Company Law - Questions and Answers for Competitive Exams | GkSeries

49. Share premium received by issuing shares can be used for ___________.

• [A] payment of dividend
• [B] issue of bonus share
• [C] remuneration to management
• [D] any business purpose

Answer: Option [B]

50. Under the companies act, which of the following powers can be exercised by the board of directors?

• [A] Power to sell any of the companies undertaking
• [B] Power to make call.
• [C] Power to borrow money in excess of the paid up capital.
• [D] Power to reappoint on auditor

Answer: Option [B]

51. The liability of shareholders of a public company is limited to the _________.

• [A] paid up value of shares
• [B] nominal value of shares
• [C] extent of their private assets
• [D] amounts called up.

Answer: Option [A]

52. Under the Indian Companies Act, 1956, a person can be a Director in ___________.

• [A] 7 companies.
• [B] 10 companies
• [C] 20 companies
• [D] 25 companies.

Answer: Option [C]

53. Investment in which of the following is most risky?

• [A] equity shares
• [B] preference shares
• [C] debenture
• [D] Land

Answer: Option [A]

54. Which of the following is not an ownership security?

• [A] equity shares.
• [B] debentures.
• [C] preference shares.
• [D] None of the above

Answer: Option [B]

55. In which of the following, interest and dividend is payable even if the company does not earn profit?

• [A] equity capital
• [B] preference capital.
• [C] debentures
• [D] bonds

Answer: Option [C]

56. Debentures cannot be _____________

• [A] irredemable debentures.
• [B] participating debentures
• [C] registered debentures
• [D] earear debbentures

Answer: Option [C]

57. The existence of a joint stock company is interrupted by ______________.

• [A] the death of its members
• [B] the death of its directors.
• [C] the death or insolvency of its manigins; director
• [D] none of these

Answer: Option [D]

58. When an existing company offers its shares for sale to the existing shareholders, it is known as_____________.

• [A] private placing
• [B] bonus issue
• [C] rights issue
• [D] offer for sale.

Answer: Option [C]

59. A ___________ is a combination of two companies to form a new company.

• [A] merger
• [B] public
• [C] private
• [D] private

Answer: Option [A]

60. Promoter is a person who__________.

• [A] takes part in the incorporation of a company.
• [B] is a director.
• [C] is a relative of the managing director.
• [D] works to siva publicity to the co.

Answer: Option [A]