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(1)

MULTIPLE CHOICE QUESTIONES: Q1 Q1 Environment includes: a) Socio-economic sectors b) Technological sectors c) Competitive sectors d) All of above

Q2 General Agreement on Trade and Services (GATS) was implemented on: a) January 1, 2005

b) January 1, 2006 c) January 5, 2005 d) January 1, 2006

Q3 Which of the following characterizes business environment: a) It is complex & dynamic

b) It is multi-faceted c) None of the above d) Both (a) & (b)

Q4 Which of the following factors is/are to be considered for environmental scanning: a) Events

b) Trends c) Issues

d) All of the above

Q5 Organizational culture can be viewd as:

a) The infrastructural environment of the company

b) The system of shared values and beliefs that shape a company’s behavioral norms. c) Both (a) & (b) above

d) None of the above

Q6 Human resource is the part of: a) Internal environment b) Micro environment c) Macro environment d) Both (a) & (c)

Q7 Macro envirionment consists of factors: a) Which are external to the industry b) Which are internal to the industry

c) Which are external & internal to the industry d) None of the above

Q8 Demographic is the part of a) Internal environment b) Micro environment

(2)

c) Macro environment d) Both (b) & (c) above

Q9 Which of the following factors influence operating in the technological environment: a) Sources of technology

b) Communication and infrastructural technology in management c) Socio culture variables

d) Both (a) & (b) above

Q10 means of production and distribution of wealth is related to a) Technological environment

b) Economic environment c) Social environment d) Internal environment

CHAPTER 1

Q1 (d) Q2 (a) Q3 (d) Q4 (d) Q5 (b) Q6 (a) Q7 (a) Q8 (c) Q9 (d) Q10 (b)

MULTIPLE CHOICE QUESTIONES:

Q1 Any rule or system of rules agreed upon by persons for the regulation of their conduct towards each other is known as:

(a) Imperative law (b) Moral law

(c) Conventional law (d) Customary law

Q2 Something done or said which serves as an example or rule to authorize or justify a subsequent act of the same or an analogous kind is known as the

(a) Legislation (b) Precedent (c) Golden rule (d) Mischief rule

(3)

Q3 The law of the state or of the land, the law of lawyers and the law courts: (a) Imperative law

(b) Moral law

(c) Conventional law (d) Civil law

Q4 Which one is the function of law: (a) To entertain people

(b) To stop crime in the country (c) to secure justice

(d) all of the above

Q5 The sources which have no binding force and which are not recognized by the law: (a) Legal source

(b) Historical law (c) Formal

(d) Both (a) & (b)

Q6 Which law consists of rules, which are made for the attainment of certain ends: (a) Practical or Technical Law

(b) Civil Law (c) Historical Law (d) Customary Law

Q 7 The definition “Law is the aggregate of rules set by men as politically superior, or sovereign, to men as politically subject” is given by:

(a) Austin (b) Holmes

(c) Woodrow Wilson (d) None of above

Q8 Something done or said which serves as an example or rule to authorize or justify a subsequent act of the same or an analogous kind is known as the:

(a) Legislation (b) Precedent (c) Golden rule (d) Mischief rule

Q9 The source of law, which is recognized by law is: (a) Legal source

(4)

(b) Historical law (c) None of the above (d) Both (a) & (b)

CHAPTER 2

Q1 (a), Q2 (b), Q3 (d), Q4 (c). Q5 (b) Q6 (a) Q7 (a) Q8 (b) Q9 (a)

MULTIPLE CHOICE QUESTIONS: Q1 Which of the following statements is false?

a) Consideration must be received by all the joint promisors, to bind the other joint promisors.

b) Consideration may move from promisee or any othe r person.

c) Consideration may be an act, abstinence or forbearance or a return promise. d) Consideration must be real

Q2 Which of the following offers constitute a valid offer?

a) An auctioneer displays a T.V. set before a gathering in an auction sale.

b) Shyam advertises in a newspaper that he would pay Rs 5000 to anyone, who finds out & returns his lost briefcase contaning valuables.

c) Ram who is in a possession of three cars purchased in different years says “I will sell you a car”

d) Ram communicates to Shyam that he will sell his car for Rs 1,50,000.

Q3 Anil aged 17 years, borrowed money from a moneylender by representing himself to be of 21 years

a. Anil can be sued for fraud; b. Anil cannot be sued for fraud c. Anil is liable to replay the amount

d. Guardian of Anil is liable to repay the amount Q4 Which of the following is not a flaw in a contract?

a. Inadequacy of consideration b. Wager in nature

c. Illegal object

(5)

Q5 An agreement made under coercion, renders the contract a. Valid

b. Void c. Voidable d. illegal

Q6 The type of damages awarded in case of breach of a promise to marry is a. No damages

b. General damages c. Nominal damages d. Exemplary damages

Q7 Which of the following relationships does not raise presumption of undue influence? a. Trustee & beneficiary

b. Doctor & patient c. Solicitor & client d. Landlord tenant

Q8 The contract entered with a lunatic during the times of his sound mind is (a) Valid

(b) Void

(c) Void abinitio (d) voidable

Q9 „A‟ accepts „B‟s invitation to dinner by phone. This is not a contract as (a) There is no consensus between the two parties

(b) Acceptance is given orally

(c) There is no intention to create a legal relationship (d) Both (b) & (c) above

Q10 A‟ agreed to sell his car to „B‟. His consent was given at gun point. This contract is void as it involves

(a) Undue influence (b) Compulsion (c) Coercion (d) extortion

CHAPTER 3

(6)

MULTIPLE CHOICE QUESTIONS:

Q1 The bailment of goods as security for payment of a debt is called a) Lien

b) Mortgage c) Hypothecation d) Pledge

Q2 Which of the following agents are treated as non-mercantile agents? a) Factors

b) Auctioneer c) Broker

d) Insurance agent

Q3 In which of the following cases an agency is terminated other than by operation of Law? a) On performance of the contract

b) By mutual agreement

c) On the insolvency of the principal d) On the destruction of the subject matter

Q4 The right of a person to retain possession of some goods belonging to another until some debt or claim of the person in possession is satisfied, is known as

a) Bailment b) Pledge

c) Hypothecation d) Lien

Q5 Who enjoys the right of subrogation in a contract of indemnity? a) Creditor b) Principal debtor c) Indemnifier d) Indemnified Q6 General Insurance is a a) Voidable contract b) Wager c) Contract of guarantee d) Contract of indemnity

(7)

Q7 Which of the following is not a contract of bailment? a) Lease

b) Money deposited in a bank account

c) Acceptance of articles by post office as V.P.P. d) Acceptance of goods by a transport company

Q8 If the goods of the bailor gets mixed up with the like goods of the bailee by the act of an unauthorized third party, the cost of separation will have to be borne by

a) Bailor b) Bailee

c) The third party

d) Bailor & bailee in proportion of their share of goods Q9 In case of a pledge, the pawnee

a) Can retain the goods, until the debt is paid

b) Can retain the goods for payment of interest due on debt

c) \can not retain the goods for necessary expenses incurred in respect of goods pledged d) Both (a) & (b) above

Q10 The liability of a hotel keeper in respect of goods belonging to a guest is that of a a) Pawnee b) Surety c) Bailee d) Acceptor CHAPTER 4 1 (d), 2 (d), Q3 (b), Q4 (d). Q5 (c) Q6 (d) Q7 (b) Q8 (b) Q9 (d) Q10 (c)

MULTIPLE CHOICE QUESTIONS:

Q1 Under the Sale of Goods Act, 1930,which of the following is/are the implied warranty(ies)? a) Warranty of quiet possession

b) Werranty of freedom from encumbrances c) Warranty as to quality or fitness.

(8)

Q2 The right available to an unpaid seller by implication of law is to a) Retain the goods for the price when the goods are in transit b) Recover the possession of goods

c) Recover the price d) Recover the damage

Q3 The position of the finder of lost goods is that of a a) Bailor

b) Bailee c) Creditor d) True owner

Q4 The right of lien exercised by an unpaid seller is to a) Retain possession

b) Recover possession

c) Recover price & other charges d) damages

Q5 The buyer of goods from a mercantile agent who has no authority to sell gets a good title to the goods if

a) The agent is in possession of the goods or documents of title to the goods b) The buyer is aware of the fact that the agent has no authority to sell

c) The buyer acts dishonestly d) Both (a) & (b) above

Q 6 Which of the following is/are necessary constituent(s) of a contract of sale? a) Three distinct parties- seller, buyer & a mediator

b) Movable goods for a price c) Transfer of general property d) Both (b) & (c) above

Q7 Which of the following is not a requirement of Section 23 of the Sale of Goods Act regarding uncertain goods and their appropriation?

a) There should be an appropriation b) The appropriation can be conditional

c) The appropriation should be goods of the description contracted for d) Both (b) & (c) above

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a) The buyer should examine the goods before he accepts them

b) The buyer has the right to give notice of rejection of goods to the seller

c) The buyer has the right to take delivery of goods within reasonable time after the tender of delivery.

d) Where the property in the goods passes to the buyer, it is his duty to pay the price according to the terms of the contract.

Q9 Where goods are required over a certain period, the tenders that may be invited, are termed as

a) Cross offer b) Counter offer c) Standing offer d) General offer

Q10 Which of the following statements is false as per the provisions of Sale of Goods Act? a) The seller may exercise his right of lien notwithstanding that he is in possession of the

goods as an agent or bailee of the buyer

b) The lien depends on actual possession of title

c) The possession of the goods by the seller must not expressly exclude the right of lien. d) The lien can be exercised by the unpaid seller only for the price & not for any other

charges such as warehouse or dock charges.

CHAPTER 5

Q1 (d), Q2 (a), Q3 (b), Q4 (a), Q5 (a), Q6 (d), Q 7 (d), Q8 (a), Q9 (c ), Q10 (b)

MULTIPLE CHOICE QUESTIONS:

Q1 Under which of the following instances, the banker cannot refuse to honor its customer‟s cheque?

a) Where a post dated cheque is presented for payment prior to the date it bears. b) Where the customer does not have sufficient funds to his credit

c) Where the customer has countermanded payment

d) Where the bank holds sufficient funds of the customer.

Q2 The grace period allowed in case of a bill, except where it is payable on demand is a) 2 days

b) 3 days c) 5 days d) 7 days

(10)

Q3 Which of the following is not considered as material alteration of a negotiable instrument? a) Alteration relating to date

b) Alteration relating to place of payment c) Alteration relating to rate of interest d) Filling blanks of an inchoate instrument

Q4 When a promissory note or bill of exchange has been dishonored by acceptance or non-payment, the holder may, within a reasonable time cause such dishonor to be noted and certified by a notary public. Such certificate is called a/an

a) Protest b) Noting c) Endorsement d) estoppel

Q5 If a cheque drawn by a person is dishonored for insufficiency of funds, the drawer of the cheque will be punishable with

a) Fine up to the amount of cheque or one year imprisonment or with both

b) Find upto twice the amount of cheque or two year imprisonment or with both c) Fine of Rs 50,000

d) Imprisonment upto two years

Q6 Which of the following is an example of general crossing of cheques? a) Bank of India

b) A/c payee c) & Company

d) Bank of India- not negotiable

Q7 The manager of a private sector bank has wrongfully dishonored the cheque of its customer, though the customer has sufficient funds/balance in his account. The customer can sue for

a) General damages b) Special damages c) Exemplary damages d) Nominal damages

Q 8 When is a notice of dishonor of a negotiable instrument unnecessary? a) When the drawer countermands payment

b) When the notice is expressly waived

c) When the party is not likely to suffer any loss or damage for want of notice d) All the above

(11)

Q9 Which of the following is true regarding a cheque? a) An ante dated cheque is invalid

b) A cheque is valid for six months from the date of the cheque c) A cheque is negotiable by statute

d) Both (b) & (c) above Q10 Inchoate

a) Is an incomeple instrument

b) Is an instrument delivered for a special purpose as a collateral security c) Is essentially a case of estoppel

d) Both (a) & (b) above

CHAPTER 6

Q1 (d), Q2 (b), Q3 (d), Q4 (a), Q5 (b), Q6 (C), Q7 (c), Q8 (d), Q9 (d), Q10 (a)

MULTIPLE CHOICE QUESTIONS:

Q1 The corporate veil of a company can be lifted a) When revenue of the state is to be protected b) To determine the character of an enemy company

c) When the company does not refund the application money on failure, to make allotment d) All the above

Q2 The liability of members in a company limited by shares a) Is limited to the called up value on shares

b) Is nil, if the shares are fully paid up

c) Is limited to the guarantee given by members d) Is unlimited

Q3 Four out of eight members of a public company die. Such company a) Becomes a defunct company

b) Becomes private company

c) Belongs to 4 living members along with the legal representatives of the deceased members

d) Is taken over by the central government

Q4 Since a company is regarded as an entity separate from its members

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b) The assets & liabilities of the company are also the assets & liabilities of the members

c) The shareholders can enter into contracts with the company d) The shareholders are the agents & trustees of the company.

Q5 If a company uses „Corporation‟ as a key word in its name, it must have a minimum authorized share capital of

a) Rs 5 lakhs b) Rs 10 lakhs c) Rs 50 Lakhs d) Rs 500 lakhs Q6 A public company

a) Can not have more than 100 members

b) Can commence business immediately on incorporation c) Need not hold the statutory meetings

d) must have at least 3 directors

Q7 A public company may be converted into a private company by a) Passing an ordinary resolution

b) Passing a special resolution

c) Getting the approval of the central government d) Both (b) & (c) above

Q8 A private company must have at least a) Seven directors

b) Two directors c) Three directors d) Four directors

Q9 A public company, desirous of getting its securities listed on a recognized stock exchange, shall apply to the

a) Stock exchange b) SEBI

c) NCLT

d) Central government

Q10 Which of the following companies is covered under Section 25 of the Companies Act, 1956?

(13)

b) Companies limited by share c) Association not for profit

d) Companies limited by guarantee having share capital

CHAPTER 7

Q1 (d), Q2 (b), Q3 (c), Q4 (c), Q5 (d), Q6 (d), Q7 (d), Q8 (b), Q9 (a), Q10 (a) MULTIPLE CHOICE QUESTIONS:

Q1 Which of the following is essential to alter the objects clause of the Memorandum of Association?

a) Ordinary resolution is to be passed b) Special resolution is to be passed c) Special resolution is not to be passed

d) Special resolution & confirmation of the NCLT

Q2 A certified copy of the order of the Central Government confirming the alteration of Memorandum of Association is to be registered with the Registrar of Companies within _______ of its alteration.

a) One month b) Two months c) Three months d) Six months

Q3 When a private company is converted into a public company it has to file a/an_______ with the Registrar of Companies.

a) Information memorandum b) Shelf prospectus

c) Red herring prospectus

d) Statement in lieu of prospectus Q4 Memorandum of Association

a) Is the constitution of company

b) Enables outsiders to know what power of company is c) Indicates to what extent powers have been delegated d) Both (a) & (b) above

Q5 which of the following requires an alteration to the Memorandum of Association? a) Reduction of share capital

(14)

c) Making the liability of the directors unlimited d) All of above

Q6 shifting of registered office from one state to another

a) Requires an ordinary resolution to be passed at the general meeting of shareholders b) Requires a special resolution to be passed at the general meeting of shareholders c) Must be confirmed by NCLT

d) Both (b) & (c) above

Q7 A company will be considered as a subsidiary of another when

a) It holds more than ½ in the nominal value of equity share capital of the latter b) The latter controls the composition of board of Director of the former c) The former can remove directors of the latter at its own discretion

d) Both (a) & (c) above

Q8 Subscribers to the Memorandum become members a) After the company commences business b) Immediately after incorporation

c) Only when their names are entered in the registers of members d) Only when shares are allotted to them

Q9 Articles of Association of a company

a) Contains the ancillary objects of the company b) Is superior to the memorandum of association c) Contains rules beyond the scope of the memorandum

d) Governs the way in which the objects of the company are to be carried out Q10 An Act is said to be ultra-vires a company when it is beyond the powers

a) Conferred on the company by the articles b) Of the directors

c) Of the directors but not the company d) Of the company

CHAPTER 8

(15)

MULTIPLE CHOICE QUESTIONS

Q1 Under which of the following occasions, does the allotment of shares become void? a. When any of the stock exchanges refuses to grant permission

b. When the minimum subscription is not received

c. When the money received on application is less than 5% of the nominal value of each share.

d. When the statement in lieu of prospectus is not filed with the registrar of companies. Q2 In a public issue by an unlisted company, the promoters shall contribute not less than __ of the post issue capital

a. 5% b. 10% c. 15% d. 20%

Q3 Share premium which is in the nature of capital reserve cannot be used for a. Issue of fully paid up bonus share

b. Writing off preliminary expenses c. Payment of dividends

d. Payment of premium payable on redemption of preference share

Q4 Equity shares issued by a company to its employees or directors at a discount or for consideration other than cash for providing know-how or services are called

a. Bonus share

b. Sweat equity share c. Share warrants d. Premium share

Q5 issue of share warrants can be made by the a. Private companies

b. Public companies

c. Companies limited by guarantee d. Both (a) & (b)

Q6 In case of any issue of capital to the public, the minimum promoters‟ contribution shall be locked in for a period of

a) 1 year b) 2 years c) 3 years d) 4 years

(16)

Q7 According to Section 79 of the Companies Act, 1956, a company can issue shares at a discount only if the issue is authorized by a resolution passed by the company in general meeting and the approval of the National Company Law Tribunal is obtained. The maximum rate of discount as specified in the resolution cannot exceed

a) 1% b) 2.50% c) 5% d) 10%

Q8 Capital invested in stock of goods is called a) Called up capital

b) Fixed capital c) Loan capital

d) Circulating capital

Q9 A company can issue preference shares

a) That can be redeemed after the expiry of a period of 20 years from the date of issue b) That are redeemable even if the articles do not provide for it

c) That can be redeemed out of profit which would otherwise be available for dividend

d) Both (a) & (b) above Q10 Bonus shares can be issued

a) Within 12 months of any public issue

b) Before partly paid up shares are made fully paid up c) By capitalizing of revaluation reserves

d) Out of genuine profit alone

CHAPTER 9

Q1 (a) Q2 (d) Q3 (c) Q4 (b) Q5 (b) Q6 (c) Q7 (d) Q8 (d) Q9 (c) Q10 (d) MULTIPLE CHOICE QUESTIONS:

Q1 Under which of the following situations, is an expert not held liable, in respect of any wrong statement made by him in the prospectus issued by a company?

a) When he withdraws his consent in writing before the prospectus is delivered to the registrar for registration

b) After registration but before any allotment is made, on becoming aware of the untrue statement, he withdraws his consent in writing & gives a public notice to that effect c) He had every ground to believe that that statement made by him was true

(17)

d) All of the above

Q2 A company issuing a prospectus should issue it within

a) 30days after it is registered with the registrar of companies b) 45 days after it is registered with the registrar of companies c) 60 days after it is registered with the registrar of companies d) 90 days after it is registered with the registrar of companies

Q3 A company issuing a prospectus to the public must do it within _____ days of the date on which a copy has been delivered to the Registrar for registration.

a) 30 b) 40 c) 45 d) 90

Q4 A shareholder loses the right to rescind a contract a) When he attempts to sell the share

b) When he attends & votes at a general meeting by proxy c) When the parties can not be relegated to their original position d) All of the above

Q5 Every prospectus issued by an existing company should be signed by a) The managing director of the company

b) The managing director & the secretary of the company c) Majority of the directors of the company

d) All the directors of the company

Q6 A member purchased equity shares of a company through regional stock exchange. If the prospectus of the company contained misstatements, which of the following remedies is available to the member?

a) He can claim damages only but can not rescind the contract b) He can rescind the contract only but can not claim damages c) He can sue every director responsible for issue of prospectus d) He has no remedy against the company

Q7 A director shall be liable for misstatements in prospectus if he

a) Withdraws his consent before issue of prospectus & the same was published without his consent.

b) Has reasonable grounds to believe that the statement was true c) Relied on the basis of fair representation of a public document

(18)

d) Informs only the company that his name was included without his knowledge or consent

Q8 A prospectus issued by some of the Directors of ABC Ltd. stated that the company had paid a dividend every year during 2001-03; as a matter of fact the company had sustained losses during the relevant period and had paid dividends only out of secret reserves accumulated in the past. Which of the following statement(s) is/are correct?

a) The directors who authorized the issue of prospectus are liable b) All the directors of the company are liable

c) No director is liable

d) Payment of dividend out of secret reserves is also valid

Q9 Pravin an allottee of shares in Alfa (Tech) Ltd., came to know of the misrepresentation in the prospectus on the basis of which he had applied for shares. But he failed to take any action for a period of 5 months after that he want to repudiate the allotment of shares in the company on the ground of misrepresentation in prospectus. Which of the following statement(s) is/are correct?

a) Pravin can repudiate contract on the ground of misrepresentation b) Pravin can not repudiate the contract on the ground of fraud

c) Pravin loses his right to repudiate the contract by making delay to initiate the action d) Both (b) & (c) above

Q10 ABC Ltd., was incorporated on 10 November, 2002 it entered into a contract for supply of certain materials to Balaji & Co. The company failed to obtain Certificate to Commence Business on failure to supply the materials the Balaji & Co. wants to sue ABC Ltd., for breach of contract. Which of the following statement(s) is/are correct?

a) Balaji & Co can sue ABC Ltd b) Balaji & Co can not sue ABC ltd

c) A company can not competently enter into a contract on its incorporation d) Balaji & Co is not allowed to sue any person

CHAPTER 10

(19)

MULTIPLE CHOICE QUESTIONS: Q1 Which of the following is/are true?

a) Quorum is required only at the beginning of the meeting of the company b) Quorum is required at the end of the meeting of the company

c) Quorum is required throughout the meeting of the company d) Quorum is not required only for the meeting of the company Q2 Quorum for the general meeting in case of a private company is

a) 2 persons b) 3 persons c) 5 persons d) 7 persons

Q3 The minimum number of board meetings to be held by a company other than a charitable company, every year shall be

a) 1 b) 2 c) 3 d) 4

Q4 As per Section 217 of the Companies Act, 1956 the Board‟s report is to be adopted in a) AGM

b) Board meetings

c) Extra ordinary meetings d) Class meetings

Q5 The quorum for a board meeting shall be

a) 1/2 of its total strength or 2 directors whichever is lower b) 1/3 of its total strength or 2 directors whichever is higher c) ¼ of its total strength or 2 directors whichever is lower d) ¾ of its total strength or 2 directors whichever is higher

Q6 For a general meeting of any kind (statutory, annual or extraordinary) at least ______notice must be given to members.

a) 7 days b) 10days c) 15 days d) 21 day

(20)

Q7 The first annual general meeting of a company should be held within a) 6 months of its incorporation

b) months of its incorporation c) 15 months of its incorporation d) 18 months of its incorporation

Q8 As per Section 165 of the Companies Act, 1956, the „statutory meeting‟ is to be held by a) A private company

b) A public company

c) A public company having liability of its members unlimited

d) A private company that converts itself into a public company within a period of six months from the date of its incorporation

Q 9 Statutory meeting is mandatory for

a) Public company with unlimited liability b) Government company

c) Public company limited by guarantee & having a share capital d) Company limited by guarantee & not having share capital

Q10 A proxy

a) Is allowed to vote on a poll b) Is allowed to vote by show of hand

c) Will be valid only if it is deposited 24 hours before the meeting d) Has to be a member

CHAPTER 11

(21)

MULTIPLE CHOICE QUESTIONS:

Q1 Who among the following can become a director of a company? (a) Bodies corporate

(b) Association of persons (c) Firms

(d) Individuals Q2 Qualification shares

(a) Are to be held by a director before his appointment

(b) Are to be acquired within a period of less than 2 months of appointment, if provided by the articles of the company.

(c) Can be held jointly, unless the articles provided otherwise (d) Can exceed a nominal value of Rs 5,000.

Q3 An alternate director can hold office

(a) Till the next annual general meeting after his appointment (b) The date upto which the original director would have held office (c) Only during the absence of the original director

(d) For a period longer than that permissible to the original director.

Q4 A person cannot be a director at the same time in more than _____ companies. (a) 10

(b) 15 (c) 20 (d) 25

Q5 A director who enters into a contract with the company for sale, purchase or supply of goods under circumstances of urgent necessity

(a) Need not obtain the consent of the board

(b) Has to obtain the consent of the board within 2 months of the date of contract.

(c) Has to obtain the consent of the board within 3 months of the date of the contract (d) Has to obtain the consent of promoters within one month of the date of contract Q6 Total managerial remuneration payable by a public company to its directors

(a) Shall be less than 10% of net profit for the financial year (b) Can not exceed 11% of gross profits for the financial year (c) Can not exceed 11% of net profits for financial year (d) Can exceed 11% but not 15% of gross profit

Q7 Total managerial remuneration to directors does not include (a) Expenditure incurred in providing free accommodation

(b) Guarantee commission on the guarantee given for company loans (c) Sitting fee payable for attending meetings

(22)

Q8 A director

(a) Has to take up qualification shares within a period of 1 month of his appointment, if provided in the articles of association

(b) Need not take up qualification shares if there is no such provision in articles

(c) Has to take up qualification share before his appointment if such a provision is there in the articles of association

(d) Has to take up qualification shares within a period of 15 days of his appointment, if provided in the articles of association

Q9 A casual vacancy of a Director (a) Can not be filled up

(b) Has to be filled up at the annual general meeting by passing an ordinary resolution (c) Can be filled up at a meeting of the board

(d) Required a special resolution to be filled up

Q10 Which of the following powers of the board of directors cannot be exercised except with the consent of the company in the General meeting?

(a) Power to issue debentures

(b) Power to invest the funds of the company

(c) Power to sell the whole of the undertaking of the company (d) Power to make calls

CHAPTER 12

Q1 (d) Q2 (c) Q 3 (c) Q4 (b) Q5 (c) Q6 (c) Q7 (d) Q8 (b) Q9 (c) Q10 (c)

MULTIPLE CHPICE QUESTIONS:

Q1 Which of the following is a just and equitable ground to wind-up a company by court? a) Where there is a deadlock in the management of a company

b) If the membership in a public company falls below the statutory minimum of seven members

c) If a company is unable to pay its debts

d) If a company does not commence its business within a year of its incorporation Q2 Which of the following is not a ground for winding up of a company?

a) Default in holding statutory meeting by a public companyt limited by shares b) Default in holding annual general meeting

c) Failure to commence business within a year of its incorporation\ d) Inability to pay debts

Q3 Which of the following payments are not allowed to be paid as preferential payments in winding up of a company?

(23)

(b) Amount payable to financial institution

(c) Accrued holiday remuneration payable to employees

(d) Any compensation or liability under the workmen‟s compensation Act, 1923 Q4 A petition for winding up, in case of failure to hold statutory meeting, can be filed by the contributory

(a) Before the expiry of 21 days from the date on which the statutory meetings was to be held

(b) Within the expiry of 14 days from the date on which the statutory meeting was to be held

(c) Any time after expiry of the date on which the meeting was to be held

(d) After the expiry of 14 days from the day on which the meeting ought to have been held

Q5 When the company is no longer able or never has been able to carry on the business for which it was formed, the

(a) Court can wind up the company on the ground that it is just & equitable (b) Court can not wind up the company on the ground that it is just & equitable (c) Court can wind up the company only if majority shareholder approve

(d) Court can wind up the company only if a special resolution is passed by the company Q6 Petition for winding up for failure to hold statutory meeting can be presented by a

(a) Company (b) Contributory (c) Registrar

(d) Both (a) & (c) above

Q7 When a resolution has been passed by the company, for voluntary winding-up, before the presentation of a petition, winding-up commences

(a) At the time of presentation of petition

(b) When the petition is acknowledged by the court (c) From the date of resolution

(d) 14 days after the resolution has been passed

Q8 In a compulsory winding up, preliminary report of the official liquidator should be submitted to the court

(a) Before the receipt of the statement of affairs (b) 3 months after the date of order of winding up

(c) After receipt of statement of affairs & before 6 months from the date of order of winding- up

(d) 3 months before the date of order of winding up

Q9 Period for submission of statement of affairs can be extended by the Court to a maximum of ______ of appointment of official liquidator.

(a) 30mdays (b) 2 months

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(c) 3 months (d) 4 months

Q10 In a members voluntary winding-up, the declaration of solvency should be made (a) After 5 weeks of passing a resolution for winding up

(b) At the time of passing the resolution

(c) Within 5 weeks immediately preceding the date of passing of resolution (d) When petition for winding up has been made to the court

CHAPTER 13

Q1 (a) Q2 (b) Q3 (b) Q4 (d) Q5 (a) Q6 (d) Q7 (c) Q8 (c) Q9 (c) Q10 (c)

MULTIPLE CHOICE QUESTIONS:

Q1 On receipt of a complaint, a copy of the complaint is to be referred to the opposite party, directing him to give his version of the case within within:

a) 30 days b) 15 days c) 20 days d) 10days

Q2 basic rights of consumers as per the Consumer Protection Act (CPA) is/ are a) The right to be informed about the quality & quantity of goods

b) The right to be protected against marketing of goods c) The right to seek redressal against unfair trade practices d) All of above

Q3 Complaint means

(a) any allegation in writing made by a complainant (b) any allegation in writing made by a seller

(c) any allegation in verbal by a competitor (d) both (a) & (b)

Q4 goods means:

a) means every kind of movable property except (b) & (c) b) Money, stocks & shares

c) growing crops d) All of above

Q5 unfair or deceptive practice includes: a) False or misleading representation b) Hoarding or destruction of goods c) compliance of product safety standard d) both (a) & (b)

(25)

Q6 Who is a Consumer?

a) Who buys or agrees to buy any goods for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment; b) any user of such goods other than the person who actually buys goods and such use is

made with the approval of the purchaser

c) purchases goods for commercial or resale purposes d) both (a) & (b)

Q7 Who Can file a Complaint a) Consumer

b) Central Government c) State Government d) All of the above

Q8 Central Consumer Protection Council consists of:

a) The Minister in charge of Consumer Affairs in the Central Government b) State Government or Union Territory Administrations

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

Q9 State Consumer Protection Council

a) The Minister in charge of Consumer Affairs in the state Government b) Other official and non-official members representing varied interests c) None of the above

d) Both (a) & (b)

Q10 Every member of the District Forum holds office for:

a) 5 years or upto the age of 65 years whichever is earlier b) 10 years or upto the age of 60 years whichever is earlier c) 15 years or upto the age of 65 years whichever is earlier d) 5 years or upto the age of 60 years whichever is earlier CHAPTER 14

Q1 (a) Q2 (d) Q3 (a) Q4 (a) Q5 (d) Q6 (d) Q7 (d) Q8 (a) Q9 (d) Q10 (a)

ASSIGNMENT ‘C’

Q1 Any person is a holder in due course if he has obtained the negotiable instrument a) For consideration

b) By gift

c) Before its maturity d) Both (a) & (c) above

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Q2 Michael Porte‟s Five Forces Model includes: a) Threat of Substitutes

b) Bargain Power of supplier c) Bargain Power of Government d) Both (a) & (b)

Q3 I had applied for subscription in Rajlakshmi scheme of UTI. The essence of the scheme was that the sum of money deposited with the UTI would grow 21 times in 28 years. However subsequently, the UTI extended the maturity date by two years. Can I approach a Consumer Court?

a) Yes you can seek relief in a consumer court b) No you can‟t seek relief in a consumer court

Q4 Can Consumer Forums adjudicate disputes involving scale of pay? a) Yes, Consumer Forums do adjudicate dispute-involving scale of pay b) No, Consumer Forums do adjudicate dispute-involving scale of pay

Q5 In which of the following instances, the collecting banker shall not be liable for conversion to the true owner under the Negotiable Instruments Act, 1881?

(a)The collecting bank advances money to the customer against the cheque even before the cheque is realized

(b)The uncrossed cheque given to the collecting bank for collection is crossed by the banker (c)The payment is received by the collecting bank on behalf of a person who is not a customer of the bank

(d)The collecting bank is a holder for value

(e)The collecting bank is acting as an agent for receiving the payment.

Q6 Which of the following amounts to reduction of share capital under section 100 of the Companies Act, 1956?

(a)Redemption of redeemable preference shares under the provisions of Section 80 and 81 of the Companies Act, 1956

(b)Forfeiture of shares for non-payment of calls (c)Payment of dividend out of share premium (d)Surrender of shares to a company

(e)Reduction of nominal share capital of a company by canceling any shares which have not been taken by any person.

Q7 Which of the following statements is false in respect of offer and it‟s acceptance under the Indian Contract Act, 1872?

(a) An offer will be valid only if it is communicated to the offeree

(b)A person who acts according to the terms of an offer which has not been communicated to him will not be deemed to have accepted the offer

(c)The communication of the offer must be made with an intention to obtain the assent of the offeree

(d)A mere intent of acceptance will not suffice, the acceptance must be communicated to the offeror

(27)

Q8 Mr. Dheeraj is a director of Laxmi Ltd., which failed to file its annual returns from the year 2003-04. The maximum period for which Mr. Dheeraj will be disqualified from becoming a director in any public limited

company is (a) 3 years (b) 5 years (c) 7 years (d) 8 years (e) 10 years.

Q9 Which of the following statements is false in respect of a contract of guarantee under the Indian Contract Act,

1872?

(a) Guarantee given for a time barred debt is valid

(b) A guarantee may be given retrospectively for an existing debt

(c)A contract of guarantee presupposes the existence of a debt, therefore, if there is no existing liability, there cannot be a guarantee

(d) There are always three parties in a contract of guarantee

(e)Where the principal debtor‟s liability becomes unenforceable because of illegality, the surety cannot be made liable on the said debt.

Q10 Which of the following statements is false in respect of a contract of sale under the Sale of Goods Act, 1930?

(a)Title to goods is immediately transferred to the buyer (b)A contract of sale is an executed contract

(c)In case of default by the seller, the buyer may rescind the contract (d)In a sale, a breach of condition can only be treated as a breach of warranty (e)In a contract of sale the goods are specified and ascertained.

Q11 The articles of association of Rathi Informatics Ltd. provided for a maximum of 18 directors on the Board. Presently there are 12 directors on the Board of the company. The company wishes to increase the strength of its Board to 15. Which of the following statements is correct in respect of these circumstances under the Companies Act, 1956?

(a)As the proposed increase is within the maximum permissible number fixed by the articles only an ordinary resolution is required

(b)As the proposed increase is beyond 12, a special resolution is required

(c)As the proposed increase is within the maximum permissible number fixed by the articles only an ordinary resolution as well as approval of the Central Government is required

(d)As the proposed increase is beyond 12, a special resolution as well as approval of the Central Government is required

(e)As the proposed increase is beyond 12, a special resolution as well as approval of the National Company Law Tribunal (NCLT) is required.

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(a)Where there are two or more types of preference shares, the shareholders of the class which has priority are entitled to their preferential dividend before any dividend is paid to other shareholders

(b)Cumulative preference shareholders are entitled to receive all dividends which are in arrears before any dividend is paid on equity shares

(c)Where cumulative preference shares have been issued at different times, the arrears of dividend will have to be paid to all the preference shareholders equally

(d)In case of non-cumulative preference shares, only the amount of dividend which is due in the current year will have to be paid to the holders

(e)The preference shareholder cannot sue the company for dividends, unless the company has declared the same and did not pay the amount.

Q13 Which of the following statements is false in respect of consideration under the Indian Contract Act, 1872?

(a) Consideration given at the behest of third parties will not be valid consideration (b)Inadequacy of consideration invalidates a contract

(c) Consideration must be real and not illusory

(d) Performance of an existing legal duty will not constitute valid consideration (e) Forbearance or abstinence amounts to valid consideration.

Q14 Which of the following statements in respect of bailment is false under the Indian Contract Act, 1872?

(a)The bailor is bound to disclose, all the faults in the goods bailed to the bailee, of which the bailor is aware

(b)The bailee will have to bear all the ordinary expenses incurred by vitue of the bailment

(c)The bailor is responsible to the bailee for any loss sustained by him in case the bailor is not entitled to make the bailment or to receive back the goods

(d)The bailor is not responsible to the bailee for any loss sustained by him in case of premature termination of a gratuitous bailment

(e)It is the duty of the bailor to receive back the goods after the purpose is achieved.

Q15 Which of the following statements is false in respect of dividend under the Companies Act, 1956?

(a)Dividend is to be paid only in cash

(b)Before payment of interim dividend a company must transfer to reserves the prescribed percentage of estimated profits arrived at after providing for current year‟s depreciation and arrears of depreciation/loss

(c)A final dividend for any financial year can be declared and paid only when the balance sheet and profit and loss account are presented to the shareholders at the AGM

(d)The shareholders can approve the recommended rate of dividend or lower the same, but cannot increase the amount of dividend

(e)A dividend once declared cannot be revoked even with the consent of all the shareholders.

Q16 Which of the following powers may be exercised by the board of directors without obtaining consent of the company at a general meeting?

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(a)Power to contribute to the welfare of its employees any amount less than Rs.50,000 (b)Power to borrow in excess of capital and reserves of the company

(c)Power to remit debt due by a director

(d)Power to invest compensation amounts received on compulsory acquisition of any of the company‟s properties

(e)Power to appoint sole selling agents.

Q17 Which of the following agreements is not valid under the Contract Act, 1872? (a)An agreement for training a minor in a particular trade

(b)An agreement between a minor agent and his major principal

(c)An agreement made by the certified guardian of a minor with authority for benefit of minor (d)An agreement made by a minor agent on behalf of his principal

(e)An agreement by a minor to repay a loan taken for supply of necessaries to him during his minority.

Q18 As per section 166 of the Companies Act, 1956, the first annual general meeting of a company should be held within

(a) 6 months of its incorporation (b)12 months of its incorporation (c)15 months of its incorporation (d)18 months of its incorporation (e)24 months of its incorporation.

Q19 Which of the following is not excluded for the purpose of counting maximum number of directorships under section 275 of the Companies Act, 1956?

(a)Directorship in a private company

(b)Directorship in a private company which is the holding company of a public company (c)Directorship in a unlimited company

(d)Directorship as an alternate director

(e)Directorship in an association not carrying on business for profit.

Q20 Which of the following is not a foreign bill under the Negotiable Instruments Act, 1881? (a) A bill drawn in Singapore upon a resident of India, payable in Kuala Lumpur

(b) A bill drawn in Kuala Lumpur upon a resident of Singapore, payable in India (c) A bill drawn in India upon a resident of Kuala Lumpur, payable in Singapore (d) A bill drawn in India upon a resident of India, payable in Kuala Lumpur (e) A bill drawn in Singapore upon a resident of Singapore, payable in Kuala Lumpur.

Q21 A prospectus once registered with the Registrar of Companies (ROC) should be issued within

(a) 14 days from the date of registration with ROC (b) 21 days from the date of registration with ROC (c) 30 days from the date of registration with ROC (d) 60 days from the date of registration with ROC (e) 90 days from the date of registration with ROC.

(30)

Q22 Which of the following statements is false in respect of a pawnee under the Indian Contract Act, 1872?

(a)When the pawnor defaults in payment of the principal debt, the pawnee can retain the pledged goods as collateral security

(b)When the pawnor fails to perform his part of the promise, the pawnee may sell the pledged goods after giving the pawnor a reasonable notice of sale

(c)When the pawnor defaults in payment of the principal debt the pawnee cannot recover from the pawnor any deficit between the debt due and sale price

(d)When the pawnor defaults in payment of the principal debt, the pawnee can file a suit for breach of contract against the pawnor

(e)The pawnee can sue the pawnor for any extraordinary expenses incurred by him for the preservation of the goods pledged.

Q23 Mr. Pankaj who was appointed as an additional director at the Board meeting held on December 31, 2005 continues to be in his office on the ground that the annual general meeting of the company for the year 2006 was not held as required under the Act. Mr. Pankaj was also appointed as a managing director for a period of five years with effect from January 01, 2006 at the same Board meeting. Which of the following statements is true in respect of an additional director under the Companies Act, 1956?

(a)Mr. Pankaj shall hold the office as an additional director till the completion of five years (b)Mr. Pankaj shall hold the office as an additional director upto the conclusion of any general meeting

(c)Mr. Pankaj shall hold the office as an additional director as long as he intends to (d)Mr. Pankaj shall vacate the office of the managing director

(e)Mr. Pankaj shall hold the office of the managing director till the completion of five years. Q24 Which of the following statements is false under the Companies Act, 1956?

(a) A director must be a member of the company

(b) Minimum seven persons are required for incorporation of a public company (c) Proxy has no right to speak in the general meeting

(d) Company having profits need not declare dividends (e) A private company cannot issue prospectus.

Q25 Which of the following statements is false in respect of rights of a bailee under the Indian Contract Act, 1872?

(a)Where the bailee has rendered any service or exercised his skill in respect of the goods bailed, then he can retain the bailed goods until his dues are paid

(b)If the bailee has agreed to refrain from exercising the right of lien or has waived his right, then he cannot exercise the same

(c)The right of particular lien will be revived, if the bailee gets possession of the bailed goods after parting with the same in the first place

(d)The right of lien can be exercised so long as the bailee has the possession of the goods

(e)The bailee may retain not only those goods of the bailor in respect of which some particular service has been rendered, but also other goods in the possession of the bailee belonging to the bailor.

(31)

Q26 Section 165 of the Companies Act, 1956, in respect of conduct of statutory meeting is applicable to

(a) A private company converted into a Public Company within 6 months of its incorporation

(b) A private company, which is a subsidiary of a public company (c) A public company having liability of it‟s members unlimited (d) An independent private company

(e) A government company registered as a private company.

Q27 Hiten Desai picked up a diamond ring from the floor of Divya Jewellers, Surat and handed it over to Premchand Bhatia, the manager of Divya Jewellers, with a request to hand it over to the true owner. The true owner could not be traced in spite of best efforts of Premchand. Hiten Desai paid the expenses incurred by Premchand and asked him to return the diamond ring to him. Which of the following statements is true under the Indian Contract Act, 1872?

(a)Premchand is under no obligation to return the ring to Hiten Desai as the ring was found on the floor of his shop

(b)Premchand is under an obligation to return the diamond ring only to the true owner (c)Premchand and Hiten Desai can share the value of the diamond ring equally

(d)Hiten Desai being the finder of lost goods can retain the diamond ring against everyone except the true owner

(e)Premchand can retain the diamond ring against everyone including the true owner.

Q28 Under the Companies Act, 1956, up to what date a director appointed to fill casual vacancy shall hold office?

(a) The last day on which the annual general meeting should have been held (b) Until the original director, in whose place he is appointed, returns back

(c) Till the date up to which the director in whose place he is appointed would have held office

(d) Up to the next extraordinary general meeting (e) Up to the conclusion of the annual general meeting.

Q29 At a public auction a car was put up for sale and as Mr. Ramlal was the highest bidder, he got the car. Later, it was discovered that the car was a stolen one. This fact was also not known to the auctioneer. The true owner wishes to obtain possession of the car. Under these circumstances which of the following statements is true under the Sale of Goods Act, 1930? (a)Mr. Ramlal did not get any title against the true owner

(b)The true owner cannot recover any possession as Mr. Ramlal had bought at a public auction (c)As Mr. Ramlal had purchased the car in good faith, Mr. Ramlal can enjoy possession of the car

(d)The true owner can file a suit against the auctioneer for fraudulently selling a stolen car

(e)The auctioneer is personally liable to the true owner for damages only and the true owner has no right to

(32)

Q30 Which of the following statements is false under the Companies Act, 1956? a)The Board of directors should authenticate the accounts before submission to auditors (b)The Profit and Loss account should reveal the details of auditor‟s remuneration

(c)The provision of depreciation is necessary to show true and fair picture of the accounts (d)Company with a paid up capital of Rs.2 crores is required to form an ‘audit committee’ (e)The first auditor usually holds office till the conclusion of the first annual general meeting. Q31 Which of the following instances is not treated as „crossing‟ under the Negotiable Instruments Act, 1881?

(a)A cheque bearing across its face the words ‘account payee’ without two transverse parallel lines

(b)A cheque bearing across its face the words „not negotiable‟ with two transverse parallel lines (c)A cheque bearing across its face the words „not exceeding rupees two hundred‟ within two transverse parallel lines

(d)A cheque bearing across its face the words „HDFC Bank, Karol Bagh Branch, New Delhi‟ within two transverse parallel lines

(e)A cheque bearing across its face the words „Citi Bank, Daryaganj Branch, New Delhi‟ without two transverse parallel lines.

Q32 Which of the following persons is incompetent to enter into a valid contract under the Indian Contract Act, 1872?

(a)The official assignee of an adjudged insolvent

(b)A person of the age of twenty years for whose estate a guardian has been appointed by the Court

(c)A person who is a foreign diplomat (d)A convict after the expiry of his sentence

(e)An Indian, voluntarily residing in a foreign country.

Q33 Which of the following statements is false in respect of qualification shares to be held by a director of a company under the Companies Act, 1956?

(a)A director will have to take up qualification shares only if required by the articles of association

(b)The nominal value of the qualification shares shall not exceed Rs.5,000 or the nominal value of one share where it exceeds Rs.5,000

(c)The qualification shares required to be taken up by a director must be purchased from the company

(d)Share warrants will not count for the purpose of share qualification

(e)Any provision in the articles requiring a person to obtain qualification shares before his appointment as director or within a period shorter than two months of his appointment shall be void.

Q34 Mr. Ankit, a creditor of Silktech Ltd. issued a demand notice by registered post at the company‟s registered office to payback his loan amount worth Rs.1,50,000 (along with interest). But the company neglected to reply/ respond for a period of two months. Which of the following statements is true in respect of consequences of

(33)

failure of Silktech Ltd. to reply under the provisions of the Companies Act, 1956? (a)Mr. Ankit has no remedy for the negligent conduct of the company

(b)Mr. Ankit can sell the assets of the company and take his money (c)Mr. Ankit has to file a complaint to the Central Government

(d)Mr. Ankit can approach the National Company Law Tribunal (NCLT) for winding up of the company

(e)Mr. Ankit has to conduct the general meeting and pass resolutions for changing the directors. Q35 Which of the following casual vacancies of directors cannot be filled by Board of directors under the

Companies Act, 1956?

(a) A vacancy caused by the death of a director (b) A vacancy caused by the resignation of a director

(c) A vacancy caused by the resignation of nominee director of a financial institution (d) A vacancy caused due to disqualification of a director

(e) A vacancy caused due to failure of an elected director to assume office.

Q36 Which of the following agreements is voidable under the Indian Contract Act, 1872? (a)Agreements by way of wager

(b)Agreements contingent on impossible events (c)Agreements made under a mutual mistake of fact (d)Agreement induced by fraud

(e)Agreements by incompetent parties.

Q37 Which of the following statements is true under the Negotiable Instruments Act, 1881? (a) Every holder is a holder in due course

(b) Every holder in due course is a holder for value (c) Every holder for value is a holder in due course

(d) A holder in due course need not have taken the instrument in good faith (e) Holder in due course may be party to the fraud.

Q38 Which of the following is an illegal agreement under the Indian Contract Act, 1872? (a)Agreement by way of wager

(b)Agreeing to sell a house for paying money lost in gambling

(c)Hire of a truck knowingly for bringing goods which are prohibited (d)Agreement not to enforce promise through legal means

(e)Agreements in restraint of trade.

Q39 Under the Negotiable Instruments Act, 1881, when a negotiable instrument is delivered conditionally or for a special purpose as a collateral security or for safe custody only, and not for the purpose of transferring absolutely property therein, it is called an

(a) Inchoate instrument (b) Escrow

(c) Accommodation bill (d)Trade bill

(34)

Q40 Which of the following matters requires passing of special resolution and also the approval of the Central Government under the Companies Act, 1956?

(a) Increase in the paid up capital

(b) Rectification of name of the company under section 22 of the Companies Act,1956 (c) Payment of interest out of capital

(d) Sub-division of shares

(e) Appointment of company secretary. Answers

Q1 (d) Q2 (d) Q3 (a) Q4 (b) Q5 (e) Q6 (c) Q7 (e) Q8 (b) Q9 (a) Q10 (c) Q11 (a) Q12 (c) Q13 (b) Q14 (d) Q15 (e) Q16 (a) Q17 (b) Q18 (d) Q19 (b) Q20 (d) Q21 (e) Q22 (c) Q23 (d) Q24 (a) Q25 (c) Q26 (a) Q27 (d) Q28 (c) Q29 (a) Q30 (d) Q31 (a) Q32 (b) Q33 (c) Q34 (d) Q35 (c) Q36 (d) Q37 (b) Q38 (c) Q39 (b) Q40 (c)

References

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