The Companies Act, 2013 MCQ Quiz in తెలుగు - Objective Question with Answer for The Companies Act, 2013 - ముఫ్త్ [PDF] డౌన్‌లోడ్ కరెన్

The correct answer is option 4

Key Points

Key Managerial Personnel (KMP) or Key Management Personnel refers to the employees of a company who are vested with the most important roles and functionalities. They are the first point of contact between the company and its stakeholders.

The Chief Executive Officer
Manages and directs the company toward its primary goals and objectives. Leads a team of executives to consider major decisions including acquisitions, mergers, joint ventures, or large-scale expansion.

The definition of 'whole-time director' is an inclusive definition. A whole-time director refers to a director who has been in the employment by the company on a full-time basis and is also entitled to receive remuneration

A Company Secretary is responsible for the efficient administration of a company, particularly with regard to ensuring compliance with statutory and regulatory requirements and for ensuring that decisions of the board of directors are implemented.

Manager Job Responsibilities: Maintains staff by recruiting, selecting, orienting, and training employees. Ensures a safe, secure, and legal work environment. Develops personal growth opportunities. Accomplishes staff results by communicating job expectations; planning, monitoring, and appraising job results.

Additional Information

A chief risk officer (CRO) is an executive in charge of managing risks for the company. It is a senior position that requires years of prior relevant experience.

The correct answer is Company limited by guarantee. 

Key Points

• The company limited by guarantee can be either a private limited company or a public limited company also, where the capital is not divided into shares. 
• Here, the capital to be introduced by the members is in the nature of the guarantee.
• The subscriber to the Memorandum subscribes to the amount guaranteed and puts signature against the amount guaranteed.
• Here, the percentage of the ownership is based on the amount guaranteed. 
• Whenever the requirement of capital arises, the members introduce the capital to the company. 
• The liability of members is limited up to the amount of guarantee provided only.
• These companies can also issue shares, where the shareholders are also liable up to the amount unpaid on the shares as discussed above.
• However, shareholding is not the criteria for deciding ownership.
• In an unlimited company, the liability of the members is not limited. In case any debt arises, the liability of the members does not limit to their part in the company, rather it extends to their personal assets also. 

Additional Information

• Foreign companies are owned by foreigners. An entity is registered as a foreign company when foreign participation in shareholding increases to more than 50%. Businesses registered outside India find it the most accessible way to set up business in India. 
• In Company limited by shares, the capital is introduced in the form of Shares i.e. the capital of the company is divided into a small portion, known as shares. In this type of company, the liability of the members is limited up to the unpaid capital on the shares subscribed.
• A type of Private Company itself, One Person Company is commonly known as OPC. In OPC, there is only 1 member at any time during its existence. Here, this member must be an individual and an Indian resident.

The correct answer is A company with a paid-up capital of 4 Crores.

Key Points

Small Company

• A paid-up share capital equal to or below Rs.4 crore or a higher amount specified not exceeding Rs.10 crores.
• A turnover equal to or below Rs.40 crore or a higher amount specified not exceeding Rs.100 crore.

However, the following will never be treated as a small company regardless of Turnover and paid-up share capital:

• a holding company or a subsidiary company
• a company registered under section 8
• a company or body corporate governed by any special Act.

Hence, the correct answer is A company with a paid-up capital of 4 crores.

The correct answer is 51%

Key Points

The correct answer is Unlimited Liability

Key Points

The most important features of a sole proprietorship are as follows

1. One Man Ownership:

• In a proprietorship, only one man is the owner of the enterprise.

2. No Separate Business Entity:

• No distinction is made between the business concern and the proprietor. Both are one and the same.

3. No Separation between Ownership and Management:

• In a proprietorship, management rests with the proprietor himself/herself. The proprietor is a manager also.

4. Unlimited Liability:

• Unlimited liability means that in case the enterprise incurs losses, the private property of the proprietor can also be utilized for meeting the business obligations to outside parties.

5. All Profits or Losses to the Proprietor:

• Being the sole owner of the enterprise, the proprietor enjoys all the profits earned and bears the full brunt of all losses incurred by the enterprise.

6. Less Formalities:

• A proprietorship business can be started without completing many legal formalities. There are some businesses that too can be started simply after obtaining the necessary manufacturing license and permits.

Advantages:

The various advantages that proprietorship form of business offers are as follows:

1. Simple Form of Organisation:

• Proprietorship is the simplest form of organization. The entrepreneur can start his/her enterprise after obtaining licenses and permits. There is no need to go through the legal formalities. For starting a small enterprise, no formal registration is statutorily needed.

2. Owner’s Freedom to Make Decisions:

• The owner, i.e. the proprietor is free to make all decisions and reap all the fruits of his labor. There is no other person who can interfere or weigh him down.

3. High Secrecy:

• Secrecy is another major advantage offered by proprietorship. This is because the whole business is handled by the proprietor himself and, as such, the business secrets are known to him only.

4. Tax Advantage:

• As compared to other forms of ownership, the proprietorship form of ownership enjoys certain tax advantages. For example, a proprietor’s income is taxed only once while corporate income is, on occasions taxed twice, say, double taxation.

5. Easy Dissolution:

• In a proprietorship business, the entrepreneur is all in all. As there are no co-owners or partners, therefore, there is no scope for the difference of opinion in the case the proprietor/entrepreneur wants to dissolve the business. It is due to the easy formation and dissolution, the proprietorship is often used to test the business ideas.

The correct answer is Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).

Key Points

• if it has a reasonable cause to believe that a company has failed to commence its business within 1 year of its incorporation; or
• a company is not carrying on any business or operation for a period of 2 immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under Section 455 (In such case, ROC shall send a notice to the Company and all their directors of his intention to remove the name of Company and requesting them to send their representations along with relevant document within 30 days from the date of the notice); or 

The correct answer is 1/3 of total strength or 2 directors; whichever is higher

Key Points

Additional InformationFor section 8 Companies, the quorum for the BM, is either 8 members or 25% of its total strength whichever is less, however, the quorum shall not be less than two members.

The incorrect answer is  B, C only

Important Points

(A) Ensure freedom of trade for other participants in incidental and connected markets.

• This is one of the objectives of The Competition Act, 2002.
• The Competition Act, 2002 ensures freedom of trade carried on by other participants in markets, in India, and for matters connected therewith or incidental thereto.

(B) Provide a reasonable level of reliability and connect operation.

• This is not the objective of The Competition Act, 2002.
   

(C) Adhere to generally accepted security procedures.

• This is not the objective of The Competition Act, 2002.
   

(D) Protect the interests of consumers.

• This is one of the objectives of The Competition Act, 2002.
• The Competition Act, 2002 ensures protection of interests of consumers.

Additional Information

The Competitors Act, 2002 Competition is the act of sellers seeking to gain the protection of buyers in order to gain personal profit or market share.

This Act, enacted by the Parliament of India in 2002 and the Monopolies and Restrictive Trade Practices Act, 1969 was replaced.

It is effective to control Indian competition.

Its objectives are as follows:

• To prepare a roadmap for the establishment of the Competition Commission
• To prevent monopoly and promote competition in the market.
• To protect consumer interests.
• Ensuring the freedom of the people participating in the business.

The correct answer is Foreign company.
Key Points

• Foreign company:
  • A foreign company is one that is incorporated outside India but has a place of business in India, whether by itself or through an agent, physically or through electronic mode.
  • This definition includes companies that conduct business in India and are subject to Indian corporate laws and regulations applicable to foreign entities.

Additional Information

• Government company:
  • Incorrect in this context. A government company is one in which the government holds at least 51% of the paid-up share capital. It is incorporated within the country and not outside.
• Holding company:
  • Incorrect in this context. A holding company is one that owns a controlling interest in another company, known as a subsidiary. It does not necessarily have to be incorporated outside India.
• Subsidiary company:
  • Incorrect in this context. A subsidiary company is one that is controlled by another company, known as the parent or holding company. A subsidiary can be either domestic or foreign but is distinct from the definition of a foreign company.

The correct answer is Legal process of registering a company.
Key Points

• Legal process of registering a company:
  • Incorporation refers to the legal process through which a company is formed and officially registered with the relevant government authorities.
  • Once incorporated, the company becomes a legal entity separate from its owners, capable of owning property, incurring liabilities, and entering into contracts.
  • This process typically involves filing necessary documents, such as the Articles of Incorporation, and paying required fees.

Additional Information

• Dissolution of a company:
  • This option is incorrect. Dissolution refers to the process of legally closing or terminating a company, not forming it.
• Transfer of ownership:
  • This option is incorrect. Transfer of ownership involves changing the ownership of a company's shares or assets from one party to another, not the initial formation of the company.
• Issuance of shares:
  • This option is incorrect. Issuance of shares involves creating and distributing new shares of stock to investors, which is an activity that can occur after the company has been incorporated.