MULTIPLE CHOICE QUESTION(SAMPLE)

CORPORATE AND SECURITIES LAW SYBBI SEM 4

1.Minimum number of members required to apply for incorporation certificate in a public ltd
company is

a. 3                    b. 2                    c. 7                    d. 50

Ans. C

2. The address of the registered office of the company must be notified to the registrar within
_________ days of registration, if it is not done at the time of incorporation

a. 15                    b. 30                    c. 60                    d. 45

Ans. B

3. The articles of association needs to be signed by

a. all proposed directors                  b. registrar                  c. subscribers of memorandum                   

d. none of the above

Ans. C

4. Number of clauses in Memorandum of Association is

a. 5                    b. 6                    c. 7                    d. 8

Ans. B

5. Which of the following clause of Memorandum of Association cannot be altered

a. Name                    b. Object                    c. situation                    d. liability

Ans. D

6. The Prospectus must be issued to the public within ______________ days of its date

a. 30                    b. 60                    c. 90                    d. 100

Ans. C

7. Powers, rights, remuneration, qualification and duties of directors are discussed clearly in

a. Memorandum of Association b. Articles of Association c. Prospectus d. none of the above

Ans. B
8. A company is known as the _______company of another company if it has control over that
other company.

a. subsidiary                    b. holding                    c. controlling                    d. statutory

Ans. B

9. A person cannot hold directorship in more than ____ public companies

a. 3                    b. 10                    c. 20                    d. 7

Ans. C

10. .Private company prohibits any invitation or acceptance of deposits from persons other than
its ___________

a. Members                    b. directors                    c. Partners                    d. banks

Ans. A

11. The company needs to obtain prior permision from central government when it changes the
address of its registered office from

a. one city to another city                    b. with in the same city

c. one state to another                         d. one country to another country

Ans. C

12. ___________ cannot give invitation to the public to subscribe for any shares in or debentures
of the company

a.Subsidiary company                    b. Statutory Company                 c. Private company                 

d. Registered company

Ans. C

13. What is known as a charter of a Company?

 [A] Memorandum of Association

 [B] Bye laws

 [C] Articles of Association

 [D] Prospectus

Ans. A

14. The most important document of a company is its__________.

 [A] prospectus
  [B] annual report.

 [C] memorandum of association

 [D] articles of association

Answer: C

15.Property of the company belongs to

a) Company b) Share holders c) Members d) Promoters

Ans. A

16. Which company shares can be freely transferable

a) Private Company b) Public Company c) Both (a) & (b) d) None of the above

Ans. B

17. Generally Company liability is

a) Limited b) Unlimited c) Situation does not arise

ANS C

18. Generally partnership firm liability is

a) Limited b) Unlimited c) Situation does not arise

Ans. B

19. A company is named as govt. company if it is holds ______% of paid up share capital

a) more than 30 b) more than 40 c) more than 50 d) None

Ans. C

20. Central Government permission is required in case of _______ conversion __________ a)

Private to public b) Public to private c) Both (a) or (b) d) None of the above

Ans B

21. With in how many days prospectus or statement in lieu of prospectus should file with ROC
_______ a) 30 b) 40 c) 20 d) 50

Ans C

22.Alteration of articles must be done only by passing

a) Special resolution b) Ordinary resolution

Ans A

23. M.M. ltd is incorporated on Jan 1, 2021. It must hold its first AGM before. a) Dec 312022 b)
Dec 312021 c) June 302021d) June 30 – 2022

Ans C

24. SAT shall be headed by

a) Director b) CEO c) chairman d) presiding member.

Ans D

25. Any person aggrieved by an order of the appellate tribunal may, within ______from the date
of receipt of order of the Appellate tribunal, prefer an appeal to the Supreme Court. The supreme
court may allow a further period not exceeding _____for filing the appeal, if it is satisfied that
the appellant was prevented by sufficient cause from filling the appeal within that period.

a) 30 days, 30 days

b) 45 days, 45 days

c) 60 days, 60 days

d) None of these

Ans C

25. Aggrieved party may appeal to SAT within days of order against which appeal to be

made is received:

a) 60 days

b) 30 days

c) 45 days

d) 90 days

Ans C

26.The objective of Securities Contract regulation Act is to:

a) To Regulate the capital market, protect the interest of investors

b) To prevent undesirable transactions in securities by regulating the business of dealing therein.

c) To regulate intermediaries participating in capital market.

d) Both (a) & (B).

Ans B

27. What is Demutualization of Stock Exchange?

a) Conversion of existing Non-Profit Organization into a profit oriented company

b) Conversion of mutually owned associations to an organization that is owned by shareholders.

c) Transforming the legal structure of an exchange from mutual business to a business

corporation form.

d) All of above

Ans D

28. Application for recognition of stock exchange is made to:

a) SEBI

b) Central Government

c) Securities Appellate Tribunal

d) None of the above

Ans B

29. Scheme for corporatization and demutualization of recognized stock exchange is sent to :

a) Central Government

b) SEBI

c) ROC

d) None of above

Ans B

30. SEBI may restrict scheme of corporatization and demutualization on :

a) The voting rights of shareholders who are also stock brokers of the recognized stock exchange

b) The right of shareholders or stock brokers to appoint the representatives on the board

c) The maximum number of representative appointed shall not exceed ¼ of the total strength of
the board.

d) All of above

Ans D
31. 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 exchange

b) Give an opportunity of being heard.

c) Enforce due performance of contracts entered before the notification date

d) Enquire into the affairs of the stock exchange.

Ans A

32.Ultra vires means

a) Beyond the power b) with in the power c) Both d) None of the above

Ans A.

33. Ultra vires loans granted by the company are

a) Void b) Voidable c) Valid d) None of the above

Ans A

34. _____ is the charter of a company.

a) Memorandum b) Articles c) Both a) and b) d) None of the above

Ans A

35.The granting of the certificate of incorporation renders the illegal objects include in the

memorandum:

a) Legal b) Void c) Voidable d) None of the above

Ans B

36. 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.

Ans C

37. An Adjudicating officer may be appointed by :

a) SEBI

b) High Court

c) Central Government

d) Stock exchange.

Ans A

38. Can the business of stock exchange be suspended?

a) No the business of the stock exchange cannot be suspended unless its affairs are held in a
manner detrimental to the interest of trade or public.

b) Yes SEBI can suspend the business of the stock exchange.

c) Yes central government can suspend the business for a period not exceeding 7 days for
reasons to be set out.

d) Yes SAT can suspend the business of stock exchange.

Ans C

39. 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

Ans B

40. 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.

Ans B

41. An annual report is to be furnished by stock exchanges to :

a) SEBI
b) Central Government

c) ROC

d) Both (b) & (c).

Ans B

42.Every recognized stock exchange shall preserve its books of accounts and other documents

for a period of :

a) 8 yearsa

b) 10 years

c) As determined reasonably.

d) 5 years

Ans D

43.An inquiry into the affairs of the stock exchange or its members be made by :

a) SEBI

b) Central Government

c) SAT

d) None of the above.

Ans A

44.  If minimum subscription is not received application money should be refunded with in
_____  days

a) 20

b) 30

c) 25

d) 10

Ans d

45. Which of the following is not a stage of the development of company?

(a) Promotion (b) ProductionD(c) Incorporation (d) Commencement of Business

Answer:  B

46. which of the following company/companies are registered by the Companies Act, 2013?

(a) Government Company (b) Private Company (c) Public Company (d) All of the above

Answer: D

47. Which of the following statement is false?

(a) No legal formality is required to form a company.

(b) The shareholders of a company have limited liability.

(c) A company can own property in its own name.

(d) A company is managed by the elected representatives of shareholders.

Answer: A

48. Which of the following are the functions of a promoter?

(a) Decides name of a company

(b) Nomination of directors

(c) Settles the details of memorandum and articles

(d) All of these

Answer: D

49. The companies are regulated under .

(a) Companies Act, 1596 (b) Companies Act, 1957A(c) Indian Partnership Act,1932 (d)
Companies Act, 2013

Answer: D

50. Company is managed by

(a) Shareholders (b) Board of Directors (c) Karta (d) Both(a)&(b)

Answer: . B

51. When was SEBI constituted?

 (a) April, 1988

(b) March, 1982

(c) July, 1992

(d) Dec. 1974

Ans. a

52. SEBI stands for –

a. Securities and E-commerce Board of India
b. Stock Exchange Board of India
c. Securities and Exchange Board of India
d. None of the Above
Answer: Securities and Exchange Board of India

53. Accepting of deposits from public in case of private company is

(a) Prohibited
(b) Restricted
(c) Acceptable
(d) None of these
Ans. (a)
54.  Ultra vires loans granted by the company are
(a) Void
(b) Voidable
(c) Valid
(d) None of the above
Ans. (a)

55. Ques. conceives the idea of the business

(a) Promoters
(b) Directors
(c) Auditors
(d) None of the above
Ans. (a)

56. If any body wants to file a case against the company they should file at what place _____
(a) Company
(b) Registered Office
(c) BOD
(d) Books of accounts
Ans. (b)

57.  ____ are the shares issued by the company to it employees or directors for consideration
other than cash
(a) Bonus
(b) Sweat
(c) Right
(d) None of the above
Ans. (b)

58. Accepting of deposits from public in case of private company is

(a) Prohibited
(b) Restricted
(c) Acceptable
(d) None of these
Ans. (a)

59. Forfeiture can be made only if it is authorized by ______

(a)AOA
(b)MOA
(c)ROC
(d)C.G
Ans. (b)

60 SEBI Act was passed in ‐‐‐‐‐‐‐‐‐‐‐‐.

(a) 1988 (b) 1990 (c) 1991 (d) 1992
Ans D

61 The objectives of SEBI include -------------.

(a) To protect interests of inventors
(b) To regulate securities market
(c) To promote the development of the market
(d) All of the above
Ans D

62. The regulatory body for the securities market in India is ------------.
(a) RBI (b) SEBI (c) IRDA (d) Stock exchanges
Ans B

63. A depository is ------------------.

(a) An electronic transfer through dematerialization
(b) A fixed deposit in a bank
(c) A transfer of physical securities
(d) Surveillance on price manipulation
Ans A

64 Listing is mandatory for ------------------.

a) Trading in stock market
b) Marketing a new issue
c) Trading in international markets
d) Declaring dividend
Ans C

65. A stock market index -------------.

(a)Shows trends in the market (b) Provides weights to shares
(c) Show the volume of trade in market (d) Shows transactions of shares
Ans A

66. Depositories Act is enacted in -----------------.

(a) 1993 (b) 1998 (c) 1997 (d) 1996

Ans D

67 Permanent removal of securities of a company from the stock exchange.

(A) De-listing (b) Re‐ listing (c) Listing (d) None of these
Ans A

68 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is the market where the existing securities of companies are traded.
(a) Primary market (b) Secondary market (c) Money market (d) None of these
ANA B

69. ‐‐‐‐‐‐‐‐‐‐‐‐ is the process of admitting securities for trading on a recognized stock exchange.
(a) Issuing (b) Investing (c) Listing (d) None of these
ANS C

70 Member of stock exchanges is called ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) Stock broker (b) Investor (c) Issuer (d) None of these
Ans A

71. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ buy and sell securities on behalf of the investing public.
(a) Arbitrage (b) Commission brokers (c) Stock broker (d) None of these
Ans B
72. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is the person who buys securities with a view to sell them in future at a profit.
(a) Speculator (b) Issuer (c) Stock brokers (d) None of these
Ans A

73. A person who sells the shares with the expectation of buying them in future at a reduced
price.

(a) Bull (b) Bear (c) Stag (d) None of these

Ans B

74. Dematerialisation request can be rejected by issuer or R&T agent in case.

a) All/some certificates received by R&T agent from the DP is /are found to be fake or reported
lost or stolen.
b) Duplicate certificate earlier issued by R&T agents.
c) All/some certificate received by R&T agent are found to bear forged or fake endorsement.
d) All of the above
Ans d

75. is the market where the existing securities of companies are traded.
(a) Primary market (b) Secondary market (c) Money market (d) None of these
ANS B

76. ‐‐‐‐‐‐‐‐‐‐‐‐ is the process of admitting securities for trading on a recognized stock exchange.
(a) Issuing (b) Investing (c) Listing (d) None of these
ANS C

77. A person appointed by a stock broker to assist him in the business of securities trading is
called ‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) Sub broker (b) Tarawaniwalas (c) Authorized clerk (d) None of these
ANS C

78. The process of artificially increasing or decreasing the price is known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
(a) Price bond (b) Price rigging (c) Cover system (d) None of these
ANS B

79 An order for the purchase of securities of a fixed price is known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) Limit order (b) Open order (c) Stop loss order (d) None of these
ANS A

80 The electronic clearing and Depository system set up by the ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) SGL (b) SHCIL (c) HCL (d) None of these
ANS B
 81 National stock exchange operations are divided into ‐‐‐‐‐‐‐‐‐‐‐ and capital market
segment.
a. Whole sale debt market (b) Money market (c) Secondary market (d) None
of these
ANS A

82 ‐‐‐‐‐‐‐‐‐‐‐‐‐ is a market where unlisted securities are dealing.

b. Grey market (b) Kerb market (c) Capital markets (d) None
of these
ANS A

83‐‐‐‐‐‐‐‐‐‐‐‐‐ is a barometer for market behavior.

c. Investment (b) Index (c) Arbitrage (d) None
of these
ANS B

84. Securities of ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ companies are traded in secondary market.

(a) Listed (b) Relisted (c) Unlisted (d) None of these
Ans A

85. An option exercised at the time of maturity it is termed as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) American option (b) European option (c) Call options (d) None of these
Ans B

86 An option exercised at any time, it is termed as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) American option (b) European option (c) Call options (d) None of these
Ans A

87. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is the first depository in India.

(a) Central depository services India Ltd. (b) National securities depository Ltd.
(c) State of India depository services Ltd. (d) None of these
Ans B

88. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is the second depository in India.

(a) Central depository services India Ltd. (b) National securities depository Ltd.
(c) State of India depository services Ltd. (d) None of these
Ans A

89. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ means eliminating the paper certificates and maintaining records in the
form of electronic entries only.
(a) Dematerialization (b) Depository (c) Stock market index (d) None of these
Ans A

90.The first stock exchange in India was started in ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) 1875 (b) 1885 (c) 1895 (d) 1865
Ans A

91. A depository is an institution which transfers the ownership of securities in ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

mode.

(a) Electronic (b) Artificial (c) Analytical (d) None of these

ANS A

92. Depository participant is the link between the ‐‐‐‐‐‐‐‐‐‐‐ and the owner.
(a) Depository (b) Government (c) Corporate (d) None of these
ANS A

93. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐ system reduces time for transfer for transfer of securities.
(a) Depository (b) government (c) Investment (d) None of these
ANS A

94. Depository system leads to ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) Scrip less system (b) Online system (c) Offline system (d) None of these
ANS A

95. An instrument which derives its value from an asset backing it is called ‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
(a) Derivatives (b) Depository (c) Documentation (d) None of these
ANS A

96. CDSL stands for ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) Central Depository Services Ltd. (b) Central Derivatives Services Ltd. (c) Central
Derivatives System Ltd (d) Central Deposit System Ltd
ANS A

97. National securities depository Ltd incorporated on ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) December 12, 1995 (b) December 21, 1995 (c) December 21 1985 (d) None of
these

ANS B

98. ‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ means the worth of shareholding.

(a) Market capitalization (b) market creation (c) market specification (d) none of these
ANS A

99. In ‐‐‐‐‐‐‐-------, a listed company decides on its own to permanently remove its securities
from a stock exchange.

(a) Compulsory delisting (b) Voluntary delisting (c) Relisting (d) Listing
ANS B

100. National securities clearing corporation Ltd established in ‐‐‐‐‐‐‐‐‐‐.

(a) 1995 (b) 1996 (c) 1997 (d) 1998
ANS A

101. National Securities Depository Ltd established in ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) 1995 (b) 1996 (c) 1997 (d) 1998
ANS B

102. National stock exchange of India situated at ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) Bangalore (b) Hyderabad (c) Bombay (d) None of these
ANS C

103. All activities related to finance and organized into a system called ‐‐‐‐----‐‐‐‐‐‐‐‐.
(a) Capital market (b) Money market (c) Financial system (d) open market
ANS C

104. Capital market is a market for ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ capital.

(a) Long term capital (b) Short term capital (c) Working capital (d) Fixed capital

ANS A

105 SEBI stands for ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) Securities Exchange Board of India (b) Stock Exchange Board of India

(c) Securities and Exchange Board of India (d) Stock Earn Board of India

ANS A

106 Equity shares are the ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ shares of a limited company

(a) Voting (b) Ordinary (c) Limited (d) Unlimited
ANS B

107 Equity shares and preference shares are ownership securities, also known as
‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
(a) Debt capital (b) Capital stock (c) Fixed capital (d) Capital issue
ANS B
108. Bonds, debentures etc. are creditor ship securities, also known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
(a) Debt capital (b) Capital stock (c) Working capital (d) Capital issue
ANS A
109. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ are equity shares issued by the company to employees or directors at a
discount or for consideration other than cash.
(a) Derivatives (b) Securitized instruments (c) Sweat equity shares (d) detachable warrants
ANS C

110. The companies Act (Sec. 85) describes preference shares as those which carry a ‐‐‐‐‐‐‐‐right
to payment of dividend during the life time of the company.

(a) Dividend (b) Interest (c) Preferential (d) Priority

ANS C

111. Convertible preference shares can be converted to equity shares at the option of the holder,
so these shares are also known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) Conversion of preference shares (b) Quasi equity shares (c) fully convertible preference
shares (d) Participating preference shares

ANS B

112. Debenture is a ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ instrument issued by the company with a promise to pay
interest and repay the principal on maturity.

(a) Credit (b) Debt (c) Cash (d) Negotiable

ANS B

113 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ issued by the central government or state governments are referred
to as government securities.
(a) Instruments (b) Securities (c) Bonds (d) Shares
ANS B

114 Government securities are also called ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ because of the safety and security of
investments made in them and regularity of return.

(a) Gift‐edged securities (b) Long term securities (c) Short term securities (d) Investments
130.

ANS A

115 Government securities are issued through ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ of RBI.

(a) Public debt office (b) SEBI (c) DFHI (d) Stock exchange
ANS A

116. ‐‐‐‐‐‐‐‐‐‐‐‐ issued by a foreign entity, such as bank or company, but is issued and traded in
the United States and denominated in U.S. dollars.
(a) Bonds (b) GDR (c) IDR (d) Yankee bonds
ANS D

117. RBI established ‐‐‐‐‐‐‐‐‐‐‐‐‐ in 1988 to perform the money market operations on its behalf.

(a) SEBI (b) RBI office (c) DFHI (d) SBI

ANS C

118. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is a unsecured promissory note issued with a fixed maturity, by a company,
and approved by RBI, maturity from 7 days to one year, issued at a discount on the face
value.
(a) Certificate of Deposits (b) Treasury bill (c) Commercial Bills (d) Commercial papers
ANS C

119 IPO stands for ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) Initial Public Offer (b) Initial Public Offering (c) Individual Public offer (d) none of these
ANS A
120 Bonus issue is the issue of shares to ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ out of the free reserves of the company.

(a) Existing shareholders (b) New shareholders (c) None of these (d) All of them
145.
ANS A

121 ESOP stands for‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

(a) Employers Stock Option Plan(b) Employees Stock Option Plan (c) Employees Stock Option
Premium (d) Employees Stock Ownership Plan
ANS B
122 Underwriters charge a commission for their service which is known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
(a) Commission (b) Penalty (c) Underwriting charge (d) Underwriting commission

ANS C