official liquidation is issued by transferor or transferee in Form
A. CAA9 B. CAA1 C. CAA2 D. CAA5
49. The scheme of compromise or arrangement should be approved by the members or class of members or creditors or class of creditors. What is the minimum
requirement for the same
A. It shall be approved by more than 50% B. It shall be approved by more than 75% C. It shall be approved by more than 75% D. Both a and b
majority in number of members, class of majority in value of members, class of majority in number of members, class of together
members, creditors and class of creditors members, creditors or class of creditors members, creditors and class of creditors
50. For division of classes or considering the class of members or creditors, will equity and preference shareholder stands under the same class or different
A. Equity and preference shareholder shall be considered in different class B. They both belong under the same class as they are a part of share capital
together
51. Whether the unsecured creditors holding decree but not executed and other unsecured creditors stand under different class for the purpose of meeting to be held
under compromise and arrangement
A. Obtaining decrees or filling suits by an unsecured creditor B. Unsecured creditor holding decree and unsecured creditor have different rights shall be
does not make him a secured creditor and considered as single treated in different classes for Compromise and arrangement
class
52. Comment on the following whether it is true or false: Where a decree has already been executed, the unsecured creditors will not be clubbed with those who are
yet to obtain decrees
A. As the decree has been executed, the rights and liabilities are different and hence the B. Even though the decree has been executed, the rights and liabilities
statement is true remains same hence the statement is false
5.8
53. Which of the following concept is the result of dispute

A. Arrangement B. Merger C. Compromise Amalgamation
54. Who can make an application to the NCLT under section 230
A. Member or any class of members B. Creditors or any class of creditors C. Company itself D. All of the above
55. The members an creditors have agreed to the scheme of compromise and arrangement in dual majority as per the Companies Act, 2013. But the Tribunal has not
sanctioned the scheme of compromise and arrangement. Comment on the following whether the scheme shall be binding on company, all creditors, members or
class thereof?
A. The scheme shall be binding on B. the scheme shall be binding on company, all C. the scheme shall be binding on company, D. None of the above
company, all creditors, members creditors, members or class thereof when all creditors, members or class thereof
or class thereof only when sanctioned by tribunal but not necessarily when approved by members, creditors,
approved by requisite approved by members, creditors, or class class thereof and sanctioned by Tribunal
majority in number and value thereof
56. The tribunal may not call the meeting or creditors or class of creditors in the following situations
A. When the creditors or class B. When the creditors or class of creditor C. When the creditors or class of D. When the creditors or class of
of creditor majority in majority in number and majority in value creditor of 90% in value have given creditor of 75% in value have given
number have given have given their consent in writing their consent by way of their consent by way of affidavit
their consent in writing affidavit
57. In the famous case of Sadanand Varde Vs State of Maharashtra, what all has been held:
1. Provisions relating to compromise, arrangement and amalgamation are a complete code
2. A scheme of compromise or arrangement is intended to be a single window clearance system
3. If a scheme of C&A includes increasing share capital, it can be done as a part of scheme without complying with the specific provisions of Companies Act
4. If a scheme of C&A includes reduction of share capital, it can be done as a part of scheme but with complying with the specific provisions of Companies Act
A. 1,3 &4 B. 1&4 C. 1,2 &3 D. All points 1-4
58. For buy-back of securities which is part of scheme of compromise and arrangement, is it necessary to comply with Section 68 of Companies Act, 2013 separately
A. As sec 230 is a complete code, it Is not necessary to comply B. The tribunal shall not sanction the scheme of C&A involving buyback of securities unless
with sec 68 of companies act, 2013 there is compliance of Section 68
59. Satyam Ventures Limited, a listed company filed a petition to the tribunal for the scheme of Compromise and Arrangement under Section 230. The Scheme 5.9
included a takeover offer.
The Tribunal approved the scheme of C&A but there was no compliance followed by the Listed company as per the SEBI (SAST) Regulations, 2011. Comment on
the following case
A. The Tribunal has sanctioned the scheme and hence binding on B. Compromise or Arrangement may include takeover offer but for listed companies,
company, members, creditors or class therof and no further takeover offer shall be according to SEBI (SAST) Regulations, 2011 and compliance needs to
compliance is necessary be done according to
60. Can the Tribunal intervene by supervising or modifying it for its implementation after sanctioning the scheme of Compromise & Arrangement
A. No the Tribunal cannot interfere B. It is the duty of officers appointed, if any or C. Both a D. Yes the Tribunal has the power to supervise or give
in between the once the scheme directors to follow the orders of Tribunal and and b directions or make modification to make proper
is being sanctioned make the scheme implement properly implementation of the scheme
61. For amalgamation in the nature of merger, the companies need to follow which of the following conditions:
1. All the assets and liabilities of the transferor company become after amalgamation, the assets and liabilities of the transferee company
2. Shareholders holding not less than 90% of the face value of the equity shares of the transferor company become either equity or preference shareholders
of the transferee company by virtue of amalgamation
3. The business of transferor company is intended to be carried on after the amalgamation by the transferee company
The consideration for the amalgamation receivable by those equity shareholders of the transferor company who agree to become equity shareholders can also be
discharged partly in cash and partly by equity shareholder
A. 1,2 &4 B. 1,3&4 C. 1&3 D. 2&4
C
62. The time limit within which the representation if any, of Sectoral regulators shall be made within from the date of receipt of Notice of the meeting to
be called, held and conducted by the Tribunal
63. Under the scheme of compromise or arrangement, the undertaking, property and liabilities of ABC Enterprises Pvt. Ltd. and PQR Industries Pvt. Ltd. were
transferred to new company XYZ Industries Pvt. Ltd., formed under the Companies Act, 2013. Comment which type of merger or amalgamation is it:
A. Merger by B. Amalgamation in the . Amalgamation in the D. Merger by formation of a new company
absorption nature of merger nature of purchase
64. the transferor company or companies get wound up in the scheme of amalgamation and merger. what is this called?
A. Dissolution without winding up B. Compulsory winding up C. Dissolution with NCLT orders D. Dissolution with high court order
5.10
65. Bajaj Limited was demerged to Bajaj Fiserv Limited and Bajaj Limited. What type of demerger is this ?
A. Total demerger B. Partial demerger C. Internal reconstruction D. Demerger in the nature of purchase
66. In the scheme of acquisition of shares or any class of shares in a company (transferor company) to another company (transferee company) needs approval of
of the shares within the time period of of making offer by the transferee company
A. 3/4 shareholders in
th
B. 9/10 shareholders,
th
C. 9/10th shareholders D. 90% shareholders, 120 day
value, 120 day 120 day in value , 4 months
67. What is the role of transferor company in the event of purchase of minority shareholders by acquirer, person acting in concert with acquirer or group of persons
A. Delivering agent for minority shares B. Transfer agent C. Pricing agent D. Value of its own shares
68. The books and papers of amalgamated or transferor company shall be preserved for
A. 10 yrs B. Uptil permission to dispose off by CG C. Permanently D. 8 yrs
69. A meeting of members of DEF Limited was convened under the orders of Tribunal. The meeting was attended by 600 members holding 18,00,000 shares. 240
members holding 14,00,000 shares in the aggregate voted for the scheme. 280 members holding 4,00,000 shares in the aggregate voted against the scheme. 80
members holding 1,00,000 shares abstained from voting. Examine whether the scheme was approved by the requisite majority
A. Yes the scheme is approved by requisite majority B. No the scheme is not approved by the requisite majority
70. ABC Limited is a wholly owned subsidiary of VWX limited. The company made an application of merger under section 232 and the tribunal rejected the application
with the view that it should file an application under section 233. Comment on Tribunals Order of rejection of application
A. The Tribunals rejection reason was not correct and the application cannot The Tribunal has all right and power to reject the application on any
be rejected on this grounds grounds
71. For cross border mergers and amalgamation of foreign company with Indian company, the Company Secretary after complying with the Companies Act Provisions
came with the conclusion to issue equity shares with differential rights to the shareholders of merging company. Advice on the decision of Company Secretary
A. The company can issues any type of B. The company cannot issue anything of its C. No, the consideration can be only D. None of the
securities and hence can issue equity choice and will depend on the decision of cash, Depository receipts or party above
shares with differential rights Tribunal and RBI cash and depository rights
72. For scheme to be approved under section 233, the scheme should be approved by members or class of members at a holding at least
of the total number of shares

A. A meeting called by B. AGM 90% C. A meeting called by Tribunal, 90% D. General meeting 90%
5.11
Tribunal, 75%
73. For scheme to be approved under section 233, the scheme should be approved by majority representing of the creditors or class of creditors
A. 3/4 B. 9/10 C. 75% in value D. 9/10 in value
74 Section 233 refers to merger of which of the following:

1. Between 1 small company and not a small company on other side
2. Between holding and its wholly owned subsidiary company
Between holding and its subsidiary company where it holds 99.9 % shareholding and only 0.1% shares are held as per section 187
A. Only 2 B. 1&2 C. 2&3 D. All of above
75. Whether the liability of offences committed by officer in default of transferor company under section 240 prior to the merger or amalgamation or acquisition be
continued even after such merger or amalgamation or application shall be dismissed on the grounds that transferor company is no more in existence
A. the liability of offences shall continue even B. The Tribunal shall direct C. The Existence of company is dissolved and D. None of the above
after such merger, amalgamation or whether they shall continue or hence the application or liability of such
acquisition dismissed offences shall be nullified
76. Comment on the following: “The object clause of memorandum of association shall contain a clause of approving the amalgamation or merger or acquisition”
A. To amalgamate with another company is the inherent B. Memorandum of Association shall contain provisions of merger and amalgamation, otherwise
power of the company and not an object of company and the act would be ultravires the company and hence statement is true
hence above statement is not valid.
77. a. In the scheme of merger and amalgamation of ABC Ltd. and XYZ Ltd., the valuation of former company was done on the basis of Book Value method while the
valuation of second company was done on the basis of average market price method. The Regional director opposed the case saying that the method of
valuation for pricing of the shares shall be same. Decide on the above whether this valid or not?
C. The tribunal shall reject the scheme on the ground that RD D. The valuation of shares are carried by professionals and hence unless there is some fraud or
has contended on the valuation of the shares mala fide intention involved, the scheme can be approved by the Tribunal
Answers
1. C 2. D 3. B 4. A 5. B 6. B
7. A 8. B 9. B 10. A 11. A 12. C
13. C 14. C 15. B 16. C 17. D 18. C
19. D 20. A 21. B 22. C 23. B 24. A

25. C 26. D 27. C 28. D 29. A 30. C
5.12
31. D 32. C 33. B 34. C 35. D 36. C
37. C 38. B 39. D 40. B 41. B 42. A
43. B 44. B 45. C 46. C 47. B 48. A
49. D 50. A 51. A 52. A 53. C 54. D
55. C 56. C 57. C 58. B 59. B 60. D
61. C 62. B 63. D 64. A 65. B 66. C

67. B 68. B 69. B 70. A 71. C 72. D
73. D 74. C 75. A 76. A
Chapter 6 Oppression & Mismanagement
Chapter 6: Oppression & Mismanagement 6.1
1. The rule of “Majority shall prevail” was inferred from which famous case law
A. Reylands v\s B. Mohinibibis v\s Dharmodas C. Balfour v\s D. Foss v\s Horbottle
Fletcher Ghose Balfour
2. The company once proposed to appoint a Criminal for abducting shareholders asking for dividend.75%
directors agreed to this rest 25% disagreed to the same. Whose vote shall prevail?
A. Majority shall prevail B. Minority shall C. Prior permission of D. None
prevail chairman
3. Company once proposes to borrow Rs.10 cr from Bank wherein MOA&AOA permitted borrowing only uptil
Rs. 5 crore.70% directors approved to such vote rest 30% could not approve. Whose voting shall prevail?
A. Majority shall prevail B. Minority shall C. Permission of D. Permission of MD
prevail chairperson
4. In which of the following cases majority rule does not prevail?

A. Where the act is ultra B. where the act is C. where the act infringes D. all of the above
vires the company illegal to the company personal rights
5. In the late 1913 act, the only remedy available to oppressed minority was
A. change in B. removal of majority C. Winding up petition D. None
management shareholder
6. The term oppression is definition by Lord Cooper in which case

A. Foss v\s Horbottle B. Reylands v\s Fletcher C. Elder v\s Elder & Watson D. Edwards v\s Halliwell
7. Which of the following acts can amount to oppression?

A. Not calling general B. depriving member of C. Refusal to register D. All of the above
Meeting the right to dividend’ transmission under will
8. Which of the following acts are not oppressive?

A. an unwise, inefficient or B. lack of details in notice of C. non-maintenance D. all of the above.
careless conduct meeting of records
9. In case company having share capital how many members can apply to court?
A. 100 members or B. 100 members or C. 50 members or 1\8th D. 50 members or 1\8th of
th th
1\10 of total 1\10 of total of total whichever is total whichever is higher
whichever is higher whichever is lower lower
10. Which of the following member cannot apply for relief

A. a holder of share B. a holder of letter of allotment C. a member whose calls D. all of the above
Warrant of partly paid have not been paid
11. Which of the following member cannot apply for relief

A. Company incurring B. removal of C. arrangement with creditors D. violation of memorandum
Losses director in company’s bonafide
12. All of the following are acts of mismanagement except

A. where there is serious B. continuation in C. company doomed to D. company is
infighting between directors office after expiry trade unprofitably incurring losses
6.2
13. Which of the following held to not to amount to mismanagement
A. merely because company B. arrangement with creditors in C. removal of D. all of the above
is making losses company’s bonafide interest directors
14. On what grounds u/s 245 pertaining to Class Action can the Tribunal reject an application with it:
A. When the application is found to be B. When the tribunal does not want to proceed further with
frivolous or vexatious the application and no reason has been recorded
15. On receipt of application by NCLT u\s 241 the tribunal can frame its opinion on which points :
A. that the company’s affairs have been B. that to wind up the company would C. None of
conducted in the manner prejudicial to any unfairly prejudice such members or above
member members
16. The order passed by tribunal shall provide for

A. regulation of conduct of affairs B. restriction on transfer or C. removal of managing director
allotment of shares
D. ALL OF ABOVE
17. When the order involves reduction of share capital or alteration of MOA the provisions of act shall
apply as may direct
A. CG B. Tribunal C. BOD D. Chairman
18. To whom shall section 245 not apply

A. A family owned B. A public company having C. Banking D. Applicable to all type
private company less than 100 members company of companies
19. Rule of majority was established in which case law:

A. Elder v Elder & B. Foss v. Harbottle C. Shanti Prasad Jain v. D. Thomas Veddon V. J. v
Watson Ltd. Kalinga Tubes Kuttanad Robber Co. Ltd.
20. Application for withdrawal under 241 shall be filed in form as prescribed by
A. ROC B. NCLT C. MCA D. Companies act
21. If the members are filing application by way of class action u\s 245 application shall not be less than
A. 1\8th of total number B. 1\10th of total number C. 1\5th of total number D. 1\4th of total
22. The number of depositors who may file application u\s 245 shall not be less than
A. 100 or 10% B. 200 or 10% C. 50 or 20% whichever D. 150 or 10% whichever is
whichever is less whichever is higher is higher less
23. Power to tribunal for passing order is u\s

A. 240 B. 242 C. 246 D. 245
24. In which of the following cases tribunal shall take prior permission of the party concerned before setting
aside or terminating the order
A. removal of B. recovery of undue gains C. manner in which MD or manager may D. all of
managing director or made by any managing be appointed subsequent to an order the above
any director director or director during removing the existing MD or manager
his appointment or manager of the company.
25. Application to tribunal can be filed if it’s likely that affair of the company will be conducted in a manner
6.3
prejudicial to
A. its interest B. its members C. ANY OF ABOVE.
26. Relief shall be given by tribunal for any affairs conducted in manner following except:
A. prejudicial to B. prejudicial o oppressive C. prejudicial to interest D. Acted in interest
public interest to any member of co of company
27. The company contravenes section 242(5)i.e. alteration to MOA \AOA shall be punished with
A. Fine 500000 - B. Fine 200000- C. Fine 100000- D. Fine 25000-100000
1000000 500000 300000
28. Contravention of section 245 by company shall be penalized

A. 200000-700000 B. 500000-1000000 C. 500000-2500000 D. 100000-300000
29. Class action can be initiated u\s

A. 245 B. 240 C. 242 D. 241
30. Provision of Compromise and Mismanagement dealing with Companies act 1956 was section
A. 336 B.337 C.332 D.335
31. MJK Private Limited has two group of shareholders, one foreign shareholders holding 55% and one Indian
shareholders holding 45% of the shares of the company. The AOA provides for the terms of mutual
understandings of both the groups. Both the groups have equal managerial powers. The relationship
between two groups could not last longer and disputes arose leading to deadlock in management. The
Indian Group complained to NCLT for action against the foreign group for oppression. Whether the case
amounts to oppression or winding up under the Act?
A. Both the groups being equally strong B. Foreign group C. The above case is D. Both (a) &
one is unable to oppress the another, can be said to be not tenable under (c).
hence there is deadlock in oppressive over the provisions of
management but not oppression the Indian group oppression
32. The shareholders holding 15% of the voting rights of ABC Private Limited filed an application to NCLT alleging
various acts of fraud and mismanagement done by Mr. Roy, the ex-managing Director of the company. The
acts of mismanagement were done 8 years ago and Mr. Roy was removed after the
incident came to light. Whether the case for mismanagement done in past be filed now?
A. Yes the case can be filed B. Yes the case can be C. No, the Case cannot be D. No, the Case cannot
to NCLT even for an act of filed but not to referred to NCLT for an act be filed to both
mismanagement in the past NCLT but to of mismanagement in the NCLT and CLB
CLB. past.
33. X and Y majority shareholders of the company opposed the special resolution for increase in capital since
they did not have enough funds and feared that Z, the chairman of the company would corner the shares
and become predominant in the company. They proposed for dilution of control of the company by issuing
shares to persons who are shareholders in the company. Z filed a petition complaining of oppression saying
that X and Y wanted to throw him out to bring change in management. What should be
the logical conclusion of the petition?
A. Seeking B. In terms of the provisions of the act, it is C. Petition filed by Z is D. all of
change of permissible for a company to offer shares to tenable if it is proved that the
management persons who are not the existing further issue of non- above
does not, shareholders by passing a special shareholders was to
prima facie resolution. This requirement has been benefit one group to the
tantamount to complied with in the present case; there is detriment of the other.
6.4
oppression no illegality in the action of the company.
34. Does the following acts by the board amount to oppression?

(i) Denial of inspection of books of accounts.
(ii) Not holding board meeting in timely manner.
(iii) Non declaration of dividend
(iv) Company is incurring looses for last 3 years
A. (i), (ii), (iii) - Amount B. (i), (ii)- amount to C. iii), (iv)- Amount to d. None of the above is
to oppression oppression oppression oppression
35. XYZ Ltd. is a company having 8 shareholders. Can members holding less that 1/10 of the share capital of
the company apply to NCLT for relief against oppression and mismanagement?
A. Yes, if a genuine application to B. No C. Yes minority shares D. None of the above.
NCLT is made for the same and have right to file a
approved by NCLT petition to NCLT
36. In the famous case of McDonalds (McDonalds India Private Limited) and Connaught Plaza Restaurants
Private limited, whether an arbitration Clause in the Joint Venture agreement would deprive NCLT to
establish its jurisdiction to hear disputes regarding oppression and mismanagement?
A. Private agreements B. Since JVA is incorporated in the AOA of the company and thus any malafide
like JVA lie beyond the actions or an act of oppression would be considered as oppression against the
scope of this Section shareholders and against the interest of the company. Thus NCLT has the right to
pass the order even though the dispute was arising out of private agreement
C. Both (a) & (b) D. None of (a) & (b).
37. PQR Private Ltd had failed to allot shares against the application money raised by them for issue of shares.
The names of the persons who had paid money for such shares are not in the register of members of the
company. Can this stop the persons to file an application for oppression and mismanagement
against the company?
A. The persons are assumed to B. Share Certificates being C. The names of such D. None of
be shareholders even though a conclusive evidence persons is not in the
their names are not in the of their membership, the register of Above
register of members since since they do not members and
they have paid application possess the share hence they cannot
money for shares and are certificates they are not file a petition
entitled to allotment of shares the members of the against the
by the company. Hence they company and hence not company since
can file a petition against entitled to file a they are not the
oppression and petition against the members of the
mismanagement company company
38. Ajay Private Limited is a holding company of Vijay Private Limited pursuant to transfer of shares. Vijay
Private Limited rejected to enter the name of Ajay Private Limited in the register of members on unjustifiable
grounds and without sufficient cause. Whether the petition filed by the holding company Ajay
Private Limited will be maintainable under this section?
A. No, since Ajay Private B. Yes, even though Ajay Private Limited’s name is not in the register of
Limited’s name is not in Members the petition is maintainable since the NCLT is a court of
the register of members equity and the matter is to be considered on equitable grounds.
39. Shareholders of Lucky Private Limited had entered into transactions which could not be termed as fair
dealing and were against the interest of the company. The minority shareholders lacked confidence in the
transactions entered by majority and thus filed a petition for oppression. What is a valid ground for
petition?
6.5
A. Lack of Confidence B. Must involve lack of probity C. There must be continuous D. All the
of the minority in or fair dealing to members in acts on the part of the above
majority does not the matter of proprietary majority shareholders,
prove oppression rights as a shareholder. Continuing upto the date of
petition.
40. What are the rights of the minority shareholders under the act
A. Class Action Suits B. Application for C. Appointment of D. All of above
NCLT Small Shareholders
41. Does NCLT have powers to grant relief even if the complainant does not make out a case for oppression
and mismanagement? The Case of Needle Industries is an example of the powers of the NCLT (Formerly
CLB).
A. Yes the NCLT can grant a relief even if the complaint does B. No NCLT cannot provide relief in any
not amount of oppression since the NCLT is not powerless other cases
to do substantial justice between the parties.
42. POQ Limited allotted shares without proper application and notice of board meeting. The majority
shareholders claimed that this was done to reduce the majority shareholders to minority. Petition was
filed by majority shareholders for oppression. What should be the ruling in such case?
A. Since No money was received by POQ B. Further issue of C. Further issue of D. Both (a) &
Limited from the allottees and the shares does not shares amounts to (c).
respondents did not furnish any details amount to oppression if the
relating to the allotment made and no oppression proper procedure
application for the allotment was has not been
made. It is to be held that no shares complied with.
could be allotted without a formal
application. No shares could be allotted
as the petitioners constitute majority in
the board. The allotment of shares was
accordingly to be cancelled
43. A Company appointed Mr. Jay as Managing Director of the company without sending proper notice of
AGM. Petitioner claimed that such appointment is Null and Void. Is It Correct?
A. Yes, if there is no proof of B. No, if the it is C. No, if it held that D. Both (a) & (c)
sending notice of AGM and proved that the majority
filing of requisite forms for notice for AGM was shareholders had
appointment of managing sent and requisite proposed and
director, the appointment forms are filed seconded the
shall be null and void. agenda in the AGM.
44. What were the takeaways from the recent petition of minority shareholders Cyrus Investments Private
Limited and Sterling Investments Corporation Limited of TATA Sons Limited alleging acts of oppression
and mismanagement in the conduct of affairs of TATA sons Limited?
A. Sections 241 and B. To invoke the jurisdiction of the C. Mere unfairness of D. Both (a) & (b).
242 are for Tribunal under section 241, the the action
preventive reliefs company must be a going complained of is
(not declaratory) to concern, there must be an enough to invoke
arrest action in progress and the section 241
the malafide ongoin action should be oppressive or
g in a company prejudicial to any of the
members complaining or the

company. If these elements of
6.6
section 241 are complied with,
the Tribunal will then ascertain
whether the proved facts would
justify the winding-up of the
company on just and equitable
grounds. Lastly the Tribunal
must arrive at the finding that
the winding-up of the company
on just and equitable ground
would unfairly prejudice the
member. Only once this entire
process is achieved, the
Tribunal can then pass relief
under section
241 for oppression and / or
mismanagement.
45. XYZ Private Limited has been experiencing liquidity crisis which has majorly hit its operating cycle. The
company is unable to pay its debt obligations. In order to protect the interest of creditors an arrangement
was made to issue shares in lieu of their amount due and to appoint them as directors. Does it amount to
mismanagement or oppression?
A. No, since the B. Yes it results in dilution of C. Yes since the creditors would be D. Both (b) &
arrangement was in control of the existing appointed as directors they will (c).
bona-fide interest of shareholders and hence have the power to take
the company against their interest decisions which works in their
favour
46. Jack Private Limited appointed new directors and removed the existing directors from the board. Can it be
challenged in a petition under this section
A. Yes if the directors B. No, change in the board does C. Yes such change has D. Both (a) & (b).
were removed not amount to prejudicially
without a justified misappropriation or affected the
reason oppression. It is only when the interest of the
new directors misconduct the company or the
affairs of the company than it general public
can be said that they had been interest.
working to the prejudice of the
company
46. If a company has not declared dividend since last 8 years and is building up reserves for further
investments and growth. Does this act of the company amount to Oppression or mismanagement
A. No, Non declaration of dividend B. Yes, Non declaration of C. Yes, if the shares D. None of above.
does not amount to Dividend results in loss to are devalued.
misappropriation and the shareholders and
Oppression is against their interest.
47. . Whey Private Limited was incurring losses since its incorporation and has not been able to meet the
expectation of the shareholders. The shareholders feel that the operations of the company are
mismanaged by the authority and have filed a petition under this section. Is the allegation valid?
A. Yes since shareholders have B. No merely because company C. Yes if it is proved D. Both (b)
invested in the company with incurs losses it cannot be said that the losses have & (c).
an expectation to earn to be mismanaged by the occurred due to

returns. authority. mismanagement
6.7
49. The Board of directors of Say Limited have indulged in the following acts. Whether the following acts can
be said to be mismanagement :
(i) Not filing documents with Registrar of Companies
(ii) Sale of assets at glaringly low price.
(iii) Violations of provisions of law and of memorandum or articles of association.
(iv) Application of company finances.
A. i), (ii) & (iv) are B. (ii), (iii) & (iv) are C. (i), (ii) & (iii) are D. All are mismanagement
mismanagement mismanagement mismanagement
50. Removal of Mr. Alok from the post of director of Jai Private Limited without giving sufficient reasons have
made Mr. Alok to file a petition under this section for oppression. Can Mr. Alok do so?
A. Yes, Mr. Alok can B. Yes, Mr. Alok can file a petition C. No, Mr. Alok cannot D. Both (a) & (b).
file a petition since he feels that it is prejudicial file a petition under
since his removal to the interest of companies as this section since he is
is unjustified. other directors have a strategy not a
to take undue advantage which shareholder/member
Mr. Alok had
opposed to.
51. In Pork Private Limited, the managing director was removed pursuant to an order passed by the tribunal
under section 242 in the year 2015. Can the person be appointed as manager in the year 2019?
A. Yes, if the person B. No, he cannot be C.. Yes, he can be appointed D. Both (a) & (c).
takes leave from the appointed after a period of 5 years has
tribunal elapsed from the date of
termination of such
agreement
52. Taking the above case, What will be consequences if he continues to act as managing director even after
termination of the agreement by the tribunal
A. Imprisonment B. Fine of Rs 1,00,000 C. Imprisonment of 6 D. Imprisonment up to 6 months
upto 1 year months and Fine of or fine of Rs 5,00,000 or both
Rs 5,00,000
53. What are the consequences if a group of members have formed an alliance to stop the company from
entering into an agreement which they are not interested and hence have made frivolous objections and filed
an application to the tribunal to abstain the company from entering into the agreement?
A. The Tribunal may B. The tribunal after investigation C. The tribunal will D. The tribunal
accept the application with reasons to be recorded in reject the will not accept
and pass an order writing reject the application application with the application
abstaining the company and pass an order to the reasons in
from entering into the applicant to pay a cost to the recording
agreement opposite party not exceeding
of Rs 1,00,000
54. Can a Tribunal consolidate similar applications prevalent in any jurisdiction and appoint a lead applicant in
order to save its time and dispose off the proceedings faster
A. Yes but only of same jurisdiction B. No C. MAY BE D. YES
55. Members and depositors have filed class action suits for the same cause of action differently. Will both the
application be accepted
A. No, only a single class action suit is allowed for a B. Yes different class action suit can be filed by
same cause of action. different interest groups
6.8
56. When can a member make a complain to the Tribunal under Section 241:
A. The affairs of the B. affairs of the company have C. The affairs of the D. All of the
company have been been or are being conducted company have been or above
or are being in the manner prejudicial or are being conducted in
conducted in the oppressive to such member the manner prejudicial
manner prejudicial or any other member to interest of the
to public interest company
57. When can a Central Government make a complain to the Tribunal under Section 241
A. The affairs of the B. The affairs of the C. The affairs of the D. The affairs of the
company have been company have been company have been or company have been or
or are being or are being are being conducted in are being conducted in
conducted in the conducted in the the manner prejudicial the manner prejudicial
manner prejudicial manner prejudicial to interest of the to interest of the
to public interest to public interest company company
58. The Tribunal gave an order of terminating of agreement under Section 242 to ABC Limited. Advice the
company what will be the consequence on the directors, managing director or manager due to the order of
Tribunal with respect to their role In the company
A. The MD, Manager B. The MD, Manager C. The Managing director, D. No the director, MD
and other directors and other directors other director or manager and manager are
if found guilty of shall vacate their for the period of 5 years not responsible for
any fraud and office, if found that without the leave of the any of the act and
misfeasance shall they had the tribunal, shall not be won’t affect their
be penalized with knowledge of such appointed or act as MD, roles in the
Rs. 1,00,000 each act and fraud on other directors or manager company unless
their part causing of the company Tribunal so specified
oppression and
mismanagement
59. The 20 members out of 200 members of ABC Ltd. a company having share capital has authorized Mr. A to
make an application to the Tribunal under section 241.Where this 20 members hold 5% of the authorised share
capital and 9% of issued share capital. Mr. A made an application on to Tribunal. Is the application of Mr. A valid
according to Companies Act
A. Yes application by Mr. A, B. No the criteria of minimum C. Only Central Government can
authorized by other members is number of members making make an application and
valid under the act and also an application is not hence the application by Mr.
requirement of minimum number is complied with and hence A is not valid
satisfied application is not valid
60. MJK Private Limited has two group of shareholders, one foreign shareholders holding 55% and one Indian
shareholders holding 45% of the shares of the company. The AOA provides for the terms of mutual
understandings of both the groups. Both the groups have equal managerial powers. The relationship between
two groups could not last longer and disputes arose leading to deadlock in management. The Indian Group
complained to NCLT for action against the foreign group for oppression. Whether the case amounts to
oppression or winding up under the act
A. Both the groups being equally B. Foreign group can be said C. The above case is not D. Both (a) & (c).
strong one is unable to to be oppressive over the tenable under the
oppress the another, hence Indian group. provisions of
there is deadlock in oppression.
management but not

oppression
6.9
61. The members of XYZ Limited filed the case of oppression against the directors saying that despite
sufficient reserves and profits they hadn’t declared dividend to the members. Advice whether the
allegation filled falls under the category of oppression?
a) Yes, non-payment of dividend is the b) Failure to declare the dividend does not
matter of oppression amount to oppression
62. Mr. X a minority shareholder and wanted to file an application for oppression and mismanagement but
before he could file an application he died. Advice whether the legal heir of Mr. X can file an application
to the Tribunal?
a) Yes the application can be filed by legal b) No the application can be filed only by the
heir of the deceased who stands under victim i.e. the minority holder
the criteria of minority
63. In terms of prevention of oppression and mismanagement, what does issue share capital mean?
a) Issued share capital includes only equity b) Issued share capital is that part of share capital
share capital only which is fully paid up
c) Issued share capital includes both d) None of the above
equity and preference share capital
64. Can the decision of BOD for writing off bad debts be considered as the matter of mismanagement and
oppression and does it require a judicial interference?
a) The decision of BOD is a commercial b) The writing off of bad debts is the decision of
decision and does not require any members and BOD does not have any power
judicial interference to do so, and can file a petition
65. The Board of directors of Relay Industries Private Limited sold the asset of the company at a price lower
than the market price and not according to the required provision. Advice whether this act of BOD would
attract mismanagement or not?
a) Yes this act of selling the asset amount b) This act amount to oppression of the interest
to mismanagement of member
c) The act is a commercial decision and d) None of the above
does not mean oppression or
mismanagement
66. When would the act of further issues of shares amount to be oppression and needs to be prevented?
a) When the issues of shares was not done b) When the issue benefited only the directors
for the benefit of the company and small group of people
c) The only purpose for further issue of d) All of the above
shares was to convert the majority into
minority
67. What penalty is levy if the company does not abide by the orders of Tribunal?
a) Company In default: Fine: 5 to 25 Lac b) Company In default: Fine 1 lac Rs but which
and to Officer in default: imprisonment may extend to 5 Lac Rs and officer in default:
upto 3 years and fine 25000 to 1 Lac imprisonment which may extend to 1 years
and fine 25000 Rs but may extend to 50000 Rs
c) Also penalties under section 337 to 341 d) a and c
shall also apply
68. Following is not the exception to the general rule of “one who holds the majority rule the company”
a) Ultravires or illegal acts b) Transactions requiring special majorities

c) The fraud on the minority exception d) Payment of Interim Dividend
6.10
69. What are the circumstances under which the Central Government make an application to the Tribunal for
its order under section 241
a) Can suo motu make an application if b) Can suo motu make an application if the affairs
the affairs of the company are of the company are conducted in the manner
conducted in the matter prejudicial to prejudicial to the members
the stakeholders
c) Can suo motu make an application if d) All of the above
the affairs of the company are
conducted in the matter prejudicial to
the public interest
70. Examine the following: after the petition being filed to the Tribunal u/s 241, some of the petitioners have
withdrawn their consent and the criterion of minimum members was breached. What will be the result of
such fall in requisite number of applicants on the petition filed to the tribunal
a) The Tribunal can dispose off the b) The validity of the petition is judged on the
petition facts as they were at the time of presentation
of petition, and hence the petition would
proceed further
c) Again a fresh petition with the d) Both c and b (order would be first c and then
minimum number of members need to b)
be filled
71. Which of the following is an act of oppression & mismanagement

a) Continuous losses to the company b) Payment of no dividend or low dividend
inspite of the efforts by the members
and directors
c) Payment of salary to the directors and d) Sale of asset for the benefits of directors
not declaring the dividend themselves
72. Within how many days should the certified copy of order of Tribunal be filled with Registrar
a) 30 days b) As per specified in order
c) 60 days d) 90 days
73. Comment on the following: Can a single act of renting out the premises without the knowledge of
members be termed as oppression or mismanagement?
a) Single act without knowledge of b) A single act cannot be termed as oppression
members is inherently oppressive
74. The tribunal by order terminated the agreement of PKL Enterprises Pvt. Ltd. with ABC Ltd. ABC Ltd, and
then sued the PKL Enterprises Pvt. Ltd for damages caused due to termination of agreement. Advice on
such petition filled by other party for damages
a) The company will have to pay basic b) As the contract was terminated on orders of
damages caused to the other party on Tribunal, no claims or damages can be claimed
termination of the agreement by other party and hence the petition is not
maintainable
75. Mr. A and Mr. B, members of company ABC Developers Private Limited filed two different applications
under section 245 to the Tribunal requesting suitable action against the auditor of the company for the
improper and misleading statements in audit report regarding the company. Advice the company on the
following application of class action
6.11
a) Both the application shall be filed and b) Two class action applications for the same
proceeded by making it a joint cause of action shall not be allowed;
application
c) Both the application shall be rejected d) None of the above
and filled with the appellate tribunal
76. Who shall bear the cost and expenses connected with the class application:
a) Applicant b) Company or person responsible for oppressive
act
c) Cost and expenses shall be borne by all d) Partly by both the parties
the members or applicants collectively
Answers
1. D 2. B 3. B 4. D 5. C 6. C
7. D 8. D 9. B 10. D 11. D 12. D
13. D 14. A 15. C 16. D 17. B 18. C
19. B 20. B 21. C 22. A 23. B 24. D
25. C 26. D 27. D 28. C 29. A 30. B
31. D 32. D 33. D 34. D 35. A 36. B
37. A 38. B 39. D 40. D 41. A 42. D
43. A 44. D 45. A 46. C 47. A 48. D
49. C 50. C 51. D 52. D 53. B 54. C
55. A 56. D 57. A 58. C 59. A 60. C
61. B 62. A 63. C 64. A 65. A 66. D
67. D 68. D 69. C 70. B 71. D
72. A 73. B 74. B 75. B 76. B
Chapter 7 Registered Valuer
Chapter 7: Registered Valuer 7.1
1. Who shall carry out the valuation of any property, stocks, shares, debentures, securities or goodwill or
any other assets or net worth of a company or its liabilities?
a. CFO b. Liquidator c. Registered Valuer d. None of the above
2. Who shall appoint the Registered Valuer of the Company?

a. Board of b. Audit c. Nomination and d. Audit Committee, in their
Directors Committee Remuneration absence by Board of Directors
committee
3. What factors shall a Registered Valuer consider while conducting valuation of assets or liabilities of the
Company?
a. Make an b. exercise due c. not undertake valuation of any assets in which he d. All of
impartial diligence has or will have a direct or indirect interest any the
valuation time during or after the valuation of assets. above
4. Mr. X sold a building to PQR Ltd. in Jan 2016. In the year 2018, PQR Ltd. seeks to appoint Mr. Y (Brother
of Mr. X) as its Registered Valuer. Will the appointment be considered valid?
a. No, as 3 years have b. No, as 5 years have not c. No, as 8 years have not d. None of the
not lapsed from the lapsed from the date lapsed from the date above
date Mr. X sold the Mr. X sold the asset. Mr. X sold the asset.
asset.
5. Mr. X sold a building to PQR Ltd. in Jan 2016. In the year 2018, PQR Ltd. seeks to appoint Mr. X as its
Registered Valuer. Will the appointment be considered valid?
a. No, as 3 years have not b. No, as 5 years have not c. No, as 8 years have not d. None of
lapsed from the date Mr. lapsed from the date lapsed from the date Mr. X the
X has sold the asset. Mr. X has sold the has sold the asset. above
asset.
6. Mr. X sold a building to PQR Ltd. in Jan 2016. In the year 2018, PQR Ltd. seeks to appoint Mr. Y (Friend
of Mr. X) as its Registered Valuer. Will the appointment be considered valid?
a. No, as 3 years have not b. No, as 5 years have c. No, as 8 years have not d. None of
lapsed from the date Mr. X not lapsed from the lapsed from the date Mr. X the above
sold the asset. date Mr. X sold the sold the asset.
asset.
7. In the year 2018, PQR Ltd. was appointed Mr. X as its Registered Valuer. Mr. X seeks to sell a building to
PQR Ltd. in Jan 2020. Can the transaction be entered into?
a. No, as 5 years have not lapsed b. No, as 3 years have not c. No, as 8 years have d. None of
from the date of appointment lapsed from the date of not lapsed from the the above
of Mr. X. appointment of Mr. X. date of appointment
of Mr. X.
8. Mr. X sold a building to PQR Ltd. in Jan 2012. In the year 2018, PQR Ltd. seeks to appoint Mr. X as its
Registered Valuer. Will the appointment be considered valid?
a. Yes, as 5 years have lapsed b. Yes, as 6 years have c. Yes, as 3 years have d. None of
from the date Mr. X has lapsed from the date lapsed from the date Mr. the
sold the asset. Mr. X has sold the asset. X has sold the asset. above
Chapter 7 Registered Valuer
9. Mr. Akhil sold a building to Ranka Ltd. in Jan 2012. In the year 2018, Ranka Ltd. seeks to appoint Mr.
7.2
Akhil as its Registered Valuer. In March 2018, Mr. Akhil conducts valuation of its shares and debentures.
Will he face any consequence?
a. fine which shall not be less b. fine which shall not be less c. fine which shall not be less d. None
than Rs. 25,000 but which than Rs. 15000 but which than Rs. 5000 but which of
may extend to Rs. 1 Lac. may extend to Rs. 1 Lac. may extend to Rs. 1 Lac. the
abov
e
10. Mr. Raman sold a building to Ranka Ltd. in Jan 2016. In the year 2018, Ranka Ltd. seeks to appoint Mr.
Raman as its Registered Valuer. In March 2018, Mr. Raman conducts valuation of its shares and
debentures. Will he face any consequence?
a. fine which shall not be b. fine which shall not be c. fine which shall not be less d. None
less than Rs. 25,000 but less than Rs. 15000 but than Rs. 5000 but which of the
which may extend to Rs. 1 which may extend to Rs. 1 may extend to Rs. 1 Lac. above
Lac. Lac.
11. Mr. P, valuer of LMN Ltd. contravened with the provisions of Section 247 with an intention to defraud
the company. What are the consequences he will have to face?
a. Imprisonment up b. Fine: Rs. 1 lac up to c. (a) or (b) d. (a) and (b)
to 1 year Rs. 5 lakh.
12. Mrs. Prachi, valuer of LMN Ltd. contravened with the provisions of Section 247 with an intention to
defraud the company. What are the consequences she will have to face?
a. Imprisonment up to b. shall be liable to: c. (a) d. (a)
one year and Fine Rs. i. refund the remuneration received and or and
1 lac up to Rs. 5 lakh. ii. pay for damages to the company or to any other person (b) (b)
affected.
Answers
1. C 2. D 3. D 4. D
(As interest held by relative of Registered Valuer is not considered in
sec 247)
5. A 6. D 7. B 8. C
(As interest held by friends of Registered Valuer
is not considered in sec 247)
9. D 10. A 11. D 12. D
(Since 3 years have lapsed from the date of
sale, his appointment is valid and will not
face any consequence)
Chapter 8 Removal of Name of Companies
Chapter 8: Removal of Name of Companies 8.1
1. Certificate of Incorporation would be deemed to be cancelled from

a. Date of Date mentioned in a. Date from which the b. Date from which
application to the notice by the directors decides to the company stops
ROC ROC dissolve the company its business
2. XYZ Ltd filed an appeal with the Tribunal against the order issued by the Registrar regarding removal
of their name from the registrar of companies and Tribunal passes the order in the favor of the
Company on 16th October 2018, what would be the status of the Certificate of incorporation of
company .
a. The old b. Tribunal will c. Registrar d. Company needs to file
certificate of issue new Certificate will issue new the order issued by the Tribunal
incorporation would of Incorporation certificate of within 30 days from the date of
stand valid incorporation order and ROC will issue a fresh
certificate
3. XYZ company was incorporated on 1.4.17 and it started its business on 30.3.18, Registrar sent a
notice to the company on 15th April 2018 stating that as there is no business in the FY2017-18 the
companies name would be removed from the ROC. Does Registrar have power to send notice on this
basis
a. Yes b. No
4 ABC Pvt Ltd changed its registrar company address on 6th May 2018, On 15th July 2018 it changed
its name from ABC Pvt to XYZ Ltd and 30th September made an application to the ROC for removal of
name, Under Section 248 can the Registrar accept the application for the removal of the name
a. Yes b. No
5 LML Company after discharging all its liabilities wanted to make an application to Registrar for
removal of its name and for the same they came up with the below proposal, Suggest the correct
proposal to the company
a. Company b. Company c. Company needs to d. Company
needs to take needs to take consent take consent of 75% needs to take consent
consent of 55% of 75% members in members in terms of paid of 75% members in
members in terms of terms of share capital up share capital terms of paid up share
share capital capital
6. Any person aggrieved by the order of the ROC may file an appeal before the Tribunal within
a. 20 years b. within c. within a period of three d. within 1
from the publication 3 years of the years from the date of passing of the years of the order
in the Official order passed order dissolving the company passed by ROC
Gazette by ROC under section 248
7. LMN Ltd along with its directors receive notice from the Registrar about his intention to remove
name of the company from Registrar of Companies under Section 248 and also asked to send their
representative along with relevant document if any , Within how many days the LMN Ltd will have to
send their representation
a. 60 days from the b. 30 days from c. 30 days from d. 60 days from
date of notice the date of notice the receipt of notice the receipt of notice
8. ROC may strike off name of the company from the Registrar of companies
a. On expiry of b. After expiry of c. c. After expiry of d. After expiry of
8.2
time mentioned in 30 days from the 45 days from the time 60 days from time
notice notice sent mentioned in notice mentioned in notice
9. When can the registrar send a notice to the company for removal of its name from ROC
a. When b. When c. When d. When company is not
Registrar believes company is not company is not carrying its business for a
that the company carrying its business carrying its period of 2 immediately
failed to commence for a period of 1 business for a preceding FY and the company
its business even immediately period of 2 has applied for status of
after 2 years of preceding FY immediately dormant Company u Sec 455
incorporation preceding FY
10. Prohibition to remove name of company from the Registrar of Companies in case of Amalgamation
and Merger is covered under which section of Companies Act
a. Sec 248 b. Sec 248(2) c. Sec 249 d. Sec 252(2)
11. LALAL Ltd name was struck off on 20.4.13 and its certificate of incorporation was cancelled but its
creditor LALI with whom the company was buying material knew the companies business was
operational till 31.3.13, hence LALI wanted to appeal to Tribunal on 1.4.18 what is the time period
within which they can file an application with the Tribunal for the same
a. 5 years from the b. 5 years from the c. 20years from the date d. 20 years from the
date of publication in the of dissolution publication in the
dissolution Official Gazette Official Gazette
12 Kishan Ltd has been striked off by the Registrar from the list of Registrar of companies , Directors
and Members of the company declare that as the company has been striked off by the Registrar they
are relived from any kind of obligations and liabilities the company owes , Do you agree with them
a. Yes b. No
13. The notice for removal of the company u sec 248(1) needs to be published in Official Gazette and
newspaper, and the newspaper needs to be :-
a. It needs to b. It needs to be c. It needs to be d. It needs to be
be published English published vernacular published in leading published in leading
newspaper newspaper wherein English newspaper and English newspaper and
the companies Vernacular newspaper leading Vernacular
Registered office is both having wide newspaper both having
located circulation in the State wide circulation in the
wherein the companies state wherein the
Head office is located companies Registered
office is located
14. If a company files an application in violation of Section248(1) it shall be punishable with

a. Strike off of b. Cancellation c. Fine which may d. Fine which may
Company of Certificate of extend up to 1 lac extend upto 2 lacs
Incorporation
15. Section 252 of the Companies Act 2013 empowers Tribunal

a. To issue a b. To reject the c. To reject the plea d. To pass an order for
Fresh Certificate of plea of the appeal by of the Registrar the restoration of
Incorporation the applicant company which has
company been struck off by ROC
16 PQR Ltd stood dissolved under sec 248 from 1st April 2018 and ceased to operate from that day and 8.3
Certificate of Incorporation also deemed to cancelled from that date except
a. Till appeal to b.Till fresh c. Amount due to the company is d. Till DIN number of
Tribunal is done certificate of realized for the payment or discharge the Directors is
incorporation of the liabilities/obligations of the cancelled
is issued company.
17. Which companies are exempt u Sec 248(2)

a. Private Ltd b. Public Ltd c. Listed Companies d. LLP
Company Company
Answer
1. B 2. D 3. B
Hint: As per Sec 250(1) , On and Hint: Company needs Hint: As per Sec 248(1) if the company fails
from the date mentioned in the to file the order issued to commence business within 1 year of its
notice the Company shall cease by the Tribunal within incorporation, Registrar has power to send
to operate as a company and 30 days from the date of notice for removal of companies name from
Certificate of Incorporation order and ROC will issue ROC but in the above case the company had
issued shall be deemed to be a fresh certificate started business within 1 year hence Registrar
canceled from such date does not have the power to send notice on
this basis
4. B 5. D 6. B
Hint :An application to remove the company name Hint:- Company Hint:- As per Sec 252 Any
shall not be made if any time in the previous 3 needs to take person aggrieved by the
months the company has changed its name and in consent of 75% order of the ROC may file an
this case, the company has changed its name in members in terms appeal before the Tribunal
previous 3 months hence their application would of paid up share within 3 years of the order
not be accepted by the Registrar capital passed by ROC
7. C 8. A 9. C
Hint: Hint: On expiry of the time mentioned Hint:-As per Section 248(1) A company is not
Representation in the notice, the ROC may, strike off carrying on any business for a period of
shall be sent within its name from the register of 2 immediately preceding FY & has not
30 days from the companies and publish notice thereof applied within such period for obtaining the
date of notice in official gazette status of a dormant company under section
455
10. C 11. D 12. B
Hint: Prohibition to remove Hint: The Tribunal, on an application Hint: Strike off does not
name in case of Merger and made by the company/ relieve the directors and
Amalgamation of companies is member,/creditor or workman before members from their
covered under Sec 249 of the expiry of 20 yrs from the publication liabilities, if any, under the
Companies Act 2013 in the Official Gazette of the notice of law.
dissolution of the company
13. D 14. C 15. D
Hint: Notice for removal of name under sub- Hint: In pursuance of Hint: Section 252 of the
section (1) of section 248 needs to be published in Section 249(2) that if a Act empowers the
English language in a leading English newspaper company files an Tribunal, to pass an
and at least once in vernacular language in a application in violation of order for the
leading vernacular language newspaper, both Section 248(1) it shall be restoration of company
having wide circulation in the State in which the punishable with fine which which has been struck
registered office of the may extend to Rs. 1 lakh. off by the ROC
company is situated.
16. C 17. C
Hint :As per Section 250 of the Act, if a company stands dissolved under section Hint: Listed companies
8.4
248, it shall on and from the date mentioned in the notice of dissolution, cease u sec 8 would be
to operate as a company and the Certificate of Incorporation issued to it shall exempted u sec 248(2)
be deemed to have been cancelled from such date except for the purpose of
realizing the amount due to the company and for the payment or discharge of
the liabilities or obligations of the company
Chapter 10 Winding Up
Chapter 10: Winding Up

10.1
1. Mr. Anup has been listed in B list contributories during the winding up proceedings and order is passed
by the court to recover amount payable by him on unpaid calls. Mr. Anup’s shares were forfeited earlier.
Whether company can demand money and add his name in B List Contributories even after his
shares are forfeited before winding up procedure started?
A. A. No the company cannot demand B. B. Yes Mr. Anup will be liable to pay if the winding up
from Mr. Anup as he is no more a took place before expiry of 1 year from the order of
member of the company. forfeiture of shares.
C. C. Yes Mr. Anup will be liable to pay of List A D. Both (b) & (c).
contributories are unable to meet the debts.
2. JAZ Ltd had two group of shareholders holding 40% each and the rest were held by a trust in which these
two groups had equal members as trustees. Dispute arose between the two groups with regard to
management of the affairs of the company and since the dispute could not be settled amicably, one of
the groups filed a petition for winding up on two grounds i.e. unable to pay the debts and it was just and
equitable to wind up the company. There were over 1000 workers employed in the company on the date
of winding up. The workers being members of the union made an application to set aside the winding up
petition. Will an application of workers be considered by the court to decide whether to
wind up or not ?
A. Yes it is the duty of the court to B. No the section in the act provides only creditors and
consider interest of workers while contributories to oppose the petition so workers union
deciding on winding up. cannot be allowed to file an application to set aside the
winding up order.
C. No the duty of the court to consider the interest of workers would D. Both (b) & (c)
not create a right of workers to intervene the proceedings in the
absence of provisions in the act.
3 A past member is not liable to contribute

A. In respect of any liability contracted after he ceased to be B. One year passed since he ceased
member of the company. to be a member
C. In case of company limited by shares, no liability arises if D. All of the above
shares are fully paid up
4 Which of the following statement is true:

A. Preference share capital together with B. The holders of cumulative preference shares are entitled to
any arrears of dividend will have arrears of dividend if there is a surplus after return of
priority for payment over equity capital.
equity capital.
C. Preference shares are treated as D. If articles provides for payment of arrear of dividend,
fully secured creditors. then it must be paid even by contributories if shares are
partly paid
5 After appointment of Company Liquidator, a report is to be submitted within

A. 30 days B. 60 days
C. 90 days D. 45 days
6 The report to be submitted by the liquidator shall include :

A. Details of trademarks
B. The manner in which company was incorporated
C. Viability of Business
D. All of Above
10.2
7 Can creditors and contributories make application to tribunal to revise the time limit within which the
entire proceedings be completed?
A. YES B. NO
8 In case of Prayag Private Limited, the tribunal after hearing from the liquidator, creditors and
contributories decided to sell the company as going concern and hence did not order winding up of the
company. Can a tribunal pass such order ?
A. Yes the tribunal can pass an order in the interest of company B. No the tribunal cannot pass
and public at large order for sale of company
C. No power of the tribunal under the section restricted to decide D. Both (b) & (c).
whether the company should be wound up or not.
9 Dissolution of a company is synonymous to winding up

A. In winding up the assets and liabilities are settled B. Dissolution of company means the existence
by the liquidator and Dissolution is a process after of the company comes to a end, while in
the proceedings of winding up are over. winding up the company still exists.
C. The company can be dissolved without winding D. All of above.
up.
10 The provisional liquidator appointed by the tribunal shall be from

A. Panel maintained by Central Government B. Registered insolvency professionals
C. Panel maintained by ROC D. Registered chartered accounts
11 The liquidator appointed is required to give a declaration disclosing their interest or lack of
independence if any, within
12 The winding up committee constituted by the tribunal shall consist of

A. Official liquidator B. Nominee of secured creditor
C. A professional nominated by tribunal D. All of above.
13 The advisory committee is same as winding up committee

A. Yes B. No the winding up committee is formed to look into the process of winding up and
advisory committee is formed to advise the liquidator and report to the tribunal.
14 Maximum number of members of advisory committee shall be

A. 12 B. 4
C. 5 D. 15
15 Members of the advisory committee shall be decided by the tribunal among the existing:
A. Statutory auditors of the company B. Creditors and contributories
C. Shareholders D. Banks
16 In case of Maz Limited, the directors were held liable by the tribunal to contribute towards payment of
debts and liabilities of the company beyond contributions made by them as ordinary members. When is
the director not liable to pay?
A. a person who has been a director or manager B. a person who has been a director or
shall not be liable to make such further manager shall not be liable to make such
contribution, if he has ceased to hold office for a further contribution in respect of any debt
year or upwards before the commencement of or liability of the company contracted after
the winding up he ceased to hold office
C. subject to the articles of the company, a director or manager shall not be liable to make D. All of 10.3
such further contribution unless the Tribunal deems it necessary to require the above
contribution in order to satisfy the debts and liabilities of the company, and the
costs, charges and expenses of the winding up.
17 Who can file a petition for winding up under section 272?

A. The company B. Prospective creditors
C. The registrar D. All of above
18 Circumstances under which a company may not be wound up by the tribunal

A. If company is unable to pay its debts B. If the tribunal has ordered winding up
19 Jay Prakash Private limited has failed to pay a debt of Rs 25,00,000 of Mr. Deepak for a period exceeding
six months. Mr. Deepak has send a written notice for deanding payment of such sum on 14 th November
2018. The Company has failed to make payment or even create security or re-structure the
debt till January 2019. Shall Jay Prakash Private Limited be deemed to be unable to pay debts?
A. Yes the company is deemed to be unable to pay its B. No only after the tribunal determines
debt since it has elapsed a period of 21 days from the through investigations , it can be said that
receipt of notice to take reasonable steps for the company is unable to pay the
satisfaction of creditor debt
C. No the company cannot be deemed to be unable to pay its debt D. Both (b) & (c).
only on the grounds of default in payment of a single creditor.
20 Pratik Hydro Power Limited has resolved by passing a special resolution to wind up the company by
tribunal and has made a petition for the same. The company has not filed statement of affairs along with
the petition to the tribunal since they were not audited.
Will the petition be admitted in the tribunal ?
A. Yes it can file unaudited statement B. No Petition has to be accompanied with the statement of
of affairs with the petition affairs
21 What are the powers of the tribunal on receipt of petition for winding up ?
A. To dismiss it with or without cost B. To make interim orders
C. To appoint provisional liquidator D) All of above
22 A Company was incorporated in July 2015 with main object of providing services of merchant banking
and other ancillary services. But it could not get approval of RBI and hence the business could not be
started. The company has no assets. Petition has been filed by the company under section 272 for winding
up. Keeping in view the powers of the tribunal, will winding up be passed for such a company
having no assets?
A. Yes tribunal can make an order for B. No the tribunal will refuse to pass an order for winding up
winding up even if the company has since there is no security in the form of assets for
no assets discharge of creditors.
C. Yes the tribunal will make an order for winding up since the D. Both (a) & (c)
company has not started business.
23 Creditors have filed a petition for winding up before the tribunal and have deposited security amount.
The tribunal has directed the company to file its objections along with statement of affairs within 30 days.
The Company files its objections but fails to provide the statement of affairs. Does a company
have a right to file objections without statement of affairs? What are the consequences of such failure?
A. Yes the company can file statement B. No the company’s right to oppose the petition is
of affairs within 30 days of filing forfeited and directors responsible for such non-
objections compliance are punishable with imprisonment for a term

upto 6 months or fine or both.
10.4
C. Yes the company can file statement of affairs within such D. None of the above.
extended period as directed by the tribunal
24 Winding Up order has been passed by the tribunal for Helix Limited. The tribunal has received an
application for seeking leave under section 279 for a suit pending before the high court. Does this
section apply to proceedings pending before the high court?
A. Yes a leave can be granted by the tribunal for all B. No this section does not apply to
proceedings in any judicial bodies. proceedings in the high court
C. Yes the section applies to proceedings in the high court D. Both (a) & (c)
but not Supreme Court.
25 Company passes Special Resolution for winding up by the

A. High court B. ROC
C. Tribunal D. MCA
26 Tribunal has ordered winding up of the company under

A. Chapter XIX B. Chapter XXI
C. Chapter XIV D. Chapter XXX
27 Tribunal winds up company when company has made default in filing its finanacial statements or annual
returns with ROC for immediately preceding
A. 5 Years B. 2 years
C. 3 Years D. 1 year
28 Company shall be deemed to be unable to pay its debts when company fails to pay within 21 days after
receipt of notice of creditor or failed to provide adequate security if the amount of such debt is more
than
A. 1 lakh B. 5 lakhs
C. 2 Lakhs D. 10 lakhs
29 Company should pay debt of creditor within days of receipt of notice of demand
C. 30 days D. 60 days
30 Which of the following are not permitted to present the petition for winding up?
A. Company B. Contributories
C. Creditors D. Related Party
31 Which of the following are permitted to present the petition for winding up?
A. Creditors B. Contributories
C. Company D. All of the above
32 Shareholder can act as contributory only when he has held share for by him immediately before
winding up
A. atleast 6 months during 18 months B. atleast 3 months during 12 months

C. atleast 9 months during 15 D. atleast 12 months during 18 months
months 10.5
33 Registrar shall be entitled to present petition for winding up

A. u/s 271 B. u/s 272
C. u/s 274 D. u/s 276
34 Registrar can present a petition when company is unable to pay its debts only when
A. The financial condition is reflected in B. from report of an inspector appointed
its balance sheet
C. Both A or B D. company is in no mood to pay debts
35 Copy of petition filed under sec 272 based on which registrar shall submit his views to tribunal within a
period of
A. 60days B. 30 days C. 45 days D. 90 days
36 The tribunal has a power to refuse from making winding up order when the company has no assets or
the existing assets are mortgaged for an amount equal to or in excess of those assets.
Is the above statement true?
A. True B. False
37 The company can file its objectives along with statement of affairs only when the petitioner is
A. other than an Individual B. other than a LLP
C. Bother than a Company D. other than a Firm
38 Compliant u/s 274 to be filed by registrar before

A. NCLT B. Central Government
C. High court D. Special Court
39 Official Liquidator can be appointed by way from amongst

A. Insolvency professional under IBC, B. By way of passing SR
2016
C. By way of Board Resolution D. By way of a contract
40 Mr. B was appointed as official liquidator of Z ltd. During the course of winding up he realized one
creditor to be his immediate relative result of which he settled their debts on priority. Later he got
penalized heavily. What he should have done ideally according to law?
A. File a declaration within 7 days regarding conflict of interest and lack of independence
B. Enter into a NDA with such creditor
C. File a declaration with 7 days
41 When is the “Notice of Discharge” not applicable under the winding up process?
A. When business is not continued B. When business is making less profits
C. When business is continued D. When the business is under inspection
42 Winding up committee should be constituted within

A. 30 days of BM B. 3 weeks from order
C. 15 days of Special Resolution D. 45 days of Notice
43 Winding up committee shall consist of..

10.6
A. Auditor B. Independent Director
C. Professional nominated by Tribunal D. Nominee of directors
44 Company tribunal shall place before tribunal report along with minutes of committee on basis
A. Monthly B. Quarterly
C. Fortnightly D. Weekly
45 Draft Final report of winding up committee after approval shall be placed before tribunal for passing
A. Winding up order B. . Dissolution order
C. Disclaimer Order D. Stay order
46 Pending litigation on existing suits is not allowed to be continued except cases with
A. SAT B. NCLT
C. ITAT D. HS & SC
47 Existing suits or new suits against company can be proceeded during winding up only if permission by
tribunal is given within
C. 90days D. 100 days
48 If directors, promoters, officers or employees fails to extend full cooperation to company liquidator, he
shall be penalized by
A. Imprisonment upto 6 months or, B. Imprisonment upto 3 months or, Fine upto Rs.100000
Fine upto Rs.50000
C. Imprisonment upto 10 months or, D. Imprisonment upto 12 months or, Fine upto Rs.50000
Fine upto Rs.50000
49 .In which of the following cases the “Person who has been a member” is NOT liable to contribute while
winding up
A. When current members are able to B. When such member is ceased to be a member for 1 year
pay or more before commencement of winding up
C. Debt is contracted after his D. All of the above
cessation
50 Company Liquidator is compulsorily required to make on progress.

A. Quarter end report B. Month end report
C. Half year end report D. Year-end report
51 Company Liquidator shall summon creditors & contributory meeting if requested in writing by not less
than
A. 1/8th in value of such creditor and B. 1/5th in value of such creditor and contributory
contributory
C. 1/4th in value of such creditor and D. 1/10th in value of such creditor and contributory
contributory
52 Company Liquidator shall give receipt and payment account in duplicate at least
A. Once a year of tenure B. Twice a year of tenure
C. Thrice a year of tenure D. 4 times in a year of tenure
53 Company owing any amount to contributory can set off in case of unlimited company for any
independent deal or contract except amount owed as
A. Dividend B. Insurance 10.7
C. Interest D. Others
54 Examination on oath is by
A. Word by mouth B. Written interrogatories
C. On affidavit D. Any of the above
55 Mr. A was a person having property, accounts & papers of company in his possession and was about to
leave India for evading payment of calls or of avoiding examination affairs of company. The tribunal has
the power to detain him and seize his property under section
A. Sec 300 B. Sec 304
C. Sec 302 D. Sec 301
56 Workmen’s dues payable for a period of preceding the winding up order or such period as may be
prescribed shall be paid first
A. 4 years B. 6 months
C. 1 year D. 2 years
57 Which of the following is correct priority for payment of debts under 327
1. all accrued holiday remuneration 2. all revenues, taxes, cesses and rates due from the
becoming payable to any employee: company to CG or SG within 12 months preceding that
date
3. all wages or salary including wages 4. all employers contribution payable during 12 months’
payable under ESIA
A. 2,3,4,1 B. 1,2,4,3,
C. 3,2,4,1, D. 4,3,2,1
58 Affidavit can be sworn only in India

A. TRUE B. FALSE
59 If the tribunal is satisfied that the company does fraudulent preference. The tribunal may
declare such transaction as
A. Cancelled B. Invalid
C. Illegal D. Valid
60 Any transfer or assignment by a company of its properties to trustees for the benefits of all its directors
shall be
A. Valid B. ILLEGAL
C. VOID .. D. LEGAL
61 If 12 months before commencement of winding order a floating charge was created shall be invalid
unless proved that after creation of charge the company is
A. Under winding up B. Under insolvency
C. Solvent D. financially weak
62 If property of company consist of onerous property the CL may with the permission of tribunal at any
time within 12 months after commencement of winding up
10.8
A. sell the property B. surrender the property
C. Disclaim the property D. Mortgage the property
63 If existence of onerous property was not known to company liquidator within …month of
commencement of the time of 12 months shall be calculated after he becomes aware
A. 3 months B. 2 months C. 1 month D. 6 months
64 Offences by officers of companies in liquidation shall be

A. Imprisonment for 3-5 years B. Both
C. Fine 1 to 3 lakhs D. NONE
65 Every invoice, order of goods or letter head of company after being wound u shall contain a statement
that the co is being wound up. If not, penalty
A. 50000 to 3 lakhs B. 10000 to 2 lakhs

C. 10000 to 4 lakhs D. 20000 to 5 lakhs
66 After the dissolution of company and after its winding up books and papers should be disposed as
A. ROC Directs B. MCA directs
C. Tribunal directs D. Official liquidator Directs
67 The Company Liquidator shall file audited form within prescribed details about proceeding within of
commencement.
A. 2 YR B. 3 YR
C. 1 YR D. 5 YR
68 No audit of proceedings of winding up is required if provisions of sec are applicable

A. 290 B. 292 C. 294 D. 299
69 If Official Liquidator receives money by way of an official liquidator of any company he shall pay the
money to
A. Tribunal B. RBI .
C. CG D. SBI
70 Every CL shall deposit monies received by him in his capacity to

A. SCHEDULED BANK B. ITAT
C. CG D. RBI
71 Neither OL nor CL shall deposit any money received by him in that capacity to Private Banking account.
Is the above statement true?
A. True B. FALSE
72 The CL shall deposit into “Company Liquidation Dividend and Undistributed Asset account” any money
representing
A. Dividend payable to any creditor B. On dissolution of company, unpaid dividend and
but unpaid since 6 months undistributed assets
C. Assets refundable remain D. All of the above
undistributed for 6 month
73 Failing to deposit any amount in “Company Liquidation Dividend and Undistributed Asset account” will
have to pay interest
A. 10 B.8 10.9
C.12 D. 15
74 Amount remained unclaimed in “Company Liquidation Dividend and Undistributed Asset account” shall
be transferred to general revenue account of CG after
A. 10 YR B. 12 YR
C. 15 YR D. 20 YR
Answer
1. D 2. D 3. D 4. C 5. B 6. D
7. A 8. A 9. D 10. B 11. C 12. D
13. B 14. A 15. C 16. D 17. D 18. D
19. A 20. B 21. D 22. A 23. B 24. B
25. C 26. A 27. A 28. A 29. A 30. C
31. D 32. A 33. A 34. C 35. A 36. C
37. C 38. D 39. A 40. A 41. A 42. C
43. C 44. A 45. B 46. D 47. A 48. A
49. D 50. A 51. 52. B 53. A 54. D
55. D 56. D 57. A 58. B 59. B 60. C
61. C 62. C 63. C 64. B 65. A 66. C
67. C 68. C 69. B 70. A 71. A 72. D
73. C 74. C
Chapter 11: Companies Authorised to Register under this Act
1. Can partners of" AAA LLP", convert the LLP into a company limited by shares with just 3 partners
Amar, Akbar and Anthony as the minimum requirement for a company to register is 7 members
a. Yes , As there b. No, As the minimum c. Yes , As there is d. No as LLP cannot be
are more than 2 requirement is 7 no minimum registered as firm
members it can requirement for
be registered as members
company
2. Ms. Devaki wanted to take benefit of Companies Act 2017 and register her certain entities under
this Act. Which group of entities from the below list can be registered under this Act?
a. b.
 M/S Dwarkananth (Proprietor firm)  Kishanlal LLP
 Kana Pvt Ltd (Registered under Companies  Radhe Co-operative Society
Act 2013)  Radhe Kishan Partnership firm
 Kishanlal LLP  M/S Dwarkananth (Proprietor firm)
 Maganlal LLP
c. d.
 Kishanlal LLP  Kishanlal LLP
 Radhe Co-op Society  Maganlal LLP
 Kana Pvt Ltd (Reg under Co Act 2013)  Radhe Co-op Society
 Radhekishan Partnership firm  Radhekishan Partnership firm
3. RR LTD was registered under Companies Act 2017 as Company Limited by guarantee, Mr. R was a
member of the company and he ceases to be a member of the company on 1.1.2017, On
2.2.2018, the company winds up and there is a net liability payable by the Company amounting
to Rs 25 lacs which is due from past 3 years. Will Mr. R be held liable to contribute?
a. No, Mr. R has b. Yes, Mr. R has ceased c. Yes, Mr. R has d. No, The company has
ceased to be a to be a member of the ceased to be a been wound up after
member of the Company but as the member of the 1 year of his
Company hence company is registered Company but the resignation hence he
is not liable as Company limited by company has would not be liable
anymore to the guarantee , members winded up within even if liability was
companies would be liable even if 2 years after he during the term
liabilities they have resigned ceases to be a when he was a
member hence he member
is liable
4. "XYZ LLP" has been now registered under the Companies Act 2017 as "XYZ Pvt Ltd Company", but
XYZ LLP has still not completed the formalities to dissolve the LLP, what are the consequences for
the same
a. LLP will have to b. As the LLP has been c. LLP will have to d. LLP will have to
pay a fine of 500 registered under make an Obtain chartered
per day from the Companies Act 2017 application in accountant
date of winding the LLP will be Form 24 certificate once the
up to the date of deemed to have been winding up
filing dissolved under that procedure is
Act without any complete and file an
further act or deed application in Form
24
5. SYZ Partnership Firm having 3 partners’ wants to get registered their firm as unlimited company,
can they do so?
a. Yes b. No
6. Ram Shyam LLP had 2 partners and they wanted to get itself converted into Unlimited Company ,
as per the Provisions of the Act are they allowed to do so
a. No, LLP can be b. Yes, as they fulfill c. No, As they can d. Yes, LLP can be converted
converted into the requirement of be converted only as Unlimited company as
only company having 2 members into Company there is no restriction for
limited by hence they can go Limited by the type of company to be
shares. ahead and convert guarantee converted
7. Is NOC from the concerned Registrar of Firms or Registrar of companies (LLP) required for
conversion of entities?
a. Yes b. No
8. Section 368 of the Act covers

a. Certificate of Registration b. Saving of Existing c. Vesting of Property d. Effect of
of Companies Liabilities on Registration Registration
9. Unless and until all the liabilities of the company are paid off the entity conversion into the
company cannot be done. Is this statement true?
a. True, As it is a b. False, Conversion of c. True, As per the d. False, The earlier
new entity itself the company does not amendment the entity can pay off
hence assets of affect the rights or conversion takes debts and then wind
liabilities of the obligations of the place only when all up, it does not
earlier entity company the liabilities of the impact the
would not be of entity has been conversion of the
the new entity cleared off company as they are
2 different entities
10. A railway company incorporated under any Act of Parliament or other Indian law or any Act of
Parliament of the United Kingdom would be a registered Company or Unregistered Company?
a. Registered Company b. Unregistered Company
11. Which form needs to be filled by the LLP for registration with ROC for its conversion into Company
a. URC-1 b. URC-2 c. No application required d. URC-3
12. SSS partnership firm converted into a Company Limited by guarantee, before the conversion the
company had filed a legal case against XYZ Pvt Ltd for recovery of its dues, XYZ Pvt Ltd kept a
stand in the case stating that they were liable to pay SSS Partnership firm and not Company hence
the legal case would not stand valid in the court unless and until the partners of the firm in their
individual capacity file the case against XYZ Pvt Ltd, Do you think stand of XYZ Pvt Ltd is Correct?
a. Correct, Legal case was b. Not Correct, As c. Correct, As the d. None of the
made by the partners conversion into partnership has above
on the XYZ Pvt Ltd company does not been ceased
hence once the change any rights or lawfully the case
existence of obligations of the would be now on
partnership ceases the converting company individual partners
case would not stand and not company
13. UNO Pvt Ltd was incorporated in Germany but they had a company in India to look after Indian
business after 2 years of incorporation the Indian Company decided to close its Indian office.
What would be the procedure for winding up of Indian Office?
a. As the company has b. The company will c. The company will d. Indian company
been incorporated have to follow all the have to follow all can be wounded
outside India, Indian guidelines as those the guidelines as up only when the
Company would of Registered those of incorporated
automatically get Company requires Unregistered company which in
wound up once they for winding up of the Company requires this case is
stop their business. company. for winding up of Germany is
the company. wounded up.
14. Which is the entity which cannot be registered under the Companies Amendment Act 2017
a. Trust b. Society c. Companies formed under Companies Act 2013 d. Partnership firm
15. XYZ Company had permanent paid up capital of 5 lacs and it wanted to register its company under
the new amendment Act , Which type of Company it can get itself registered
a. Company Limited b. Company Limited by c. Unlimited d. Limited Company
by Shares Guarantee Company
16. How much majority is required to assent for company to register as a Limited Company
a. 1/4th of the b. 3/4th of the members c. 3/4th of the d. 1/4th of the
members present present in person or members present members present only
in person or proxy proxies if proxies are only no proxies no proxies allowed in
if proxies allowed allowed allowed in this case this case
17. Can companies with less than 7 members get itself registered as Private Company as per Co Act
2017
a. Yes b. No c. d.
18. For which type of company to register under Co Act 2017 , it requires assent of members
accompanied by resolution
a.Unlimited b. Company Limited c.Company Limited d. Public Limited
Company by by guarantee Company
Shares
19. Can HUF be converted into a registered company as per the Co Act 2017 as HUF has more than 2
members
a. No , As HUF is b. Yes, as HUF has more c. No , As HUF is d. Yes, HUF can be
considered as a than 2 members it can governed by Hindu registered a s only
single person be registered as Marriage Act it Company limited by
Company cannot be registered guarantee under this
under Co Act 2017 Act
20. In computing any majority, when a poll is demanded how would the number of votes be regarded
a. Number of b. Number of shares held c. number of votes to d. Number of members
members present by each members would which each member including the proxies
would be number be the total number of is entitled according would be the number of
of votes votes to the regulation of total votes
the company
21. Table F & Table I are applicable to all the entities registered under Co Act 2017.
a. Yes, As it is a b. Only Table I is c. Only Table I is d. Table F in Schedule I
registered applicable and F is not applicable and F is shall not apply unless
Company hence applicable adopted by special and except in so far as it
all the tables resolution is adopted by special
would be resolution
applicable for
them
22. In Publication of notice of registration what needs to be published in newspaper

a. Notice of b. Notice of new c. Notice about d. Notice of winding up
conversion of Registration Office registration and of earlier entity
entity and the and members seeking objections
new registered if any
entity name
23. Is Stamp duty payable on Vesting of Property on Registration

a. Yes b. No c. d.
24. As per the Co Act 2017 , Shares of all the companies registered under this Act need to be
numbered
a. Shares of all the b. There is no need of c. Numbering of d. Numbering of shares
companies any kind of numbering shares shall not is required for only
registered under for shares apply to any those companies who
this Act need to company whose are registered as
be numbered numbers are not Company limited by
numbered shares
25. M/s Ruby a proprietor firm was a family business which was carried on by two members ,
Turnover of M/S Ruby was 49 lacs , they wanted to register their firm as M/s Ruby Pvt Ltd as per
Co Act 2017, Can it get registered under this Act
a. No, As M/s Ruby b. Yes, As there are 2 c. No, As the d. Yes, As the turnover
is proprietary members hence companies of the company is 49
firm it cannot be minimum required to turnover does not lacs it can be
registered under register company is exceed 50lacs registered
Co Act 2017 fulfilled hence it can hence it cannot be
be registered registered
26. XYZ Pvt Ltd who is a registered Company under this Act gets a notice of winding up from the ROC
and also a provisional liquidator for the same has been appointed , There was a legal proceeding
against the company by its supplier for the recovery of amount , What will the role of Liquidator
in the proceedings of this case
a. Liquidator will b. No suit or legal c. The company d. Liquidator will appeal
ensure that the proceeding can be cannot be winded up to the Tribunal in such
amount will be processed against the until the legal case matter
paid to the company or the matter is resolved
supplier from contributor of the
the Receipts of company
winding up
27. Section 374 of the Act covers

a. Power of Court b. Continuation of c. Effect of d. Obligation of
to Stay or Pending Legal Registration under companies
Restrain Proceedings this Part Registering under this
Proceedings Part
28. Power to Wind up Foreign Companies is covered under which Section of Co Act 2017
a. Sec 367 b. 376 c. 375 d. 373
Answers
1. A 2. D 3. D
(Unregistered entities like LLPs, (As per the Section 366 of The (For companies registered as
partnership firms, societies, Companies Act, 2013, the "Company Limited by guarantee"
etc. with two or more companies capable of being under this act, in the event of
members can with effect from registered includes any Company being wound up while he is
15th August, 2018 onwards society, cooperative society, a member, or within one year after
opt for conversion into a partnership firm, limited he ceases to be a member, he will be
company limited by liability or liability partnership, or any liable for payment of the debts and
guarantee or with unlimited other business entity which liabilities of the company as may
liability in accordance with the has been incorporated under have been contracted before he
provisions of Act) any law other than ceases to be a member)
Companies Act Indian
Companies Act)
4. B 5. A 6. A
(Provided that upon registration (As per the provisions of the (An LLP is permitted to get itself
as a company under this Part a Act, Partnership firm can be converted in a company limited by
limited liability partnership converted into unlimited shares only, i.e., conversion of an LLP
incorporated under the Limited company). into an unlimited company or
Liability Partnership Act, 2008 company limited by guarantee is not
shall be deemed to have been permitted under the Act).
dissolved under that Act
without any further act or deed
(Companies Act 2017)).
7. A 8. C
(NOC from the concerned Registrar of Firms or Registrar of companies (LLP) is required for
conversion of entities).
9. B
10. A
(Hint: As the above company is specifically excluded from Unregistered Companies list , it would be a
registered Company)
11. A 12. B 13. C
(Hint: An applicant for (All suits and other legal (Hint: As per Section 376 of the Act Where a
registration with the ROC proceedings taken by or body corporate incorporated outside India
has to be done in Form against which are pending which has been carrying on business in
URC-1 to get converted at the time of the India, ceases to carry on business in India, it
into Company.) registration of a company may be wound up as an unregistered
in pursuance of this Part, company under this Part, notwithstanding
may be continued in the that the body corporate has been dissolved
same manner as if the or otherwise ceased to exist as such under
registration had not taken or by virtue of the laws of the country under
place). which it was incorporated.)
14. C 15. A 16. B
(Hint: Company registered (Hint: Company shall (Hint : Company to register as a limited
under the previous company be registered in company requires majority to assent:
law: a company registered pursuance of this where a company not having the liability of
under the Indian Companies section as a company its members limited by any Act of
Act, 1882 or under the Indian limited by shares only Parliament or any other law for the time
Companies Act, 1913 or the if it has a permanent being in force is about to register as a
Companies Act, 1956, shall not paid-up (Sec 366)) limited company, the majority required to
register in pursuance of this assent as aforesaid shall consist of not less
section) than 3/4th of the members present in
person, or where proxies are allowed, by
proxy at the meeting.)
17. A 18. C 19. A
(Hint: Entity consisting of 2 or (Hint: where a company is about to (Hint: HUF is considered
more members can register register as a company limited by legally as one person only
itself as a Private Company as guarantee, the assent to its being so even if it has lot of
per Companies Act 2017.) registered shall be accompanied by a members in it, hence it
resolution declaring that each member cannot be registered under
undertakes to contribute to the assets Companies Act as it does
of the company, in the event of its being not fulfill the condition of
wound up while he is a member, or having atleast 2 members.)
within one year after he ceases to
be a member).
20. C 21. D 22. C
(Hint: In computing any (Hint: Table F&I shall not apply to (Hint: Publication of notice of
majority, when a poll is the entities registered under Co registration: publish in a
demanded regard shall be to Act 2017 unless and until it is newspaper, advertisement one in
the number of votes to which adopted by special resolution.) English and one in vernacular
each member is entitled language in such form as may be
according to the regulation of prescribed giving notice about
the company.) registration under this Part,
seeking objections and address
them suitably.)
23. B 24. C 25. A
(Hint: Nowhere under the Stamp Act does (Hint: The provisions of this (Hint: The minimum
it provides for payment of stamp duty on Act relating to the number of member
vesting of property. In the matter of Vali numbering of shares shall required to be registered
Pattabhirama Rao Vs. Sri Ramanuja Ginning not apply to any company under this Act is 2, as this
and Rice Factory (P) Ltd. AIR 1984; Andhra whose shares are not a proprietary firm it does
Pradesh 176[4]; it was stated that “The numbered) not fulfill this criteria
Division Bench of Andhra Pradesh High hence it cannot be
Court relying on Section 575 of the registered under the
Companies Act, 1956 has held that if a purview of the Act.)
partnership firm registered as a company,
there was a statutory vesting including of
all immovable property and no separate
conveyance was required for the same;”)
26. B 27. D 28. B
(Hint: Refer Sec 373, where an order has (Hint: Sec 374 covers (Hint: Sec 367 of Co Act
been made for winding up, or a provisional Obligation of companies 2017 covers Power to
liquidator has been appointed for, a Registering under this Part) Wind up Foreign
company registered in pursuance of this Part, Companies, although
no suit or other legal proceeding shall be Dissolved).
proceeded with or commenced against the
company or any contributory of the company
in respect of any debt of the company, except
by leave of the Tribunal and except on such
terms as the Tribunal
may impose.)
Chapter 12 Foreign Company
Chapter 12: Foreign Company 12.1
1. IPL Ltd is a company having place of business in India of which 60% Paid Up capital is held by one or
more Indian citizens. State the type of company.
a. Indian Company b. Foreign company c. Deemed Indian Company d. None of the above
2. PQR Ltd is a company having place of business in India of which 45 % Paid up capital is held by Indian
Body Corporate. State the type of company and laws applicable to it.
a. Indian Company, b. Foreign company, Chapter c. Deemed Indian d. None of the
Companies act 2013 of Foreign Company Company, Companies above
act,2013
3. LIT Ltd is a company having place of business in Canada of which 45 % capital is held by Mr. Pankaj, an
Indian citizen, state the laws applicable to LIT ltd.
a. Companies Act, b. Chapter of Foreign c. Companies act,2013 d. None of the
2013 Company considering it as Deemed Indian above
Company
4. If minimum 50% of Paid up capital of Foreign Company is held by following then provisions of
Companies Act, 2013 shall not apply to:
a. One or more citizen b. One or more companies in c. One or more bodies d. None of the
or citizens of India; India; or/& corporate in India. above.
or/&
5. Under the Companies Act, 2013 a foreign LLP shall be considered as :

a. Foreign LLP b. Subsidiary of Indian Company c. Indian Company d. None of the
above
6. Z ltd ,a foreign company shall, within how many days of the establishment of its place of business
(POB) in India, deliver to the Registrar for registration the documents required —
a. within 30 days b. Within a month c. Within 60 days d. Within 90 days
7. X ltd is an existing Foreign Company who has not filed the documents and particulars u/s 592(1) of the
Companies Act, 1956 shall file under following section of the Companies Act, 2013.
a. Sec 383 b. Sec 382 c. Sec 381 d. Sec 380
8. Filing of details of Foreign Co. u/s 380 are in form:

a. Form FC 1 b. Form FC 2 c. Form FC 3 d. Form FC 4
9. RMN Ltd., a Foreign company has made alteration in the documents delivered to the Registrar, do
they need to file the revised documents with the ROC and within how many days?
a. Within 15 days In b. Within 30 days In Form FC c. Within 15 days In Form d. Within 30 days
Form FC 2 2 FC 1 In Form FC 1
10. A ltd is a Foreign Company which can issue prospectus to Indian Public on if the Prospectus is:
a. i. Signed by the b. i. Signed by the c. i. Signed by the Chairman d. i. Signed by the
Chairman & 2 other Chairman & 1 & 1 director of the Chairman & 2 other
directors of the Managing Director Company. directors of the Company
Company and 1 CS of the ii. Approved by the ii. Approved by the
ii. Approved by the Company. resolution of the MD. resolution of the BOD.
resolution of the ii. Approved by the iii. Delivered to ROC for iii. Delivered to ROC for
MD. resolution of the BOD. registration. registration
12.2
iii. Delivered to ROC iii. Delivered to ROC iv. Stating that it is being iv. Stating that it is being
for registration for registration delivered to ROC & consent delivered to ROC &
iv. Stating that it is iv. Stating that it is is rightfully obtained u/s consent is rightfully
being delivered to being delivered to 388 as stated above obtained u/s 388 as
ROC & consent is ROC & consent is stated above
rightfully obtained rightfully
u/s 388 as stated obtained u/s 388
above as stated above
11. JHU Ltd. a Foreign Company, contravened provisions of chapter “Company Incorporated outside
India”. What is the consequence of such contravention?
a. Fine which b. Fine which shall c. Fine which shall not be less d. Fine which shall not be
shall not be not be less than than Rs. 1 lakh but which less than Rs. 1 lakh but
less than Rs. Rs. 1 lakh but may extend to Rs. 5 lakhs; which may extend to Rs. 3
1 lakh but which may and for continuing offence lakhs; and for continuing
which may extend to Rs. 5 Additional fine which may offence Additional fine
extend to Rs. lakh; extend to Rs. 50 thousand which may extend to Rs.
3 lakh; for every day 50 thousand for every day
12. Any process, notice, or other document required to be served on a foreign company shall be deemed
to be sufficiently served:
a. If addressed b.if addressed to any person c. left at, or sent by post to, the d. Any of the
by electronic whose name & address address which has been so above
mode have been delivered to the delivered to the Registrar
ROC
13. HUL Ltd. is a Foreign Company and seeks to know which of the following sections shall apply.
Comment.
a. Section 71 b. Section 128 c. Sec 135 related to Corporate Social d. All of the above
related to relating to Books Responsibility subject to such
Debentures of Accounts exceptions, modifications, adaptations.
14. Sec 387 related to ‘Dating of prospectus and particulars to be contained therein’ for a Foreign
Company shall not be applicable for issue of prospectus of/ for:
a. Securities issued b. To existing shareholders c. For securities of the d. (b) & (c)
for formation of or debenture holders same nature which are
company or irrespective of whether already issued by
future formation they renounce the shares company and are listed
of company. or not on recognized stock
exchange
15. LYT Ltd., a Foreign Company failed to comply with the provisions of chapter on ‘Company Registered
outside India’. Company is of the opinion that the acts and contracts entered into by it shall not be
affected. Further, since it was in a dispute with XYZ Pvt. Ltd. it seeks to file a suit against it against it.
Comment.
a.Since the Company b.Since the Company has c. Though the Company d.Since the Company
has failed to failed to comply with the has failed to comply has failed to comply
comply with the Chapter, it cannot file any with the Chapter, it with the Chapter, the
Chapter, its acts suit until compliance is can file suits and also acts and contracts
shall be construed made however the acts the acts and entered into by the
invalid and it and contracts entered contracts entered Company shall be
cannot file any suit into by the Company shall into by the Company invalid. However, it
as well. be valid. shall be valid. can file suit.
12.3
16. LYT Ltd., a Foreign Company contravened the provisions of chapter on ‘Company Registered outside
India’ and they seek to know the consequences of the same.
a. Fine - not less b. Fine which shall not c. Fine which shall not be d. Fine which shall not
than Rs. 1 lakh be less than Rs. 1 less than Rs. 1 lakh but be less than Rs. 1 lakh
but which may lakh but which may which may extend to but which may extend
extend to Rs. 5 extend to Rs. 3 Rs. 5 lakhs; and for to Rs. 3 lakhs; and for
lakhs; and for lakhs; and for continuing offence continuing offence
continuing continuing offence Additional fine which Additional fine which
offence Additional Additional fine may extend to Rs. 50 may extend to Rs. 50
fine which may which may extend thousand for every thousand for every
extend to Rs. to Rs. 50,000 for day. day
50,000 for every every day
day Every officer in default: Every officer in
Every officer in i. Imprisonment which default:
Every officer in default: may extend to 6 i. Imprisonment which
default: i. Imprisonment months or; may extend to 6
i. Imprisonment which may extend to ii. Fine which shall not months or;
which may 6 months or; be less than Rs. 25 ii. Fine which shall not
extend to 6 ii. Fine which shall thousand but which be less than Rs. 25
months or; not be less than Rs. may extend to Rs. 3 thousand but which
ii. Fine which 25,000 but which lakh or; may extend to Rs. 3
shall not be less may extend to Rs. 5 iii. Both. lakh or;
than Rs. 25,000 lakh or; iii. Both.
but which may iii. Both.
extend to Rs. 5
lakh or;
iii. Both.
17. LIFE Ltd is a company having place of business in India of which 57% Paid Up capital is held by one or
more Indian citizens. State the type of company.
a.Indian Company b.Foreign company c. Deemed Indian Company d.None of the above
18. Marine Ltd is a company having place of business in India of which 39 % Paid up capital is held by
Indian Body Corporate. State the type of company and laws applicable to it.
a. Deemed b. Foreign company, Chapter c. Indian Company, d.None of the
Company, of Foreign Company Companies act,2013 above
Companies act 2013
19. TILT Ltd is a company having place of business in Mexico of which 45 % capital is held by Mr. Pankaj, an
Indian citizen, state the laws applicable to LIT ltd.
a. Companies Act, b. Chapter of Foreign c. Companies act,2013 d. None of the
2013 Company considering it as Deemed Indian above
Company
20. If minimum 50% of Paid up capital of Foreign Company is held by following then provisions of
Companies Act, 2013 shall not apply to:
a. One or more companies in b. One or more citizen c. One or more bodies d. None of the
India; or/& or citizens of India; corporate in India. above.
or/&
21. Under the Companies Act, 2013 a foreign LLP shall be considered as :
a. Foreign LLP b. Subsidiary of Indian c. Indian Company d. None of the above

Company
12.4
22. EMNM ltd, a foreign company shall, within how many days of the establishment of its place of
business (POB) in India, deliver to the Registrar for registration the documents required —
a. within 60 days b. Within a month c. Within 30 days d. Within 90 days
23. X ltd is an existing Foreign Company who has not filed the documents and particulars u/s 592(1) of the
Companies Act, 1956 shall file under following section of the Companies Act, 2013.
a. Sec 382 b. Sec 383 c. Sec 380 d. Sec 381
24. Filing of details of Foreign Co. u/s 380 are in form:

a. Form FC 1 b. Form FC 2 c. Form FC 3 d. Form FC 4
25. SHTA Ltd., a Foreign company has made alteration in the documents delivered to the Registrar; do
they need to file the revised documents with the ROC and within how many days?
a. Within 30 days In b. Within 15 days In Form FC c. Within 30 days In Form d. Within 15 days
Form FC 2 2 FC 1 In Form FC 1
26. A ltd is a Foreign Company which can issue prospectus to Indian Public on if the Prospectus is:
b. c. d.
a. i. Signed by the i. Signed by the i. Signed by the Chairman i. Signed by the
Chairman & 2 other Chairman & 1 director & 1 Managing Director and Chairman & 2 other
directors of the of the Company. 1 CS of the Company. directors of the
Company ii. Approved by the ii. Approved by the Company
ii. Approved by the resolution of the MD. resolution of the BOD. ii. Approved by the
resolution of the MD. iii. Delivered to ROC iii. Delivered to ROC for resolution of the BOD.
iii. Delivered to ROC for registration. registration iii. Delivered to ROC for
for registration iv. Stating that it is iv. Stating that it is being registration
iv. Stating that it is being delivered to delivered to ROC & consent iv. Stating that it is
being delivered to ROC ROC & consent is is rightfully obtained u/s being delivered to ROC
& consent is rightfully rightfully obtained u/s 388 as stated above & consent is rightfully
obtained u/s 388 as stated obtained u/s 388 as
388 as stated above above stated above
27. HUM Ltd. a Foreign Company, contravened provisions of chapter “Company Incorporated outside
India”. What is the consequence of such contravention?
a. Fine which shall not be less b. Fine which c. Fine which d. Fine which shall not be less
than Rs. 1 lakh but which may shall not be shall not be than Rs. 1 lakh but which
extend to Rs. 5 lakhs; and for less than Rs. less than Rs. may extend to Rs. 3 lakhs;
continuing offence Additional 1 lakh but 1 lakh but and for continuing offence
fine which may extend to Rs. which may which may Additional fine which may
50 thousand extend to Rs. extend to Rs. extend to Rs. 50 thousand
for every day 5 lakh; 3 lakh; for every day
28. Any process, notice, or other document required to be served on a foreign company shall be deemed
to be sufficiently served:
a. if addressed to any person b. If addressed c. left at, or sent by post to, d. Any of the
whose name & address have by the address which has above
been delivered to the ROC electronic been so delivered to the
mode Registrar
29. SIM Ltd. is a Foreign Company and seeks to know which of the following sections shall apply.
Comment.
a. Section 71 b. Section 128 c. Sec 135 related to Corporate Social d. All of the above 12.5
related to relating to Books Responsibility subject to such
Debentures of Accounts exceptions, modifications, adaptations.
30. Sec 387 related to ‘Dating of prospectus and particulars to be contained therein’ for a Foreign
Company shall not be applicable for issue of prospectus of/ for:
a. Securities issued b. To existing shareholders or c. For securities of the same d. (b) & (c)
for formation of debenture holders nature which are already
company or irrespective of whether issued by company and are
future formation they renounce the shares listed on recognized stock
of company. or not exchange
31. LYT Ltd., a Foreign Company failed to comply with the provisions of chapter on ‘Company Registered
outside India’. Company is of the opinion that the acts and contracts entered into by it shall not be
affected. Further, since it was in a dispute with ZYS Pvt. Ltd. it seeks to file a suit against it against it.
Comment.
a. Since the b. Since the Company has c. Though the d. Since the Company
Company has failed to comply with the Company has failed has failed to comply
failed to comply Chapter, it cannot file any to comply with the with the Chapter,
with the Chapter, suit until compliance is Chapter, it can file the acts and
its acts shall be made however the acts suits and also the contracts entered
construed invalid and contracts entered acts and contracts into by the Company
and it cannot file into by the Company shall entered into by the shall be invalid.
any suit as well. be valid. Company shall be However, it
valid. can file suit.
32. YNT Ltd., a Foreign Company contravened the provisions of chapter on ‘Company Registered outside
India’ and they seek to know the consequences of the same.
a. Fine - not less than Rs. b. Fine which shall not be c. Fine which shall not d. Fine which shall not
1 lakh but which may less than Rs. 1 lakh but be less than Rs. be less than Rs. 1 lakh
extend to Rs. 5 lakhs; which may extend to 1 lakh but which but which may extend
and for continuing Rs. 5 lakhs; and for may extend to Rs. to Rs. 3 lakhs; and for
offence Additional continuing offence 3 lakhs; and for continuing offence
fine which may Additional fine which continuing offence Additional fine which
extend to Rs. 50,000 may extend to Rs. 50 Additional fine may extend to Rs. 50
for every day thousand for every which may extend thousand for every
day. to Rs. 50,000 for day
Every officer in default: every day
i. Imprisonment which Every officer in default: Every officer in default:
may extend to 6 i. Imprisonment which Every officer in i. Imprisonment which
months or; may extend to 6 default: may extend to 6
ii. Fine which shall not months or; i. Imprisonment which months or;
be less than Rs. ii. Fine which shall not be may extend to 6 ii. Fine which shall not
25,000 but which less than Rs. 25 months or; be less than Rs. 25
may extend to Rs. 5 thousand but which ii. Fine which shall not thousand but which
lakh or; may extend to Rs. 3 be less than Rs. may extend to Rs. 3
iii. Both. lakh or; 25,000 but which lakh or;
iii. Both. may extend to Rs. 5 iii. Both.
lakh or;
iii. Both.
Answer
12.6
1. c. (> 50% by specified persons u/s 379(2) 17. c
2. b. (< 50% by specified persons u/s 379(2) 18. b
3. d. ( Not Foreign Co. as defined since POB is 19. a
outside India)
4. d. 20. d
5. a. 21. a
6. a. 22. c
7. d. 23. c
8. a. 24. a
9. b. 25. a
10. a 26. a
11. d. 27. d
12. d. 28. d
13. d. 29. d
14. d 30. d
15. b. 31. b
16. b 32. c
Chapter 15 Power to Demand Information & Statics
Chapter 15: Power to Demand Info & Stats 15.1

1. As per Sec 405 of the Companies Act, 2013, who shall have the right to demand information or
statistics w.r.t. constitution or working of the Company?
a. RBI b. ROC c. CG d. None of the above
2. Sanika Ltd. failed to provide some statistical information to the Central Government within time. It
seeks to know of the repercussions, if any. Kindly inform.
a. Company: Penalty b. Company: Penalty c. Company: Penalty d. Company: Penalty of
of Rs. 25,000 of Rs. 50,000 of Rs. 25,000 and Rs. 25,000
Every officer: Jail up to Every officer: Jail up to Every officer: Jail Every officer: Jail up to 6
6 months & fine 6 months & fine from up to 6 months & months or fine from Rs.
from Rs. 25,000 to Rs. 50,000 to Rs. 3 lac fine from Rs. 25,000 to Rs. 3 lac or
Rs. 3 lac 50,000 to Rs. 3 lac Both
3. CG published in the Official Gazette to a Class of Companies for submission of certain documents, XYZ
Ltd. being one of those companies. However, Mr. Chander, a director in XYZ Ltd. is of the opinion that
since direction is given to a class of companies and not specifically to XYZ Ltd., it is under no
obligation to provide the documents. Is the contention of the director valid?
a.No, CG may demand b. Yes, Company is under c. No, CG shall demand d. None
documents from a specific an obligation to submit documents a class of of the
company or a class of documents only on companies through a above
companies through a receipt of Individual and notification in the
notification in the Official specific demand of Official Gazette only.
Gazette. information.
4. CG published in the Official Gazette to a Class of Companies for submission of certain documents on
20th Jan 2019 within 30 days. XYZ Ltd. being one of those companies, got the knowledge of such
demand on 28th Jan 2019. Within what date shall the documents be submitted by XYZ Ltd. and
other companies in the same class?
a. XYZ. Ltd: 27th Feb b. XYZ. Ltd: 28th Feb c. XYZ. Ltd and d. XYZ. Ltd and Other
2019 2019 Other Companies: 20th Feb
th
Other Companies: Other Companies: Companies: 19 2019
th th
19 Feb 2019 28 Feb 2019 Feb 2019
5. PQR Ltd. submitted all the requisite information and Statistics to the CG as required by it, However,
CG wishes to know the veracity of the information so received. What steps can be taken by the CG in
order to ensure that the information and statistics provided is correct and complete?
a. CG may take an affidavit b. CG may order the c. CG may examine d. Any of the
from PQR Ltd. to ensure it Company PQR Ltd. to the officers of PQR above
receives correct and allow inspection of the Ltd. under oath.
complete information. documents so provided.
Answers
1. c 2. d 3. a 4. c 5. b
Chapter 16 Nidhi Companies
Chapter 16: Nidhi Companies 16.1
1. Suyog Mutual Benefit Nidhi Limited is of the view that its objective is to develop a habit of saving not
only amongst its members for mutual benefit and lending to each other but also of 3rd Party. Is the
statement valid?
a. Yes b. No c. Can’t say, depends on the object d. Yes, only after unanimous resolution
clause of the Company by members.
2. Nidhi Company means a company which the CG has notified in the Official Gazette as a Nidhi or
Mutual Benefit Society. Is the statement true?
a. Yes b. No c. Can’t say, depends purely on if the d. No, as it furthers needs
object of the Company is to inculcate a registration as NIDHI
habit of saving amongst its members. Company.
3. Rathi Mutual Benefit Nidhi Limited is of the opinion that provisions of the Companies Act do not
apply to Nidhi Company as special provisions for Nidhi Companies are applicable. Check the veracity
of their opinion.
a. Special provisions b. CG may direct that c. CG may direct that provisions of d. (b) or (c)
for Nidhi provisions of the Act the Act shall apply with
Companies have are not applicable to exceptions, modifications or
been formulated. Nidhi Co. adaptations.
4. Nidhi Companies shall be treated as …………….

a. Private b. Public Company c. Sec 8 Company d. None of the above
Company
5. To be formed as Nidhi Company, a company shall have minimum of ………..

a. Paid Up b.Paid Up Capital of c. Paid Up Capital of Rs. 5 Lacs d. Paid Up Capital of Rs.
Capital of Rs. Rs. 10 Lacs or Turnover of Rs. 10 Lacs 10 Lacs or Turnover of
5 Lacs Rs. 100 Lacs
6. Ratan Nidhi Company intends to issue Preference shares along with equity shares, can the same be
done?
a.No, Nidhi b.Yes, Nidhi c. Yes, Nidhi Companies can d.Yes, Nidhi Companies
Companies can Companies can issue Preference shares also can issue Preference
only issue issue but after approval from Equity shares also but after
Equity shares Preference shareholders approval from Central
shares also Government.
7. Sneha Nidhi Company was incorporated on 1st Jan 2018. It shall ensure within a year of its
incorporation:
a. Minimum b. Net Owned Funds of 10 Lacs or c. Ratio of NOF to d. All of the above.
200 more; and Unencumbered Deposits can be 1:20.
members; Deposits of 10%
8. Ankita Nidhi Company seeks your advice on the time limit of filing a return as a statutory
requirement and the appropriate Form. Name the form and time limit for filing the same.
a. Form NDH-2 ≤ 30 b. Form NDH-1 ≤ 90 c. Form NDH-1 ≤ 30 days d. Form NDH-2 ≤ 90
days end of FY days end of FY end of FY days end of FY
Chapter 16 Nidhi Companies
9. Anwesha Nidhi Company seeks your advice on the time limit of filing on compliance of provisions by
it. Name the form and time limit for filing the same.
16.2
a. Form NDH-2 ≤ b. Form NDH-1 ≤ 90 c. Form NDH-1 ≤ 30 d. Form NDH-2 ≤ 90 days
30 days end of days end of first FY days end of first FY end of first FY
first FY
10. XYZ Nidhi Company wants to accept a minor as its member. It seeks your advice on acceptability of a
minor as its member.
a. Can be b. Cannot be c. Can be accepted if Legal d. Can be accepted if
accepted if a accepted as a Guardian accompanies the AOA so provides.
Trustee is member. minor.
appointed.
11. A draft copy of the notification proposed to be issued shall be laid before each House of Parliament
while it is in session for …………
a. 1 month b. 30 days. c. 60 days d. 15 days each
12. The House of Parliament after laying down the draft copy of proposed notification was adjourned for
a period of 2 days, then held in session for 12 more days and again adjourned for 3 days. Will it
constitute as laying before the Houses of Parliament for 30 days in session?
a. No, as the number of b. Yes, as the number of days of c. No, as no d. None of
days of adjournment adjournment was not for a adjournment is the
was for 5 days. consecutive period of 4 days. permitted during above.
the said period.
13. Within how many days shall the copies of every notification notifying a Company as Nidhi Company
issued by CG be placed before each House of Parliament?
a. 30 days b. 1 month c. Immediately d. 60 days
14. Which is the business prohibited to Nidhi Companies?

a. Carrying business b. Accepting Deposits c. Enter into a partnership d. All of the above
other than lending from any other for borrowing and
or borrowing person lending.
15. Which of the following can a Nidhi company not do?

a. Accept Body b. Accept Trusts as its c. Accept minor as its d. All of the above
Corporate as members. member unless legal
its members. guardian accompanies him.
Answer
1. a 2. a 3. d 4. b 5. a 6. b
7. d 8. b 9. a 10. c 11. b 12. b
13. c 14. d 15. d
Chapter 17 NCLT & NCLAT
Chapter 17: NCLT & NCLAT

17.1
1. ................... means a member of the Tribunal or the Appellate Tribunal appointed as such and includes the
President or the Chairperson, as the case may be
a. Chairperson b. Judicial Member c. President d. Member
2. NCLT\NCLAT shall be constituted by the--------- by notification in the Official Gazette.

a. State Government b. Central Government c. High Court d. Supreme Court
3. NCLT shall consist of a --------

a. President, Chairman, b. President, c. Chairman, Technical d. President, Technical
Member Chairman, Secretary members, Judicial Member member, Judicial Member
4. NCLAT shall consist of a --------

a. President, b. President, c. Chairman, Technical d. President, Technical
Chairman, Member Chairman, Secretary members, Judicial Member member, Judicial Member
5. What is the maximum number of Judicial & Technical members in NCLAT?

a. 3 b. 11 c. 6 d. 10
6. The President and the members of NCLT shall be appointed by the Supreme Court.
a. True b. FalseThe President and the members of NCLT shall be appointed c. Partly d. Partly
by the Central Government. Sec 408 & Sec 410 True False
7. A president of NCLT shall be a person who is or has been Judge of High Court for ------ years.
a. 5 Years b. 2 Years c. 7 years d. 1 year
8. A person shall not be qualified to be appointed as a Judicial member unless he is or has been,
a. A judge of a High b. A District judge for at c. At least 10 Years been an d. Any of the above
Court least 5 years advocate of a Court.
9. Mr. AB was appointed as a Technical Member in NCLT. He has been in practice as a Chartered
Accountant since 12 years. Is the Appointment of Mr. AB as a Technical Member in order?(He does not
possess any other qualification)
A. Yes B. No C. Don’t Know D. May be
10. Ms. Vidya has been a presiding to Tribunal under Industrial Disputes Act, 1947 for more than 5 years. Is
Ms. Vidya eligible to be a technical Member in NCLT?
a. Yes b. No c. Don’t Know d. May be
11. The President of the Tribunal shall be appointed after consultation with the------------
a. President of India b. Prime Minister of c. Home Minister of d. Chief Justice of India
India India
12. Selection Committee recommends the appointment of --------------- of Tribunal.

a. Members b. Chairman c. President d. All of the above
13.Selection Committee consists of—

a. Chief Justice of India, Senior Judge b. Secretary in Ministry c. Secretary in d. All of the
of SC or Chief justice of HC of Corporate Affairs Ministry of Law and Above

Justice
17.2
14. The President /Chairperson and Members of Tribunal/ Appellate Tribunal shall hold office for a term of
----years from the date on which he enters upon his office
A. 3 years + 3 years B. 5 Years + 5 Years C. 5 years + 3 years D. 10 Years
15. Mr. P was appointed as a President of NCLT when he was 64 years of age. During his tenure of 5 years,
he attains the age of 67 years. As per the Provisions, a president of the tribunal shall hold office for a
period of years and can be reappointed for a period of 5 years, as such until he attains 67 years. What
action is to be taken?
A. Continue till the tenure ends B. Vacate the office C. None of the above
16. Mr. Dev wants to be a member of Appellate Tribunal. His age is 48 years. Is he eligible to be appointed
as a member of Appellate Tribunal?
A. Yes B. No C. Not Applicable
17. Mr. Dev wants to be a member of Tribunal in the year 2020. His age is 49 years in 2018. Would he be
eligible for appointment as member of the Tribunal?
a. Yes b. Not Applicable c. No d. Can’t say
18. Mr. Y, President of NCLT died due to heart attack during his tenure. Thus the vacancy is created in the
office of President. The other members are Mr. U, age 59 years and Mr. V, age 62 years. Who shall act as
president of NCLT until the date on which a new President enters upon his office?
A. Mr. U B. Mr. V C. Nobody D. Chief Justice of India
19. Mr. H, President of NCLT wants to resign from office. He submitted his resignation in writing, signed
and addressed to the Central Government. Is his Resignation in order?
a. Yes b. No c. May be d. Don’t know
20. Mr. T was a President of NCLT. Due to some circumstances he resigned from the office of president of
NCLT on 1 June 2018. He still acts as president of NCLT. Another Member objected on this on 2 July 2018.
His term expires on 10 July 2018. Is his objection valid?
a. Yes b. Can’t say c. No d. Not Applicable
21. Mr. Loot, President of NCLT has been adjudged insolvent. Can the Central government after
consultation with the Chief Justice of India remove him from office of the President?
A. Yes b. No c. Don’t Know d. Not Applicable
22. The Central government after consultation with the Chief Justice of India removed the president of
NCLT, Mr. Y from office of the President without giving the reasonable opportunity of being heard on
grounds of moral turpitude. Is the removal in order?
a. Yes c. No c. Don’t Know d. May be
23. The order of removal of the President, Chairman or the member can be made by the----------
a. State Government b. Central Government c. High Court d. Adjudicating Authority
24. The Principal Bench of the Tribunal shall be at ---------

a. Mumbai b. Bengaluru c. Chennai d. New Delhi
25. How shall decision be taken if the members of a Bench differ on opinion on any point?
a. Mutual b. Majority c. None of the Above

agreement
17.3
26. Tribunal passed an order on 1 August 2018. Within some days it realised that it contained mistake
apparent from the record. Tribunal wanted to rectify the order. What is the time limit to rectify the order?
a. Within 1 year from b. Within 2 years from c. Within 3 years from d. Within 4 years from the
the date of the the date of the the date of the date of the order
order order order
27. Mr. S is aggrieved by the order of NCLT. A copy of the order of tribunal was made available to Mr. S on
1 July 2018. He wants to file appeal to the Appellate Tribunal. What is the time limit to file appeal?
a. 15 Days b. 30 Days c. 45 Days d. 60 Days
28. Mr. G was found indulged in activities of money laundering. During the proceedings order was made by
the Tribunal. But he was aggrieved by the order made by Tribunal and filed appeal before the Appellate
Tribunal. Further, the order was made by the Appellate Tribunal. Again he was aggrieved by the order
made by the Appellate Tribunal. What can be the next course of action?
a. File an Appeal to b. Accept the order c. File an appeal to the d. File an appeal to the
the High Court and pay Fine Sessions Court Supreme Court
29. What is the time limit from the date of receipt of the order to file Appeal to the Supreme Court?
a. 30 Days b. 45 Days c. 15 Days d. 60 Days
30. The Appeal to the Supreme Court may be filed only on a question of --------- arising out of the order of
the Appellate Tribunal.
a. Law b. Fact c. None of the above d. Both of the above
31. Proceedings under Prevention of Money Laundering Act, 2002 was going on against Mr. D. During the
proceedings he was asked by the Authority to submit documents related to the income and bank
transactions. Along with these transactions, some other documents were also asked to be submitted. Mr.
D refused to submit the documents citing the reason that this does not come under the powers of Tribunal.
State whether Mr. D is correct or not.
a. Correct b. Incorrect c. Partially correct d. Partially incorrect.
32. Mr. Q was appointed as a Technical Member of the NCLT on 15 July, 2017 for a period of 5 years. He
will be completing 62 years on 14 June, 2022. Whether he can be re-appointed on the NCLT on completion
of his tenure in 2022?
a. Yes b. No c. May be d. Don’t Know
33. Only such proceedings relating to the winding up of companies shall be transferred to the Tribunal as
are at a stage as may be prescribed by the Central Government.
a. True b. False c. Partly True d. Partly False
34. The President of the Tribunal and the Chairperson and Judicial Members of the Appellate Tribunal shall
be Appointed after consultation with the chief justice of India.
35. The President of the Tribunal shall hold office as such for a term of 5 years from the date on which he
enters upon his office but shall not be eligible for re appointed for another term of 5 years.
A True B. False
36. The President of Tribunal shall be a person who is or has been a --------------- for 5 Years
a. Judge of High Court b. District Judge c. Advocate of a Court d. Any of the Above
17.4
37. Mr. X is a Judge of a High Court for 5 years. He wants to be a Judicial Member of NCLAT. His age is 49
years. Is he eligible to be Judicial member of NCLAT?
a. Yes b. No
38. Where an order is made by the Tribunal with the consent of the parties, no party shall have a right to
prefer an appeal to the Appellate Tribunal.
a. True b. False
39. Every application presented before the Tribunal shall be disposed off by it within---------------- from the
date of such application.
a. 3 months b. 90 days c. 30 days d. 1 month
40. A person shall not be qualified for appointment as a Technical Member unless he-
a. is, or has been, in practice as b. is, or has been, in practice c. is, or has been, in d. Any of the
a Chartered Accountant for at as a Cost Accountant for at practice as a Company above
least 15 years least 15 years Secretary for at least 15
years
41. The Chairman & Judicial Member of NCLAT shall be appointed after consultation with the--------
a. President of India b. Prime Minister of c. Home Minister of d. Chief Justice of India
India India
42. Mr. X, a qualified CA has been practicing for 26 years in Investment and Accountancy and seeks to be
appointed as a Technical Member in NCLAT, can he be so appointed?
a. No, as practicing CA b. No, as experience of c. Yes, as experience of d. Yes, as experience of 15
cannot be appointed 30 years is required in 25 years is required in years is required in
as Technical Member Investment and Investment and Investment and
in NCLAT. Accountancy to be Accountancy to be Accountancy to be
appointed as a appointed as a appointed as a Technical
Technical Member of Technical Member of Member of NCLAT.
NCLAT. NCLAT.
43. Mr. X, a qualified CA has been practicing for 26 years in law and seeks to be appointed as a Technical Member
in NCLAT, can he be so appointed?
a. No, as experience of 30 years is b. Yes, as experience of 25 years is c. None of the above
required in Law to be appointed required in Law to be appointed
as a Technical Member of as a Technical Member of
NCLAT. NCLAT.
44. Which quasi-judicial forums have been replaced by NCLT?

A. Company law board b. BIFR C. Both of the above D. None
45. Appellate Authority is constituted in place of:

A. Company law board B. BIFR C. Industrial & financial Reconstruction D. Special court
46. Person shall be qualified to act as president of NCLT only when he has been
A. Member of Indian B. Practicing chartered C. Judge of high court D. Judge of supreme court for
corporate law service accountant for 15 years for 5 years 5 years
47. A person shall be qualified to act as Judicial member of the NCLT only when he is or has been
A. a Judge of HC or B.. a district judge for C. an advocate court for D. any of the above…
atleast 5 years, or atleast 10years,or
48. A person shall be qualified to act as Technical Member only when he is or has been
A. Member of Indian B. is or has been in C. is or has been a presiding D. any of the above 17.5
Corporate law practice as CA, officer of a labour court,
service or Indian CWA, CS tribunal or national tribunal
legal service constituted under Industrial
disputes act
49. Mr. B is a judge by profession. He has served high court of Aurangabad for more than 7 years and wishes to
get himself on the board of NCLT. Where is he eligible to be appointed based on his experience?
A. Qualified as Judicial B. qualified as C. Qualified as D. Qualified as Manager
member Technical Member President
50. Chairperson of NCLAT shall be person who is or has been

A. Judge of Supreme B. Judge of High Court C. ‘a’ or ‘b’ D. Judge of district court
Court
51. Judicial member of NCLAT shall be a person who is or has been

A. Judge of high B. Judicial Member of C. ‘a’ or ‘b’ D.. None
court tribunal for 5 years
52. Selection committee shall consist of the following except

A. Secretary into MCA – B. Secretary in Ministry of C. Judge of District D. Chief justice of India or his
member law & justice –member Court nominee
53. President of the Tribunal shall hold office upto….of age

A.65 years B.67 years C.62 years D.60 years
54. President and every other member shall hold office for a term of ------
55. Member of the tribunal shall hold office uptil the age of
56. President of the Appellate Tribunal shall hold office uptil the age of
57. President of tribunal ,shall for disposal of any case relating to rehabilitation ,restructuring or winding up of
companies shall constitute
A. Special Bench B. Judicial Bench C. Additional Bench D. Junior bench
58. Member of the appellate tribunal shall hold office uptil

A. 65 years B.67 years C.72 years D.70 years
59. In case of disposal of case relating to rehabilitation or winding up, the CG shall constitute a…..which shall be
the head of all the benches.
A. Special Bench B. Principle Bench C. Additional Bench D. Deputy Bench
60. Tribunal can amend or rectify the order passed by it within a period of …..years
A. 5 years B. 2 years C. 1 year D.3 years
61. No act of …..in pursuance of section 10 FP shall be called in question in any court before any authority on a
ground whatsoever
A. Junior metropolitan B. Deputy metropolitan C. Additional D. Chief metropolitan
Magistrate Magistrate metropolitan Magistrate Magistrate
62. Any person aggrieved by any decision or order of Appellate Tribunal may file an appeal to supreme court
17.6 within….from the date of communication of order of Appellate Tribunal
A. 45 days B. 30days C. 15 days D. 60 days
63. Chairperson or member shall be removed when

A. He is adjudicated as B. He has convicted an C. has abused his D. all of the above cases
an Insolvent offence involving moral position
turpitude
64. Any person aggrieved by opinion of Tribunal can file case to appellate tribunal within a period of
A.30 days B.60 days C.20 days D.45 days
65. The powers of tribunal can be exercised by Judicial & Technical members u\s
A.10 FQ B.10FH C.10FI D.10FA
66. Vacancy in tribunal is dealt in section

A.10 FL B.10FH C.10FB D.10FA
67. The tribunal member for appellate tribunal shall have special knowledge & experience of not less than ----- YRS
A.10 B.25 C.30 D.40
68. Mr. X, a qualified CA has been practicing for 26 years in law and seeks to be appointed as a Technical Member
in NCLAT, can he be so appointed?
a. No, as practicing CA b. No, as experience of c. Yes, as experience of d. None of the above
cannot be appointed 30 years is required in 25 years is required in
as Technical Member Law to be appointed Law to be appointed
in NCLAT. as a Technical as a Technical
Member of NCLAT. Member of NCLAT.
Answer 17.7
1. B 2. B 3. D 4. C 5. B 6. B
7. A 8. D 9. B 10. A 11.D
(Hint: Minimum experience of 15 (Hint: Minimum experience of 5 yrs as
years as a CA in practice is presiding officer to Tribunal under Industrial
required to be appointed as a Disputes Act, 1947 to be appointed as a
Technical Member). Technical Member is required.)
12. A 13. D 14. B 15. B 16. B 17. A
(Hint: To be a member of NCLT, Minimum
age should be 50 years)
18. B 19. A 20. C
(Hint: As per Sec 415(1) any (Hint: U/s 416, the (Hint: In spite of the fact that the President
vacancy at the office of President, has resigned from his office he shall
chairman or president shall be Chairperson or any continue in office until 3 months have
filled by the senior most Member by notice expired from the date of receipt of his
member who shall temporarily in writing under his resignation by the Central Government. Or
reside in such office until the hand address a person duly appointed as successor enters
new president or chairman is his/her resignation upon his office or the expiry of his term of
appointed). to the CG) office, whichever is the earliest.)
21. A 22. B 23. B 24. D
(Hint: As per the proviso to Sec 417, the President, the Chairperson or
the Member shall not be removed on any of the grounds specified in
clause (b) to (e) without giving him a reasonable opportunity of being
heard).
25. B 26. B 27. C 28. D 29. D 30. A
31. B 32. A 33. A
(Hint: ‘’Requiring the discovery and production of (Hint: Mr. Q may be reappointed to hold
documents” is one of the powers of Tribunal and office as a Member of NCLT for the
Appellate Tribunal. (Section 424)) period 15 July 2022 to 14 June
2027.)
34. A B 36. A 37. B 38. A
(Section 413) (Hint: A person who has not completed 50 years of (Sec 421)
age shall not be eligible for appointment as Member
of the Appellate Tribunal)
39. A 40. D 41. D 42. C 43. C
(Hint: As per Companies Amendment Act, 2017, 15 yrs of
experience in the following is required to be appointed as a
Technical Member in NCLT: Industrial Finance / Industrial
Management / Industrial Reconstruction, Investment and
Accountancy).
44. C 45. C 46. C 47. D 48. D
49. C 50. C 51. C 52. C 53. B
54. B 55. B 56. C 57. A 58. B
59. B 60. B 61. D 62. D 63. D
64. D 65. C 66. B 67. B 68. D
Chapter 18 Producer Company
Chapter 18: Producer Company 18.1

1. Which of the following shall not relate to object of producer companies?
a. Production, Harvesting, b. Promoting c. Revitalization of land None of
procurement of goods, marketing, techniques if and water resources the above
selling mutuality
2. Objects of producer company shall be in section

a. 571 B b. 581B c. 581 H d. 581 I
3. Status of producer co will be private company for situations where chapter. ...is silent.
a. IX-A b. X-A c. XI-A d. XII-A
4. Only ..... Co-operative society can become Producer Company.

a. Single state b. Multi state c. Dual state d. Triple state
5. Liability of members is. ... in producer company.

a. Limited b. Unlimited c. Guaranteed d. Non-guaranteed
6. Amendment of AOA shall not be inconsistent with

a. 581 A b. 581 B c. 581 C d. 581 I
7. Mr. P is a director of Anand Producer Limited Company, has vacated his office since he has been
convicted by court for an offence involving moral turpitude and sentenced for a period of 4.5 months. Is
this vacation required?
a. Yes b. No c. Partly yes d. Partly No
8. One shall vacate due to default made in repayment of loans or advances from the Producer Company in
which he is a...
a. Promoter b. Partner c. Director d. Shareholder
9. Failure to appoint a CS can result in a penalty of.....till the default continues.

a. Rs.100000 per day b. Rs.10000 per day c. Rs.1000 per day d. Rs.500 per day
10. Quorum of AGM for producer company is..

a. 1/3rd or 2 b. 1/2 of total membership c. 1/3rd or 3 d. 1/4thof total membership
11. Every member shall within .... of his becoming a member name a nominee to whom his shares shall
vest in case of death.
a. 6 Months b. 1 Months c. 3 Months d. 45 days
12. Share Capital of Producer Company shall consist of only equity shares. The above statement is..
13. In case of death of a director of a producer company shares held by him shall be transferred to
nominee. If nominee is not a producer then board shall
a. Re-issue the share b. Sell the shares to c. Direct to surrender the d. Simply transfer the
him. shares shares to him
14. The aggregate amount of donation and subscription in any FY shall not exceed .... of net profit in
immediately preceding FY.

a. 3%.. b. 5% c. 5% d. 3.5%
18.2
15. Anand Producer Company limited has made a contribution of 2% of its net profit to a Political Party for
its welfare. Is the above contribution valid?
a. Yes, its valid b. No, it’s not valid c. Valid since within the d. Invalid since exceeding
limit the limit
16. Loans and advances against security specified in articles to any member is repayable within the period
…
a. More than 6 b. More than 1 year but c. More than 3 months d. More than 9 Months but
months but not more not more than 5 years but not more than 7 not more than 10 years.
than 2 years years
17. Any loan or advance to any director or his relative shall be granted only after...
a. Approval of Board b. Approval of c. Approval of Chairman d. Approval of Members in
in BRLM Promoters GM
18. Any PCL may invest in any other company for an amount not exceeding..
a. 15% of its b. 30% of its aggregate c. 10% of its aggregate d. 20% of its aggregate paid
aggregate paid up paid up capital and free paid up capital and free up capital and free reserves.
capital and free reserves reserves
reserves
19. Producer company shall become a Body Corporate as if its a private company without having …
a. Any limit of paid up b. Any limit for c. Any limit to the d. Any limit to the number
capital transferability of shares number of members of directors.
20. Total Number of directors including additional directors shall be...

a. Max 15 b. Max 18 c. Max 12 d. None of the above
21. Which of the following can incorporate a producer company?

1. Any ten or more persons engaged in any activity connected with primary produce or 2 or more producer
institutions or companies
2. Any 2 or more producer institutions or companies
3.A combination of 10 or more individuals and producer institutions
4.Any other institution
a. 1 and 2 b. 2 and 3 c. 1 and 3 d. 2 and 4
22. Registered Producer company......

a. Can never be a d. Is a Private Co. for c. Is always a private d. Is a Private Co. for
private limited situations where limited company situations where Chapter
company Chapter X-A is silent IX-A is silent
23. The 1st AGM of the shareholders has to be held within a period of of its registration.
a.180 days b.90 days c.30 days d.15 days
24. Blossom Producer Company Limited is having a having an average annual turnover exceeding Rs.8
Crores in each of 3 consecutive financial years, has appointed Mr. Rex as CA to take care of all the
secretarial practices like filing returns, forms, legal documentations, etc. Is the appointment of Mr. Rex
valid?
a. No b. Yes c. May be d. Yes, if it is valid as per clauses in AOA.
25. Blossom Producer Company Limited is having a having an average annual turnover exceeding Rs.7 Crores
18.3
in each of 3 consecutive financial years, has appointed Mr. Rex, a member of the ICSI as a whole time
secretary to take care of all the secretarial practices like filing returns, forms, legal documentations,
etc. Is the appointment of Mr. Rex valid?
26. Mr. Zanpure a member of Lotus Producer Company Limited seeks to avail of a credit facility from the
Company in relation to business of the Company. For what period can the same be availed?
a. not exceeding 2 b. not exceeding 6 c. not exceeding 3 d. not exceeding 9 months
months months months
27.Credit facility to any member in connection with business of the company for a period not exceeding
a.12 months b. 3 months c. 6 months d. 9 months
28. Blossom Producer Company Limited is having an average annual turnover exceeding Rs.3 Crores in
each of 3 consecutive financial years, has appointed Mr. Rex as CA to take care of all the secretarial
practices like filing returns, forms, legal documentations, etc. Is the appointment of Mr. Rex valid?
29. Suffix of the Producer Company will be

a. ........... private ltd b ............ public ltd c. ........... & company d............ producer company
limited
30. Who can be subscriber or member of Producer Companies?

a. Primary b. Marketing agents to c. Producer doing value addition d. All of the above
Producers increase the market to the products making it
marketable
31. For the purpose of law, the Producer companies shall be dealt as if it is:
a. Public Limited b. Private Limited c. Limited by Guarantee d. Unlimited Company
company company company
32. Who can form the Producer Company

a. 10 Individual b. 2 Producer c. combination of 10 or d. a or b or c
Producers Institutions more individuals and
producer companies
33. What are the minimum number of directors for producer company
a. 5 directors b. Minimum 2 director as in c. 3 directors d. No minimum number of directors
private company
34. Now the farmers and producers of the Onion want to incorporate the Company under Companies Act,
2013. But there are only 8 primary producers of Onion. Also, there is 1 Producer Institution who wishes to
incorporate a PC. Can these People incorporate a PC?
a. Yes they can b. No as the c. Yes They can d. No they cannot as public
incorporate the requirement of 10 incorporate as a public company but can as
PC as a private individual and company private company
company institution is not
complied
35. ABC Producer Company Limited was formed with the object of producing, harvesting the grains and
selling the same by marketing. There were 11 members and out of which 1 member “A” got his interest
conflicted to that of producer company and one member “B” ceases to be a primary producer but was
18.4
carrying out the ancillary work related to primary produce. Will it amount to surrender of shares by both
of these members?
a. The member “A” shall cease to be member b. Both A and B c. Both A and B shall d. None of the
as his interest in conflicted with that of the would not cease to be the above
company and “B” shall continue to be cease to be members of
member as he is related to primary member Producer
produce and included as primary Company
producer
36. Amulya Producer Company Limited was formed with equity shares of Rs. 5,00,000 (50000 equity shares
of Rs. 10 each) and now for raising its funds the company intends to issues debentures to its members and
increase the capital by doing so. It intends to raise the capital of Rs. 3,50,000 (3500 debentures of Rs. 100).
Can the company do so?
a. The Company can b. The Company can do c. The company cannot d. Can issues part amount of
issue debentures so only upto Rs. issue debentures to its equity and part amount of
and increase its 2,50,000 as debt members and can only debentures
capital cannot exceed 50% raise it by equity
of the equity issued shares
37. PQR Producer Company Limited has a Paid-up capital of Rs.4,00,00,000 and average annual turnover of
Rs. 6,00,00,000 of preceding 3 financial years. Does the company need to appoint a company secretary
under Sec 203 of companies Act or under section 581K?
a. No the requirement of b. The company needs to c. No the requirement of d. None of the above
Company appoint company Company Secretary is
Secretary is not secretary under section not mandatory to
mandatory to 581K of companies Act, Producer companies
Producer companies 1956
38. PQR, a multistate co-operative society wants to convert itself to the Producer Company. But the
existing members are more than 500 in number and also the directors are 12. Can a co-operative society
be converted to Producer Company?
a. Yes it can be b. The number of members c. No a co-operative d. Both B and C
converted as there is needs to be only society cannot be
no limit on number maximum upto 200 so as converted into
of to form the producer Producer Company
members even if the company which gets the
producer status of Private Limited
company acts as a company under the act
private limited
company
39. XYZ Producer Company Limited held 4 board meeting in 2017-2018 but held once in every 3 months
and the gap between 2 meeting of June 2018 and December 2018 exceeded 120 days. Was there any non-
compliance on the part of Producer Company?
a. No according to b. The Company has held 4 meeting c. There was non- d. There is no
sec 581V the in a calendar year according to compliance requirement of
company has held sec 173 of companies Act but the according to minimum number of
4 meeting and 1 days between any 2 meetings both board meeting for
in each quarter, cannot exceed 120 days and thus Companies Act, the producer
so there was no there is a non-compliance, as 1956 and company
non- Producer Company needs to Companies Act,
compliance comply the provisions of 2013
Companies Act 2013 in line with

the Companies Act, 1956
18.5
40. “X” a producer member of XYZ Producer Company Limited nominated Mr. A as his nominee within 3
months of his being a member In producer company. Now Mr. X is deceased and his shares are transferred
to Mr. A - nominee of Mr. X who is not a producer of any primary products? Whether such transfer of
shares is justified
a. The shares will be transferred to b. The nominee though c. The nominee’s d. None of
nominee and thereafter the board not a primary business or his activity the
of Directors shall direct the producer can still is not concerned for above
surrender of shares by nominee hold the shares his holding of shares
41. How does voting rights of member is being calculated or recognized or determined:
a. In a case where b. In a case where the membership c. In a case where the d. All of
the membership consists of Producer institutions membership consists of the 3
consists solely of only, the voting rights of such individuals and above
individual Producer institutions shall be Producer institutions,
members, the determined on the basis of their the voting rights shall be
voting rights participation in the business of the computed on the basis
shall be based Producer Company in the previous of a single vote for every
on a single vote year, as may be specified by articles Member
for every
Member
42. Whether the limits of internal audit of sec. 138 is applicable to Producer Companies or is it mandatory
for producer companies to get the Internal audit done by a Chartered Accountant?
a. Every producer b. If the limits specified for the c. Internal audit is d. Producer
company needs to applicability of internal audit applicable only to the company are
carry out the under section 138 gets companies whose exempted from
internal audit of attracted, then only internal turnover is more than provisions of
the producer audit is applicable. Rs. 3 Crores Internal audit
company
43. XYZ PCL wants to make some donations and subscriptions to a political person for the purpose of
general awareness. Can the donation be done and to what extent?
a. No b. The PCL can c. The PCL can make the contribution with d. The PCL can make
contribution make the the only condition that it will be used the donations,
can be made contribution only for the purpose of general contribution or
to any to the extent awareness and for the benefit of subscription to
political of only 3 % of general public at large any extent.
person or to its profit
any person
for political
reasons
44. Is it mandatory to transfer funds to general reserve by PCL?

a. Every Producer Company shall b. No it is not c. Depends on the d. Depends on the wish of
maintain a general reserve in mandatory wish of the members and profit
every financial year, in directors earned for the financial
addition to any reserve year
maintained by it as
may be specified in articles.
45. ABC PCL appointed the Chief Executive officer “c” who was the nominee of the member “A” in the
company, Can the company do so?

a. No, the b. The Act provides that c. Any person d. The PCL need not appoint
18.6
company cannot only a member cannot whether member any CEO as it is exempted
appoint the be appointed as the or no can be
member’s CEO of PCL, so appointed as the
nominee as a nominee can act the CEO of PCL
Chief Executive CEO of company
Officer
46. An inter-state co-operative society was converted into a PCL on 01st April 2018 and has 18 directors on
its Board after incorporation. Advice the company whether it can have such number of directors?
a. The PCL incorporated b. No a PCL can have c. There is no criteria d. The PCL has its own
can have more than 15 only maximum of for maximum existence and is managed
directors on the Board 15 directors on its number of by its members and do not
for a period of 1 year Board since its directors require to appoint
after incorporation incorporation directors in the company
47. Who are the first directors of the Producer Company Limited?
a. The members who sign the memorandum acts as first The directors shall be appointed by the
directors of the company, until the directors are members of the company within 90 days of its
appointed at the AGM. But there shall be minimum incorporation
5 number of directors
48. Aditya a director in Amulya Ltd., Producer company Limited failed to call for annual general meeting
due to natural calamity which occurred where the registered office of the company was situated. Advice
the company on vacation of office of directorship of Aditya?
a) The office of director b) There is no responsibility on the c) No, the office of d) None of
shall part of director to call for AGM director shall not be the
become vacate as and hence he Is not liable for the vacate as it is an above
director failed to call default and will not vacate the exception to Section
for annual office 581Q
general meeting
49. Who shall be responsible for sending notice to directors for calling of Board Meeting of Producer
Company
a. Company secretary, if b. Managing c. Chief Executive d. Manager
appointed or any director director Officer
authorised
50. The producer company had 32 members and now the AGM was called for the members. 7 members
were present for the meeting and there were 10 directors (out of which 2 are members not included in 7
members).Advice Whether the requirement of quorum is fulfilled?
a. There was no b. The adequate quorum was c. The adequate quorum was d. None of
adequate present as the members present as there is requirement the above
quorum as only 7 present are more than 8 (i.e. of only 5
members were 1/4th of the members) members to be present for
present AGM
51. In ABC Ltd, a producer company has 12 individual members and 3 producer institution forming part of
the members of such company. The members decide to call for an EOGM and thus 3 Producer Institution
and 1 member proposed and send the notice in writing for calling of EOGM. Advice the company on
whether the notice was duly sent to members for calling EOGM?
a. The meeting is not duly called as the b. The EOGM is duly c. Producer d. None of
minimum requirement for members called and hence is a company cannot the
to call the notice Is 5 members valid meeting hold an EOGM above
18.7
52. XYZ Ltd, donated material to a politician for distribution to general public value of which is not
exceeding 3% of its net profits of the previous financial year, after obtaining requisite approval of
members. Is it a valid transaction?
a. Yes since approval of b. Yes Since it is within the limit of 3% c. Both A&B d. It is Invalid.
members is obtained. of net profits of the previous
financial year.
53. PQR Ltd subscribed shares of QP Ltd, a producer company by obtaining approval of members in the
general meeting. However the total amount of subscription is 50% of its paid up capital. Is approval of
central government required?
a. Yes since it b. No members’ c. No it is to be calculated on total d. None of the above
exceeds the approval is of paid up capital and free
limits sufficient. reserves.
54. PZ Ltd, wants to issue bonus shares to its members by capitalization of its general reserves. Can a
Producer Company Issue Bonus Shares?
a. No b. Yes with prior c. Yes with approval d. Yes with approval of Board and
approval of board of Members central government.
only.
55. Mr. Ajay, a member of a producer company wants to transfer his shares to Mr. Rupesh. Can he do so?
a. Yes, with b. Yes, with approval c. Both a & b d. No, shares cannot be
approval of other of Board transferred.
members
56. Light Producer Company Ltd. wants to grant credit facility to a member who is a relative of a director
for a period of 2 months. The transaction is approved in the Board meeting. Is this transaction within the
powers of board as per Section 581R?
a. The Board Can b. No, the board cannot c. Yes, the Board can d. No, members’ approval
grant credit grant the credit grant without any is mandatory.
facility subject to facility. limit
a limit
57. James Ltd. has a paid up capital of Rs 5 Crores in previous financial year. Is it mandatory to appoint a
Whole Time Company Secretary?
a. Yes b. No c. Not mandatory d. None of the above
58. Mr. Joy a member of Race Ltd has ceased to be a primary producer. The Board has asked Mr. Joy to
surrender his shares at par. Mr. Joy does not agree to such surrender of Shares. Is he entitled to continue
as Member of the company?
a. No Mr. Joy is liable to surrender his b. Mr. Joy can continue to be a None of the above
shares member
59. PJ Ltd wants to appoint an internal auditor as per section 581ZF. It intends to appoint AZ & Associates,
a Cost Accountant firm as internal auditors. Can a Cost Accountant be appointed as internal auditor?
a. Yes b. No
Answer
1. d 2. b 3. a 4. b 5. a
6. b 7. b 8. c 9. d 10. d
18.8
(Hint: vacation is not required as he is sentenced for a
period less 6 months)
11. c 12. a 13. c 14. 15. b
(Hint: any contribution to political party is not allowed)
16. c 17.d 18. b 19. c 20. b
21. c 22. d 23. b 24. a 25. b
(Hint: Every producer company having average annual
turnover exceeding Rs.5 Crores in each of 3 consecutive
financial years shall appoint a whole time secretary who
is member of ICSI)
26. b 27. c 28. b 29. d 30. a
(Hint: Every producer company having average annual turnover exceeding
Rs.5 Crores in each of 3 consecutive financial years shall appoint a whole
time secretary who is member of ICSI)
31. b 32. d 33. a 34. b 35. a
36. c 37. b 38. a 39. b 40. a
41. d 42. a 43. a 44. a 45. b
46. a 47. a 48. c 49. c 50. b
51. a 52. d 53. c 54. c 55. b
56. d 57. b 58. a 59. b
Chapter 19 Special Court
Chapter 19: Special Court 19.1
1. Special Courts are formed for purpose of:

a. Speedy Trial of b. Speedy Recovery of amount c. Both a. and b. d. Neither a. nor b.
Offences from Defaulting Directors
2. Constitution of Special Court shall be :

a. Single Judge being a Sessions Judge b. Metropolitan Magistrate or c. Both a. d. Neither a.
or Additional Sessions Judge JMFC and b. nor b.
3. Offences punishable under Companies Act, 2013 with imprisonment of 2 or more years can be dealt
by:
a. Single Judge being a Sessions Judge b. Metropolitan c. Both a. and b. d. Neither
or Additional Sessions Judge Magistrate or JMFC a. nor b.
4. Offences punishable under Companies Act, 2013 other than above can be dealt by:
a. Single Judge being a Sessions b. Metropolitan c. Both a. and b. d. Neither a. nor b.
Judge or Additional Sessions Magistrate or
Judge JMFC
5. Appointment of Judges/ Magistrate for purpose of Special Court shall be done by :

a. CG in concurrence of the b. SG in concurrence of the c. CG in d. SG in
CJ of HC within whose CJ of HC within whose concurrence concurrence
jurisdiction the jurisdiction the appointee with SC with HC
appointee Judge is Judge is working
working
6. Special Court called upon to adjudicate on matters involving 2 years imprisonment or more shall be
selected based on:
a. Location where Registered b. Location of c. Location of d. As
office of the Company in Plaintiff whether Respondent whether decided
relation to which crime is Company or Company or others by the SC
committed others
7. In case where 2 or more Special Courts exercise jurisdiction over the area of the Regd Office of the Co
in relation to which crime is committed and crime is punishable by 2 years or more imprisonment
then:
a. Special Court shall be b. Special Court shall be c. Specified by the d. Specified by
selected at option of selected at option of High Court the Supreme
plaintiff respondent Court
8. Where offence is tried at with the Judicial Magistrate: Detention can be done for upto:
9. Where offence is tried at with the Executive Magistrate: Detention can be done for upto:
10. Special Court under Companies Act, 2013 may conduct trail for offences under:
a. Companies Act, 2013 b. Any other offence charged at the c. Both d. None
accused under CrPC 1973
19.2 11. Summary Trial can be conducted by Special Court if offence under this Act is not punishable with
imprisonment :
a. >3 years b. > 5 years c. > 4 years d. > 2

years
12. If convictions are determined in case of Summary Trial: the sentence for imprisonment shall not be:
a. >1 years b. > 2 years c. > 3 months d. > 6 months
13. Until formation of the Special Court, the cases triable thereunder shall be tried under:
a. Court of Sessions b. Court of Metropolitan Magistrate c. Court of JMFC d. All of these
14. Compounding can be done in case of offences punishable by:

a. Fine only b. Imprisonment Only c. Both a. and b. d. Neither a. nor b.
15. Compounding can be done at which stage of prosecution:

a. Before b. After c. Both d. Neither a. nor b.
16. Compounding can be done by :

a. Tribunal b. Regional Director or CG approved officer for fine upto 5 lakhs c. Both d. None
17. If Investigation provisions are invoked can the Company or its officers Compound the offence
a. Yes b. No c. Upto certain monetary limits
18. What period shall elapse before a similar offence compounded previously can be compounded again?
a. 4 years b. 3 years c. 2 years d. 1 year
19. Can fine imposed under Compounding exceed the Fine otherwise imposable had there been no
compounding:
a. Yes b. No c. Upto certain monetary limits
20. Application for Compounding to be made to:

a. High Court b. Supreme Court c. Tribunal/RD/CG Officer d. Registrar
21. Registrar shall forward application for compounding with his comments to:
22. Intimation of offences once compounded shall be made to :

23. Time limit for aforesaid Intimation shall be

24. When Compounding of offences is concluded while a Court proceeding is ongoing, notice to the Court
shall be given by:
a. Respondent b. Plaintiff c. Tribunal/RD/CG Officer d. Registrar
25. For the purpose of providing speedy trial of offences punishable under this Act, with imprisonment of
Two years or more, the ------------- may by notification establish as many special courts as possible.
a. State Government b. Central Government c. Supreme Court d. High Court
26. A Special Court shall consist of a single judge who shall be appointed by the Central Government with
19.3
the concurrence of the ---------- within whose jurisdiction the judge to be appointed is working.
A. Chief Justice of the B. Prime minister of C. President of India D. Chief Justice of
Supreme Court India the High Court
27. A person shall not be qualified for appointment as a judge of a Special Court unless he is, immediately
before such appointment, holding office of a Sessions Judge or an------------
A. Director of B. Minister in C. Additional Sessions D. Additional Director of
Government Company Cabinet Judge Government Company
28. All offences under this Act shall be triable only by the Special Court established for the area in which
the registered office of the company in relation to which the offence is committed or where there are
more Special Courts than one for such area, by such one of them as may be specified in this behalf by
the ------------ concerned
A. Supreme court B. High Court C. NCLT D. Sessions Court
29. Where a person accused of, or suspected of the commission of, an offence under this Act is forwarded
to a -----------under sub-section (2) or sub-section (2A) of section 167 of the Code of Criminal
Procedure, 1973.
A. Magistrate B. Sessions court judge C. High Court Judge D. Additional Sessions Court
judge
30 A Special Court may, upon perusal of the police report of the facts constituting an offence under this
Act or upon a complaint in that behalf, take cognizance of that offence without the accused being
committed to it for trial.
A. True B. False
31. Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the Special Court may, if
it thinks fit, try in a summary way any offence under this Act which is punishable with imprisonment
for a term not exceeding --------- --.
A. Seven years B. three years C. two years D. an year
32. In the case of any conviction in a summary trial, no sentence of imprisonment for a term exceeding
one year shall be passed.
A. True B. False
33. When at the commencement of, or in the course of, a summary trial, it appears to the Special Court that
the nature of the case is such that the sentence of imprisonment for a term exceeding one year may
have to be passed or that it is, for any other reason, undesirable to try the case summarily, the Special
Court shall, after hearing the parties, record an order to that effect and thereafter recall any witnesses
who may have been examined and proceed to hear or rehear the case in accordance with
the procedure for the regular trial.
A. True B. False
34. Magistrate may authorise the detention of such person in such custody as he thinks fit for a period not
exceeding --------- in the whole where such Magistrate is a Judicial Magistrate and seven days in the
whole where such Magistrate is an Executive Magistrate.
A. fifteen days B. Ten days C. seven days D. twelve days
35. The provisions of the Code of Criminal Procedure, 1973 shall apply to the proceedings before a Special
19.4
Court and for the purposes of the said provisions, the Special Court shall be deemed to be a --------------
--and the person conducting a prosecution before a Special Court shall be deemed to be a Public
Prosecutor.
A. High Court B. NCLT C. Court of Session D. None of above
36. For the purpose of providing speedy trial of offences punishable under this Act, with imprisonment of--
----------, the Central Government may by notification establish as many special courts as possible.
A. A year or more B. Three years or more C. six months or more D. Two years or more
37. A Special Court shall consist of -----------who shall be appointed by the Central Government with the
concurrence of the Chief Justice of High Court within whose jurisdiction the judge to be appointed is
working.
A. Single judge B. Two judges C. Three Judges
38. Magistrate may authorise the detention of such person in such custody as he thinks fit for a period not
exceeding fifteen days in the whole where such Magistrate is a Judicial Magistrate and ---------- in the
whole where such Magistrate is an Executive Magistrate.
A. Seven days B. Ten Days C. Twelve Days D. Fifteen days
Answers
1. A 2. C 3. A 4. B 5. A
6. A 7. C 8. A 9. A 10. C
11. A 12. A 13. D 14. A 15. C
16. C 17. B 18. B 19. B 20. D
21. C 22. D 23. A 24. D 25. B
26. D 27. C 28. B 29. A 30. A
31. B 32. A 33. A 34. A 35. C
36. D 37. A 38. A
Chapter 20 Miscellaneous Provisions
Chapter 20: Miscellaneous Provisions

20.1
1. Mr. Ram committed a fraud amounting to Rs. 6 Lakhs. Mr. Ram is of the opinion that he is liable to a fine
of Rs. 6 Lacs or max upto 18 lacs. Is his contention correct?
a. Yes, he will be b. No, he will be liable to c. No, he will be liable to d. No, we will be liable to
liable only to a a fine of Rs. 20 Lacs a fine of Rs. 20 Lacs fine of 100% to 300% of
fine of Rs. 6 Lacs and upto 5 years. or jail upto 5 years or Fraud amount or Jail
to Rs. 18 Lacs both. from 6 months to 10
years
2. Mr. Sam committed a fraud amounting to Rs. 6 Lakhs. Company accuses that the repercussion of the
fraud is affecting Public Interest at large. Mr. Ram is of the opinion that since the amount of fraud is less
than Rs. 10 Lacs, he is liable to a fine of upto Rs. 20 Lacs. Is his contention correct?
a. Yes, he will be b. No, he will be liable to c. No, he will be liable to d. No, we will be liable to fine
liable only to a a fine of Rs. 20 Lacs a fine of Rs. 20 Lacs or of 100% to 300% of Fraud
fine of Rs. 20 and upto 5 jail upto 5 years or amount or Jail from
Lacs. years. both. 6 months to 10 years
3. Mr. Smith committed a fraud amounting to Rs. 16 Lakhs. However, no public interest is affected. Mr. Ram
is of the opinion that since no public interest is involved, he is liable to a fine of upto Rs. 20 Lacs. Is his
contention correct?
a. Yes, he will be b. No, he will be liable c. No, he will be liable d. No, we will be liable to fine of
liable only to a to a fine of Rs. 20 to a fine of Rs. 20 100% to 300% of Fraud
fine of Rs. 20 Lacs and Lacs or jail upto 5 amount or Jail from 6 months
Lacs. upto 5 years. years or both. to 10 years
4. Mr. Nikhil committed a fraud amounting to Rs. 16 Lakhs. Company accuses that the repercussion of the
fraud is affecting Public Interest at large. Mr. Ram is of the opinion that since the amount of fraud is less
than Rs. 10 Lacs, he is liable fine of Rs. 16 Lacs or max upto 48 lacs and jail of minimum 6 months.. Is his
contention correct?
a. Yes, he will be b. No, he will be liable c. No, he will be liable to a d. No, we will be liable to fine
liable only to a to a fine of Rs. 20 fine of Rs. 20 Lacs or of 100% to 300% of Fraud
fine of Rs. 20 Lacs and jail upto 5 years or amount or Jail from 6
Lacs. upto 5 years. both. months to 10 years
5. Mr. Surya committed a fraud amounting to Rs. 1 Lakh. Company accuses that the repercussion of the fraud
is affecting Public Interest at large. Mr. Ram is of the opinion that since the amount of fraud is less than Rs.
10 Lacs, he is liable fine of Rs. 1 Lac or max upto 3 lacs and jail of minimum 6 months.. Is his
contention correct?
a. Yes, he will be b. No, he will be liable to c. No, he will be liable to d. No, we will be liable to fine of
liable only to a a fine of Rs. 20 Lacs a fine of Rs. 20 Lacs or 100% to 300% of Fraud
fine of Rs. 20 and upto 5 jail upto 5 amount or Jail from 6
Lacs. years. years or both. months to 10 years
6. Mr. Nihal committed a fraud amounting to Rs. 1 Lakh. Turnover of the company is 8 Lacs. Mr. Ram is of
the opinion that since the amount of fraud is less than Rs. 10 Lacs, he is liable fine of Rs. 1 Lac or max
upto 3 lacs and jail of minimum 6 months. Is his contention correct?
a. Yes, he will be b. No, we will be liable to fine c. No, he will be liable to d. No, he will be liable
liable only to a fine of 100% to 300% of Fraud a fine of Rs. 20 Lacs to a fine of Rs. 20
of Rs. 20 amount or Jail from and upto 5 Lacs or jail upto 5
Lacs. 6 months to 10 years years. years or both.
7. PQR Ltd. has been in operation for the last 6 months. It comes to the knowledge of the ROC about the
presence of this Company and that it is not registered with the ROC in the jurisdiction to which it belongs.
What are the consequences of the same?
a. Liable to fine of Rs. b.Liable to fine of Rs. c. Officers involved liable to jail d. (b) and (c)
1000 to Rs. 5,000 per 500 to Rs. 2,000 per of not less than 6 months
day during such a use. day during such a use.
20.2
8. Mr. Tom committed a fraud amounting to Rs. 14 Lakh. Turnover of the company is 2200 Lacs. Mr. Ram
is of the opinion that since fraud involved does not amount to 1% of the turnover of the Company; he is
liable to a fine of Rs. 20 Lacs or jail upto 5 years or both. Is his contention correct?
a. Yes, he will be liable to a b. No, he will be liable to a c. No, we will be liable to fine of d. None of
fine of Rs. 20 Lacs or fine of Rs. 20 Lacs and 100% to 300% of Fraud the
jail upto 5 years or upto 5 years. amount or Jail from 6 above
both. months to 10 years
9. Mr. Tim committed a fraud involving public interest amounting to Rs. 4 Lakh. Turnover of the company is
2200 Lacs. Mr. Ram is of the opinion that since fraud involved neither amounts to 1% of the turnover of
the Company nor does it exceeds Rs. 10 Lacs; he is liable to a fine of Rs. 20 Lacs or jail upto 5 years or
both. Is his contention correct?
a. Yes, he will be liable to b. No, he will be liable to a c. No, we will be liable to fine of d. None of
a fine of Rs. 20 Lacs or fine of Rs. 20 Lacs and 100% to 300% of Fraud the
jail upto 5 upto 5 years. amount or Jail from 6 months above
years or both. to 10 years
10. Mr. Nick committed a fraud amounting to Rs. 12 Lakhs. However, no public interest is affected. Mr. Ram
contention correct?
a. Yes, he will be liable b. No, he will be liable to a c. No, we will be liable to fine of d. None of
to a fine of upto Rs. fine of upto Rs. 20 Lacs 100% to 300% of Fraud amount the above
20 Lacs or jail upto 5 years or or Jail from 6 months
both. to 10 years
11. Mr. Anil committed a fraud amounting to Rs. 3 Lakhs. Mr. Ram is of the opinion that he is liable to a fine
of upto Rs. 20 Lacs as fraud does not exceed Rs. 10 Lacs. Turnover of the Company is 280 Lakhs. Is his
contention correct?
a. Yes, he will be liable b. No, we will be liable to c. No, he will be liable to d. None of the above
to a fine of upto Rs. fine of 100% to 300% of a fine of upto Rs. 20
20 Lacs Fraud amount or Jail Lacs or jail upto 5
from 6 months to 10 years or both.
years
12. Mr. Anuj committed a fraud involving public interest amounting to Rs. 1.5 Lakhs. Mr. Ram is of the
opinion that he is liable to a fine of upto Rs. 20 Lacs as fraud does not exceed Rs. 10 Lacs. Turnover of
the Company is 280 Lakhs. Is his contention correct?
a. No, we will be liable to fine b. No, he will be liable to a c. Yes, he will be liable to a d. None of
of 100% to 300% of Fraud fine of upto Rs. 20 Lacs fine of upto Rs. 20 Lacs the
amount or Jail from or jail upto 5 years or above
6 months to 10 years both.
13. Mr. Lakshman gave false evidence in the form of an affidavit. What will be the consequence of the same?
a. He will be liable to a. He will be liable to jail of a. He will be liable to jail a. He will be liable to
jail of 2 years to 8 3 years to 7 years or fine upto 5 years and fine jail of 3 years to 7
years and fine upto 5 upto 10 Lacs. upto 10 Lacs. years and fine upto
Lacs. 10 Lacs.
14. Ms. Surekha gave false evidence in the form of an oath. What will be the consequence of the same?
a. She will be liable to b. She will be liable to jail of c. She will be liable to d. She will be liable to
jail of 3 years to 7 2 years to 8 years and fine jail of 3 years to 7 jail of 2 years to 8
years and fine upto upto 5 Lacs. years or fine upto 10 years and fine upto 5
10 Lacs. Lacs. Lacs.
15. The Board of Directors of Parmar Ltd. by passing a resolution by circulation decided on diversifying the
business of the Company. Is it valid? If not, what are the consequences?
a. Acts are b. Act are invalid c. Acts are invalid. Penalty d. Act are invalid 20.3
valid unless further applicable will be Rs. 10,000 plus unless ratified in the
approved by GM. 1000 per day under this section. next BM.
16. The Board of Directors of Tycoon Ltd. by passing a resolution by circulation decided on amalgamation of
Myson Ltd. the business of the Company. Is it valid? If not, what are the consequences?
a. Act are invalid b. Act are invalid c. Acts are d. Acts are invalid. Penalty applicable
unless further unless ratified in valid will be Rs. 10,000 plus 1000 per
approved by GM. the next BM. day under this section.
17. The Board of Directors of LIL Ltd. by passing a Board Meeting resolution amended the Object clause of
the Company. Is it valid? If not, what are the consequences?
a. Yes, b. Yes, valid only if appropriate disclosure c. Invalid, as amending MOA d. None of
valid. made in the Board’s Report is exclusive right of GM. the above
18. The Board of Directors of SIL Ltd. by passing a Board Meeting resolution amended the Article of
Association of Company. Is it valid? If not, what are the consequences?
a. Yes, b. Yes, valid only if appropriate disclosure c. Invalid, as amending AOA d. None of
valid. made in the Board’s Report is exclusive right of GM. the above
19. Mr. Somesh who is in full time employment with XYZ Ltd. was not paid his remuneration for a period of
3 months. He, therefore, embezzled cash equal to the unpaid amount of remuneration. Will he face any
consequence?
a. Since the amount b. Liable to penalty of c. Compensation for d. (b) and (c)
withdrawn is against Rs.1 Lac to 5 Lacs and the property or
the amount liable by jail up to 2 years delivering property
the Company to Mr. in original state.
Somesh, he will face
no consequence.
20. Mr. Smart committed a fraud amounting to Rs. 28 Lakh. Turnover of the company is 5700 Lacs. Mr. Ram
is of the opinion that since fraud involved does not amount to 1% of the turnover of the Company; he is
a. Yes, he will be liable b. No, he will be liable to a c. No, we will be liable to d. None of the above
to a fine of Rs. 20 fine of Rs. 20 Lacs and fine of 100% to 300%
Lacs or jail upto 5 years. of Fraud
upto 5 years or amount or Jail from 6
both. months to 10 years
21. Mr. Sumit committed a fraud amounting to Rs. 18 Lakhs. However, no public interest is affected. Mr. Ram
contention correct?
a. Yes, he will be b. No, he will be liable to a c. No, we will be liable to fine of d. None
liable to a fine of fine of upto Rs. 20 Lacs or 100% to 300% of Fraud amount of the
upto Rs. 20 Lacs jail upto 5 years or both. or Jail from 6 months to 10 years above
22. SIL Ltd. has been in operation for the last 6 months. It comes to the knowledge of the ROC about the
presence of this Company and that it is not registered with the ROC in the jurisdiction to which it belongs.
What are the consequences of the same?
a. Liable to fine of Rs. 500 to b. Liable to fine of Rs. 1000 c. Officers involved liable d. (a) and
Rs. 2,000 per day during to Rs. 5000 per day during to jail of not less than 6 (c)
such a use. such a use. months
23. LMN Ltd. involved in the manufacturing of bearings has been inactive in its operations for 2 years 3
months and has not filed Financial Statements for the said period as well. The directors of the company
seek to know if the Company can apply for a Dormant Status.

a. Yes, as it fulfills all b. No, as it has to be c. No, as it has to be d. Yes, if it fulfills all
20.4 the conditions to be inactive for a minimum inactive for a the conditions
enabled to apply for period of 3 years minimum period of applicable to be
dormancy. 3 years enabled to apply
for dormancy.
24. LMN Ltd. involved in the manufacturing of bearings has been inactive in its operations for 2 years 3
months and has not filed Financial Statements for the said period as well. The directors of the company
seek to know if the Company can apply for a Dormant Status. They wish to know what are the additional
conditions required to be fulfilled.
a. no prosecution is b. securities not listed on c. does not have d. All of the above
initiated or Stock Exchange outstanding
pending against it Government dues
25. HUL Ltd. involved in the manufacturing of bearings which is listed with the Bombay SE has been inactive
in its operations for 2 years 3 months and has not filed Financial Statements for the said period as well.
The directors of the company seek to know if the Company can apply for a Dormant Status. They wish to
know what are the additional conditions required to be fulfilled.
a. company is not having b. no inspection, inquiry or c. (a) & (b) d. Neither (a)
Public Deposits or investigation is ordered and nor (b) is
Outstanding Loans pending against it applicable
26. Mr. Arijit committed a fraud amounting to Rs. 1 Lakh. Turnover of the company is 220 Lacs. Mr. Ram is
of the opinion that since fraud involved does not amount to 1% of the turnover of the Company; he is
a. Yes, he will be liable b. No, he will be liable to a c. No, we will be liable to d. None of the above
to a fine of Rs. 20 fine of Rs. 20 Lacs and fine of 100% to 300%
Lacs or jail upto 5 upto 5 years. of Fraud amount or
years or Jail from
both. 6 months to 10 years
27. Realisation Ltd. a Dormant Company wants to apply for the status of an ‘Active’ Company. Which form
shall the application be made in?
a. MSC – 1 b. MSC – 2 c. MSC - 3 d. None of the above
28. Laziness Ltd. a Dormant Company fails to comply with the conditions of Form MSC-1 and hence will
need to apply for the status of an ‘Active’ Company. Which form shall the application be made in and
within what time period?
a. MSC-2, within 15 days b. MSC-2, within 1 month c. MSC-2, within 7 days d. MSC-3, within 7
days
29. Mr. Anuj committed a fraud involving public interest amounting to Rs. 1.5 Lakhs. Mr. Anuj is of the
opinion that he is liable to a fine of upto Rs. 20 Lacs as fraud does not exceed Rs. 10 Lacs. Turnover of
the Company is 280 Lakhs. Is his contention correct?
a. No, we will be liable b. No, he will be liable to a c. Yes, he will be liable to d. None of the above
to fine of 100% to fine of upto Rs. 20 Lacs a fine of upto Rs. 20
300% of Fraud or jail upto 5 years or Lacs
amount or Jail from both.
6 months
to 10 years
30. Ms. Smita committed a fraud amounting to Rs. 4.8 Lakhs. Company accuses that the repercussion of the
fraud is affecting Public Interest at large. Mr. Smitha is of the opinion that since the amount of fraud is less
than Rs. 10 Lacs, she is liable to a fine of upto Rs. 20 Lacs. Is her contention correct?
a. Yes, she will be liable b.No, she will be liable to c. No, she will be liable d. Yes, she will be
only to a fine of Rs. fine of 100% to 300% of to a fine of upto Rs. liable to a fine of
20 Lacs. Fraud amount or Jail from 20 Lacs or jail upto 5 upto Rs. 20 Lacs
6 months to 10 years years or both.
20.5
Answers
1. c 2. d 3. d 4. d 5. d 6. b 7. b
8. c 9. c 10. c 11. b 12. a 13. d 14. a
15. c 16. d 17. c 18. c 19. d 20. c 21. c
22. a 23. d 24. d 25. d 26. a 27. b 28. c
29. a 30. b
Chapter 21 Securities and Exchange Board of India, 1992
Chapter 21: Securities and Exchange Board of India, 1992

21.1
1. X Ltd. wants to come up with an IPO of Rs. 15 crore from public. It has made all the necessary arrangements
for such IPO. The company has tangible assets of Rs. 5 crore in last 2 years. The company filed offer document
with SEBI but SEBI rejected saying that conditions are not fulfilled. Is the contention of SEBI valid?
a. No b. Yes, Rs. 3 crore tangible assets c. Yes, Rs. 10 crore tangible d. Yes, Rs. 10 crore
in last 3 years assets in last 2 years tangible assets in last 3
years
2. For making an IPO, the company should have minimum average pre-tax operating profit of Rs. ----------
during 3 profitable years out of immediately preceding ----------- years.
a. Rs. 15 Cr. & 2 years b. Rs. 10 Cr. & 4 years c. 15 Cr. & 5 years d. 20 Cr. & 5 years
3. B Ltd. gets incorporated on 22 December, 2010. Due to expansion the company proposes to announce IPO
in the year April, 2013. The company has net-worth of around Rs. 4 crore since its incorporation, can such
company release IPO?
a. Ye b. Not until December 2013 c. With permission of CG d. Not until December 2014
s
4. In case of an IPO, aggregate of proposed and previous issue in same FY shall not exceed 5 times of its--------
---.
a. Share capital b. Net worth pre issue c. Reserve and Surplus d. Loans and
borrowings
5. If the issuer company has changed its name in last 1 year at least -------- of revenue of one full preceding
year shall be earned under new name
a. 75% b. 50% c. 60% d. 100%
6. Q ltd planning to issue IPO could not satisfy eligibility conditions. Issue is then made through book building
process. Q Ltd. should mandatorily allot at least ---to QIB .
a. 75 % b. 25% c. 50% d. 100%
7. B ltd has made public issue & it was successfully subscribed by 800 shareholders. Can the Company allot to
these shareholders?
a. No, atleast 1000 b. No, atleast 1500 c. No, atleast 2000 d. Yes, only 500
prospective prospective allottees prospective allottees prospective allottees
allottees needed needed needed needed
8. For regulation of offer document with SEBI the issuer company shall file atleast------ of draft prospectus
with SEBI
a. 10 copies b. 40 copies c. 30 copies d. 60 copies
9. Changes in offer document to be made ------- of filing

a. Within 21 days
Chapter 21 Securities b.and
Within 14 days c. Within 7 days
Exchange Board of India, 1992
d. Within 10 days
10. If the issue is undersubscribed (<90%), under writer shall fulfill commitment within
a. 15 days b. 30 days c. 60 days d. 10 days 21.2
11. In case of ------------50% shares should be reserved for applications below Rs. 1 lakh.
a. Fixed price issue b. Book built issue c. Both of the above d. None
12. Price band in case of book built issue shall be---------

a. 30% b. 20% c. 40% d. 50%
13. In case of book built issue ---------- shares should be reserved for QIB’s
a. 35% b. 40% c. 50% d. 20%
14. In case of Book building route the electronic book is maintained about price bids. Such book shall be open
for.
15. Pricing of the book building process should be according to-------.

a. Schedule II b. Schedule I c. Schedule X d. Schedule XI
16. Price band in case of book building issue shall have upper limit of------- & floor price
a. 100% b. 150% c. 120% d. 60%
17. Price related disclosure in case of fixed price issue shall be made in ------------- --.
a. Red herring prospectus b. Abridged prospectus c. Draft prospectus d. Information
memo
18. Red Herring prospectus shall contain everything about IPO except
a. Price b. No. of securities c. Either a. or b. d. None of above
19. A ltd issued an IPO of issue price per share of more than 500. It wants to keep Rs 8 Face value. Is it valid?
a. No b. Yes, provided it must be >=Rs 1 c. Yes, must be <Rs 10 d. No, must be <Rs 5
20. Minimum Promoters contribution in case of IPO shall be atleast --------- of post issue capital
a.10 % or more b.20 % or more c. 50 % or more d.60 % or more
21. Mr. D was a promoter of A Ltd. and was holding 20% of post issue capital at 1.6.2010 (Date of allotment) .
The shares of such promoter shall be locked in till-----
a.1.6.2011 b. 1.6.2012 c.1.6.2013 d. 1.6.2014
22. If the offer size is Rs. 100 Crore or more minimum ------------- shall be offered to public.
a.60% b. 25% c. 10% d. 15%
23. When offer size is Rs. 100 Crore or more, issuer Company should allot 60% to ---- --.
a. Anchor investor b. QIB c. Trust d. Merchant

banker
21.3
24. X Ltd. makes a right issue to existing share holders of offer size of Rs. 60 lakhs. Is the Company eligible to
directly file letter of offer to SEBI?
a. Yes b. No ,file draft letter with Board c. No, file draft letter with MCA d. No filing of letter
25. A Ltd. withdrew right issue post announcement of record date. According to law Company should not
make any application for listing of shares to RSE for 12 months. Can equity share on conversion thereof be
listed?
a. No b. Yes, provided issue of convertible c. With approval CG d. With approval of
instruments was prior to record date MCA
26. J Ltd. has a huge amount of reserve in store and proposes to issue bonus shares to the shareholders.
Company had not paid interest due on debt instruments in past 3 years. Is Company eligible to issue Bonus
shares?
a. Yes, default is < 5 years b. No,as any default is prohibited c. SR at GM of d. Approval of
Co. SEBI
27. P Ltd proposes to issue bonus shares to all shareholders. But the Company has failed to pay gratuity to its
shareholders since 3 years. Can the Company make such issue?
a. Yes, as default is < 5 years b. No, as any default is prohibited c. SR at GM of d. Approval of
Co SEBI
28. Bonus share can’t be issued to partly paid shares. Is this statement true?
a. False b. True, they’re to be firstly c. True, capital is reduced to extent d. True, bonus is paid
made into fully paid of unpaid value of shares as dividend instead
29. S Ltd. has announced to issue of dividend to all share holders. Due to change in plan Company decided to
issue bonus share instead of dividend. Can the Company do so?
a. Yes, bonus shares can be b. No, bonus shares cannot be c. Ony if approved d. Only if
issued in lieu of dividend. issued in lieu of dividend by shareholders approved by
MCA
30. The B Ltd. has enough amounts in revaluation reserve. Can the Company issue bonus shares out of it?
a. Yes, as it’s a valid b. No, as it’s merely a re-valuation of c. Ony if approved d. Only if
financial reserve assets specifically prohibited by CG approved by
MCA
31. Preferential allotment means issue of shares by body corporate on preferential basis but does not include--
---
a. Public issue b. Bonus shares c. Sweat equity d. All of the
above
32. Mr. X who was a shareholder of A Ltd. has sold equity shares on May, 2018. A Ltd. proposes to issue shares
by way of preferential allotment with relevant date being in September, 2018. Can A Ltd. issue shares to
Mr. X?
a. Yes, as 3 months have elapsed b. No, as 6 months c. Yes, as no time limit is 21.4
haven’t elapsed prescribed
33. Pricing of the preferential issue of shares which are already listed for 26 weeks or more shall be Higher of
the average of weekly high/ low of VWAP during ----------------------- whichever is higher
a. 26 weeks or 2 weeks b. 26 week or 1 week c. 52 week or 3 week prior d. 52 week or 2
prior to relevant date prior to relevant date to relevant date week prior to
relevant date
34. Securities allotted to promoter upto 20% of the total capital of the company shall be locked it for
35. The entire pre- preferential share capital held by allottees shall be locked in post pref. allotment for atleast
a. 10 months b. 6 months c. 2 months d. 1 yr
36. If any person indulges in fraudulent & unfair trade practices relating to securities he may attract penalty
u/s 15HA to the higher of:
a. 1 lakh to 5 cr or 3x b. 5 lakh to 5cr or 3x c. 5 lakh to 25 cr or d. 5 lakh to 25 cr or 5x

profit derived profit derived 3x profit derived profit derived
37. Atleast ------------ of directors of Audit Committee should be Independent director in case of a listed
Company
a. 1/2 b. ¾ c. 2/3 d. 1/8
38. J Ltd is a Company in the top 100 select group of listed Companies by SEBI. J Ltd has to make create
exclusively of the following committees:
a. Audit Committee b. Risk Management c. NRCM d. SRC
39. The directors of Nomination & Remuneration Committee in case of Listed Company shall be:
a. Executive b. Independent Directors c.Additional Directors d. Non-Executive Directors
Directors
4 The company which is listed shall file its audited standalone financial results within ------- days of end of FY
0.
a.45 days b. 60 days c. 30 days d.100 days
4 According to Regulation 24 regarding Corporate Governance requirements, a Listed Entity shall not dispose
1. shares in its unlisted material subsidiary to less than without passing GM-SR
a. 75% b. 60% c. 50% d.29%
4 A Ltd. was selling assets (amounting to more than 20% of total assets) of its material subsidiary under a
2. scheme of arrangement duly approved by Tribunal. Will A Ltd. require permission of SH?
a. Yes, since its under scheme b. No, as it’s under c. Yes, since the sale is d. No permission
scheme >20%
21.5
4 A listed entity shall file share holding pattern----------- days before listing of securities on stock exchanges.
3.
a. 21 days b. 10 days c. 1 day d. 30 days
4 Every listed entity shall file a statement showing Investor Grievances within 15 days from the end of quarter?
4.
a.True b. False, file within 14 days c. False , file within 21 day d. False, file within 30 days
4 Every listed entity shall within 15 days from the end of the quarter shall file report on ------- --.
5.
a.Shareholding Pattern b.Investor Grievance c. Financial Result d. Compliance of Corporate
Governance
4 In case of Listed Company who has undergone capital restructuring shall file shareholding pattern within 10
6. days of such action only when total paid up capital increases by .
a.By 2% b. By 5% c. By 4% d. By 6%
4 BOD of listed entity shall inform RSE 5 days before -------

7.
a.Meeting to consider b.Recommendation or c. Both a.and b d.None of these
Financial Statements declaration of Dividend
4 In the case where the BOD is having agenda discussing about the matter specified in Section 29(1)(b) the
8. BOD shall in Form stock exchange atleast before
a.5 working days b. 2 working days c.7 working days d. 11 working days
4 When the listed entity wants to notify any record date it is shall intimate RSE atleast ------ before doing so.
9.
a.11 working days b.5 working days c. 2 working days d.7 working days
5 SEBI (ICDR) Regulations,

0.
a.2010 b.2011 c. 2009 d. 2015
5 Management of BOD of SEBI should have 2 members from the officials of

1.
a. Ministry of Defense b. Ministry of Admin c. Ministry of Finance d. Directorate of
Account
5 Chairman of the SEBI board shall have age limit of-----

2.
5 Management of SEBI should have atleast 1 member from amongst -----.

3. 21.6
a. National Sample Survey b. RBI c. Income Tax Dept d. CAG
5 Cease and desist order proceeding is u/s -------of SEBI Act.

4.
a. 11A b. 11B c. 11C d. 11D
5 Failure to comply with order of inspector in respect of duties stated in 11 C result in imprisonment upto-------
5. -
a. 6 months b. 1.5 years c. 1 year d. 2 years
5 When any employee is of a listed Company is caught making profit out of Unpublished Price Sensitive
6. Information , he shall be penalize with Fine of:
a. 30Cr. or 2 times of b. 25Cr. or 4 times c. 10 Lacs to 25Cr. or d. 50Cr. or 2 times of profit
profit of profit 3 times of profit
5 H, a registered stock broker charges an amount of brokerage which is in excess of brokerage specified in
7. regulation, he shall be penalized to the extent of:
a. 1 lac or 5 times of b. 2 lacs or 6 c. 5 lacs or 3 times OF d. 4 lacs or 8
brokerage times brokerage times of
brokerage brokerage
5 For the process of adjudication Board appoints an Adjudicating officer who is not below the rank of
8.
a. Subordinate Chief b. Additional Director c. Deputy Chief d. Division Chief
5 SAT shall be headed by:

9.
a. Director b. CEO c. Chairman d. Presiding member
6 The tenure of presiding member under SAT shall be:

0.
6 Presiding officer can be

1.
a. Sitting or retired judge of b. Sitting or retired c. Appointed by CG in d. Any of the above
SC Chief Justice of HC consultation with Chief
Justice of India
6 Aggrieved party may appeal to SAT within ------ days of order against which appeal to be made is received:
2.
6 In case of allotment of QIP atleast 10 % of eligible securities should be allotted to----

3.
a. Anchor investor b. Share holder c. Promoter d. Mutual Funds 21.7
6 If the issue size of QIP is Rs. 350 Crores, the total number of allottees shall be-----.
4. a. >=2 b. >=4 c. >=5 d. >=7
6 QIB who are under same -------shall be deemed to single allottee.

5.
a. Country b. Group c. Capital Adequacy d. None
Norms
6 QIB allotment to a single allottee shall not be more than -------

6.
a. 50% b. 60% c. 70% d. 75%
6 Allotment of QIB’s pursuant to special resolution shall be computes within---- --.

7.
a. 6 months b. 10 months c. 12 months d. 2 years
6 The issuer of QIP shall not make issue of QIB until expiry of 6 months from the date of prior QIP. True or
8. False.
a. True b. False, 12 months c. False, 18 months d. False, 24 months
6 The aggregate of proposed QIP and QIP made by issuer in same FY shall not exceed of the net worth
9. of the issuer as per audited Balance Sheet
a. 1x b. 2x c. 3x d. 5x
7 Tenure of convertible securities issued via QIP’s should not exceed more than ----------- months
0.
a. 100 b. 90 c. 60 d. 80
7 Failure to furnish return or maintain books and records u/s 15A shall attract penalty upto lower of:
1.
a. 1 lakh/day or 1 crore b. 2 lakh/day or 2 crore c. 5 lakh/day or 5 crore d. 10 lakh/day or 10
crore
7 SEBI was set up in

2
a.1988 b. 1992 c. 1999 d. 1982
7 Failure by intermediary to enter into an agreement with his client. u/s 15B shall attract lower of:
3
a. 1 lakh/day or 1 crore b. 2 lakh/day or 2 crore
c.5 lakh/day or 5 crore d. 10 lakh/day or 10 crore
7 Mr. Oldy, 58 years of age was appointed as Chairman of the SEBI for 5 years. Under the provisions of the
4 SEBI,1992 decide whether he can be re appointed on the same post after expiry of the original tenure. Also 21.8
decide whether he has the right to relinquish his office at any time before the expiry of his period of office
A. Yes he can be B. No he cannot be re C. Yes he can be D. No he cannot be re
reappointed and he can appointed and he reappointed and he appointed and he
relinquish his office cannot relinquish cannot relinquish his can relinquish his
his office office office
7 What is the manner of relinquishing his office?

5
A. By giving to the CG B. By giving to the SEBI C. By giving to the CG D. By giving to the Central
notice of not less notice of not less notice of not less than 3 Government notice of not
than 1 month in than 3 months in months in writing less than 2 months in writing
writing writing
7 Mr. Fraud, a member of the SEBI nominated by the RBI has been convicted of an offence which in the
6 opinion of the CG involves a moral turpitude. What is the course of action now
a. CG has the power to remove B. SEBI has the power to remove C. High court has the power to
remove
7 Mr. T is a director of IMB Ltd. There is a particular matter coming up for consideration in a meeting of SEBI’s
7 Board related to IMB Ltd. Mr. T who is a member of SEBI Board has indirect pecuniary interest in such
matter. What would be the course of action now?
A. Mr. T will as usual B. Mr T will disclose nature of his C. Mr T will have to vacate his office by
participate the SEBI interest and will not take part relinquishment or request the CG to
meeting and take part in any deliberations related to remove him
in all proceedings such matter
7 Does any defect in the constitution of the Board invalidate the proceedings of the board?
8
a. Yes b. No
7 Pooling of funds under any scheme or arrangement , which is not registered with the Board or is not covered
9 under sub section (3), involving a corpus amount of Rs. 100 crore or more shall be
a. Deemed to be a collective investment scheme B. Called as ESOP C. Deemed to be Bonus issue
8 SEBI received complaints from some investors alleging that ABC Ltd. and some brokers are indulging in price
0 manipulation in the shares of ABC. Ltd. The allegations were found to be correct by the SEBI. So, SEBI
restrained such persons from accessing the securities market and prohibit any person associated with the
securities market to buy, sell or deal in securities. IS the action of SEBI in order with the SEBI Act, 1992?
a. Yes section 11 (4) b. No
8 SEBI appoints a person to investigate the affairs of an intermediary u/s 11C because:
1
21.9
A. SEBI has reasonable B. Any intermediary or any C. Both a. and b. D. Neither a. nor b.
ground to believe that person associated with the
the transactions in securities market has
securities are being violated any of the
dealt with in a provisions or directions of
manner detrimental the law
to the investors
8 Mr. Win refuses to comply with the order of inspector to produce to the investigating authority book,
2 register, and relevant records. State the penalty to which Mr. Win is subject to.
A. Imprisonment for a term B. Imprisonment for a C. Imprisonment for D. Imprisonment for a term
upto 6 months or with term upto 2 years a term upto 1 year upto 1 year or with fine
fine upto Rs 1 crore plus or with fine upto Rs or with fine upto upto Rs 1 crore plus Rs. 5
Rs. 5 lakhs for every day 1 crore plus Rs. Rs 2 crore plus Rs. lakhs for every day till the
till the default continues 50000 for every 5 lakhs for every default continues
day till the Default day till the default
continues continues
8 ------------ prepare an annual statement of Accounts. The accounts of the SEBI shall be audited by----. The
3 certified accounts of the Board shall be forwarded annually to the--------
A. SEBI, CAG, Central B. Central Government, C. CAG, CAG, Central D. None of the
Government CA, Ministry Government Above
8 The Board shall, …… after that end of each FY, submit to the Central Government, a report in such form as
4 may be prescribed giving a true and full accounts of its activities, policy and programs during the previous FY.
A. Within 30 days B. Within 60 days C. Within 120 days D. Within 90 days
8 What is the penalty to a person who is required to maintain books account, fails to maintain the same?
5
A. Penalty which shall B. Penalty which shall C. Penalty which shall not be D. Penalty which shall
not be less than RS not be less than RS less than RS 1lakh but not be less than Rs.
1lakh but which 1lakh but which which may extend to one 50000 but which
may extend by one may extend to one lakh rupees for each day may extend to one
thousand rupees for lakh rupees for during which such failure lakh rupees for each
each day during each day during continues subject to a day during which
which such failure which such failure maximum of Rs. 1 crore such failure
continues subject to continues subject to continues subject to
a maximum of Rs. 1 a maximum of Rs. a maximum of Rs. 1
crore. 50000 crore
8 A group of investors are upset with the leading stock broker of Chennai Stock exchange and want to make a
6 Complaint to SEBI because the stock broker charges an amount of brokerage which is in excess of the
brokerage specified in the regulations. What is the penalty applicable to the stock broker 21.10
A. He shall be liable for B. He shall be liable for C. shall be liable for more D. He shall be liable
more than Rs 1 lakh but more than Rs 1 lakh than Rs 1 lakh but for more than Rs
which may extend to but which may extend which may extend to 50000 but which
two times the amount to five times the five times the amount may extend to five
of brokerage charged in amount of brokerage of brokerage charged times the amount
excess of the specified charged in excess of in excess of the of brokerage
the specified specified brokerage,
brokerage, whichever is charged in excess
brokerage, whichever whichever is lower
higher. of the specified
is higher
brokerage,
whichever is
higher
On the complaint of Mr. Verma after enquiry SEBI finds that Mr. Sharma a CEO of the company on the basis
8 of unpublished price sensitive information, has indulged in the trading of the securities of that company.
7 What action can SEBI take against Mr. Sharma under the SEBI Act,1992?
A. Penalty of more than B. Penalty of more than Rs 1 C. Penalty of more D. Penalty of more
Rs 10 lakh extending lakh extending upto 25 than Rs 10 lakh than Rs 10 lakh
upto 25 crore crore rupees/three times extending upto 25 extending upto 25
rupees/three times the amount of profits crore rupees/three crore rupees/four
the amount of profits made out of insider times the amount times the amount
made out of insider trading, whichever is of profits made out of profits made out
trading, whichever is higher of insider trading, of insider trading,
higher whichever is lower whichever is higher
8 What is the penalty for contravention where no separate penalty has been provided
8
A. Penalty may B. Penalty shall not be C. Penalty shall not be D. Penalty shall not be
extend to Rs. 1 less than one lakh less than ten lakh less than twenty
crore rupees but which may rupees but which may five lakh rupees but
extend to Rs. 1 crore extend to Rs. 1 crore which may extend
to Rs. 1 crore
8 What will happen in a situation where the Board on examination of record of any proceedings satisfies itself
9 that the order passed by the adjudicating officer is erroneous to the extent it is not in the interests of the
securities market?
A. It may order to do B. It may order to carry C. It may order enhancing D. None of the
inspection again out due diligence the quantum of penalty above
9 In continuation to the above question, upto what time limit SEBI can consider the order passed by the
0 Adjudicating officer?
A. 2 months from the B. 3 months from the C. 30 days from the D. 120 days months
date of the order date of the order date of the order from the date of the
passed or disposal of passed or disposal passed or disposal order passed or 21.11
the appeal, whichever of the appeal, of the appeal, disposal of the
is earlier whichever is earlier whichever is earlier appeal whichever is
earlier
9 All sums realised by the way of penalties under this Act shall be credited to the ---------
1
A. Investors education and B. Consolidated fund of C. Prime Minister D. Central
protection fund India National Relief Government Fund
Fund
9 Mr. Vakil has been a retired Judge of Supreme court. Is he eligible to be appointed as a presiding officer of
2 SAT?
A. Yes No
9 Mr. Vakil has been a retired Chief Justice of High court. Is he eligible to be appointed as a presiding officer of
3 SAT?
a. Yes b. No
9 Mr. Expert is a person of proven ability, integrity and standing having special knowledge and professional
4 experience of not less than 15 years in financial sector including securities market .Is he eligible to be
appointed as a technical member of SAT?
a. Yes b. No
9 Mr. Sad was aggrieved with the order made by SEBI. He wants to file Appeal. To whom appeal can be filed
5 and what is the time limit to file the appeal?
A. Securities Appellate B. Securities Appellate C. Securities Appellate D. Securities
Tribunal, 45 days from Tribunal, 30 days Tribunal, 60 days from Appellate
the date on which copy of from the date on the date on which copy Tribunal, 90 days
order is received by him which copy of order of order is received by from the date on
is received by him him which copy of
order is received
by him
9 Any person who discloses the aggregate of his shareholding in the body corporate before he acquires any
6 shares of that body corporate shall be penalized u/s 15H upto the higher of:
A. 10 Lakhs to 10 crore or 5x B. 10 Lakhs to 25 crore or 5x C. 10 Lakhs to 10 D. 10 Lakhs to 25
the profit derived the profit derived crore or 3x the crore or 3x the
profit derived profit derived
9 If any person fails to pay the penalty imposed by the adjudicating officer or fails to comply with any of his
7. directions or orders, he shall be punishable with ---
A. Imprisonment for a B. Imprisonment for a term C. Imprisonment for a D. Imprisonment for
term which may which shall not be less term which shall not a term which shall
extend to ten years than one month but be less than one not be less than
, or with fine, which may extend to month but which may one month but
which may extend eight years , or with fine, extend to ten years , which may extend
to Rs. 25 crore or which may extend to Rs. or with fine, which to ten years , or 21.12
with both 25 crore or with both may extend to Rs. 20 with fine, which
crore or with both may extend to Rs.
25 crore or with
both
98. Any other non-compliance for which no separate penalty has been provided under SEBI Act shall be
punishable by:
a. Rs. 1 lakh/day upto maximum of 1 crore b. Rs. 2 lakh/day upto maximum of 1 crore
c. Rs. 5 lakh/day upto maximum of 5 crore d. Rs. 5 lakh/day upto maximum of 1 crore
99. Any person who makes a public announcement to acquire shares at a minimum price shall be penalized u/s
15H upto the higher of
A. 10 Lakhs to 10 crore or B. 10 Lakhs to 25 crore C. 10 Lakhs to 10 crore or D. 10 Lakhs to 25
5x the profit derived or 5x the profit 3x the profit derived crore or 3x the
derived profit derived
100. Any person who makes a public offer by sending letter of offer to the shareholders of the concerned
company shall be penalized u/s 15H upto the higher of
A. 10 Lakhs to 10 crore or 5x the B. 10 Lakhs to 25 crore or C. 10 Lakhs to 10 D. 10 Lakhs to
profit derived 5x the profit derived crore or 3x the 25 crore or 3x
profit derived the profit
derived
Answers
Q Answers Q Answers
1. b (Reg 26(1)(a)) SEB(ICDR) 2009 51. c (SEBI Sec 4)
2. c (Reg 26(1)(b)) SEB(ICDR) 2009 52. c (SEBI Sec 5)
3. b (Reg 26(1)(c)) SEB(ICDR) 2009 53. b(SEBI Sec 4)
4. b (Reg 26(1)(d)) SEB(ICDR) 2009 54. D
5. b (Reg 26(1)(e)) SEB(ICDR) 2009 55. c (SEBI Sec 11C)
6. b (Reg 26(2)) SEB(ICDR) 2009 56. c (SEBI Sec 15G)
7. a (Reg 26(4)) SEB(ICDR) 2009 57. a (SEBI Sec 15F)
8. a 58. d
9. a 59. d (SEBI Sec 15L)
10. c 60. b (SEBI Sec 15N)
11. a 61. d (SEBI Sec 15M)
12. b 62. c (SEBI Sec 15T)
13. c 63. d (Reg 86 SEBI (ICDR) 2009)
14. c 64. c (Reg 87 SEBI (ICDR) 2009)
15. d 65. b (Reg 87 SEBI (ICDR) 2009)
16. c 66. a (Reg 87 SEBI (ICDR) 2009))

17. c 67. c (Reg 88 SEBI (ICDR) 2009)
18. c 68. a (Reg 88 SEBI (ICDR) 2009) 21.13
19. b 69. d (Reg 89 SEBI (ICDR) 2009)
20. b 70. c (Reg 90 SEBI (ICDR) 2009
21. C 71. a SEBI Sec 15A
22. c Reg 41 SEB(ICDR) 2009 72. A
23. b Reg 41 SEB(ICDR) 2009 73. a SEBI Sec 15B
24. B 74. a (SEBI Sec 5)
25. b 75. c (SEBI Sec 5)
26. b 76. a (SEBI Sec 6)
27. b 77. b (SEBI Sec 7A)
28. b 78. b (SEBI Sec 8)
29. b 79. A
30. b 80. A
31. D 81. c SEBI Sec 11C
32. B 82. D
33. A 83. A
34. C 84. D
35. B 85. C
36. c SEBI Sec 15HA 86. B
37. C 87. A
38. B 88. B
39. D 89. c SEBI Sec 15I to 15JB
40. B 90. B
41. C 91. b SEBI Sec 15I to 15JB
42. b Regulation 24 SEB(ICDR) 2009 92. a SEBI Sec 15M
43. C 93. a SEBI Sec 15M
44. C 94. a SEBI Sec 15M
45. D 95. a SEBI Sec 15T
46. A 96. d SEBI Sec 15H
47. D 97. d SEBI Sec 24
48. B 98. a SEBI Sec 15HB
49. D 99. d SEBI Sec 15H
50. C 100. d SEBI Sec 15H
Chapter 22 Securities Contract Regulation Act, 1956
Chapter 22: Securities Contract Regulation Act, 1956

22.1
1. The objective of Securities Contract regulation Act is to:
a. To Regulate the capital market, protect b. To prevent undesirable transactions in securities by
the interest of investors regulating the business of dealing therein.
c. To regulate intermediaries participating d. Both (a) & (B).
in capital market.
2. What is Demutualization of Stock Exchange?

a. Conversion of existing Non-Profit b. Conversion of mutually owned associations to an
Organization into a profit oriented organization that is owned by shareholders.
company
c. Transforming the legal structure of an d. All of above
exchange from mutual business to a
business corporation form.
3. Application for recognition of stock exchange is made to:

a. SEBI b. Central Government
c. Securities Appellate Tribunal d. None of the above
4. Scheme for corporatization and demutualization of recognized stock exchange is sent to :

a. Central Government b. SEBI
c. ROC d. None of above
5. SEBI may restrict scheme of corporatization and demutualization on :

a. The voting rights of shareholders who are b. The right of shareholders or stock brokers to appoint
also stock brokers of the recognized the representatives on the board
stock exchange
c. The maximum number of representative d. All of above
appointed shall not exceed ¼ of the total
strength of the board.
6. If a stock exchange fails to submit the scheme of corporatization and demutualization or the scheme
submitted is rejected by SEBI, then the central government has the right to:
a. Withdraw the recognition of the stock b. Give an opportunity of being heard.
exchange
c. Enforce due performance of contracts d. Enquire into the affairs of the stock exchange.
entered before the notification date
7. A recognized stock exchange intends to amend its rules relating to voting of members in the meeting.
Such amendment shall be valid only if approval of is taken and published in the official
gazette :
a. SEBI b. ROC
c. Central Government d. None of the above
8. Recognized stock exchange can transfer its functions relating to clearing house to a clearing corporation
being a company incorporated under the Companies Act subject to approval of :
c. ROC d. None of above
9. Duties and functions of clearing house/clearing corporation shall involve:
a. Periodical settlement of contracts and b. The delivery and payment for securities
differences thereunder
22.2 c. Submission of periodical settlements d. All of above
10. The power to supersede the governing body of the stock exchange is vested with :
c. Representatives appointed central d. ROC
government
11. What are the consequences of suppression on the stock exchange

a. The members shall cease to be the b. The persons appointed can exercise duties and powers
members. of the governing body which has been superseded.
c. All the property shall vest in such person d. All of above
appointed under this section for the
purpose of enabling him to carry on the
business.
12. An appeal by an investor pursuant to delisting of securities of the company in which he is a member shall
be made to SAT within :
a. 10 days b. 7 days
c. 15 days d. 30 days
13. Can a civil court pass an injunction order for a matter which a SAT is empowered?
a. No the civil court has no jurisdiction b. Yes the civil court can pass an injunction order
14. A person aggrieved by any decision or order of SAT shall file an appeal to the supreme court within :
15. An appeal to supreme court can be filed only if :

a. If the party is aggrieved by the order of SAT b. There is a question of law arising out of such order
c. The order is not in the favour of the d. The order is not in the interest of public at large.
appellant.
16. What are the penalties in the following cases :

(i) If a director of a stock exchange fails to furnish the authority making an inquiry all such records in his
custody without reasonable cause.
(ii) If a member of a stock exchange enters into contract in notified areas.
(iii) If a person owns a place other than that of recognized stock exchange which is used for the purpose
of entering into contracts in contravention of the provisions.
a. Imprisonment which may extend to 10 b. Imprisonment which may extend to 10 years or fine
years or fine which may extend to Rs 1 which may extend to Rs 25 crores or both.
crores or both.
c. Imprisonment which may extend to 5 d. None of above.
years or fine which may extend to Rs 10
crores or both.
17. If a person fails to maintain or furnish information, records, returns, reports to a recognized stock
exchange he shall be liable to penalty which shall be :
a. Not less than Rupees 1 lakh but extend to Rs 1 lakh per day during b. Not less than Rupees 5 lakh.
which the failure continues subject to maximum of Rs 1 Crore.
c. Not less than Rupees 1 lakh but extend to Rs 1 lakh per day during d. Not less than Rupees 10
which the failure continues subject to maximum of Rs 50 lakhs. lakhs.

22.3
18. If a stock broker fails to resolve investor grievances within the stipulated period, shall be punishable with a
penalty which shall be :
a. Imprisonment which may extend to 5 years or fine which may b. Not less than Rupees 10 lakhs.
extend to Rs 10 crores or both.
c. Not less than Rupees 1 lakh but extend to Rs 1 lakh per day d. None of above.
during which the failure continues subject to maximum of Rs
1 Crore.
19. If a company fails to comply with listing conditions or commits a breach shall be punishable with a penalty
which shall be :
a. Not Less than Rs 5 lakhs but may b. Not less than Rupees 1 lakh but extend to Rs 1 lakh per
extend to Rs 25 Crores. day during which the failure continues subject to
maximum of Rs 1 Crore.
c. Not Less than Rs 5 lakhs but may d. None of above
extend to Rs 1 crore.
20. Any person aggrieved by the decision of the adjudicating officer, SEBI or recognized stock exchange may
file an appeal to SAT within :
21. The appeal filed to SAT shall be disposed off :

a. As expeditiously as possible b. Within 3 months
c. Within 6 months d. Within a year.
22. Equity Shares and cumulative preference shares of Private Limited Company were sold under a share
purchase agreement wherein amount was to be paid in 5 equal instalments. A clause in the agreement
stated that the company has no liability due as on the date of agreement. After the purchase of shares it
was realized that income tax and sales tax liability was due. The purchaser defaulted in payment of
amounts and a case was filed. Whether the agreement is illegal under SCRA?
a. SCRA deals with marketable securities and b. Yes this is an illegal agreement.
shares of private company are not
marketable securities. Hence the legality
cannot be determined.
c. The present contract is not governed by d. Both (a) & (c).
SCRA and hence not illegal.
23. A broker registered under the SEBI allowed his terminal to be used by unauthorized person, acting as un-
registered sub broker, did not maintain client registration forms, and delayed payments in violation of
provisions of SEBI and SCRA. Is the registration liable to be cancelled and what are the penalties?
a. Yes, Not Less than Rs 1 lakhs but may b. No
extend to Rs 1 crore.
24. An Adjudicating officer shall be appointed by :

a. SEBI b. High Court
c. Central Government d. Stock exchange.
25. Can the business of stock exchange be suspended?

a. No the business of the stock exchange b. Yes SEBI can suspend the business of the stock
cannot be suspended unless its affairs exchange.
are held in a manner detrimental to the

interest of trade or public.
22.4
c. Yes central government can suspend the d. Yes SAT can suspend the business of stock exchange.
business for a period not exceeding 7
days for reasons to be set out.
26. An order has been passed by the central government to amend the rules of the all the recognized stock
exchange. It shall be complied with within a period of
a. 15 days b. 2 months
c. 30 days d. 3 months.
27. The amendment in bye laws of the recognized stock exchange by SEBI shall come into effect on:
a. Passing an order b. On publication in official gazette of India.

c. On intimation to stock exchange d. One publication in official gazette of state.
28. An annual report is to be furnished by stock exchanges to :

c. ROC d. Both (b) & (c).
29. Every recognized stock exchange shall preserve its books of accounts and other documents for a period of :
a. 8 years b. 10 years
c. As determined reasonably. d. 5 years
30. An inquiry into the affairs of the stock exchange or its members be made by :
c. SAT d. None of the above.
Answers
1. b 2. d 3. b 4. b 5. d
6. a 7. c 8. a 9. d 10. b
11. d 12. c 13. a 14. c 15. b
16. b 17. a 18. c 19. a 20. b
21. c 22. d 23. a 24. a 25. c
26.b 27.b 28. b 29.d 30.a

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Chapter 1 Directors: Appointment & Qualifications

Chapter 1: Appointment & 1.1

2. What is the minimum number of directors required in Private Company?

3. What is the minimum number of directors required in Public Company?

8. Appointment of woman Directors is mandatory for following companies:

9. Casual Vacancy of a woman director shall be filled by ……………..

16. On being appointed as director, he shall file Form......... with Company.

18. What is the time limit for filing DIR-12?

21. Who shall mandatorily appoint Independent Directors?

23. What is the term of appointment of an Independent Director?

24. Independent Director may hold office for …..

27. Independent Director means a director other than ……..

28. Who shall be eligible to be appointed as Independent Director?

29. Who shall be eligible to be appointed as Independent Director?

42. Casual Vacancy of an Independent director shall be filled by ……………..

bearings. Are these appointments valid?

55. A Small Shareholder’s Director needs to vacate office if he:

56. First Directors of a Company shall be appointed in the following manner:

62. A company on the Board consisting of the following:

Director. Is the contention of the CS correct?

95. First Directors of a Company shall be appointed in the following manner:

110. Which form shall be filed for application of DIN?

111. What is the validity of an allotted DIN?

above those mentioned in Sec 164. Can it do so?

a. Yes b. No c. Allowed if approval from GM is d. None of the above

125. Maximum no. of Public Companies in which a person can be Director:

126. Which of the following shall not be included in calculating Directorships:

133. Director resignation from excess Directorships shall be valid w.e.f:

a. Intimated by b. He/ She himself c. Company may d. Intimated by CG

139. Contravention of sec 184 by Director shall result in:

140. A Director who is removed from office u/s 169 shall:

144. What shall be the tenure of office of the aforementioned Director(s):

145. Private company may:

>6 months to >12months

147. A Director can resign :

154. Documents to be submitted to Registrar by Director when intimating of his/her resignation:

Q. Option No. / Reason

Chapter 2:Board Meetings 2.1

& Its powers

4. The following is an extract of balance sheet of a Company on 31stJan , 2016:

a. An Independent b. An Independent c. If the Company has d. Notice calling such a

21. What modes of attendance are available to a Director attending a BM

25. What shall be Quorum in case No. of Directors is 12:

26. What shall be Quorum in case No. of Directors is 13:

a. No as 6 Directors b. No as the requisite c. Yes as 2 Directors are d. A single Director can

38. Which of the following is correct: The resolution passed by circulation

minutes thereof and made part of Minutes ratified by shareholders

Resolution exceeds 10 % net undertaking exceeds

a. Imprison : <= 1 b.Imprison : <= 6 c. Imprison: <= 1 yr d. Imprison: <= 6 mt Fine

69. A. Ltd’s extract of financial statements is as follows :

a. Yes, as for b. No, as the c. Yes, as the d. No, as the amount is

82. A. Ltd. Made contribution to political parties as follows:

a. Mr. Good is b. BOD’s view is c. Mr. Good is d. BOD’s view is correct

a. Yes, as the same is b. No, as there is no

69 a. PUC+FR+SP=110; Money(borrowed +to be borrowed - temporary loans)=50+60-

Chapter 3: Appointment & 3.1

Remuneration of Managerial Personnel

8. Sec 196(2)(4)(5) shall not apply to

18. Key managerial personnel in relation to a company means

A. The Chief Executive B. The company C. The whole time D. All of

A. Authorized B. Share holder C. Underwriter D. Whole time key managerial

A. Fine extending Rs B. Fine extending Rs C. Fine extending Rs 5000 D. Fine extending Rs

29 What are the functions of the Company Secretary