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 CA Kishan Kumar MCQs – Preliminary, Incorporation, MOA & AOA May & Nov 2021

ICAI Study Material MCQs

1. The minimum number of members in a private company and public company are
a) Three and Seven respectively
b) Two and seven respectively
c) Two and nine respectively
d) None of the above

2. Which one of the following is not the content of the Memorandum of Association?
a) Name clause
b) Registered office clause
c) Objects clause

A
d) Board of Directors clause

ro C
3. The Registrar shall register any alteration of the memorandum with respect to the objects of the company and

P
certify the registration within a period of ______ from the date of filing of the special resolution.

Th e
a) 30 days

y
b) 60 days

B
c) 90 days

e d
d) 6 months

pi l
4. Only a natural person who is an Indian citizen and who has stayed in India for a period of at least days during

m
the immediately preceding one financial year shall be eligible to incorporate an OPC.

o
a) 180 days

C
b) 181 days
c) 182 days
d) 183 days

5. A section 8 company can call its general meeting by giving a clear at least _________ notice.
a) 7 days
b) 14 days
c) 21 days
d) 27 days

6. XYZ Co; is having 15% share capital held by X Company and 50% held by Central Government and 10% held by
State Government and 25% held by other people then that company will be ____________.
a) Government Company
b) Private Company
c) Public Company
d) None of these

7. Which one of the following statements is least likely to be true? A company is a subsidiary if another company:
a) exercises more than 50% of the total voting power
b) controls the composition of its board of directors

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 CA Kishan Kumar MCQs – Preliminary, Incorporation, MOA & AOA May & Nov 2021

c) is subsidiary of a company which is subsidiary of the first mentioned company

d) is holding of a company which is the holding for the first mentioned company

8. Forms of (1) Articles of guarantee company having a share capital (2) Articles of a guarantee company not having
a share capital (3) Memorandum of an unlimited company with share capital (4) Memorandum of a company
limited by shares; are respectively given in:
a) Table G; H; E & B
b) Table G; H; E & A
c) Table G; H; D & A
d) Table G; H; B & A

9. Tweeter Ltd. has invested 51% in the shares of Snapchat Pvt Ltd on 31st March 2018. Snapchat Pvt Ltd. have
been holding 2% equity of Tweeter Ltd since 2011. Snapchat Pvt Ltd. wants to increase its holding in equity upto

A
4% in Tweeter Ltd. after 31st March 2017. Can Snapchat Pvt Ltd. increase its holdings in equity upto 4% in

ro C
Tweeter Ltd. after 31st March 2018?

P
a) Yes; it can increase its holding

Th e
b) No; it cannot increase its holdings
c) Can’t say

y
d) None of the above

d B
10. A director member deposited with company INR 5000 and demanded that AGM notice should be sent by Blue

pi le
Dart courier only. Is that company bound to serve it that way only?
a) Yes, because he is a director

m
b) No, because company is allowed to serve documents by ordinary post

C o
c) Yes, because member has deposited money
d) No, because directors can't get special privileges

11. To entrench its article after incorporation a public company:

a) will have to pass a special resolution
b) will have to take consent of all members
c) is not allowed to do so
d) will have to pass special resolution and take approval of Tribunal

12. AOA of a private company says that Preference shareholders will have right to vote only if last 3 years dividend
is not paid. This is:
a) Void as it is against the companies act
b) Valid because section 47 is applicable to a private company subject to AOA.
c) Void because as per section 6 act is superior
d) Valid because Companies Act allows voting power to preference shareholders if their dividend is not paid
for last 3 years.

13. If a company is registered by incorrect information then its winding up may be ordered by:
a) Central Government
b) Registrar of companies
c) National company law tribunal
d) Court

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 CA Kishan Kumar MCQs – Preliminary, Incorporation, MOA & AOA May & Nov 2021

14. "A not for profit company shall not alter the provisions of its memorandum or articles".
a) False; it can freely change it.
b) False; It can do so with permission of Central Government
c) True; because it will be violation of terms of licence
d) True; because MOA/AOA of a section 8 company is unalterable

15. If a company changes its name; which of the following is most accurate:
a) It is not allowed to use old name in any way
b) New name should not be identical with old name
c) Old name should be painted/printed for next 1 years along with new name
d) Old name should be painted/printed for next 2 years along with new name

16. A company registered with the name of a trade mark already in existence:

C A
a) Central Government can give it an order anytime to change its name

ro
b) Company will have to change its name within 3 months from the order of Central Government

P
c) Trademark owner will make complaint within three years

Th e
d) All of the above

y
ICAI Past Year MCQs

d B
17. A private company and public company must have a minimum paid-up capital of

pi le
a. INR 1 lakh and INR 2 Lakh respectively
b. INR 3 lakh and INR 5 lakhs respectively

o m
c. INR 2 Lakh and INR 3 lakhs respectively

C
d. Such amount as may be prescribed

18. A model form of articles contained in table ‘F’ relates to a company limited by
a. Shares
b. Guarantee
c. Shares and guarantee
d. None of the above

19. Alteration of object clause of memorandum of association of a company requires.

a. Special resolution
b. Approval of registrar of companies
c. Approval of company law board
d. Special resolution and approved of company law board.

20. Contracts which are entered into by agents or trustee on behalf of a prospective company before it has come
into existence are called:

a. Provisional contracts
b. Pre-incorporation contracts
c. Both provisional and pre-incorporation contracts
d. None of the above

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 CA Kishan Kumar MCQs – Preliminary, Incorporation, MOA & AOA May & Nov 2021

ICAI Sample MCQs

21. Angel Infrastructures Pvt. Ltd. with a paid-up capital of Rs.45 Lacs and annual turnover of Rs.175 Lacs, is a
wholly owned subsidiary of Almighty Infrastructure Development Ltd. a listed company. Can Angel
Infrastructures be called a small company?

a. Yes. The paid up capital and annual turnover of Angel Infrastructure Pvt. Ltd. is not exceeding the limit as
specified under the definition of Small company.
b. No. Because Angel Infrastructure Pvt. Ltd. is a wholly owned subsidiary company.
c. No. Because Angel Infrastructure Pvt. Ltd. is not a subsidiary of a listed company.
d. No. Because the paid-up capital is Rs. 45 lacs less than prescribed limit of Rs. 50 Lacs but its turnover is
exceeding Rs.100 Lacs.

A
22. High Aim Pvt. Ltd. wants to change its object clause of the Memorandum of Association of the Company. This

ro C
need:

P
a. Shareholders’ approval by way of Ordinary Resolution

Th e
b. Shareholders’ approval is not required for change of object clause of the company.
c. Shareholders’ approval by way of Special Resolution

B y
d. The approval from Tribunal for changing object clause of the company.

e d
23. Sapan and Sanjay made a name reservation application accompanied by requisite fee to the Registrar for

pi l
forming a new private company. The Registrar accorded its approval for reservation of most preferred name
Sapanjay Softwares Private Ltd. on 6th July, 2018. In how many days, necessary documents for incorporation

m
of the company must be submitted to the Registrar so that the reserved name does not get lapsed.

C o
a. Within 10 days from the date of approval
b. Within 20 days from the date of approval
c. Within 45 days from the date of approval
d. Within 60 days from the date of approval

24. Seema Bulbs Ltd. is desirous of having significant influence in Shaukeen LED Bulbs and Tubes Ltd. so that
the latter becomes its ‘associate company’. For exercising ‘significant influence’ one of the options available
to Seema Bulbs is to control at least twenty per cent of total voting power of Shaukeen LED Bulbs and Tubes.
What is the other option available?

a. To control or participate in the recruitment decisions relating to appointment of middle management

personnel of Shaukeen LED Bulbs and Tubes under an agreement.
b. To control or participate in the dividend decisions of Shaukeen LED Bulbs and Tubes under an agreement.
c. To control or participate in the business decisions of Shaukeen LED Bulbs and Tubes under an agreement.
d. To control or participate in the export decisions of Shaukeen LED Bulbs and Tubes under an agreement.

25. Rukmani, a fresh science graduate, wants to make available the farmers good quality seeds and manure. For
her business she is contemplating to form a company and is weighing various options. Sometimes before, she
came to know that a ‘one-person company’ has minimum one member and one director whereas a private
company has minimum two members and two directors. As regards a public company, she has vague idea that
there should be minimum three directors but she does not know about the minimum members required in
this case. Advise.

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 CA Kishan Kumar MCQs – Preliminary, Incorporation, MOA & AOA May & Nov 2021

a. When there is requirement of minimum three directors, the public company can be formed by minimum
three persons.
b. There should be minimum five persons for formation of a public company though requirement of minimum
directors shall remain three.
c. There should be minimum seven persons for formation of a public company though requirement of
minimum directors shall remain three.
d. There should be minimum nine persons for formation of a public company though requirement of
minimum directors shall remain three.

26. Ruchir Marcons Ltd. which provides marketing and consultancy services is keen to have a ‘significant
influence’ in Ruchika Marketing Ltd. so that it becomes its ‘associate company’. For having ‘significant
influence’ Ruchir Marcons Ltd. needs to control certain percentage of total voting power of Ruchika Marketing
Ltd. What is that?

C A
a. For creating ‘significant influence’ Ruchir Marcons Ltd. must control at least five per cent of total voting

ro
power of Ruchika Marketing Ltd.

P
b. For creating ‘significant influence’ Ruchir Marcons Ltd. must control at least ten per cent of total voting

Th e
power of Ruchika Marketing Ltd.
c. For creating ‘significant influence’ Ruchir Marcons Ltd. must control at least fifteen per cent of total voting

B y
power of Ruchika Marketing Ltd.

d
d. For creating ‘significant influence’ Ruchir Marcons Ltd. must control at least twenty per cent of total voting

le
power of Ruchika Marketing Ltd.

pi
27. Jatin is desirous of forming a ‘One Person Company (OPC)’ for which he wants to nominate his wife Jasmin

m
who in the event of his death shall become the member of OPC. However, he is not aware of as to which

C o
document should contain the name of the nominee. Advise him in the matter.

a. Name of the nominee should be mentioned in the Articles of Association after the names of the directors.
b. Name of the nominee should be mentioned in the Memorandum of Association
c. Either Articles of Association or Memorandum of Association may contain the name of the nominee.
d. There is no need to mention the name of the nominee in either Articles of Association or Memorandum of
Association; a simple consent letter obtained from the nominee and kept in the records is sufficient.

28. The Registrar shall register any alteration of the memorandum with respect to the objects of the company and
certify the registration within a period of from the date of filing of the special resolution.
a. 30 days

b. 60 days
b. 90 days
c. 6 months

29. Swastik Pvt Ltd passed a special resolution to change its name to Swastik Darshan Pvt Limited on 30th May,
2017. Relevant MCA filing was done on due time and then Company got its new stationery printed on 1st, July,
2017. However, there was a delay in issue of certificate and Company received new certificate on 20th August,
2017 which was issued on 10th August, 2017. Company wants to enter into a lease agreement for new premise.
When they can do such agreement in new name of the Company?

a. 30th may, 2017

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 CA Kishan Kumar MCQs – Preliminary, Incorporation, MOA & AOA May & Nov 2021

b. 1st July, 2017

c. 20th August, 2017
d. 10th August, 2017

30. Mr. Pushkar wishes to start his own venture with an idea of recycling of plastic waste. He approaches you for
your advice so as to decide on which type of entity he should incorporate mainly based on the aspects of
taxation, capital funding and other monetary benefits to the promoters. Kindly suggest a suitable form of
entity from the following –

a. Limited Liability Partnership;

b. Private Limited Company;
c. Section 8 Company;
d. Producer Company.

C A
31. DEF Private Limited altered its Articles of Association on its conversion into public Company. A copy of order

ro
of the competent authority approving the alteration, is required to be filed with Registrar. How many days

P
Company have to file such order?

Th e
a. 15 days

y
b. 30 days

B
c. 45 days

le d
d. 60 days

pi
32. An Indian Company decided to shift its registered office within the jurisdiction of same Registrar in a Board

o m
meeting held on 25th May, 2017. Within how many days Company shall intimate such change to Registrar of

C
Companies?

a. Within 15 days from the date of such change;

b. Within 30 days from the date of such change;
c. Within 15 days from the date of Board meeting;
d. Within 30 days from the date of Board meeting;

33. Seven Hospitality Limited (“Company”) was incorporated in 2013. Company run resorts and hotels nearby
Mumbai. In 2018, Central government received an application from Mr. X (“proprietor”) who has registered
trademark for word “Seven”. In ideal situation, what will be the Central Government’s stand?

a. Central Government will ask to take permission from Registrar, as he have approved this name in first place;
b. Central Government will ask them to mutually agree to use the word “Seven”;
c. Central Government will direct the Company to change its name;
d. Central Government will deny his application;

ICAI RTPs and MTPs

34. Rajesh has formed a ‘One Person Company (OPC)’ with his wife Roopali as nominee. For the last two years his
wife Roopali is suffering from terminal illness and due to this hard fact, he wants to change her as nominee. He
has a trusted and experienced friend Ramnivas who could be made nominee or his (Rajesh) son Rakshak who is
of seventeen years of age. Whom should he nominate as nominee in place of his wife?

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 CA Kishan Kumar MCQs – Preliminary, Incorporation, MOA & AOA May & Nov 2021

a) Since blood relation can only be appointed as nominee in case of OPC, Rajesh needs to appoint his son
Rakshak.
b) Rajesh can appoint his friend Ramnivas as nominee in his OPC
c) Roopali is not agreeable to the proposal of Rajesh and hence, Rajesh cannot change her as the nominee
d) Either Rakshak or Mr. Ramnivas can be appointed as nominee

35. A Ltd. is the holding company of B Ltd. Another company C Ltd. is the subsidiary company of B Ltd. Is there any
relationship between A Ltd. and C Ltd?

a) There is no relationship between A Ltd. and C Ltd.

b) C Ltd. is deemed to be the subsidiary of A Ltd.
c) A Ltd. shall be deemed to be the holding company of C Ltd. provided A Ltd. acquires at least 10% stake in
C Ltd.
d) C Ltd. shall be deemed to be the subsidiary of A Ltd. if the latter company acquires minimum 10% stake in
the former company within six months after C Ltd. becomes subsidiary of B Ltd.

C A
ro
36. Shruti, a common friend of Suchitra and Sukanya, got incorporated OPC sometime before and during a chit-
chat with her friends informed them that there is some limit on the maximum capital which her OPC can have

P
and she would have to convert her OPC either into a private or public limited company if such limit exceeded.

Th e
Suchitra and Sukanya who are desirous of forming a private limited company for carrying on textile trading
business, are unsure about the maximum capital which a private limited company can have. Advise.

B y
a) A private limited company can have maximum of INR One crore as share capital.

e d
b) A private limited company can have maximum of INR Two crores as share capital.

pi l
c) A private limited company can have maximum of INR Five crores as share capital.
d) A private limited company can have unlimited share capital.

C o m
37. Vinay and Sanjay made a name reservation application accompanied by requisite fee to the Registrar for forming
a new private company. The Registrar accorded its approval for reservation of most preferred name Vinanjay
Softwares Private Ltd. on 7th July, 2018. By which date necessary documents for incorporation of the company
must be submitted to the Registrar so that the reserved name does not get lapsed.

a) Latest by 20th July, 2018

b) Latest by 27th July, 2018
c) Latest by 4th August, 2018
d) Latest by 4th September, 2018

38. In Roopali Marketing Company Private Limited (Authorised capital 50,000 shares of Rs. 10 each and paid-up
share capital of Rs. 4,50,000), 1000 shares are jointly held by Abeer and Abheek; another 800 shares are jointly
held by Seema and Srividya; and another 1200 are jointly held by Ramesh, Raksha and Rajneesh. Further,
42,000 shares are held by 193 individual persons in their individual capacity. Is it possible for the company to
induct more persons?

a) The company is unable to induct more persons since it already has two hundred individual members.
b) The company can induct four more persons as members.
c) The company can induct another 20 persons (i.e. 10% of two hundred individual members) after seeking
permission from the concerned ROC.
d) If the company does not want to seek permission of the concerned ROC, it can induct only 10 more persons
(i.e. 5% of two hundred individual members).

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 CA Kishan Kumar MCQs – Preliminary, Incorporation, MOA & AOA May & Nov 2021

39. Feel Rich Co. Ltd. Having its registered office at New Delhi, is a subsidiary of a German company named
Richman Company limited. The financial year of the parent/holding company ends on 31st December every year.
The subsidiary company intends to follow a different financial year for consolidation of its accounts with its
parent company, situated outside India. For doing so it is required to take prior permission of the competent
authority. For the purpose from the following who will be this competent authority---

a. Registrar of Companies at New Delhi

b. Tribunal
c. Central Government - Ministry of Corporate Affairs
d. SEBI

40. Food lovers Inc. was incorporated as a one-person company (OPC) on 1st September 2015 with paid up share
capital of Rs. 25 lacs. This OPC wants to convert itself into a private limited company during the year ending on
31st March 2017. But the provisions of the Companies Act, 2013 prohibits an OPC from doing so before the

A
expiry of a specified period. From the following options in which situation this OPC will mandatorily be

C
converted into a private/public company even before expiry of such period—

ro
a. After the expiry of two years from the date of its incorporation

e P
b. Paid up share capital of the company is increased beyond fifty lakh rupees

Th
c. The average annual turnover during the relevant period exceeds one crore rupees

y
d. If the application is filed with the ROC within 90 days of its incorporation as OPC, to be converted into a

B
Private Limited company.

le d
pi
41. The Registrar shall register any alteration of the memorandum with respect to the objects of the company and
certify the registration within a period of ______ from the date of filing of the special resolution.

o m
a. 30 days

C
b. 60 days
c. 90 days
d. 6 months

MCQs for Practice

42. _________________ in relation to another company, means a company in which that other company has a
significant influence, but which is not a subsidiary company of the company having such influence and includes
a joint venture company

a. Associate company
b. Subsidiary company
c. Investing company
d. None of these

43. A company incorporated outside India which has no place of business in India and which does not conduct any
business activity in India in any manner is__________________

a. A foreign company
b. An Indian company
c. Company as defined in section 2(20)
d. None of these

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 CA Kishan Kumar MCQs – Preliminary, Incorporation, MOA & AOA May & Nov 2021

44. Company limited by guarantee means a company having the liability of its members limited by
______________ to such amount as the members may respectively undertake to contribute to the assets of
the company in the event of its being wound up

a. The Companies Act 2013

b. The Articles
c. The memorandum
d. The Rules

45. Government company means any company in which not less than 51% of the paid-up share capital is held-

a. By the Central Government

b. By any state government

A
c. Jointly by the Central Government and any State Government

ro C
d. Any of these

e P
46. A private company shall have a minimum of _______ members and a maximum of _______ members

Th
a. 1; 100

B y
b. 2; 200

d
c. 2; 100

le
d. 7; 50

pi
47. Private company means a company which by __________ prohibits any invitation to ________ to subscribe

o m
for any securities of the company

C
a. Its articles; any person
b. Its articles; the public
c. Its memorandum; the public
d. Its memorandum; any person

48. An institution may be notified as a public financial if ___________ of the paid –up share capital of such
institution is held or controlled by the Central Government or by any State Government or Governments or
partly by the Central Government and partly by one or more State Government

a. 25% or more
b. 50% or more
c. More than 50%
d. 51% or more

49. An institution may be notified as a public financial institution if it has been established or constituted by or
under ________other than the act or the previous company law

a. Any Central Act

b. Any State Act
c. Either (a) or (b)
d. None of these

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 CA Kishan Kumar MCQs – Preliminary, Incorporation, MOA & AOA May & Nov 2021

50. A company shall be a small company only if its paid-up share capital does not exceed _____________ and its
turnover (as per profit and loss account for the immediately preceding FY) does not exceed ____________

a. INR 50 Lakh; INR 2 crore

b. INR 10 crore; INR 100 crore
c. INR 50 Lakh; INR 10 crore
d. INR 10 crore; INR 50 Crore

51. Statement 1: A public company having a paid-up share capital of INR 10 lakh and a turnover of INR 40 lakh is
a small company
Statement 2: A private company having is a paid-up share capital of INR 10 Lakh and a turnover of INR 40
lakh is a small company even though it is a subsidiary of another private company

A
a. Only statement (1) is correct

C
b. Only statement (2) is correct

ro
c. Both the statements are correct

e P
d. None of the statements is correct

Th
52. The term ‘resident in India’ means a person who has stayed in India for a period of not less than ______ during

y
the immediately preceding financial year

d B
a. 180 days

pi le
b. 182 days
c. 183 days

o m
d. 210 days

C
53. A person shall be eligible to incorporate OPC only if he is ____________

a. A natural person and an Indian citizen

b. An Indian citizen and resident in India
c. A natural person and a resident in India
d. A natural person and an Indian citizen and resident in India

54. A natural person _____ a member of more than one OPC at any point of time and the said person _____ a
nominee of more than one OPC

a. Shall not be; shall not be

b. May be; may be
c. Shall not be; may be
d. May be; shall not be

55. OPC cannot get itself converted voluntary into any other kind of company unless _______ have expired from
the date of incorporation of OPC

a. 2 years
b. 3 years
c. 5 years

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 CA Kishan Kumar MCQs – Preliminary, Incorporation, MOA & AOA May & Nov 2021

d. 7 years

56. Statement (1): An OPC cannot have more than 1 director.

Statement (2): An OPC is a private company.

a. Only statement (1) is correct

b. Only statement (2) is correct
c. Both the statements are correct
d. None of the statements is correct

57. A limited company may be_____

a. A company limited by shares

b. A company limited by guarantee having no share capital

A
c. A company limited by guarantee and having a share capital

ro C
d. Any of these

e P
58. An unlimited company may be_____

Th
a. A company having no share capital

B y
b. A company having a share capital

d
c. Either (A) or (b)

le
d. A guarantee company

pi
59. An OPC cannot get itself converted voluntary into any other kind of company unless a period of _____ has

o m
expired from the date of incorporation of OPC.

C
a. 1 year
b. 2 year
c. 3 year
d. 5 year

60. An OPC shall cease to be entitled to continue as OPC if it’s paid up share capital exceeds____ or its average
annual turnover during the relevant period exceeds____

a. INR 10 crore INR 100 Crore

b. INR 50 lakh; INR 2 Crore
c. INR 50 Lakh; INR 10 crore
d. INR 10 crore; INR 50 Crore

61. Where an OPC ceases to be entitled to continue as OPC it shall within ____ convert itself into _______

a. 3 months; a private company

b. 3 months; a public company
c. 6 months; a private company or a public company
d. 6 months; a private company or a public company or a limited liability partnership or a partnership firm

62. The memorandum of OPC shall state the name of any other person who shall become the member of OPC in

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 CA Kishan Kumar MCQs – Preliminary, Incorporation, MOA & AOA May & Nov 2021

case of __________ of the subscriber to memorandum

a. Death
b. Incapacity to contract
c. Death or incapacity to contract
d. Death or insolvency

63. The capital clause of memorandum shall state-

a. The amount of the authorised share capital

b. Number of shares
c. Nominal value of each share
d. All of these

C A
64. ________ cannot be a subscriber to the memorandum and articles

P ro
a. A company

e
b. Government

Th
c. Minor

y
d. All of these

d B
65. _______ cannot be a subscriber to the memorandum and articles

pi le
a. Partnership firm

m
b. Limited liability partnership

o
c. A foreigner

C
d. All of these

66. Various forms of memorandum have been specified in ______ in _________

a. Tables A, B, C, D, and E; Schedule I

b. Table F, G, H, I and J; Schedule I
c. Tables A, B, C, D and E; Schedule II
d. Tables F, G, H, I and J; Schedule II

67. The provisions contained in table F shall apply to every company limited by shares in so as the articles of such
company do not____ or _____ the provisions contained in table F

a. Exclude
b. Modify
c. Either (a) or (b)
d. None of these’

68. In the case of a private company the provisions for entrenchment may be made at the time of formation of the
company or by an amendment of articles ____

a. By passing a special resolution

b. With the consent of all the members

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c. By passing a special resolution and obtaining the approval of the Central Government
d. With the consent of all the members and obtaining the approval of the Central Government

69. In the case of a public company the provisions for entrenchment may be made at the time of formation of the
company or by an amendment of articles________

a. By passing a special resolution

b. With the consent of all the members
c. By passing a special resolution and obtaining the approval of the Central Government
d. With the consent of all the members and obtaining the approval of the Central Government

70. In case of a company having a share capital, the subscription clause of memorandum shall contain_____

a. The number of shares subscribed by each subscriber

A
b. Name, address and occupation of each subscriber

ro C
c. Both (a) and (b)

P
d. None of these

Th e
71. For the purpose of incorporation of a company, there shall be filed with the Registrar, a declaration in Form No.
INC 9 signed by________

B y
a. Every subscriber to memorandum

le d
b. Every person named as a first director in the articles

pi
c. Either (a) or (b)

m
d. Both (a) and (b)

C o
72. Where a company has been got incorporated by furnishing any false or incorrect information or by suppressing
any material fact or information or by any fraudulent action, the Tribunal may, on being satisfied that the
situation so warrants, __________

a. Order for the winding up of the company

b. Direct removal of the name of the company from the register of companies
c. Pass such other orders as it may deem fit
d. All of there

73. Every subscriber to memorandum shall make a declaration that he has not been found guilty of any fraud or
misfeasance or beach of duty during the preceding______

a. 1 year
b. 2 year
c. 3 year
d. 5 year

74. Where a company is granted licence under section 8, it is not required to use the word(s) _________ even
though the company is limited company.

a. ‘Limited’
b. ‘Private Ltd.’

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c. ‘Limited’ or ‘Private Limited’ as the case may be

d. Company

75. A company licenced under section 8 may alter the provisions contained in its memorandum or articles only after
obtaining the previous approval of _________

a. The Central Government

b. The Tribunal
c. The Court
d. None of these

76. The firm may become a member of _______

a. A private company

A
b. A public company

ro C
c. Both (A) and (B)

P
d. A company licenced under section 8

Th e
77. _______ shall be engraved in legible characters on the common seal if any of the company

B y
a. The name of the company

d
b. The corporate identity number

le
c. Both (a) and (b)

pi
d. The name and address of the registered office

o m
78. The telephone number, fax number, if any, e-mail address and any address of website if any shall be printed

C
on____

a. Outside every office or place in which its business is carried on

b. All the business letters billheads notices and other official publications
c. Both (A) and (B)
d. None of these

79. In case of OPC the words one person’s company shall be mentioned________

a. In brackets
b. Below the name
c. Both (A) and (B)
d. None of these

80. Notice of every change in situation of the registered office shall be given to the registered within_____ of such
change

a. 7 days
b. 14 days
c. 15 days
d. 30 days

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81. A company may change its registered office from the jurisdiction of one Registrar to the jurisdiction of another
Registrar within the same state by ______

a. Passing an ordinary resolution

b. Passing a special resolution
c. Passing a ordinary resolution and obtaining the confirmation of the regional director
d. Passing a special resolution and obtaining the confirmation of the regional director

82. Every company shall have its registered office within_______ of its incorporation and at all times thereafter.

a. 15 days
b. 30 days
c. 45 days

A
d. 60 days

ro C
83. A company may change its registered office outside the local limits of the city town or village in which the

P
registered office is situated by ________

Th e
a. Passing an ordinary resolution
b. Passing a special resolution

B y
c. Passing a special resolution and obtaining the confirmation of the Regional Director

d
d. Passing a special resolution and obtaining the confirmation of the Central Government

pi le
84. A company may change its registered office within the local limits of the city, town or village in which the
registered office is situated, by_______

C o m
a. Passing an ordinary resolution
b. Passing a special resolution
c. Passing a special resolution and obtaining the confirmation of the Central Government
d. None of these

85. A company may change the place of its registered office from one state to another state by _____

a. Passing an ordinary resolution

b. Passing a special resolution
c. Passing an ordinary resolution and obtaining the confirmation of the Central Government
d. Passing a special resolution and obtaining approval of the Central Government

86. Alteration of situation clause of memorandum takes up where _____

a. Registered office is shifted outside the local limits of the city, town or village
b. Registered office is shifted from the jurisdiction of one Registrar to the jurisdiction of another Registrar
c. Registered office is shifted from one state to another state
d. All of these

87. A change in the name of a company requires __________

a. An ordinary resolution and approval of the Central Government

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b. A special resolution and approval of the Central Government

c. A special resolution and approval of the Tribunal
d. An ordinary resolution and approval of the Tribunal

88. The approval of the Central Government is not required, if the only change in the name of the company is ____

a. Deletion of the word ‘private’, consequent upon conversion of a private company into a public company
b. Addition of the word ‘private’, consequent upon conversion of a public company into a private company
c. Either (A) and (b)
d. None of these

89. A company may alter its object clause by ______

a. Passing an ordinary resolution

C A
b. Passing a special resolution

ro
c. Passing an ordinary resolution and obtaining approval of the Central Government

P
d. Passing a special resolution and obtaining approval of the Central Government

Th e
90. The name clause of memorandum may be altered by way of __________

B y
a. Change of name

d
b. Rectification of name

pi le
c. Either (A) and (b)
d. None of these

o m
91. Conversion of a private company into a public company requires___________

C
a. A special resolution
b. A special resolution and approval of the Central Government
c. A special resolution and approval of the Tribunal
d. An ordinary resolution

92. Conversion of a public company into a private company requires _________

a. A special resolution
b. A special resolution and approval of the Central Government
c. A special resolution and approval of the Tribunal
d. An ordinary resolution

93. Where the Central Government directs a company to rectify its name, the company shall rectify its name
within___

a. 1 month
b. 2 months
c. 3 months
d. 6 months

94. Where a company is registered by a name, which in the opinion of the Central Government is identical with or

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too nearly resembles the name of a company previously registered then the Central Government may direct the
company to rectify its name when such a direction is given the company shall rectify its name by

a. Passing an ordinary resolution

b. Passing a special resolution
c. Passing an ordinary resolution and obtaining approval of the Central Government
d. Passing a special resolution and obtaining approval of the Central Government

95. The proprietor of a registered trade mark may make an application to the Central Government that the name of
a company is identical with or too nearly resembles the registered trade mark of which he is the proprietor such
an application may be made by the proprietor of the registered trade make within_________ of registration of
the company by such name or registration by such new name

a. 1 year

A
b. 2 years

ro C
c. 3 years

P
d. 5 years

Th e
96. On receipt of an application from the proprietor of a registered trade mark if the Central Government is of the
opinion that the name of a company is identical with or too resembles the registered trade mark then the Central

y
Government may direct the company to rectify its name. When such a direction is given the company shall within

B
__________ rectify its name

le d
a. 1 month

pi
b. 2 months

m
c. 3 months

C o
d. 6 months

97. On receipt of an application from the proprietor of a registered trade mark if the Central Government is of the
opinion that the name of a company is identical with, or too nearly resembles the registered trade mark, then
the Central Government may direct the company to rectify its name when such a direction is given the company
shall rectify its name by_______

a. Passing an ordinary resolution

b. Passing a special resolution
c. Passing an ordinary resolution and obtaining approval of the Central Government
d. Passing a special resolution and obtaining approval of the Central Government

98. A company shall not allot or transfer its shares to ______________

a. Its parent company

b. Its subsidiary company
c. Its associate company
d. Joint venture company

99. A subsidiary company may hold shares as _________ of the holding company

a. A legal representative of a deceased member

b. A trustee

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c. Either (a) or (b) or both

d. None of these

100. A subsidiary company may hold shares in the holding company if such shares were acquired by the subsidiary
company __________ it became a subsidiary company of the holding company

a. Before
b. After
c. Within 15 days after
d. Within 30 days after

101. As per the doctrine of _____ every person dealing with the company is presumed to have read the memorandum
and articles and understood the provisions contained in them correctly

A
a. Ultra vires

ro C
b. Constructive notice

P
c. Indoor management

e
d. None of these

Th
102. As per the doctrine of _________ outsiders dealing with the company are entitled to assume that as far as

y
internal proceedings of the company are concerned everything has been done regularly

e d B
a. Ultra vires

pi l
b. Constructive notice
c. Indoor management

o m
d. None of these

C
103. As per the doctrine of ____________ any act which is not permitted or authorised by the companies act 2013
and falls outside the object clause of memorandum is void and is of no legal effect

a. Ultra vires
b. Constructive notice
c. Indoor management
d. None of these

104. Acts ultra vires the directors or articles

a. Are void
b. Cannot become valid by estoppel or ratification
c. Both (A) and (b)
d. May be ratified by the members

105. A promoter is ____ of the company

a. An agent
b. A trustee
c. Both (a) and (b)
d. None of these

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106. Statement 1: A promoter stands in a fiduciary towards the company

Statement 2: A person acting in a professional is a promoter.

a. Only statement (1) is correct

b. Only statement (2) is correct
c. Both the statements are correct
d. None of the statement is correct

107. Statement 1: A promoter can make a profit in respect of any transaction with the company, only if he makes a
full and fair disclosure of such deposit.
Statement 2: The promoters shall have no right to receive any remuneration from the company unless the
company, after incorporation, has contracted the same.

A
a. Only statement (1) is correct

C
b. Only statement (2) is correct

ro
c. Both the statements are correct

e P
d. None of the statement is correct

Th
108. Common seal is mandatory for a Company

B y
a. Yes

e d
b. No

pi l
c. At the option of Company

m
d. None of the above

C o
109. Which of the following is true?

a. A Company is always a resident

b. Company is citizen if incorporated in India
c. Company may be resident but not citizen
d. None of the above

ICAI Additional Sample

110. Abha formed a ‘One Person Company (OPC)’ on 15-10-2017 with her husband Akhil as nominee and Rs. 10
lacs as Authorised and paid-up share capital. In the month of April 2018, she got in touch with a foreigner and
is expecting to receive a substantial export order by May 2018 whose final delivery must be completed by
December 2018. She is contemplating to convert her OPC into a private limited company before she receives
the export order in May 2018.

a) Since Abha is the sole member of OPC she is having full discretion to voluntarily convert it into a private
limited company any time after 15-10-2017.

b) Abha can voluntarily convert her OPC into a private limited company only after the expiry of first financial
year by which the accounts are closed (i.e. after 31 -3-2018 without any restriction.)

c) Abha can voluntarily convert her OPC into a private limited company only after she delivers duly audited
first financial statements and Annual Return to the concerned Registrar of Companies by due date and

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without making payment of any additional fee.

d) Abha can voluntarily convert her OPC into a private limited company only after expiry of two years from
15-10-2017 (i.e. on 15-10-2019 or thereafter).

111. Arun along with his wife Arunima is running successfully a trading business. His friend Akash has suggested
him to form a ‘One Person Company (OPC)’ whose striking feature is ‘limited liability’. Arun is all convinced
to get incorporated OPC but he is in a dilemma as to how to depict the name of such OPC in the Memorandum.
Select the best option for him.

a) Aru-&-Aru (One Person Company) Trading Private Limited

b) One Person Company - Aru-&-Aru Trading & Co.
c) Aru-&-Aru Trading (One Person Company)
d) Aru-&-Aru Trading Private Limited (One Person Company)

C A
112. Anupam got incorporated ‘One Person Company’ with his sister Alpana as the nominee and about three years

ro
have passed satisfactorily. From time to time Anupam does a number of charitable works and is attached with

P
three NGOs undertaking such assignments. In the meantime, his business under his OPC has also flourished.

e
Now he is contemplating to convert the OPC either as a Section 8 company (i.e. formation of companies with

Th
charitable objects) or as a private or public company. Select the best option for him.

y
a) Since OPC belongs to Anupam, he has full discretion to convert the OPC either as a Section 8 company or

B
as a private or public company

le d
pi
b) Since OPC was formed as a private company, the only option available with Anupam is to get it converted
into a private limited company. Moreover, there is specific prohibition on converting OPC into a public
limited company

C o m
c) There is specific prohibition on converting OPC into a Section 8 company; otherwise it can be converted
into a private or public company without any hindrance.

d) Since Anupam does a lot of charitable works there is no prohibition if he converts his OPC into a Section
8 company (companies formed with charitable objects).

113. Arshi, is the sole member of his OPC and he has appointed Vishal (his dear friend) as his nominee. Now, Vishal
is leaving India permanently and has set up his own business in Italy. Due, to this fact, he has withdrawing his
consent to continue as nominee in the said OPC.

a. Vishal cannot withdraw his consent to act as a nominee of the OPC

b. Only Arshi has a right to remove Vishal as a nominee
c. Vishal can withdraw his consent to act as a nominee of the OPC by giving proper notice
d. Vishal cannot withdraw his consent only when he is disabled but not due to the reason that he has set up
his own business.

114. Vivek is in trading business whereby he supplies handmade gloves and socks to many charitable trusts who
supports the elderly people. Vivek now wants to expand his business and wants to reap the benefits of company
form of organisation by opening his business as an OPC registered under section 8 of the Companies Act,
2013. Advise Vivek:

(a) Vivek cannot form an OPC as he is in trading business

(b) Vivek cannot form an OPC to be registered under section 8 of the Companies Act, 2013

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(c) Vivek can form an OPC to be registered under section 8 of the Companies Act, 2013
(d) Vivek can form an OPC as a private company and then convert it into a section 8 company

115. Roma along with her six friends has got incorporated Roma Trading Ltd. in May 2017. She kept the paid-up
share capital at Rs. 30 lacs. Further, in April 2018, she noticed that in the last financial year, the turnover of
the company was well below Rs. 2 crores. Advise whether the company can be treated as a ‘small company’.

a) Roma Trading Ltd. is definitely a ‘small company’ since its paid-up capital is much below Rs. 50 lacs and
also its turnover has not exceeded the threshold limit of Rs. 2 crores.

b) The concept of ‘small company’ is applicable only in case of a private limited company/OPC and therefore,
despite meeting the criteria of ‘small company’ it being a public limited company cannot enjoy benefits
of ‘small company’.

c) Unlike a private limited company/OPC which automatically becomes a ‘small company’ as soon as it

A
meets the criteria of ‘small company’, Roma Trading Ltd. being a public limited company has to maintain

C
the norms applicable to a ‘small company’ continuously for two years so that, thereafter, it is treated as

ro
a ‘small company’.

e P
d) If all the shareholders of Roma Trading Ltd. give an undertaking to the ROC stating that they will not let

Th
the paid share capital and also turnover exceed the limits applicable to a ‘small company’ in the next two

y
years, then it can be treated as a ‘small company’.

d B
st
116. H Ltd. is the holding company of S Pvt. Ltd. As per the last profit and loss account for the year ending 31

le
March, 2018 of S Ltd. its turnover was to the extent of Rs. 1.50 crores; and paid up share capital was Rs. 40

pi
lacs. Since S Pvt. Ltd., as per the turnover and paid up share capital norms, qualifies for the status of a ‘small
company’ it wants to be categorized as ‘small company’. Advise.

o m
a) If H Ltd. converts itself into a private limited company, S Pvt Ltd. being its subsidiary can be categorized

C
as a ‘small company’ since it meets turnover and paid up share capital norms applicable to a ‘small
company’.

b) So long as S Pvt. Ltd. meets the turnover and paid up share capital norms applicable to a ‘small company’
(which at present is the case), it shall be categorized as a ‘small company’.

c) S Pvt. Ltd. cannot be categorized as a ‘small company’ because it is the subsidiary of another company.

d) Categorisation of S Pvt. Ltd. is possible only if H Ltd., the holding company, also meets the turnover and
paid up share capital norms applicable to a ‘small company’.

117. Abhilasha and Amrita have incorporated a ‘not for profit’ private limited company which is registered under
Section 8 of the Companies Act, 2013. One of their friends has informed them that their company can be
st
categorized as a ‘small company’ because as per the last profit and loss account for the year ending 31 March,
2018, its turnover was less than Rs. 2.00 crores and its paid-up share capital was less than Rs. fifty lacs. Advise.

a) A section 8 company, which meets the criteria of ‘turnover’ and ‘paid-up share capital’ in the last financial
year, can avail the status of ‘small company’ only if it acquires at least 5% stake in another ‘small company’
within the ensuing financial year.

b) If the acquisition of minimum 5% stake in another ‘small company’ materializes in the second financial
year (and not in the ensuing financial year) after meeting the criteria of ‘turnover’ and ‘paid-up share
capital’ then with the written permission of concerned ROC, it can acquire the status of ‘small company’.

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c) The status of ‘small company’ cannot be bestowed upon a ‘not for profit’ company which is registered
under Section 8 of the Companies Act, 2013.

d) A section 8 company, if incorporated as a private limited company (and not as public limited company)
can avail the status of ‘small company’ with the permission of concerned ROC, after it meets the criteria
of ‘turnover’ and ‘paid-up share capital’.

118. Savita and her husband Sukesh have got incorporated Savi Trading Company Private Limited with authorised
and paid up share capital of Rs. 40 lacs. As per its last profit and loss account relating to the FY 2017-18, the
turnover was Rs. one crore and seventy lacs. Accordingly, their company is considered as a ‘small company’
in the FY 2018-19. They think that the status of ‘small company’, once bestowed, will continue till next 10
financial years. Advise.

a) Their contention that the status of ‘small company’, once bestowed, will continue till next 10 financial
years is absolutely correct.

C A
b) The status of ‘small company’, once bestowed, can continue till next 7 financial years only

P ro
c) The status of ‘small company’ will keep on changing from time to time, for it is not permanent for any

e
particular period.

Th
d) If ROC permits, the status of ‘small company’ can continue maximum for three years including the year

y
in which it is attained.

e d B
119. Ravi and Ragini have formed a Section 8 company; date of incorporation being 18.02.2018 and they being the

pi l
directors and also the shareholders. During June, 2018 it transpired that two unsuitable articles were required
to be altered for smooth functioning of the company. Advise.

o m
a) Since articles regulate the internal management of the company, both Ravi and Ragini being directors

C
and shareholders are themselves capable of altering the articles.

b) In case of Section 8 company, articles can be altered only if the company shows profits consecutively for
two years.

c) In case of Section 8 company, prior approval of the Central Government is required to be obtained before
its articles are altered.

d) In case of Section 8 company, at least one year must elapse from the date of its incorporation before its
articles are altered but there is no need to obtain prior permission of the Central Government.

120. A, B, C, D, E, F, G want to incorporate a public limited company. However, G wants his private limited company
to be its member instead of himself. Following this proposition of G, D also wants his registered partnership
firm to be its member instead of himself.

a. Both G and D are required to sign the Memorandum of newly formed company in their individual capacity
and not through their concerns.

b. Private Limited company of G can be the subscriber to the Memorandum of newly formed company but D
has to sign the Memorandum in his individual capacity.

c. Both G and D have to obtain the consent of other five persons in writing before their private limited
company and partnership firm subscribe to the Memorandum.

d. Private Limited company of G cannot be the subscriber to the Memorandum of newly formed company but

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registered partnership firm of D can be the subscriber to the Memorandum.

121. Amar made an application, his wife Abhilasha being other proposed subscriber and got reserved a name for
incorporation of a private limited company but the Registrar of Companies, Delhi and Haryana, much before
the incorporation, found that the name was applied by furnishing wrong information.

a. The reserved name shall be cancelled by the ROC because the name was applied by furnishing wrong
information and Amar who made the application shall be liable to a penalty up to Rs. one lac.

b. The reserved name, after seeking explanation from Amar and after he pays a penalty of Rs. one lac shall be
allotted by the ROC and the company shall be incorporated by this name.

c. The reserved name shall be cancelled by the ROC but Amar shall not be liable to pay any penalty because
cancellation of name in itself is a penalty.

A
d. Besides cancellation of the reserved name Amar and Abhilasha shall be debarred from making an

C
application for reservation of name for one year from the date on which cancellation letter was issued by

ro
the ROC.

e P
122. Tax Ltd decided to shift its registered office from jurisdiction of one Registrar to the jurisdiction of another

Th
Registrar. Tax Ltd complied with the provisions of Companies Act, 2013 and did all relevant filing within due
period of time. Confirmation on such shifting was received by Regional Director on 26th June, 2017. By when

y
Tax Ltd has to file that confirmation with the Registrar?

d B
a) 11th July, 2017

pi le
b) 25th July, 2017

m
c) 11th August, 2017

o
d) 25th August, 2017

C
123. If a company changes its name; which of the following is most accurate:
a) It is not allowed to use old name in any way
b) New name should not be identical with old name
c) Old name should be painted/printed for next 1 year along with new name
d) Old name should be painted/printed for next 2 years along with new name

Answer Key

1. B 2. D 3. A 4. C 5. B 6. A 7. C

8. B 9. B 10. C 11. A 12. B 13. C 14. B

15. D 16. C 17. D 18. A 19. A 20. B 21. B

22. C 23. B 24. C 25. C 26. D 27. B 28. A

29. D 30. B 31. A 32. B 33. D 34. B 35. B

36. D 37. B 38. B 39. C 40. B 41. A 42. A

43. D 44. C 45. D 46. B 47. B 48. D 49. C

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50. A 51. D 52. B 53. D 54. A 55. A 56. B

57. D 58. C 59. B 60. B 61. C 62. C 63. D

64. C 65. A 66. A 67. C 68. B 69. A 70. C

71. D 72. D 73. D 74. C 75. A 76. D 77. D

78. B 79. C 80. D 81. D 82. B 83. B 84. D

85. D 86. C 87. B 88. A 89. B 90. C 91. A

92. B 93. C 94. A 95. C 96. D 97. A 98. B

99. C 100. A 101. B 102. C 103. A 104. D 105. D

A
106. A 107. C 108. B 109. C 110. D 111. D 112. C

ro C
113. C 114. B 115. B 116. C 117. C 118. C 119. C

e P
120. B 121. A 122. D 123. D

y Th
e d B
pi l
C o m

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e Pro
y Th
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pi l
C o m
 This Is a Farewell Gift

o C A
eP r
Th
B y
d
From CA KishaneSir Law
i l
for
p
Fully amended for

C o m
May / Nov 21

Taking Break From Law

To Focus on Tax & EIS-SM

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 CA Kishan Kumar MCQs – Prospectus and Allotment May & Nov 2021

ICAI Study Material MCQs

1. Offer of securities or invitation to subscribe securities under private placement shall be made to
_______________ maximum number of persons in the aggregate in a financial year.

a) 50
b) 100
c) 150
d) 200

2. A private company may issue securities through the way of, except-

a) Public offer
b) Rights issue

A
c) Bonus issue

ro C
d) Private placement

P
3. Registrar of companies shall refuse to register a prospectus:

Th e
a) If it is not dated

y
b) Contains statement of an expert who has not signed it

B
c) Contains information which is six -month old

d
d) In all the above cases

pi le
4. A prospectus issued in the form of advertisement must state:

m
a) The objects for which the company has been formed

C o
b) The liability of members
c) The amount of share capital of company
d) All of the above

5. Shelf prospectus remains valid upto-

a) 6 months
b) 1 year
c) 2 years
d) 5 years

6. An issue house (share broker) has made an advertisement in newspaper for selling a big lot of shares allotted to
it by the company under a private placement. In which of the following condition the advertisement will not be
deemed as prospectus:

a) advertisement was given within six months from the date of allotment but it has paid the entire
consideration to the company
b) advertisement was given after six months from the date of allotment & it has paid the entire consideration
to the company
c) It has not paid entire consideration to the company till the date of allotment
d) None of the above

7. In which of the following situations a company will have to issue prospectus or abridged prospectus along with
the application form:

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 CA Kishan Kumar MCQs – Prospectus and Allotment May & Nov 2021

a) In relation to shares or debentures which are not offered to the public

b) In relation to issue of shares or debentures to the existing members or debenture holders
c) In relation of issue of shares which are uniform with shares previously issued and quoted on a
recognized stock exchange
d) in relation to shares or debentures which are to be offered to the public

8. Criminal liability under section 34 for misstatement in prospectus may be avoided if: 1) the consent to become
director was withdrawn 2) prospectus was issued without his knowledge 3) misstatement was immaterial 4) had
reasonable ground to believe in truthfulness 5) it was based on statement of expert

a) 3&4
b) 1; 2; 3; 4 & 5
c) 1; 2 & 5

A
d) 3; 4 & 5

ro C
9. If a person makes multiple applications in different names; then which of the following statements are not true:

e P
a) he shall be liable for action under section 447

Th
b) above provision shall be prominently reproduced in prospectus.
c) court may also order disgorgement of gain

B y
d) Disgorged gain will be transferred to insolvency and bankruptcy fund

e d
10. Which of the following is not True?

pi l
a) in case of shares; the rate of underwriting commission to be paid shall not exceed five percent of

m
the issue price of the share

C o
b) underwriting commission should not be more than the rate specified by the Article of Association
c) in case of debentures; the rate of underwriting commission shall not exceed five percent of the
issue price of the debentures.
d) amount of commission may be paid out of profits of the company

11. A holder of depository receipts shall have right to vote:

a) at par with other equity shareholders

b) through overseas depository and in the proportion as already specified by company
c) no right to vote
d) only on resolutions directly affecting them

12. A public company sent private placement offer letter to 200 persons of its choice in March 20XX and allotted
shares to them in April 20XX. Can it send private placement offer letter to 200 new people in May 20XX?

a) Yes
b) No
c) Yes, with the permission of ROC
d) Yes, with the permission of NCLT

13. Which of the following statement is contrary with the provisions of the c\Companies Act, 2013?

a) a private company can make a private placement of its securities

b) company has to pass a special resolution for private placement

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 CA Kishan Kumar MCQs – Prospectus and Allotment May & Nov 2021

c) minimum offer per person should have market value of Rs. 20,000
d) a public company can make a private placement of its securities

14. A company can change terms of contract mentioned in the prospectus by way of

a) Ordinary resolution through postal ballot

b) Ordinary resolution in meeting
c) Special resolution in meeting
d) Special resolution through postal ballot

15. A shelf prospectus filed with the ROC shall remain valid for a period of:

a) one year from the date of registration

b) one year from the date of closing of first issue

C A
c) one year from the date of opening of first issue

ro
d) Ninety days from the date on which a copy was delivered to ROC

e P
Th
ICAI Past Year MCQs

y
16. A prospectus issued by the financial institutions or bank for one or more issues of the securities or class of

B
securities specified in the prospectus is called:

d
a) Deemed prospectus

pi le
b) Red-herring prospectus
c) Abridged prospectus

o m
d) Shelf prospectus

C
17. The underwriting commission shares must not exceed:

a) 2.0 percent of the issued price of shares

b) 2.5 percent of the issued price of shares
c) 5.0 percent of the issued price of shares
d) 5.5 percent of the issued price of shares

ICAI Sample MCQs

18. Morgan Limited decided to make an offer for purchase of securities. Application Forms for the purchase were
issued to public. However, it was not accompanied by an abridged prospectus. For this default Company is liable
for penalty. How much penalty Company has to bear?

a) Rs. 25,000
b) Rs. 50,000
c) Rs. 100,000
d) Rs. 500,000

19. Extra Limited is a growing Company and requires additional funds for expansion from time to time. They are
following the same process for making an offer to public and then issue those shares. This is very time and energy
consuming for them. Kindly advise them if there is any way out.

a) During first offer they shall file prospectus with a validity of one year, so subsequent offer issued during the
period of validity of that prospectus, no further prospectus is required;
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 CA Kishan Kumar MCQs – Prospectus and Allotment May & Nov 2021

b) During first offer they shall file prospectus with a validity on two years, so subsequent offer issued during
the period of validity of that prospectus, no further prospectus is required;

c) During first offer they shall file shelf prospectus with a validity of one year, so subsequent offer issued
during the period of validity of that prospectus, no further prospectus is required;

d) During first offer they shall file shelf prospectus with a validity on two years, so subsequent offer issued
during the period of validity of that prospectus, no further prospectus is required;

20. Ajo Private Limited made private placement offer to identified people. It was clearly stated that such people have
no right of renunciation. Company received share application money within given period of time however could
not allot shares within 60 days from receipt. Now it is duty of Ajo Private Limited to repay the share application
money. Company will be liable to pay interest if they fail to do so. Within how many days Company has to repay
the share application money to avoid interest payment?

C A
a) 15 days

ro
b) 30 days

e P
c) 60 days

Th
d) 90 days

B y
21. Mr. X is a shareholder of Mark Pvt Ltd. He transferred his shares to his daughter Ms. D, in the month of

d
February. Registration of such instrument of transfer is still pending by the Company. In this scenario,

le
Companies Act, 2013 state certain provisions which have to be kept in mind by the Company. Which provision

pi
mentioned below in this regard is correct?

o m
a) Company has to transfer the dividend in relation to such shares to the Unpaid Dividend Account;

C
b) Company has to transfer the dividend in relation to such shares in the name of transferee;
c) Company has to issue fully paid-up bonus shares in the name of transformer;
d) Company has to issue fully paid-up bonus shares in the name of transferee.

ICAI RTPs and MTPs

22. The paid-up share capital of ABC Ltd. is 5000000 shares of Rs. 200 each. 20% of its paid-up share capital is
held by 4 of its promoters, who wants to off load their holding by making an offer of sale to the public by issuing
a prospectus. They want to authorise someone to take all actions and complete all formalities related to such
offer of sale. From the following who can be authorised by them to do so—

a. Any person who has agreed to fulfil all the formalities related to such offer of sale
b. Any one or more director of the company.
c. Company itself whose shareholding they want to offload.
d. Any competent officer of the company.

23. Delight Sports Garments Limited is contemplating to raise funds through issue of prospectus in which, according
to the directors, a sum of INR 50 crores should be stated as the minimum amount that needs to be subscribed
by the prospective subscribers. The funds shall be raised in four instalments consisting of application, allotment,
first call and second & Final call. Advise the company by which instalments it should receive the minimum
subscription stated in the prospectus.

a. Along with amount subscribed as application money.

b. Along with amount subscribed as Final call money.

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 CA Kishan Kumar MCQs – Prospectus and Allotment May & Nov 2021

c. Along with amount subscribed as First call money.

d. Along with amount subscribed as second and final call money.

24. Being in need of further capital, Rimsi Cotton-Silk Products Limited opted to offer 50.00 lacs equity shares of
Rs. 1 each to 50 identified persons on ‘private placement’ basis and accordingly a letter of offer accompanied by
serially numbered application form was sent to them after fulfilment of due formalities including passing of
special resolution. One of the applicants, Rajan made a written complaint to the company highlighting the fact
that the letter of offer was incomplete as well as illegal, for the same did not contain ‘renunciation clause’ though
he wanted to exercise his ‘right of renunciation’ in favour of one of his son Uday. By choosing the correct option,
advise the company in this matter.

a. As the ‘Right of Renunciation’ cannot be denied, the company needs to rectify its mistake by including the

A
same in the letter of offer and the application form.

C
b. The company is prohibited from providing ‘Right of Renunciation’ and therefore, the letter of offer and the

ro
application form need not include any such clause.

e P
c. Instead of absolute prohibition, the company needs to provide ‘Right of Renunciation’ limited to twenty five

Th
percent of offering.

y
d. Instead of absolute prohibition, the company needs to provide ‘Right of Renunciation’ limited to fifty

B
percent of offering.

le d
pi
25. Dwapar Equipment Finance Limited, a non-banking finance company (NBFC), is desirous of offering secured,
redeemable, non-convertible 9% Debentures to the public in three or more tranches over a certain period of

m
time. Which kind of prospectus it is required to issue so that its purpose is served and there arises no need to

C o
take out a fresh prospectus for second and subsequent offer of securities.
a. Deemed Prospectus.
b. Shelf Prospectus.
c. Red Herring Prospectus.
d. Abridged prospectus

MCQs for Practice

26. ______ means a memorandum containing such salient features of a prospectus as may be specified by SEBI by
making regulations in this behalf

a. Deemed prospectus
b. Prospectus
c. Information memorandum
d. Abridged prospectus

27. Any notice, circular advertisement or other documents inviting offers from______ for the subscriptions or
purchase of any securities of ________ shall be a prospectus

a. The member, a company

b. The members; a body corporate
c. The public; a company
d. The public; a body corporate

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 CA Kishan Kumar MCQs – Prospectus and Allotment May & Nov 2021

28. ________ is included in the definition of prospectus.

a. Any document described or issued as a prospectus

b. Shelf prospectus
c. Red herring prospectus
d. All of these

29. A public company may issue securities __________.

a. by issuing a prospectus
b. By way of private placement
c. By way of a right issue or a bonus issue
d. All of these

C A
30. The term public offer includes___

ro
a. Initial public offer of securities to the public by a company

e P
b. Further public offer of securities to the public by a company

Th
c. An offer for sale of securities to the public by an existing shareholder through issue of prospectus

y
d. All of these

d B
31. Unless contrary is proved, it shall be presumed that allotment or agreement to allot the securities was made with

e
a view to the securities being offered for sale to the public if it is shown that the offer for sale to the public was

pi l
made within _____ of allotment or agreement to allot.

m
a. 3 months

o
b. 6 months

C
c. 1 year
d. 3 years

32. Statement (1): In case of a deemed prospectus the prospectus shall contain the net consideration received or
to be received by the company in respect of the securities to which the offer relates

Statement (2): In case of a deemed prospectus, the prospectus shall contain the time and place for inspection
of contract whereunder the securities have been allotted or to be allotted

a. Only statement (1) is correct

b. Only statement (2) is correct
c. Both the statements are correct
d. None of the statement is correct

33. No prospectus shall be valid if it is issued more than____ after the date on which a copy thereof is delivered to
the Registrar

a. 30 days
b. 60 days
c. 90 days
d. 120 days

34. A statement can be included as an expert’s statement in the prospectus only if the person making the statement
is not and has not been, engaged or interested in ________of the company

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 CA Kishan Kumar MCQs – Prospectus and Allotment May & Nov 2021

a. The formation or promotion

b. Management
c. Either (A) or (b) or both
d. Membership

35. _______ is required if a company intends to vary the terms of any contract referred to in the prospectus or vary
the objects for which the prospectus was issued

a. An ordinary resolution
b. A special resolution
c. Approval of the central government
d. Both (b) and (c)

36. If a company intends to vary the terms of any contract referred to in the prospectus or vary the objects for which

C A
the prospectus was issued the dissenting shareholders shall be given an exit offer by ________ and the exit

ro
price and the manner and conditions of the exist offer shall be such as may be specified by _____

e P
a. The directors, the Central Government

Th
b. The members; the Central Government
c. The promoters or controlling shareholders; SEBI

B y
d. The members; SEBI

e d
37. A company may forfeit the shares held by a member on the ground of non-payment of a call only if it authorised

pi l
by ___

m
a. A resolution passed in general meeting

o
b. The articles

C
c. A resolution passed by the board
d. Both (b) and (c)

38. Prior to the issue of a second or subsequent offer of securities under the shelf prospectus the company shall be
required to file_______ with the Registrar

a. Deemed prospectus
b. Red herring prospectus
c. Information memorandum
d. Abridged prospectus

39. ________ means a prospectus which does not include complete particular of the quantum or price of the
secured included therein

a. Shelf prospectus
b. Red herring prospectus
c. Information memorandum
d. Abridged prospectus

40. A company proposing to issue a red herring prospectus shall file it with the Registrar at least ____ prior to the
opening of the subscription list and the offer

a. 3 days
b. 7 days

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 CA Kishan Kumar MCQs – Prospectus and Allotment May & Nov 2021

c. 14 days
d. 15 days

41. Any variation between the red herring prospectus and a prospectus shall be highlighted as variations in the
_____
a. Deemed prospectus
b. Prospectus
c. Information memorandum
d. Abridged prospectus

42. The application money on every security shall not be less than______ of the nominal amount of the security

a. 2%
b. 2.5%

C A
c. 5%

ro
d. 10%

e P
43. A company shall file return of allotment with the Registrar on _____

Th
a. Allotment of securities

B y
b. Reissue of forfeited shares

d
c. Both (A) and (B)

pi le
d. Forfeiture of shares

44. A company making private placement shall issue ______

C o m
a. Private placement offer–cum-application
b. Prospectus
c. Abridged prospectus
d. Red herring prospectus

45. A company may make a private placement of its securities only if it is authorised by ____

a. The Central Government

b. The Tribunal
c. The Court
d. None of these

46. A company may make a private placement of its securities only if such proposal is approved by _____

a. The members by passing an ordinary resolution

b. The members by passing a special resolution
c. The Board by passing a unanimous resolution
d. Both (b) and (c)

47. Every person willing to subscribe to the private placement issue shall pay to the company the subscription money
by _______________

a. Cheque
b. Cash

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 CA Kishan Kumar MCQs – Prospectus and Allotment May & Nov 2021

c. Either (a) or (b)

d. None of these

48. A company making private placement shall allot the securities within ________ of receiving the application
money for the securities

a. 30 days
b. 45 days
c. 60 days
d. 90 days

49. The private placement offer-cum application letter shall be in Form _______

a. PAS-1

A
b. PAS-2

ro C
c. PAS-3

P
d. PAS-4

Th e
50. In case of a private placement, the return of allotment of securities shall be filed in Form ______

y
a. PAS-1

B
b. PAS-2

e d
c. PAS-3

pi l
d. PAS-4

m
51. The company shall maintain a complete record of private placement offers in Form____

C o
a. PAS-3
b. PAS-4
c. PAS-5
d. PAS-6

52. In case of a private placement, if the company is not able to allot the securities within the stipulated time period,
it shall, within next________, repay the application money to the applicants

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

53. Statement 1: The value of offer or invitation per person under private placement shall not be less than twenty
thousand rupees of paid up value of the securities.

Statement 2: The private placement of securities should be approved by the shareholder of the company, by a
Special Resolution, only once in a year for all the offer or invitation for such debentures during the year.

a. Only statement (1) is correct

b. Only statement (2) is correct
c. Both the statements are correct
d. None of the statement is correct

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 CA Kishan Kumar MCQs – Prospectus and Allotment May & Nov 2021

54. Defence available to promoters, directors etc. are

a) Withdrawal of consent
b) Prospectus issued without consent –
c) Belief in truth of the misleading statement purported to be made by an expert
d) All of the above

55. Statement 1: Dematerialization is mandatory for every company making public offer and such other class or
classes of public companies as may be prescribed.

Statement 2: Abridged prospectus not required where an application form is issued in connection with an
underwriting agreement.

a. Only statement (1) is correct

A
b. Only statement (2) is correct

ro C
c. Both the statements are correct

P
d. None of the statement is correct

Th e
56. Statement 1: On allotment, a valid contract is created only if it is communicated. Posting of properly addressed
and stamped letter of allotment is a sufficient communication even if the letter is delayed or lost in the course of

y
postal transit.

d B
Statement 2: In the case of debenture, commission payable shall be 2.5% of the price at which the debentures

le
are issued or the rate authorized by the articles; whichever is higher.

pi
a) Only statement (1) is correct

o m
b) Only statement (2) is correct

C
c) Both the statements are correct
d) None of the statement is correct

57. Statement 1: Under writing commission is only paid on securities which are offered to the through prospectus
or private placement.

Statement 2: The underwriting commission may be paid out of proceeds of the issue or out of the profits of
the company or both.

a) Only statement (1) is correct

b) Only statement (2) is correct
c) Both the statements are correct
d) None of the statement is correct

Answer Key

1. D 2. A 3. D 4. D 5. B 6. B 7. D

8. A 9. D 10. C 11. B 12. A 13. C 14. D

15. C 16. D 17. C 18. B 19. C 20. A 21. A

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 CA Kishan Kumar MCQs – Prospectus and Allotment May & Nov 2021

22. C 23. A 24. B 25. B 26. D 27. D 28. D

29. D 30. D 31. B 32. C 33. C 34. C 35. B

36. C 37. D 38. C 39. B 40. A 41. B 42. C

43. A 44. A 45. D 46. B 47. A 48. C 49. D

50. C 51. C 52. A 53. D 54. D 55. C 56. A

57. B

C A
e P ro
y Th
e d B
pi l
C o m

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 C A
e Pro
y Th
ed B
pi l
C o m
 This Is a Farewell Gift

o C A
eP r
Th
B y
d
From CA KishaneSir Law
i l
for
p
Fully amended for

C o m
May / Nov 21

Taking Break From Law

To Focus on Tax & EIS-SM

 Kishan Kumar Classes

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 CA Kishan Kumar MCQs – Share, Share Capital, Debenture and Transfer May & Nov 2021

ICAI Study Material MCQs

1. The subscribed capital of a company is:

a) never more than the issued capital

b) never less than the issued capital
c) always equal to the issued capital
d) prescribed percentage of the issued capital

2. A company may convert all or any of its fully paid up shares into stock:

a) by passing a special resolution

b) by passing an ordinary resolution
c) with the approval of the Tribunal
d) All of the above

C A
3. Part of the capital for which application have been received from the public and shares allotted to them:

P ro
a) Nominal capital

e
b) Issued capital

Th
c) Subscribed capital
d) Called up capital

B y
4. Shares which are issued by a company to its directors or employees at a discount or for a consideration:

le d
pi
a) Equity Shares
b) Preference Shares

m
c) Sweat Equity Shares

o
d) Redeemable preference shares

C
5. Article of association of a private company states that; it will issue preference shares which will have preference
of dividend only but no preference of repayment of capital. Can it issue such preference shares?

a) No; as per section 43 preference shares should have both preference

b) No; this will become equity share as per section 43
c) Yes, because as per section 43 preference shares should have any one preference
d) Yes; because AOA allows issue of such preference share and it is a private company.

6. A company issued 10% dividend shares with right to participate in surplus profit every year. Though these shares
do not have preference of repayment of capital but they have preference of payment of arrear of dividend at the
time of winding up. These shares are:

a) Equity shares
b) Preference Shares
c) DVR
d) None of the above

7. AOA of a company limited by guarantee and having a share capital states that preference shareholders will have
right to vote on every resolution. Can this company issue such preference shares?

a) No; because as per section 6 anything in AOA against act is void

b) No; because guarantee company can't issue preference shares
c) Yes; because provision of section 47 are applicable only to a company limited by shares
d) Yes; because provisions of section 47 are applicable to a guarantee company subject to AOA

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 CA Kishan Kumar MCQs – Share, Share Capital, Debenture and Transfer May & Nov 2021

8. A general meeting of the company is to held on 30th April, 2020. The company has not paid dividend for the
financial year ending 2019; Also, it has not yet paid dividend for the year ending 2020. Articles does not specify
any last date for payment of dividend. In this case, preference shareholders:

a) will not have the right to vote because the dividend for only last one year has not been paid
b) will have a right to vote because dividend for last two years have not been paid
c) will not have the right to vote because only equity shareholder can vote in general meeting
d) will have a right to vote because preference shareholder have the right to vote in general meetings.

9. If change of right of one class also affect right of other class then:

a) A resolution should be passed in general meeting in this case

b) company need not to do anything else
c) Consent of three fourth majority of that other class should also be obtained
d) a resolution in combined meeting of both classes should be passed

C A
10. Identify the false statement with respect to issue of sweat equity shares by a company:

P ro
a) company should pass a special resolution

e
b) There is not limit as to maximum rate of discount

Th
c) company should seek approval of Central Government

y
d) sweat equity shares means the equity shares issued by the company to the directors or employees at a

B
discount or for consideration other than cash

e d
11. Rajesh infrastructure limited wants to issue preference share for a period of more than 20 years for its

pi l
infrastructure project. On the basis of which statement company can do so?

m
a) Yes; company can issue irredeemable preference share by passing special resolution

o
b) Yes; company can issue preference share for a period of more than 20 years with the prior approval of

C
Central Government
c) Yes; company can issue irredeemable preferences shares for infrastructure project
d) Yes; company can issue preference shares for infrastructure project for a period upto 30 years

12. If a company have authorised share capital of INR 6,00,000; paid up share capital of INR 5,00,000 and a loan
from government of 2,00,000. Government ordered the Company to convert its loan into shares. In this case,
such order has the effect of increasing

a) the subscribed share capital of the company

b) the paid-up share capital of the company
c) the authorised share capital of the company
d) all of the above

13. A company bought back 10% of its equity shares in March 2020; it wants to buy back further 10% equity shares
in April; 2020.

a) it can; subject to fulfilment of other conditions; because maximum buyback in a financial year can be 25%
b) It can't; because there must be time gap of 12 months between two buybacks
c) It can; but it will have to pass special resolution in place of board resolution
d) It can't; because other conditions might not have fulfilled

14. For debenture redemption reserve which of the following statements is least likely to be true:

a) NBFCs should make DRR equal to 25% for any allotment of debentures
b) A company should make DRR equal to 25% for any allotment of debentures

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 CA Kishan Kumar MCQs – Share, Share Capital, Debenture and Transfer May & Nov 2021

c) DRR should be created out of profits freely available for distribution of dividend only
d) All of the above

ICAI Past Year MCQs

15. Sources of funds for buy back of shares are

a) Free reserves or securities premium account

b) The proceeds of any shares or others or other specified securities
c) (a) and (b) both
d) None of the above

16. Share certificates are to be issued by a company within

a) Two months after allotment

A
b) One month after allotment

C
c) Six months after allotment

ro
d) Three months after allotment

e P
17. A public company need not offer further shares to existing shareholders if

Th
a) Ordinary resolution is passed to that effect by the company in general meeting

y
b) Special resolution is passed to that effect by the company in general meeting

B
c) Resolution is passed by board of directors and approved by company law board

e d
d) Special resolution is passed by the company in GM and approved by RoC

pi l
ICAI Sample MCQs

o m
18. ABC Ltd. wants to issue redeemable preference shares for a period of 35 years. Advise whether it can do s0.

C
a) Yes, ABC Ltd. can issue redeemable preference shares
b) Yes, ABC Ltd. can issue redeemable preference shares but for only 30 years
c) Instead of issuing of shares for 35 years, ABC Ltd. should issue irredeemable preference shares.
d) Yes, ABC Ltd. can issue redeemable preference shares for a period not extending 20 years.

19. A Company limited by shares can issue equity shares with differential voting rights. Which of the following is
not a necessary condition to be fulfilled before issue of such shares?

a) The Articles of association of the company shall authorize issue of shares with differential rights;
b) The issue of shares shall be authorized by an ordinary resolution passed at a general meeting of the
shareholders;
c) The issue of shares shall be authorized by special resolution passed at a general meeting of the
shareholders;
d) The company shall have consistent track record of distributable profits for the last three years.

20. When an unlisted public company issues shares at a premium, amount of the premium received on those
shares is transferred to a "securities premium account". For which purpose amount lying in securities
premium account shall be used?

a) In writing off preliminary expenses of the company;

b) In writing off pre-incorporation expenses of the company;
c) For purchase of immovable assets;
d) For paying managerial remuneration.

21. A Private Company can issue preference shares which are liable to be redeemed within particular period, only

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if Articles authorize such issue. Within how much such preference shares have to be redeemed?

a) Within a period not exceeding 10 years;

b) Within a period not exceeding 15 years;
c) Within a period not exceeding 20 years;
d) Within a period not exceeding 25 years.

ICAI RTPs and MTPs

22. A Company limited by shares can issue equity shares with differential voting rights. Which of the following is
not a necessary condition to be fulfilled before issue of such shares?

a) The Articles of Association of the company shall authorize issue of shares with differential rights;

b) The issue of shares shall be authorized by an ordinary resolution passed at a general meeting of the

A
shareholders;

ro C
c) The issue of shares shall be authorized by special resolution passed at a general meeting of the shareholders;

e P
d) The company shall have consistent track record of distributable profits for the last three years;

Th
23. Corrupt Limited has received a request from Mr. Suresh for transfer of 100 partly paid equity shares, to Mr.

y
Ramesh. However, Mr. Ramesh expired in the meantime, but no intimation of the same has been received by

B
the company. In the given circumstances, advise as per the provisions of the Companies Act, 2013:

le d
pi
a) Corrupt Limited will not register the transfer the shares in the name of Mr. Ramesh, without verification
from Mr. Suresh

o m
b) Corrupt Limited can register the shares in the name of Mr. Ramesh as it is not aware of the untoward

C
incident.

c) Corrupt Limited will not register the transfer the shares in the name of Mr. Ramesh, without verification
from Mr. Ramesh

d) Corrupt Limited will give the shares back to Mr. Suresh

24. The Authorised share capital clause of LMN & Co. ltd. consisted of Preference share capital and Equity share
capital both. With regard to equity share capital, the Article of Association of the company has given
authorisation to issue differential equity shares. Apart from authorisation by the Articles, from the following
strike out the condition, which is not mandatory to comply with—

a) Such issue of shares must be authorised by an ordinary resolution passed at a general meeting of the
shareholders or by postal ballot, as the case may be

b) The company must have consistent track record of distributable profit for the last five years.

c) The company has no subsisting default in the payment of the declared dividend to its shareholders.

d) The company has not defaulted in filing financial statements and annual returns for three financial years
immediately preceding the financial year in which it is decided to issue such shares

MCQs for Practice

25. _________ means such capital as is authorized by the memorandum of a company to be the maximum amount
of share capital of the company.

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(a) Authorized capital

(b) Issued capital
(c) Subscribed capital
(d) Called –up capital

26. ________ means such part of the capital, which has been called for payment.

(a) Authorized capital

(b) Issued capital
(c) Subscribed capital
(d) Called up-capital

27. ________ means such capital as the company issues from time to time for subscription.

A
(a) Authorized capital

C
(b) Issued capital

ro
(c) Subscribed capital

P
(d) Called up-capital

Th e
28. ________ means such part of capital which is for the time being subscribed by the members of a company.

y
(a) Authorized capital

B
(b) Issued capital

d
(c) Subscribed capital

pi le
(d) Called up-capital

m
29. Sweat equity shares can be issued by a company only to ________.

C o
(a) Directors of the company
(b) Employees of the company
(c) Either (a) or (b) or both
(d) None of these

30. A company may issue equity shares with differential rights as to dividend, voting or otherwise, only if it is
authorized by ________.

(a) The Central Government

(b) The Court
(c) The Tribunal
(d) Its Articles

31. A company can issue the equity shares with differential rights only if it has not defaulted in filing financial
statements and annual returns for immediately preceding ______.

(a) Financial year

(b) 2 Financial years
(c) 3 Financial years
(d) 5 Years

32. A company can issue the equity shares with differential rights only if it has consistent track record of
distributable profits for the last _______.

(a) 2 years
(b) 3 years

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 CA Kishan Kumar MCQs – Share, Share Capital, Debenture and Transfer May & Nov 2021

(c) 5 years
(d) 7 years

33. The shares with differential rights hall not exceed _______ of the total post-issue paid up equity share capital
(including equity shares with differential rights issued at any point of time).

(a) 25%
(b) 26%
(c) 50%
(d) 51%

34. A company can issue the equity shares with differential rights only if it not been penalized by Court or Tribunal
during the last 3 years of any offence under _______.

(a) The Companies Act, 2013

A
(b) The Prevention of Money Laundering Act,2002

C
(c) The Indian Penal Code, 1860

ro
(d) None of these

e P
35. ________ is required for issue of shares with differential rights as to dividend, voting or otherwise.

Th
(a) An ordinary resolution

y
(b) A special resolution

B
(c) A unanimous resolution

d
(d) A Board resolution

pi le
36. Every share shall be distinguished by _______

o m
(a) The date of its issue

C
(b) The amount paid up
(c) Both (a) & (b)
(d) Its distinctive number

37. A share certificate is a _______ of the fact that the person named therein is the owner of such number of shares
as are specified therein.

(a) Conclusive
(b) Prima facie evidence
(c) Persuasive evidence
(d) Circumstantial evidence

38. In case of unlisted companies, the duplicate share certificate shall be issued within ______ of submission of
complete documents with the company.

(a) 1 month
(b) 2 months
(c) 3 months
(d) 6 months

39. Every preference shareholder shall have a right to vote _______.

(a) On such resolutions which directly affect his right

(b) On any resolution for the winding up of the company
(c) On any resolution for the repayment or reduction of share capital
(d) All of these

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40. If the dividend on any class of preference shares is not paid for ______ or more, then, every preference
shareholder of such class shall have a right to vote on every resolution placed before the company.

(a) 1 year
(b) 2 years
(c) 3 years
(d) 5 years

41. Every equity shareholder shall have a right to vote _______.

(a) Only on such resolutions which directly affect his rights

(b) Only on the resolution for the winding up of the company
(c) Only on the resolution for the repayment or reduction of share capital
(d) On every resolution placed before the company

C A
42. On a poll, the voting right of every equity shareholder shall be _______.

P ro
(a) Based on the principle of 1 vote for every member

e
(b) Based on the principle of 1 vote for every member, if so, provided by the Articles

Th
(c) In proportion to his share in the paid-up equity share capital of the company
(d) In proportion to his share in the paid-up preference share capital of the company

B y
43. The rights attached to the share of any class may be varied with the consent in writing of the holders of not less

d
than ______ of the issued shares of that class.

pi le
(a) One-half

m
(b) One-third

o
(c) Two-third

C
(d) Three-fourth

44. The rights attached to the shares of any class may be varied if ________ is passed at a separate meeting of the
holders of the issued shares of that class.

(a) An ordinary resolution

(b) A special resolution
(c) A unanimous resolution
(d) None of these

45. Where a company passes the necessary resolution for variation of rights attached to the shares of any class the
holder(s) of such class of shares who hold not less than _______ shares of such class and who had not consented
to such variation or had not voted in favour, may make an application to the Tribunal to cancel such variation.

(a) 5%
(b) 10%
(c) 20%
(d) 25%

46. Where a company passes the necessary resolution for variation of rights attached to the shares of any class, the
dissenting shareholders, if they are eligible may, within ________, make an application to the Tribunal to
cancel such variation.

(a) 7 days
(b) 14 days
(c) 21 days

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 CA Kishan Kumar MCQs – Share, Share Capital, Debenture and Transfer May & Nov 2021

(d) 30 days

47. Statement (1): A call shall be made uniformly on all the shares falling under the same class.
Statement (2): The shares on which different amounts have been paid up shall be deemed to be the shares
falling under the same class

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct
(c) Both the Statements are correct
(d) None of the Statements is correct

48. A company may accept calls in advance only if it is authorized by ________

(a) The Central Government

(b) The Court

A
(c) The Tribunal

C
(d) Its Articles

P ro
49. The ‘Securities Premium Account’ cannot be used for _______

Th e
(a) Writing off the preliminary expenses of the company
(b) Issuing fully paid bonus shares to the members

y
(c) Declaring dividend

B
(d) Writing off the discount allowed on issue of shares or debentures

le d
pi
50. A special resolution passed for by a company authorizing it to issue sweat equity shares shall be valid for making
the allotment within a period of not more than _______ from the date of passing SR.

o m
(a) 6 months

C
(b) 12 months
(c) 2 years
(d) 3 years

51. At any time, the sweat equity shares shall not exceed ________ of the paid-up equity capital of the company

(a) 10%
(b) 20%
(c) 25%
(d) 50%

52. Unless a company is engaged in infrastructure projects, it cannot issue preference shares which are redeemable
after ______.

(a) 10 years
(b) 15 years
(c) 20 years
(d) 30 years

53. In case of allotment of shares to the subscribers to memorandum, the share certificate shall be delivered by the
company within _______.

(a) 1 month of incorporation

(b) 1 month of allotment of securities
(c) 2 months of incorporation
(d) 2 months of allotment of securities

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 CA Kishan Kumar MCQs – Share, Share Capital, Debenture and Transfer May & Nov 2021

54. In case of transfer of shares, the share certificate shall be delivered by the company within ________.

(a) 1 month of receipt of application

(b) 1 month of allotment
(c) 2 months of receipt of application
(d) 2 months of effecting transfer of shares

55. In case of any allotment of shares, the share certificate shall be delivered by the company within _______.

(a) 1 month of receipt of application

(b) 1 month of allotment
(c) 2 months of receipt of application
(d) 2 months of allotment

A
56. In case of any allotment of debentures, the share certificate shall be delivered by the company within _______.

ro C
(a) 3 months of receipt of application

P
(b) 3 months of allotment

e
(c) 6 months of receipt of application

Th
(d) 6 months of allotment

y
57. A transfer deed is submitted to the company by the transferor and the shares are partly paid up. The company

B
gives a notice of the same to the transferee. The transferee has the right to object to the proposed transfer within

d
_______

pi le
(a) 30 days

m
(b) 2 weeks

o
(c) 6 weeks

C
(d) 2 months

58. The application for transfer of securities must be made in Form No. ________

(a) SH-3
(b) SH-4
(c) SH-5
(d) SH-6

59. The transfer deed (after stamping, dating and signing) shall be submitted to the company within ________ of
execution.

(a) 30 days
(b) 45 days
(c) 60 days
(d) 90 days

60. Where a transfer deed is submitted to the company by the transferor and the shares are partly paid up, the
company shall give a notice to the transferee in Form No. _______

(a) SH-3
(b) SH-4
(c) SH-5
(d) SH-6

61. Where a private company refuses to register the transfer of any securities, it shall give a notice of such refusal to

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 CA Kishan Kumar MCQs – Share, Share Capital, Debenture and Transfer May & Nov 2021

the transferor and the transferee, within ______ from the date on which the transfer deed was delivered to the
company.

(a) 7 days
(b) 14 days
(c) 15 days
(d) 30 days

62. Where a private company gives a notice of refusal to transfer the securities, the transferee may, within _______
of receipt of the notice of refusal, file an appeal with the Tribunal.

(a) 15 days
(b) 30 days
(c) 60 days
(d) 90 days

C A
63. Where a private company refuses to register the transfer of any securities, but does not send any notice of refusal,

ro
the transferee may, within _______ of delivery of the transfer deed, file an appeal with the Tribunal

e P
(a) 15 days

Th
(b) 30 days
(c) 60 days

y
(d) 90 days

d B
64. Where a public company refuses to transfer the securities, the transferee may, within _______ of receipt of the

pi le
notice of refusal, file an appeal with the Tribunal

m
(a) 15 days

o
(b) 30 days

C
(c) 60 days
(d) 90 days

65. Where a public company refuses to register the transfer of any securities, but does not send any notice of refusal,
the transferee may, within _______ of delivery of the transfer deed, file an appeal with the Tribunal

(a) 15 days
(b) 30 days
(c) 60 days
(d) 90 days

66. A company may alter the capital clause of memorandum by ________

(a) Passing an ordinary resolution

(b) Passing a special resolution
(c) Passing an ordinary resolution and obtaining approval of the Central Government
(d) Passing a special resolution and obtaining approval of the Central Government

67. A notice of every alteration of capital clause of memorandum shall be given to the Registrar within _______

(a) 7 days
(b) 15 days
(c) 30 days
(d) 60 days

68. One of the modes of alteration of capital clause of memorandum is to consolidate and divide the share capital

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into shares of _______ amount than its existing shares.

(a) Smaller
(b) Larger
(c) Either (a) or (b)
(d) None of these

69. One of the modes of alteration of capital clause of memorandum is to sub-divide the shares into shares of
________ amount than its existing shares.

(a) Smaller
(b) Larger
(c) Either (a) or (b)
(d) None of these

A
70. Offer of further shares by a company to all its existing shareholders in proportion to the paid-up share capital

C
held by them is called as ________

P ro
(a) Bonus Issue

e
(b) Right Issue

Th
(c) Public Issue
(d) None of these

B y
71. The letter of offer of a right issue shall be dispatched to all the existing shareholders at least _______ before

d
the opening of the issue

pi le
(a) 3 days

m
(b) 7 days

o
(c) 15 days

C
(d) 21 days

72. Bonus shares may be issued out of _______

(a) The free reserves

(b) The Securities Premium Account
(c) The Capital Redemption Reserve Account
(d) Any of these

73. A company can effect reduction of capital by _______

(a) Passing an Ordinary Resolution

(b) Passing a Special Resolution
(c) Obtaining the confirmation of the Tribunal
(d) Both (b) & (c)

74. Where the buyback is authorized by a special resolution, it shall not exceed ______ of ______

(a) 25%; Aggregate of paid-up capital and free reserves

(b) 25%; total paid up equity capital
(c) 25%; aggregate of paid-up equity capital and free reserves
(d) 10%; aggregate of paid-up equity capital and free reserves

75. Where the buy- back is authorized by a resolution passed in Board Meeting, it shall not exceed _______ of
_______

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 CA Kishan Kumar MCQs – Share, Share Capital, Debenture and Transfer May & Nov 2021

(a) 25%; Aggregate of paid-up capital and free reserves

(b) 25%; total paid up equity capital
(c) 10%; aggregate of paid-up equity capital
(d) 10%; aggregate of paid-up equity capital and free reserves

76. The Buy-back shall be completed within ________ of passing the resolution for buy back

(a) 3 months
(b) 6 months
(c) 9 months
(d) 1 year

77. Further offer of buy-back shall not be given within _______ of closure of preceding offer of buy-back

(a) 3 months

A
(b) 6 months

C
(c) 9 months

ro
(d) 1 year

e P
78. A company intending to buy-back its securities, shall file with the Registrar a declaration of solvency stating that

Th
it will not be rendered insolvent within next ________

y
(a) 3 months

B
(b) 6 months

d
(c) 9 months

pi le
(d) 1 year

m
79. After completion of buy-back, the company shall, within _____, file a return containing such particulars

o
relating to buy-back as may be prescribed

C
(a) 7 days
(b) 15 days
(c) 30 days
(d) 60 days

80. The company shall extinguish and physically destroy the shares bought- back within _______ of completion of
buy-back

(a) 7 days
(b) 15 days
(c) 30 days
(d) 60 days

81. The ratio of debt (secured as well as unsecured debt) owed by the company must not be more than _______
the aggregate of paid up capital and free reserves _______ the buy- back

(a) Twice; before

(b) Twice; after
(c) Thrice; before
(d) Thrice; after

82. A company may issue debentures with an option to convert them into shares, provided such issue is approved
by passing ________

(a) An ordinary resolution

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(b) A special resolution

(c) A unanimous resolution
(d) A Board resolution

83. Statement (1): A debenture can carry voting right only if it is secured
Statement (2): A debenture can carry voting right only if it is convertible into equity shares

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct
(c) Both the Statements are correct
(d) None of the Statements is correct

84. In no case the tenure of secured debentures shall exceed _______

(a) 10 years

A
(b) 20 years

C
(c) 30 years

ro
(d) 50 years

e P
85. The debenture trustee(s) may be provided with such exemption(s) as may be agreed upon by a majority of

Th
debenture holders holding not less than _______ of total debentures

y
(a) 2/3rd
in value

B
(b) 3/4th in value

d
(c) 1/3rd in value

pi le
(d) None of these

m
86. The company shall create DRR equivalent to _______ of the value of outstanding debentures.

C o
(a) 15%
(b) 25%
(c) 35%
(d) 50%

87. The company shall, on or before the 30th day of April in each year, invest or deposit, as the case may be, a sum
which shall not be less than ______ of the amount of debentures maturing up to 31 st day of March of the next
year, in deposits with any scheduled bank, unencumbered securities of the Central Government or any State
Government, etc.

(a) 15%
(b) 20%
(c) 25%
(d) 35%

88. Statement (1): A person who is registered holder of shares but does not beneficially holds any shares in a
company, shall not be appointed as a debenture trustee.
Statement (2): A person who is indebted to the company shall not be appointed as a debenture trustee.

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct
(c) Both the Statements are correct
(d) None of the Statements is correct

89. A person shall not be appointed as a debenture trustee if he has any pecuniary relationship with the company
amounting to ________ or more of its gross turnover or total income of _______ or such higher amount as
may be prescribed, whichever is lower, during the immediately preceding financial years or during the current

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financial year.

(a) 1%; Rs. 50 lakhs

(b) 2%; Rs. 50 lakhs
(c) 1%; Rs. 20 lakhs
(d) 2%; Rs. 20 lakhs

90. A person shall not be appointed as a debenture trustee if he relative of ________ or any person who is in the
employment of the company as _______

(a) Any promoter; a director

(b) Any member; a director
(c) Any promoter; director or key managerial personnel
(d) Any member; director or key managerial personnel

A
91. A meeting of all the debenture holders shall be convened by the debenture trustee on requisition in writing

C
signed by debenture-holders holding at least _______ in value of the debentures for the time being

ro
outstanding.

e P
(a) 1/5th

Th
(b) 1/10th
(c) 1/20th

y
(d) 1/3rd

d B
92. _______ may issue secured debentures for a period exceeding 10 years but not exceeding 30 years

pi le
(a) Any company

m
(b) Infrastructure Finance Companies

o
(c) Asset Reconstruction Companies

C
(d) Both (b) and (c)

93. _______ may issue secured debentures for a period exceeding 10 years but not exceeding 30 years

(a) Companies engaged in setting up of infrastructure projects

(b) Infrastructure Debt Fund Non-Banking Financial Companies
(c) Companies permitted by a Ministry or Department of the Central Government or by RBI or by
the National Housing Bank or by any other Statutory Authority
(d) Any of These

94. The secured debentures shall be secured by the creation of a charge on the assets of _______, having a value
which is sufficient for the due repayment of the amount of debentures and interest thereon.

(a) The Company

(b) Its Subsidiaries or its holding company
(c) Its associates company
(d) Any of these

95. Where a company makes an offer to its members exceeding _______ in number, the appointment of one or
more debenture trustee is mandatory.

(a) 100
(b) 200
(c) 250
(d) 500

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 CA Kishan Kumar MCQs – Share, Share Capital, Debenture and Transfer May & Nov 2021

96. Statement (1): Where a company issues a prospectus, the appointment of one or more debenture trustee is
mandatory.
Statement (2): Where a company makes an offer or invitation to the public, the appointment of one or more
debenture trustee is mandatory.

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct
(c) Both the Statements are correct
(d) None of the Statements is correct

97. Any holder of securities may make a nomination by filing Form No. ________

(a) SH-12
(b) SH-13
(c) SH-14
(d) SH-15

C A
ro
98. A nomination may be cancelled or varied by filing Form No.

e P
(a) SH-12

Th
(b) SH-13
(c) SH-14

y
(d) SH-15

d B
99. The issue of Employee Stock Option Scheme shall be approved by the shareholders of the company by passing

le
_______

pi
(a) An ordinary resolution

m
(b) A special resolution

o
(c) A unanimous resolution

C
(d) None of these

100. ________ cannot become a member of a company.

(a) Hindu Undivided Family

(b) Company
(c) Government
(d) A body corporate

101. ________ can become a member of a company

(a) A partnership firm

(b) Limited liability partnership
(c) Trust
(d) Insolvent

102. ________ can become a member of a company.

(a) A co-operative society

(b) Foreigner
(c) Joint holders
(d) All of these

103. Which of the following is essential rights of a preference shareholders?

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 CA Kishan Kumar MCQs – Share, Share Capital, Debenture and Transfer May & Nov 2021

(a) Participation with equity shares in profits of the Company (fully or to a limited extent) after payment of
dividends to equity shareholders.

(b) Participation with equity shares in any surplus of the Company (fully or to a limited extent) remaining after
repayment of entire capital.

(c) Preferential right with respect to Payment of dividend and repayment, in the case of winding up or
repayment of capital, of the amount of the share capital paid-up.

(d) All of the above

104. In case of prescribed class of Companies whose financial statement comply with AS prescribed u/s 133, Premium
payable on redemption may be provided for-

(a) Out of the profits of company; or

A
(b) Out of securities premium account.

C
(c) Proceeds of fresh issue

ro
(d) Any of the above

e P
105. A _________________must be passed to make valid call.

Th
(a) Ordinary Resolution

y
(b) Special Resolution

B
(c) Board Resolution

d
(d) Any of the above as per decision of Board

pi le
106. Dividend is paid as a proportion of _________________ of shares.

o m
(a) Nominal value

C
(b) Paid up value
(c) paid-up value if provided by Articles of the company
(d) (a) or (c)

107. Statement 1: Class of companies whose financial statement comply with the accounting standards prescribed
under sec. 133 can utilize security premium account for writing off the expenses of or the commission paid or
discount allowed on any issue of equity shares of the company.

Statement 2: Class of companies whose financial statement comply with the accounting standards prescribed
under sec. 133 can utilize security premium account for Writing off preliminary expenses of the Company.

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct
(c) Both the Statements are correct
(d) None of the Statements is correct

108. A company can issue shares at discount in following cases ____________________

(a) issue of sweet equity shares u/s 54.

(b) issue of shares at a discount to its creditors when its debt is converted into shares in pursuance of any
statutory resolution plan or debt restructuring scheme in accordance with any guidelines or directions or
regulations specified by the Reserve Bank of India.

(c) Both (a) and (b)

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 CA Kishan Kumar MCQs – Share, Share Capital, Debenture and Transfer May & Nov 2021

(d) No restriction of issue of shares at discount

109. In one FY, a company shall not issue sweat equity shares for more than _______________

(a) 15% of the existing paid up equity shares capital

(b) Shares of the issue value of INR 5 crore
(c) Higher of (a) and (b)
(d) Lower of (a) and (b)

110. Following shall not be eligible for grant of option under the ESOP scheme

(a) A permanent employee of the company who has been working outside India

(b) A director who, either himself or through his relative or through anybody corporate, directly or indirectly,
holds more than 5% of the equity shares of the company.

C A
(c) A whole-time director of the company

P ro
(d) An independent director

Th e
111. Statement 1: CG may make an order for conversion of loans or debentures into shares even if the terms of issue
of such debentures or loans do not contain any provision for conversion.

B y
Statement 2: If the terms and conditions of such conversion are not acceptable to the company, the company

d
may prefer an appeal to the Tribunal within 30 days.

pi le
(a) Only Statement (1) is correct
(b) Only Statement (2) is correct

m
(c) Both the Statements are correct

C o
(d) None of the Statements is correct

112. In which of the following cases, public company is allowed to give financial assistance for purchases of shares:

(a) Lending of money by a banking company in the specifically for purchase of its shares

(b) The provision of money for the purchase of fully paid up shares by trustees for the benefit of the employees.

(c) Giving of loans by a company its employees other than its directors or key managerial personnel for an
amount not exceeding their salary or wages for a period of 6 months with a view to enabling them to
purchase fully or partly paid-up shares in the company or its holding company.

(d) Any of the above

Answer Key

1. A 2. B 3. C 4. C 5. D 6. A 7. C

8. B 9. C 10. C 11. D 12. D 13. B 14. A

15. C 16. A 17. B 18. D 19. C 20. A 21. C

22. B 23. B 24. B 25. A 26. D 27. B 28. C

29. C 30. D 31. C 32. B 33. B 34. D 35. A

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 CA Kishan Kumar MCQs – Share, Share Capital, Debenture and Transfer May & Nov 2021

36. D 37. B 38. C 39. D 40. B 41. D 42. C

43. D 44. B 45. B 46. C 47. A 48. D 49. C

50. B 51. C 52. C 53. C 54. A 55. D 56. D

57. B 58. B 59. C 60. C 61. D 62. B 63. C

64. C 65. D 66. A 67. C 68. B 69. A 70. B

71. B 72. D 73. D 74. A 75. D 76. D 77. D

78. D 79. D 80. A 81. B 82. B 83. D 84. C

85. B 86. B 87. A 88. B 89. B 90. C 91. B

A
92. B 93. D 94. D 95. D 96. C 97. B 98. C

ro C
99. B 100. A 101. B 102. D 103. C 104. A 105. C

e P
106. D 107. A 108. C 109. C 110. D 111. A 112. D

y Th
e d B
pi l
C o m

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C o m
 This Is a Farewell Gift

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d
From CA KishaneSir Law
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C o m
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To Focus on Tax & EIS-SM

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 CA Kishan Kumar MCQs – Acceptance of Deposits May & Nov 2021

ICAI Study Material MCQs

1. An eligible company as per section 76, which is accepting deposits within the limits specified under section 180
(1) may accept deposits by means of

a. ordinary resolution
b. unanimous resolution
c. Special resolution
d. Special resolution and approval of Central Government

2. Every company shall pay a penal rate of interest for the overdue period in case of deposits, whether secured or
unsecured, matured and claimed but remaining unpaid

a. 9% p.a.

A
b. 10% p.a.

C
c. 12% p.a.

ro
d. 18% p.a.

e P
Th
3. A reserve account that shall not be used by the company for any purpose other than repayment of deposits is
called:

B y
a. debenture redemption reserve

d
b. deposit repayment reserve

pi le
c. capital redemption reserve
d. free reserve

o m
4. Where depositors so desire, deposits may be accepted in joint names not exceeding ____

C
a. 2
b. 3
c. 5
d. 7

5. No deposits are repayable earlier than ____________ from the date of such deposits or renewal thereof.

a) 3 months
b) 6 months
c) 12 months
d) 1 year

6. A company shall execute a deposit trust deed at least ______ days before issuing circular in the form of
advertisement.

a) 7
b) 14
c) 21
d) 28

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 CA Kishan Kumar MCQs – Acceptance of Deposits May & Nov 2021

ICAI Sample MCQs

7. On 30th June 2017, the liability side of Balance Sheet of X Ltd. showed balance of paid up share capital of Rs. 65
lacs, free reserve of Rs. 10 lacs, share premium account of Rs. 20 lacs, deposits of Rs. 25 lacs, repayable in the
current financial year, during the month of September 2017. In July 2017, the company was in need of some
short-term funds to the tune of Rs. 20 lacs for a period of 6 months. The maximum amount which the company
may hold as deposit together with existing deposits will be—

a. Rs. 33.25 Lacs

b. Rs. 11.25 lacs
c. Rs. 95 lacs
d. Rs. 9.5 lacs.

8. XYZ Private Limited, has passed a resolution in general meeting to accept deposit from its members. Terms and
conditions are finalized in consultation with Reserve Bank of India. Company accepted deposits of INR 30 Lakhs

C A
in year 2016. Company wants more deposits in the next quarter. Board of Directors are aware that as per the

ro
Act, they have a Ceiling limit, beyond which they cannot accept deposits. What percentage of aggregate of paid-
up share capital, free Reserves and securities premium account, they cannot cross?

e P
Th
a. 15%
b. 25%

B y
c. 35%

d
d. 45%

pi le
MCQs for Practice

o m
9. ___________________ is required to be passed, if a company intends to accept deposits from its members.

C
a. An ordinary resolution
b. A special resolution
c. A unanimous resolution
d. Resolution by circulation

10. Where a company accept deposits from its members, it shall issue a circular to the members. The circular shall
be filed by the company with the registrar, at least _____________ prior to the issue of the circular to the
members.

a. 7 days
b. 15 days
c. 21 days
d. 30 days

11. Where a company accepts deposits from its members, it shall deposit in a Scheduled Bank in a separate bank
account a sum equal to __________ of the amount of deposits maturing during the following financial year.
Such amount shall be deposited on or before the ____________ of each year.

a. 10%, 31st day of March

b. 15%, 31st day of March
c. 20%; 30th day of April
d. 15%; 30th day of April

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 CA Kishan Kumar MCQs – Acceptance of Deposits May & Nov 2021

12. The amount of deposits outstanding together with the amount of deposits proposed to be accepted shall not
exceed __________ of the aggregate of the paid-up share capital, free reserves and securities premium account
of the company.

a. 20%
b. 25%
c. 35%
d. 50%

13. All the companies accepting deposits shall file the details of monies so accepted with registrar in Form No.
___________.

a. DPT - 1
b. DPT - 2

C A
c. DPT - 3

ro
d. DPT - 4

e P
14. No company shall accept or renew any deposit which is repayable after __________ from the date of

Th
acceptance of such deposit.

B y
a. 6 months

d
b. 12 months

le
c. 24 months

pi
d. 36 months

o m
15. For the purpose of providing security, every company inviting secured deposits shall provide for security by way

C
of charge on its assets as referred to in _________ of the act excluding __________ assets of the company
for the due repayment of the amount of deposit and interest thereon.

a. Schedule II; intangible

b. Schedule II; tangible
c. Schedule III; intangible
d. Schedule III; tangible

16. In case of deposits which are secured by the charge on assets, the amount of such deposits and the interest
thereon shall not exceed the __________ of such assets as assessed by __________.

a. Market value; a registered valuer

b. Market value; a chartered accountant
c. Book value; a registered valuer
d. Book value; a chartered accountant

17. The security for deposits shall be created in favour of a trustee for the depositor shall not being the nature of
__________.

a. A mortgage
b. A pledge
c. Either (a) or (b)
d. None of these

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 CA Kishan Kumar MCQs – Acceptance of Deposits May & Nov 2021

18. A company shall execute a deposit trust deed in Form ____________ at least 7 days before issuing the circular
or circular in the form of advertisement.

a. DPT - 1
b. DPT - 2
c. DPT - 3
d. DPT – 4

19. A company shall be liable to pay a penal rate of interest of ____________ per annum for the overdue period
in case of deposits whether secured or unsecured, matured and claimed but remaining unpaid.

a. 12%
b. 15%
c. 18%

C A
d. 24%

P ro
20. If a company had accepted any deposit before the commencement of Companies Act, 2013, and such deposit or

e
interest thereon remains unpaid as on such commencement, then, the company shall file a statement in Form

Th
No. __________

y
a. DPT - 1

B
b. DPT - 2

le d
c. DPT - 3

pi
d. DPT – 4

o m
21. A company may make an application to ___________ seeking extension of time for repayment of any deposit

C
accepted before the commencement of the Companies Act, 2013.

a. The Tribunal
b. The Registrar
c. The Central Government
d. The Court

22. A company may accept deposits from person other than its members, only if it is a public company and the net
worth of the company is ____________ or more, __________ turnover of the company is ___________
or more.

a. Rs. 100 crores; or; Rs. 500 crores

b. Rs. 1000 crore; or; Rs. 5000 crores
c. Rs. 100 crores; and; Rs. 500 crores
d. Rs. 1000 crore; and; Rs. 5000 crores

23. Every eligible company shall obtain __________ credit rating for deposits accepted by it and a copy of the
credit rating shall be filed with the Registrar along with the returns of deposits.

a. At the time of acceptance of deposits

b. At the time of renewal of deposits
c. Either (a) or (b) or both
d. At least once in a year

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 CA Kishan Kumar MCQs – Acceptance of Deposits May & Nov 2021

24. Which of the following is not deposit?

a. amount received from the Relative of Promoter

b. amount received from Foreign companies
c. non-interest-bearing amount received or held in trust
d. All of the above

25. Which of the following is deposit?

a. Any amount raised by the issue of bonds or debentures

b. Any amount from bank
c. amount received against issues of commercial paper or any other instrument issued in accordance with the

A
guidelines or notification issued by the Reserve Bank of India

C
d. Amount received from members

P ro
26. Which of the following statement is true?

Th e
I. Minimum duration of deposit is 6 months

y
II. Minimum duration of deposit is 9 months

B
III. Minimum duration of deposit is 3 months provided such deposit shall not exceed 10% of the aggregate of

e d
the paid-up share capital, free reserves and securities premium account

pi l
IV. Maximum duration of deposit is 36 months
V. Maximum duration of deposit is 24 months

C o m
Select the correct answer

a. I, III, IV
b. II, III, IV
c. I, III, V
d. I, IV

27. Which of the following statement is true?

I. Maximum deposit accepted by an eligible company from its members or public can’t exceed 35% of
aggregate of the paid-up share capital, free reserves and securities premium account of the Company.

II. Maximum deposit accepted by an eligible company from its members can’t exceed 10% of aggregate of the
paid-up share capital, free reserves and securities premium account of the Company.

III. Maximum deposit accepted by an eligible company from public can’t exceed 25% of aggregate of the paid-
up share capital, free reserves and securities premium account of the Company.

IV. Maximum deposit accepted by a Government company can’t exceed 35% of aggregate of the paid-up share
capital, free reserves and securities premium account of the Company.

V. Private Company can accept deposit from its members upto 100% of aggregate of the paid-up share capital,
free reserves and securities premium account.

Select the correct answer

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 CA Kishan Kumar MCQs – Acceptance of Deposits May & Nov 2021

a. I, IV, V
b. I, IV
c. II, III, IV
d. I, II, III, IV, V

28. What are the conditions subject to which a private company can accept deposit from its members exceeding
100% aggregate of the paid-up share capital, free reserves and securities premium account of the Company?

a. It is not an associate or a subsidiary company of any other company;

b. The borrowing of such a company from banks or financial institution or anybody corporate is less than
twice of its paid-up share capital or INR 50 crore, whichever is less; and
c. Such a company has not defaulted in the repayment of such borrowing subsiding at the time of accepting
deposits under section 73.

A
d. All of the above

ro C
P
Answer Key

h e
1. A 2. D 3. B 4. B 5. B 6. A 7. A

y T
8. C 9. A 10. D 11. C 12. C 13. C 14. D

d B
15. C 16. A 17. B 18. B 19. C 20. D 21. A

pi le
22. A 23. D 24. D 25. D 26. A 27. D 28. D

C o m

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e Pro
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C o m
 This Is a Farewell Gift

o C A
eP r
Th
B y
d
From CA KishaneSir Law
i l
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p
Fully amended for

C o m
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To Focus on Tax & EIS-SM

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 CA Kishan Kumar MCQs – Charge May & Nov 2021

ICAI Study Material MCQs

1. The instrument creating a charge or modification thereon shall be preserved for a period of years from the
date of satisfaction of charge by the company.

a) 5
b) 7
c) 8
d) 15

2. On receipt of intimation of satisfaction of charge, the registrar issues a notice to the holder calling a show cause
within such time not exceeding __________ days as to why payment or satisfaction in full should not be
regarded as intimated to the Registrar:

A
a) 14

C
b) 21

ro
c) 30

e P
d) 300

Th
3. The register of charges and instrument of charges, shall be open for inspection during ______ .

B y
a) Working Hours

d
b) Business Hours

le
c) At all times

pi
d) 9 am to 5 pm

o m
4. Any person acquiring property (on which charge is registered under section 77) shall be deemed to have notice

C
of the charge from _________________.

a) end of 30 days
b) date of application for charge
c) date acquiring the property
d) date of such registration

5. An interest or lien created on the property or assets of a company or any of its undertakings or both as security
is known as:

a) Debt
b) Charge
c) Liability
d) Hypothecation

6. If a charge is created on or after 02-11-2018 but the registration is not made within the original period of 30 days
and also not made within next 30 days after the expiry of original 30 days, then the registrar is empowered to
allow such registration to be made within a further period of ______________.

a) 30 days
b) 45 days
c) 60 days
d) 90 days

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 CA Kishan Kumar MCQs – Charge May & Nov 2021

ICAI RTPs and MTPs

7. Purvi Pvt. Ltd. is maintaining a register of charges along with all other necessary books and registers. The entry
for every creation, modification and satisfaction of charges is being done properly. The company is also
preserving every instrument related to such charges. From the following, for how long the instrument of charges
shall be maintained/preserved by the company---

a. for minimum 8 years from the date of creation of charge

b. For minimum 10 years from the date of creation of charge
c. For minimum 8 years from the date of satisfaction of charge
d. permanently, without any time limit

8. Eztech Machines Limited owns a plot of land which was mortgaged to Urbane Commercial Bank Limited for
raising term loan of INR 2.00 crores. The mortgage was duly registered with the Central Registry. First loan

A
installment of INR 50.00 lacs was released immediately after sanction of term loan with the condition that

ro C
subsequent three instalments of INR 50.00 lacs shall be released as soon as the earlier released instalment is

P
utilized satisfactorily. Is it necessary either for the company or the bank to register the charge on plot with the

Th e
concerned Registrar of Companies (ROC) when the mortgage is registered with the Central Registry?

y
a. It is not necessary either for the bank or the company to register the change on plot of land with the

B
concerned Register of companies (ROC) when the mortgage is registered with the Central Registry.

e d
b. It is necessary to get the charge on plot on land registered with the concerned ROC irrespective of the fact

pi l
that mortgage is registered with the Central Registry.
c. The charge on plot needs to be registered with the concerned ROC only when the actual liability of the

o m
company with the bank exceeds INR 1.00 crore

C
d. The charge on plot needs to be registered with the concerned ROC only when the term loan sanctioned by
the bank to the company exceeds INR 2.00 crore.

9. With a view to augment its production, Surya Techno-Products Limited availed a loan INR 50.00 Lacs from Shri
Laxmi First Bank Limited for purchase of a new machinery by offering its factory worth INR 2.25 crores as
security. However, the company did not initiate any steps to get the charge on factory registered in favour of
lending banker within the specific time. As soon as the charge-holder bank came to know about the non-
registration of charge, it filed the required documents along with the instrument creating the charge and paid
the requisite fees when demanded. Advise the bank whether it can recover the fees so paid for registration of
charge from Surya Techno- Products.

a. Yes, the bank can recover the fees paid by it for registration of charge.

b. No, the bank cannot recover the fees paid by it for registration of charge because the bank is equally
responsible for getting the charge registered.

c. Only when it obtains recovery order from Regional Director (RD), the bank can recover the fees paid by it
for registration of charge from the company.

d. Only when it obtains recovery orders from National Company Law Tribunal (NCLT), the bank can recover
the fees paid by it for registration of charge from the company.

10. A charge was created by Cygnus Software Limited on its office premises to secure a team loan of INR 1.00 crore

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 CA Kishan Kumar MCQs – Charge May & Nov 2021

availed from Next Gen Commercial Bank through an instrument of charge executed by both the parties on 16 th
February, 2019. Inadvertently, the company could not get the charge registered with the concerned Registrar of
companies (ROC) within the first statutory period permitted by law and the default was made known it to by the
lending banker with a stern warning to take immediate steps for rectification. Advise the company regarding the
latest date within which it must registered the charge with the ROC so that it is a not required to pay a specific
type of lees for charge registration.

a. With a view to avoid paying a specific type of fees for charge registration, the company must get the charge
registered latest by 27th April, 2019

b. With a view to avoid paying a specific type of fees for charge registration, the company must get the charge
registered latest by 17th April, 2019

A
c. With a view to avoid paying a specific type of fees for charge registration, the company must get the charge

C
registered latest by 2nd May, 2019

P ro
d. The company cannot now get the charge registered as the time prescribed by Law has expired.

Th e
11. Cyplish Games and Toys Limited was sanctioned a term loan of INR 60.00 lacs by Zawnn Industrial Bank
Limited on 21st November, 2018. As a security, the company offered its office premises situated at Bandra,

B y
Mumbai and an instrument of charge was executed. However, the company failed to get the charge registered

d
with the concerned Registrar within the first as well as second statutory period available as per law. This was

pi le
adversely commented by the internal auditors of the Bank and therefore, after a strict advisory received by
Shahji, the senior manager of the bank, the company was prompted to take steps for registration of charge. Name

m
the specific type of fees which the company is now required to pay for registration of charge.

C o
a) Special fees
b) Ad-valorem Fees.
c) A late Registration Fees.
d) Ad-valorem duty.

MCQs for Practice

12. The term ‘charge’ is defined as an interest or lien created on the property or assets of a company or any of its
______ or both as security and includes a ________

a) Intellectual property rights; mortgage

b) Undertakings; mortgage
c) Undertakings; hypothecation
d) Intellectual property rights; pledge

13. Where a company creates a charge on any of its assets, it shall be the duty of the company to register such charge
with the Registrar within _____ of its creation

a) 15 days
b) 30 days
c) 45 days
d) 60 days

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14. For registration of charge the particulars of the charge together with a copy of the instrument, if any, creating
the charge in Form No. _______ (for other than Debentures) or Form No. ______ (for debentures) shall be
filed with the Registrar.

a) CHG-1; CHG-9
b) CHG-2; CHG -10
c) CHG-1; CHG -2
d) CHG-1; CHG-10

15. Where a charge is registered with the Registrar, the Registrar shall issue a certificate or registration of such
charge in Form No. ______

a) CHG-1

A
b) CHG-2

ro C
c) CHG-3

P
d) CHG-4

Th e
16. Where the particulars of modification of charge is registered, the Registrar shall issue a certificate of
modification of charge in Form No. _______

B y
a) CHG-1

e d
b) CHG-2

pi l
c) CHG-3
d) CHG-4

C o m
17. The Registrar shall keep a register of charges which shall be open to inspection by ______ on payment of fee

a) The company
b) The charge holder
c) Both (a) & (b)
d) Any person

18. If the property charged _______, the Registrar may record the satisfaction of charge in the register of charges
maintained by him notwithstanding the fact that no intimation of satisfaction of charge has been given to him
by the company.

a) Has been released from charge

b) Has ceased to be the property of the company
c) Either (a) or (b)
d) None of these

19. If a person appointed as a receiver or manager ceases to hold his office, he shall give a notice of such fact to
_______.

a) The company
b) The Registrar
c) Both (a) & (b)
d) None of these

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 CA Kishan Kumar MCQs – Charge May & Nov 2021

20. Every company shall keep at its registered office a register of charges in Form No. _______

a) CHG-7
b) CHG-8
c) CHG-9
d) CHG-10

21. The register of charges maintained by the company shall be preserved ________.

a) For a period of 3 years

b) For a period of 6 years
c) For a period of 8 years

A
d) Permanently

ro C
22. If there is omission or mis-statement of any entry required to be entered in the register of charges and _____

P
is satisfied that it was accidental or due to inadvertence or due to some other sufficient cause, or it is just and

e
equitable to grant relief, it may make an order for rectification of register of charges.

Th
a) The Tribunal

B y
b) The Central Government

d
c) The Court

le
d) The Registrar

pi
23. The application for condonation of delay in filing particulars of creation or modification or satisfaction of charge

o m
shall be filed in Form No. ______.

C
a) CHG-7
b) CHG-8
c) CHG-9
d) CHG-10

24. Statement (1): A specific charge is created on a class of assets, present as well as future.
Statement (2): A floating charge is created on some identifiable property of the company.

a) Only Statement (1) is correct

b) Only Statement (2) is correct
c) Both the Statements are correct
d) None of the Statements is correct

25. A floating charge crystallizes into a fixed charge if _______

a) The company is ordered to be wound up

b) The company ceases to carry on business
c) A receiver is appointed
d) Any of these

26. Statement (1): A company can even create a fixed charge on the property already subject to floating charge
without consent of the charge holders.

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Statement (2): Permission of money lender is not required for disposing an asset subject to floating charge or
converting it into some other assets.

a) Only Statement (1) is correct

b) Only Statement (2) is correct
c) Both the Statements are correct
d) None of the Statements is correct

27. Statement (1): Date of Notice of Charge shall be the date of registration of the charge.

Statement (2): Unregistered charge holder shall have the rights lesser than registered chargeholdee but higher
than unsecured creditors.

a) Only Statement (1) is correct

C A
b) Only Statement (2) is correct

ro
c) Both the Statements are correct

P
d) None of the Statements is correct

Th e
28. Statement (1): Change in interest rate including due to change in Bank Rate of RBI constitutes modification.

y
Statement (2): The particulars of charges maintained on the Ministry of Corporate Affairs portal (www.

B
mca.gov.in/MCA21) shall be deemed to be the register of charges for the purposes of section 81 of the Act.

le d
pi
a) Only Statement (1) is correct
b) Only Statement (2) is correct

m
c) Both the Statements are correct

C o
d) None of the Statements is correct

29. Statement (1): Partial release of the charge on a particular assets or property does not constitute modification.

Statement (2): Part payment or satisfaction requires intimation to the Registrar

a) Only Statement (1) is correct

b) Only Statement (2) is correct
c) Both the Statements are correct
d) None of the Statements is correct

30. Statement (1): Entries in the register shall be authenticated by a director or the secretary of the company or
any other person authorised by the Board for the purpose.

Statement (2): The application for condonation of delay shall be filed with the Tribunal along with the fee.

a) Only Statement (1) is correct

b) Only Statement (2) is correct
c) Both the Statements are correct
d) None of the Statements is correct

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Answer Key

1. C 2. A 3. B 4. D 5. B 6. C 7. C

8. B 9. A 10. B 11. B 12. B 13. B 14. A

15. B 16. C 17. D 18. C 19. C 20. A 21. D

22. B 23. B 24. D 25. D 26. C 27. A 28. B

29. D 30. A

C A
e P ro
y Th
e d B
pi l
C o m

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 C A
e Pro
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ed B
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C o m
 This Is a Farewell Gift

o C A
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B y
d
From CA KishaneSir Law
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for
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Fully amended for

C o m
May / Nov 21

Taking Break From Law

To Focus on Tax & EIS-SM

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 CA Kishan Kumar MCQs –Management and Administration May & Nov 2021

ICAI Study Material MCQs

1. Which one of the following required ordinary resolution?

a) to change the name of the company

b) to alter the articles of association
c) to reduce the share capital
d) to declare dividends.

2. A resolution shall be a special resolution when the votes cast in favour of the resolution by members are not
less than the number of votes, if any, cast against the resolution.

a) Twice
b) Three times

A
c) One third

ro C
d) One fourth

e P
3. Register of members, debenture holders or security holders or copies of return may be kept at any other place in

Th
India in which more than _________ of the total number of members entered in register of members reside,
if approved by a special resolution passed at a general meeting of the Company and registrar has been given a

y
copy of the proposed resolution in advance.

d B
a) One-half

pi le
b) One-eight
c) One-tenth

o m
d) One-third

C
4. The Registrar may grant an extension by ________, for holding the Annual General Meeting to any company
for special reasons (except in the case of first AGM of the company).

a) 1 Month
b) 2 Months
c) 3 Months
d) 6 months

5. Every listed company shall file with the Registrar a copy of the report on each annual general meeting within
______ of the conclusion of the annual general meeting.

a) 7 days
b) 30 days
c) 3 months
d) 90 days

ICAI Past Year MCQs

6. Resolution requiring special notice is required

a) For appointment of a person other than the retiring auditor as auditor at the AGM
b) For removing a director before the expiry of the period of his office
c) For both (1) and (2)

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 CA Kishan Kumar MCQs –Management and Administration May & Nov 2021

d) For none of the above

7. An extraordinary general meeting may be convened by

a) Board of Directors
b) Requisitionists
c) Tribunal
d) All the above

8. The gap between two annual general meetings must not be more than

a) 12 months
b) 15 months
c) 18 months

C A
d) 15 months, as may be extended by Register of Companies to 18 months

P ro
9. Unless the Articles provide for a larger number the quorum for a general meeting for a public limited company

e
is

Th
a) 1/3rd of the members

B y
b) 5 members personally present

d
c) 2 members

le
d) 7 members

pi
10. The financial year of AVD Company Ltd. ended on 31st march 2014. The annual general meeting of the company

o m
was held on 10th October 2014. As per requirement of the Companies Act 2013, the annual return of the company

C
shall be filed with Registrar of the Companies upto

a) 60 days from 10th October 2014

b) 60 days from 30th September 2014
c) 90 days from 30th September 2014
d) 90 days from 10th October 2014

11. An index of members is not required to be maintained by a company if its number of members is less than

a) 20
b) 50
c) 70
d) 80

ICAI Sample MCQs

12. ABC Infrastructures Limited is a listed company quoted at National Stock Exchange. The company closed its
Register of Members in June and August, 2017 for 12 and 21 days respectively. The CFO of company has
informed the company secretary to consider closing of register in December for another 15 days for some
strategic reasons. Referring to the provisions of Companies Act, 2013, examine the validity of above action of
the company.

(a) Valid, as the closure of register of members by company each time is not exceeding 30 days.
(b) Invalid, as company cannot go for closure of Register of members more than twice in a year.

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 CA Kishan Kumar MCQs –Management and Administration May & Nov 2021

(c) Invalid, as the period of closing register of members exceeding 30 days in a year.
(d) Invalid, as the period of closing the Register of members by the company is exceeding 45 days in a year.

13. The Annual General meeting of Tirupati Limited was scheduled for 28th December, 2017. Mr. Ananat,
shareholder of Tirupati Limited has desired to inspect inspection of proxies lodged with the company. The notice
for inspection should be given at least before the meeting:

(a) 24 hours
(b) 1 day
(c) 2 days
(d) 3 days

14. JX Limited, an unlisted public Company has its registered office in Mumbai. Due to a shortage of storage space,
the Board of Directors of JX Limited has decided not to preserve the books of accounts and other related records

A
of accounts. The Board has approached you, to seek an advice on this matter. Give suitable advice to the Board

C
of JX Limited:

P ro
a) The Company is not mandatorily required to maintain the Statutory Registers and Records at the Registered

e
Office.

Th
b) The Company can make space by destroying all Statutory Registers and Records which are older than 8
years.

B y
c) Company can shift the Statutory Registers and Records at JX Limited’s branch office situated at Pune,

d
where more than one-tenth of the total number of members entered in the register of members reside.

e
Company can digitize all the Statutory Registers and Records.

l
d)

pi
15. Swiss Commodities Private Limited was incorporated in 2015. Company was not running its business properly

m
due to unexpected ups and downs. It could not hold its first annual general meeting in the year 2016. The

o
company is planning to apply for extension of time for holding the AGM from the Registrar of Companies. On

C
which grounds Company can get an extension?

a) They will not get any extension.

b) It Company proves that their financial statements are confiscated.
c) If they prove that directors have fell below numbers.
d) If they prove that members are not available.

16. Annual general meeting needs to be called by giving 21 days’ clear notice. However, it can be called on a shorter
notice if members entitled to vote in that meeting give their consent in writing or by electronic mode. In such
case, how many members have to give their consents?

a) 75% of members entitled;

b) 90% of members entitled;
c) 91% of members entitled;
d) 95% of members entitled;

17. In Annual General Meeting, which one of the following will be treated as special business?

(a) declaration of any dividend;

(b) fixing of the remuneration of the auditors;
(c) appointment of directors in place of those retiring;
(d) regularization of Director’s Appointment;

18. Sukant and Sukriti, architects by profession and residents of Janakpuri, Delhi, have formed a company by the
name Suk Architects and Consultants Private Limited, whose registered office is situated in a somewhat less

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 CA Kishan Kumar MCQs –Management and Administration May & Nov 2021

inhibited market area of Gurugram, Haryana. They do not consider it to be a safe place. Therefore, to be on safer
side they have kept all the documents and information relating to incorporation of their company (that were
originally filed with Registrar for registration of Company) at Sukant’s residence. Is their action justified?

a) It is their prerogative to keep all the documents and information relating to incorporation of their company
at a place which they think is quite safe – even if it is Janakpuri, Delhi.

b) Considering registered office to be unsafe, they can keep all the documents and information relating to
incorporation of their company at any place in Haryana only where Gurugram is situated but for this
purpose they must seek permission of the ROC.

c) If they do not want to seek permission of ROC, considering registered office to be unsafe, they can keep all
the documents and information relating to incorporation of their company at any place which should be
within three kms. of their registered office but in Gurugram only.

A
d) They have to keep all the documents and information relating to incorporation of their company at the

C
registered office, only.

P ro
ICAI RTPs and MTPs

Th e
19. Supertech Computers Pvt. Ltd has 120 members. It sends notice to all of them. 20 members did not attend the
meeting. Out of remaining 100 members, 20 members abstained from voting. Advice the company, how many

B y
members should vote in favour of resolution, if it has to be passed as a Special Resolution?

le d
a) 60 votes

pi
b) 80 votes

m
c) 41 votes

C o
d) 20 votes

20. ABC Ltd., a pharmaceutical company was having its manufacturing plant in Solan, Himachal Pradesh. The
address of its registered office as informed to the Registrar of Companies was of one of its Director’s office,
situated at Mumbai, Maharashtra. To comply with the provisions of the Companies Act, 2013 it was keeping all
its books of accounts, other relevant papers and financial statements at its registered office. After sometime
Directors of the company found it difficult to maintain such books etc.at the registered office, so in a duly
convened meeting of the Board of the Directors, it was decided that the books of accounts and other relevant
papers be kept at the office situated in Solan. Within which time period the Registrar must be given notice about
such decision of the board –

a) Within 30 days from the date of taking such decision by the board.
b) Within 15 days from the date it starts maintaining its books of accounts at the office situated at Solan.
c) Within 30 days from the date it starts maintaining its books of accounts at the office situated at Solan.
d) Within 7 days from the date of taking such decision by the board.

21. All the 40 members of Taxila Traders Limited have valid voting rights. Due to some urgency, its directors are
desirous of convening Annual General Meeting (AGM) at a shorter notice than statutorily required. Is it possible
for them to do so?
a. Taxila Traders Limited cannot convene AGM at shorter notice than statutorily required.
b. Taxila Traders Limited can convene AGM at shorter notice than statutorily required, if consent in writing

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 CA Kishan Kumar MCQs –Management and Administration May & Nov 2021

or by electronic mode is accorded by all the forty members who are entitled to vote at the AGM.
c. Taxila Traders Limited cannot convene AGM at shorter notice than statutorily required if consent in writing
or by electronic mode is accorded by at least 38 members who are entitled to vote at the AGM.
d. Taxila Traders Limited can convene AGM at shorter notice than statutorily required if consent in writing or
by electronic mode is accorded by at least 36 members who are entitled to vote at the AGM.

22. In the current financial year, Zunee Traders Limited, a non-listed company, has 556 members, increased from
451 members which it had in the immediate previous financial year. For the forthcoming Annual General
Meeting (AGM), advise the company whether it is required to provide to its members the facility to exercise their
right to vote at this AGM by electronic means.

a. Since the company has more than 500 members, it is required to provide to its members the facility to

A
exercise their right to vote at the forthcoming AGM by electronic means.

ro C
b. The company is not required to provide to its members the facility to exercise their right to vote at the
forthcoming AGM by electronic means since its members are less than one thousand.

e P
c. Though the company is required to provide to its members the facility to exercise their right to vote at the

Th
forthcoming AGM by electronic means because it has more than 500 members, it can, as one-time measure,

y
seek exemption from ROC beforehand and in that case, it need not provide facility of voting by electronic

B
means.

e d
d. Only a listed company is required to provide to its members the facility to exercise their right to vote at the

pi l
General Meetings by electronic means

m
MCQs for Practice

C o
23. Every company limited by shares shall maintain the register of members in Form No. ________

(a) MGT-1
(b) MGT-2
(c) MGT-3
(d) MGT-4

24. Every company which issues or allots debentures or any other security shall maintain a separate register of
debenture holders or security holders, as the case may be, for each type of debentures or other securities in Form
No. _______

(a) MGT-1
(b) MGT-2
(c) MGT-3
(d) MGT-4

25. The entries in the registers of members or other security holders shall be made within ______ after the Board
of Directors or its duly constituted committee approves the allotment or transfer of shares, debentures or any
other securities.

(a) 7 days
(b) 14 days
(c) 15 days

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 CA Kishan Kumar MCQs –Management and Administration May & Nov 2021

(d) 30 days

26. The registers shall be maintained at the registered office of the company unless ______ is passed in a general
meeting authorizing the keeping of the register at any other place within the city, town or village in which the
registered office is situated or any other place in India in which more than _______ of the total number of
members reside.

(a) An ordinary resolution; 1/5th

(b) An ordinary resolution; 1/10th
(c) A special resolution; 1/20th
(d) A special resolution; 1/10th

27. Within _______ of any entry made in any foreign register, the company shall transmit a copy of such entry to
its registered office in India.

C A
(a) 7 days

ro
(b) 15 days

e P
(c) 21 days

Th
(d) 30 days

y
28. Where any declaration in respect of beneficial interest is filed with a company, the company shall, within

B
_______, file a return with the Registrar

le d
(a) 7 days

pi
(b) 14 days

m
(c) 15 days

C o
(d) 30 days

29. An individual who holds beneficial interest of not less than ______ or such other percentage as may be
prescribed in shares of a company shall be termed as significant beneficial owner

(a) 10%
(b) 20%
(c) 25%
(d) 50%

30. Every individual who acquires significant beneficial ownership in a company shall file a declaration in Form No.
_______to the company, within ______ of acquiring such significant beneficial ownership.

(a) BEN-1; 30 days

(b) BEN-1; 60 days
(c) BEN-2; 30 days
(d) BEN-2; 60 days

31. Where any declaration is received by the company from any significant beneficial owner, the company shall file
a return in Form No. ______with the Registrar in respect of such declaration, within _____ from the date of
receipt of declaration by it.

(a) BEN-1; 30 days

(b) BEN-1; 60 days

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 CA Kishan Kumar MCQs –Management and Administration May & Nov 2021

(c) BEN-2; 30 days

(d) BEN-2; 60 days

32. The company shall maintain a register of significant beneficial owners in Form No. ______

(a) BEN-1
(b) BEN-2
(c) BEN-3
(d) BEN-4

33. A company is empowered to close its register of members for a maximum period of ______ at any one time.

(a) 30 days
(b) 45 days

C A
(c) 60 days

ro
(d) 90 days

e P
34. A private company shall serve the notice of closure on all the members not less than ______ prior to closure

Th
of the register of members or debenture holders or other security holders.

B y
(a) 7 days

d
(b) 14 days

le
(c) 15 days

pi
(d) 30 days

o m
35. Every company shall prepare its annual return in Form No. _______

C
(a) MGT-7
(b) MGT-8
(c) MGT-9
(d) MGT-14

36. The extract of the annual return shall be in Form No. _______

(a) MGT-7
(b) MGT-8
(c) MGT-9
(d) MGT- 14

37. Where the annual return is to be certified by a company secretary in practice, the company secretary in practice
shall issue the certificate In Form No. _____

(a) MGT-7
(b) MGT-8
(c) MGT-9
(d) MGT-14

38. The registers and indices and copies of annual return shall be kept at the registered office of the company or at
any other place in India, if more than _____ of the total number of members reside at such place and ______

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 CA Kishan Kumar MCQs –Management and Administration May & Nov 2021

is passed in the general meeting.

(a) 10%; an ordinary resolution

(b) 20%; an ordinary resolution
(c) 10%; a special resolution
(d) 20%; a special resolution

39. The register of members and the index of members shall be preserved _______.

(a) For at least 4 years

(b) For at least 6 years
(c) For at least 8 years
(d) Permanently

C A
40. First AGM is to be held within _______ of close of ______

P ro
(a) 6 months; first financial year

e
(b) 9 months; first financial year

Th
(c) 6 months; first calendar year

y
(d) 9 months; first calendar year

d B
41. An AGM, other than the first AGM, shall be held within _______ of close of ______

pi le
(a) 6 months; the relevant financial year

m
(b) 9 months; the relevant financial year

o
(c) 6 months; the relevant calendar year

C
(d) 9 moths; the relevant calendar year

42. In respect of an AGM, other than the first AGM, a company is required to satisfy ______ of the following
requirements.
(1) AGM is to be held within 6 months of close of the relevant financial year.
(2) Not more than 15 months shall elapse between the date of one AGM and that of the next AGM
(3) AGM is to be held in each calendar year

(a) Any one

(b) Any two
(c) All three
(d) None of these

43. The Registrar may, for any special reason, extend the time for holding ______ by any period not exceeding
______.

(a) The first AGM; 3 months

(b) Any AGM other than the first AGM; 3 months
(c) The first AGM; 6 months
(d) Any AGM other than the first AGM; 6 months

44. A company is incorporated on 13th January, 2019. The first financial year and second financial year of the

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 CA Kishan Kumar MCQs –Management and Administration May & Nov 2021

company shall end on _______ and ______ respectively.

(a) 31st March, 2019; 31st March 2020

(b) 31st March, 2020; 31st March 2021
(c) 31st December, 2019; 31st December, 2020
(d) None of these

45. AGM shall be called during business hours, i.e. between ________

(a) 9 am & 5 pm
(b) 9 am & 6 pm
(c) 10am & 5 pm
(d) 10am & 6 pm

C A
46. AGM shall be called for a day which is not a ________ holiday.

P ro
(a) Public

e
(b) Bank

Th
(c) Gazetted

y
(d) National

d B
47. The AGM of a listed company shall be held at ______.

pi le
(a) The registered office of the company

m
(b) Some other place within the city, town or village in which the registered office is situated

o
(c) Either (a) or (b)

C
(d) Any place within India

48. The AGM of _______ may be held at any place in India if consent is given in advance either in writing or by
electronic mode by ______

(a) A listed company; all the members

(b) An unlisted company; all the members
(c) A listed company; 95% of the members
(d) An unlisted company; 95% of the members

49. If AGM is not held as per the provisions of section 96, ______may make an application to _______.

(a) Any Director; the Tribunal

(b) Any member; the Tribunal
(c) Any Director; the Central Government
(d) Any member; the Central Government

50. Where the Tribunal makes an order calling an AGM of a company, it _______ direct that 1 member _______
shall be the quorum.

(a) Shall; present in person or proxy

(b) May; present in person or proxy
(c) Shall; present in person

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(d) May; present in person

51. If ______ an EGM, _______ may order an EGM to be called, held and conducted in such manner as it thinks
fit

(a) It is impracticable to call or hold or conduct; the Tribunal

(b) A default is made in holding; the Tribunal
(c) It is impracticable to call or hold or conduct; the Central Government
(d) A default is made in holding; the Central Government

52. The Tribunal may order an EGM to be called, held and conducted _______

(a) On the application of a member

(b) On the application of a director

A
(c) Suo motu

ro C
(d) Any of these

e P
53. If a default is made in ______, the company and every officer of the company who is in default, shall be

Th
punishable with fine upto Rs. 1 lakh and fine upto Rs. 5,000 per day in case of a continuing default.

y
(a) Holding AGM under section 96

B
(b) Holding AGM under section 97

le d
(c) Holding EGM under section 98

pi
(d) Holding AGM under section 96 or 97 or EGM under section 98

o m
54. Where the board of Directors of a company, other than a company which is _______ of a company incorporated

C
outside India, calls an EGM, such EGM shall be held at a place within India.

(a) A subsidiary
(b) A wholly owned subsidiary
(c) A holding company
(d) Either (a) or (c)

55. In case of a company having a share capital, one or more members holding ______ or more of the paid-up
share capital of a company are eligible to requisition an EGM

(a) 1/10th
(b) 1/5th
(c) 1/3rd
(d) 50%

56. A requisition for calling an EGM shall not be valid if it does not specify ______

(a) The matters for the consideration of which EGM is to be called

(b) The reasons for the matters proposed to be considered
(c) Either (a) or (b) or both
(d) None of these

57. The requisitionists ______ propose a date for holding the EGM. The requisition shall be deposited at least
______ clear days before such proposed date for holding the EGM.

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(a) May; 14
(b) Shall; 14
(c) May; 21
(d) Shall; 21

58. On receipt of a valid requisition, the Board shall within ________ proceed to call an EGM to be held not later
than ___________ from the date of deposit of requisition.

(a) 7 days; 21 days

(b) 14 days; 30 days
(c) 14 days; 45 days
(d) 21 days; 45 days

C A
59. On receipt of a valid requisition, if the Board fails to call an EGM, it may be called by the requisitionists

ro
themselves within _____ from the date of deposit of the requisition.

e P
(a) 6 weeks

Th
(b) 45 days

y
(c) 60 days

B
(d) 3 months

le d
60. All _____ incurred by the requisitionists by reason of the failure of the Board to call EGM shall be repaid to the

pi
requisitionists by ________.

o m
(a) Expenses; the defaulting directors

C
(b) Reasonable expenses; the defaulting directors
(c) Expenses; the company
(d) Reasonable expenses; the company

61. Where a notice of general meeting is sent by post, it shall be deemed to be served at the expiration of ______
after the letter containing the same is posted.

(a) 24 hours
(b) 48 hours
(c) 72 hours
(d) 96 hours

62. An AGM may be called by giving a shorter notice if consent, in writing or by electronic mode, is accorded thereto
by not less than _____ of the members entitled to vote thereat

(a) 90%
(b) 95%
(c) 100%
(d) None of these

63. ________omission to give notice of a general meeting shall not invalidate the proceedings of the general
meeting.

(a) Deliberate

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(b) Accidental
(c) Planned
(d) Strategic

64. The company shall provide an advance opportunity at least _______, to the members to register their email
addresses and to update their e-mail addresses.

(a) Once in a financial year

(b) Twice in a financial year
(c) Thrice in a financial year
(d) Once in every quarter

65. A notice of general meeting may be sent by e-mail as _______ or

A
(a) A text

ro C
(b) An attachment to e-mail

P
(c) A notification providing electronic link or Uniform Resource Locator for accessing such notice

Th e
(d) Any of these

y
66. _______ is entitled to receive the notice of every general meeting.

d B
(a) Every member

le
(b) Every promoter

pi
(c) The Registrar

m
(d) All of these

C o
67. Statement 1: In an extraordinary general meeting, all business shall be deemed as ordinary business.
Statement 2: In an annual general meeting, no business shall be deemed as special business.

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct
(c) Both the Statements are correct
(d) None of the Statements is correct

68. Explanatory statement shall be annexed to the notice for transacting every item of _________

(a) Ordinary business

(b) Special business
(c) Both (a) and (b)
(d) Business requiring special notice

69. If special business relates to, or affects, any other company, the extent of shareholding in that other company of
every promoter, director, manager and every other key managerial person shall be disclosed, if the extent of such
shareholding is _______ or more of the paid-up share capital of that other company

(a) 2%
(b) 5%
(c) 10%
(d) 20%

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70. In case the number of members as on the date of meeting is ______, the quorum shall be ____ members
personally present.

(a) More than 1000 but upto 5000; 30

(b) More than 5000; 50
(c) Upto 1000; 7
(d) None of these

71. In case of a company holding 2500 members as on the date of the meeting, the quorum shall be _______
members personally present.

(a) 5
(b) 15

A
(c) 30

ro C
(d) 50

e P
72. If the quorum is not present within half-an-hour from the time fixed for holding an extraordinary general

Th
meeting called by the requisitionists under section 100, then, _______

y
(a) The meeting shall adjourn to such day, time and place as may be determined by the Board

B
(b) The members present shall be the quorum

le d
(c) The meeting shall stand cancelled

pi
(d) None of these

o m
73. If the quorum is not present within half-an-hour from the time fixed for holding a general meeting (other than

C
an extraordinary general meeting called by the requisitionists under section 100), then, _______

(a) The meeting shall adjourn to such day, time and place as may be determined by the Board
(b) The members present shall be the quorum
(c) The meeting shall stand cancelled
(d) None of these

74. Quorum needs to be present ________.

(a) At the commencement of GM

(b) At the time of passing each and every resolution
(c) Both (a) & (b)
(d) At any time during the meeting

75. Statement 1: If a poll is demanded on the election of the Chairman, it shall be taken within 48 hours of demand
for poll.
Statement 2: On a poll being taken, the Chairman elected on a show of hands shall continue to be the Chairman
of the meeting

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct
(c) Both the Statements are correct
(d) None of the Statements is correct

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76. Statement 1: The articles of a company may provide that a member of a company having no share capital shall
be entitled to appoint a proxy.
Statement 2: If the articles of a company do not provide otherwise, the provisions relating to proxies shall
not apply to a company having no share capital.

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct
(c) Both the Statement are correct
(d) None of the Statements is correct

77. A person can act as proxy on behalf of members not exceeding ________

(a) 20
(b) 25

A
(c) 50

ro C
(d) 100

e P
78. A person can act as proxy on behalf of members holding in the aggregate not more than ______ of the total

Th
share capital of the company carrying voting rights.

y
(a) 5%

B
(b) 10%

le d
(c) 20%

pi
(d) 25%

o m
79. Any provisions contained in the articles which specifies or requires a _______ period than 48 hrs before

C
meeting of the company, for depositing with the company any instrument appointing a proxy, shall have effect
as if a period of 48 hours had been specified in or required by such provision for such deposit.

(a) Longer
(b) Shorter
(c) Either (a) or (b)
(d) None of these

80. An instrument appointing a proxy, if in Form no. _______, shall not be questioned on the ground that it fails
to comply with any special requirements specified for such instrument by the articles.

(a) MGT-10
(b) MGT-11
(c) MGT-12
(d) MGT-13

81. Statement 1: A proxy has no right to speak at the meeting.

Statement 2: A proxy can vote on a show of hands

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct
(c) Both the Statements are correct
(d) None of the Statements is correct

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82. Any member is entitled to inspect the proxies deposited with the company only if ______ notice is given to the
company.

(a) 1 day’s
(b) 2 day’s
(c) 3 day’s
(d) 7 day’s

83. Statement 1: On a poll being taken, a member or proxy need not use all his votes
Statement 2: On a poll being taken, a member or proxy need not caste in the same way all the votes he uses

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct
(c) Both the Statements are correct

C A
(d) None of the Statements is correct

P ro
84. A company shall not restrict the voting right of any member on the ground that _______

Th e
(a) Calls on shares payable by the member have not been paid
(b) The company has, and has exercised, any right of lien on shares

B y
(c) Either (a) or (b)

d
(d) None of these

pi le
85. At a general meeting, a resolution shall be decided on a show of hands, unless _______

o m
(a) A poll is demanded

C
(b) Voting is carried out electronically
(c) Either (a) or (b)
(d) None of these

86. Statement 1: The provisions relating to voting through electronic means apply to all companies whose equity
shares are listed on a recognized stock exchange.
Statement 2: The provisions relating to voting through electronic means apply to all companies having 5000
or more members

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct
(c) Both the Statements are correct
(d) None of the Statements is correct

87. Statement 1: Remote e-voting includes voting by electronic means

Statement 2: Remote e-voting means voting at a general meeting through an electronic voting system.

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct
(c) Both the Statements are correct
(d) None of the Statements is correct

88. Cut-off date means a date not earlier than _______ before the date of general meeting for determining the
eligibility to vote by electronic means or in general meeting.

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 CA Kishan Kumar MCQs –Management and Administration May & Nov 2021

(a) 3 days
(b) 5 days
(c) 7 days
(d) 10 days

89. The facility for remote e-voting shall remain open for not less than _______ and shall close at ______, on the
date preceding the date of general meeting.

(a) 2 days; 5 pm
(b) 2 days; 6 pm
(c) 3 days; 5 pm
(d) 3 days; 6 pm

C A
90. During a general meeting, a company _______ to provide the same electronic voting system as used during

ro
______.

e P
(a) Is bound; remote e-voting

Th
(b) May opt; remote e-voting

y
(c) Is bound; postal ballot

B
(d) May opt; postal ballot

le d
91. In case the provisions relating to voting through electronic means apply to a company, the scrutinizer(s) shall

pi
make, not later than _____ of conclusion of the general meeting, a consolidated scrutinizer’s report to the
Chairman.

C o m
(a) 3 days
(b) 5 days
(c) 7 days
(d) 10 days

92. In case of a company having a share capital, a poll shall be ordered to be taken by the chairman if a demand for
poll is made by any member(s) present in person or proxy holding _____ of the total voting power or paid up
share capital of not less than ______ or such higher amount as may be prescribed.

(a) 1/10th; Rs 5 lakh

(b) 1/5th; Rs 1 lakh
(c) 1%; Rs 5 lakh
(d) 1%; Rs 1 lakh

93. Statement 1: A poll cannot be taken before declaration of the result of voting on a show of hands.
Statement 2: A poll may be taken on declaration of result of voting on show of hands

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct
(c) Both the Statements are correct
(d) None of the Statements is correct

94. The poll shall be taken forthwith if the question on which poll is demanded is ________

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(a) Adjournment of GM
(b) Appointment of chairman of GM
(c) Either (a) or (b)
(d) None of these

95. A company cannot use postal ballot for transacting ________

(a) Any ordinary business

(b) Any business in respect of which directors or auditors have a right to be heard at the meeting
(c) Both (a) & (b)
(d) Any special business

A
96. _______ are not required to transact any business through postal ballot

ro C
(a) One Person companies

P
(b) Companies having members upto 200

Th e
(c) Both (a) & (b)
(d) Unlisted companies

B y
97. The company shall cause an advertisement to be published stating that the ballot papers for voting by postal

d
ballot have been dispatched. The advertisement shall be published at least ______ before the date of beginning

le
of the voting period.

pi
(a) 3 days

o m
(b) 5 days

C
(c) 7 days
(d) 14 days

98. The scrutinizer shall submit his report as soon as possible after the last date of receipt of postal ballots but not
later than _____ thereof

(a) 3 days
(b) 5 days
(c) 7 days
(d) 14 days

99. In case of voting by postal ballot, the assent or dissent received after ______ from the date of issue of notice
shall be treated as if reply from the member has not been received.

(a) 7 days
(b) 15 days
(c) 30 days
(d) 45 days

100. In case of a company having share capital, one or more members holding ______ or more of the paid-up share
capital of a company are eligible to propose any resolution to the company and require the company to move
such resolution at _______.

(a) 1/10th; any general meeting

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(b) 1/5th; any general meeting

(c) 1/10th; ensuing AGM
(d) 1/5th; ensuing AGM

101. A requisition proposing any resolution to the company shall be valid only if it is deposited at least _______
before ______.

(a) 2 weeks; the AGM

(b) 6 weeks; the AGM
(c) 2 weeks; any general meeting
(d) 6 weeks; any general meeting

102. A requisition requiring a company to circulate any statement with respect to any matter to be dealt with at
_______ shall be valid only if it is deposited at least ______ before such _______.

C A
ro
(a) Any general meeting; 2 weeks; general meeting

P
(b) Any general meeting; 6 weeks; general meeting

e
(c) An AGM; 2 weeks; AGM

Th
(d) An AGM; 6 weeks; AGM

B y
103. The company shall not be bound to circulate any statement with respect to any matter to be dealt with at any

d
general meeting, if _______ is satisfied that the rights conferred under section 111 are being abused to secure

le
needless publicity for defamatory matter.

pi
(a) The Central Government

o m
(b) The Tribunal

C
(c) The Court
(d) None of these

104. If special notice is required to move a resolution at a general meeting, then, the notice of the intention to move
such a resolution shall be given to the company by members holding not less than _____ of total voting power
or holding paid up share capital of not less than ________.

(a) 1%; Rs. 5 lakhs

(b) 2%; Rs. 5 lakhs
(c) 1%; Rs. 10 lakhs
(d) 2%; Rs. 10 lakhs

105. If special notice is required to move a resolution at a general meeting, then, the notice of the intention to move
such a resolution shall be given to the company not earlier than ______ before the date of the general meeting
but at least _______ before the general meeting (excluding the day on which such notice is given and the day
of the general meeting)

(a) 1 month; 7 days

(b) 3 months; 14 days
(c) 6 months; 21 days
(d) 6 months; 30 days

106. On receipt of a special notice, the company shall give notice of the intention to move the resolution, to all its
members at least ________ before the date of the general meeting (excluding the day on which such notice is

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 CA Kishan Kumar MCQs –Management and Administration May & Nov 2021

given and the day of the general meeting)

(a) 3 days
(b) 7 days
(c) 10 days
(d) 14 days

107. Statement 1: Special notice is required for proposing a resolution for appointing a person, other than the
retiring auditor, as an auditor at the AGM.
Statement 2: Special notice is required for proposing a resolution for removing an auditor before the expiry
of his term of office

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct

A
(c) Both the Statements are correct

ro C
(d) None of these Statements is correct

e P
108. Statement 1: Special notice is required for proposing a resolution for appointing a new director at an AGM

Th
Statement 2: Special notice is required for proposing a resolution for removing a director before the expiry of
his term of office

B y
(a) Only Statement (1) is correct

e d
(b) Only Statement (2) is correct

pi l
(c) Both the Statements are correct
(d) None of these Statements is correct

C o m
109. A resolution passed at an adjourned meeting shall be treated to have been passed on the date _________.

(a) Of original general meeting

(b) On which it was in fact passed
(c) Either (a) or (b)
(d) Either (a) or (b), as per the articles

110. A copy of every special resolution together with explanatory statement is to be filed with the Registrar within
_______ of passing the special resolution

(a) 15 days
(b) 30 days
(c) 45 days
(d) 60 days

111. The minutes of every general meeting shall be prepared and signed within 30 days of –

(a) The conclusion of the meeting

(b) The commencement of the original meeting
(c) Either (a) or (b), as per the articles
(d) None of these

112. No matter shall be included in the minutes, if the chairman is of the opinion that it is ________.

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 CA Kishan Kumar MCQs –Management and Administration May & Nov 2021

(a) Defamatory of a person

(b) Irrelevant or immaterial
(c) Detrimental to the interests of the company
(d) Any of these

113. _______ shall exercise absolute discretion with regard to the inclusion or non-inclusion of any matter in the
minutes.

(a) The Company Secretary

(b) The Board of Directors
(c) The Chairman
(d) The Managing Director

A
114. The minutes of Board meetings and Committee meetings shall be signed by ________

ro C
(a) The chairman of the same meeting or the chairman of the next meeting

P
(b) The chairman of the same meeting or in the event of death or inability of that chairman, by a director duly

Th e
authorized by the Board for this purpose
(c) The chairman of the same meeting

y
(d) The Company Secretary

e d B
115. The minutes of every general meeting shall be signed by _______.

pi l
(a) The chairman of the same meeting or the chairman of the next meeting

m
(b) The chairman of the same meeting or in the event of death or inability of that chairman, by a director duly

C o
authorized by the Board for this purpose
(c) The chairman of the same meeting
(d) The Company Secretary

116. The minutes book of general meetings shall be preserved ________.

(a) For a period of 4 years

(b) For a period of 6 years
(c) For a period of 8 years
(d) Permanently

117. Inspection of minutes book of general meetings can be made during business hours, subject to reasonable
restrictions through the articles or a resolution passed in a general meeting, so that at least ______ in each
business day are allowed for inspection

(a) 1 hour
(b) 2 hours
(c) 3 hours
(d) 4 hours

118. The copies of the minute book of any general meeting shall be made available by the company to any member
within ______ of the request made

(a) 3 working days

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 CA Kishan Kumar MCQs –Management and Administration May & Nov 2021

(b) 7 working days

(c) 10 working days
(d) 15 working days

119. _______ are required to prepare a report on each AGM and file the same with the Registrar

(a) All public companies

(b) All Government companies
(c) Listed public companies
(d) Both (a) and (b)

120. The report on AGM to be filed with the Registrar shall be in Form No. _______

(a) MGT-13

C A
(b) MGT-14

ro
(c) MGT-15

P
(d) MGT-16

Th e
121. In case of an OPC, _______ shall be deemed to be the date of the meeting.

B y
(a) The date of dispatch of notice of the general meeting

d
(b) The date of signing the minutes-book by the member

pi le
(c) The date of conclusion of the general meeting
(d) The date of commencement of the general meeting

C o m
122. Statement 1: At the time of transacting business, the number of members is less than the quorum fixed for the
meeting, the business cannot be transacted and shall be a nullity.
Statement 2: Unless the articles provide otherwise, death of a member appointing proxy results in revocation
of the proxy.

a) Only statement 1 is correct

b) Only statement 2 is correct
c) Both Statements are correct
d) Both Statements are incorrect

123. Statement 1: Every chairman has a casting vote as an inherent power of being a Chairman.
Statement 2: The casting vote can be used for passing either an ordinary resolution or special resolution.

a) Only statement 1 is correct

b) Only statement 2 is correct
c) Both Statements are correct
d) Both Statements are incorrect

124. Statement 1: Every listed company may maintain their records in electronic form.
Statement 2: On deposit of a valid requisition at company’s registered office, the directors must move to call a
meeting within 21 days; and the meeting must be held within 45 days from the date of deposit of requisition.

a) Only statement 1 is correct

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 CA Kishan Kumar MCQs –Management and Administration May & Nov 2021

b) Only statement 2 is correct

c) Both Statements are correct
d) Both Statements are incorrect

125. Red Flag Ltd., which has its registered office at Delhi and having 12500 members is holding its Annual General
Meeting in Ashoka Hotel. Despite swanky arrangements most of the members did not turn up and quorum was
not present within half an hour of the schedule time of the meeting, as a result meeting was adjourned. However,
due to heavy booking schedule, hotel authorities could not make available, for adjourned meeting, sufficient
space in the same hall where meeting was originally called but allowed conduct of meeting in a different hall on
a different floor next week at same time. Please advise the option available to board:

a) The meeting stands adjourned automatically to the same place and time next week as per provisions of
law. There is no alternate but to hold meeting in the same hall,
b) As same banquet hall is not available meeting can be held at different place as may be decided appropriate

A
by the Board,

C
c) As the same hall is not available to conduct meeting after one week, a fresh notice of 21 days is needed for

ro
a different location,
d) As the same hall is not available to conduct the meeting, the company needs to conduct meeting

e P
electronically through internet and give sufficient notice to shareholders,

Th
Answer Key

By
1. D 2. B 3. C 4. C 5. B 6. C 7. D

le d
8. D 9. B 10. B 11. B 12. D 13. D 14. C

pi
15. A 16. D 17. D 18. D 19. A 20. D 21. C

o m
22. B 23. A 24. A 25. A 26. D 27. B 28. D

C
29. C 30. A 31. C 32. C 33. A 34. A 35. A

36. C 37. B 38. C 39. D 40. B 41. A 42. C

43. B 44. B 45. B 46. D 47. C 48. B 49. B

50. B 51. A 52. D 53. D 54. B 55. A 56. A

57. C 58. D 59. D 60. D 61. B 62. B 63. B

64. A 65. D 66. A 67. D 68. B 69. A 70. D

71. B 72. C 73. A 74. C 75. B 76. C 77. C

78. B 79. A 80. B 81. A 82. C 83. C 84. D

85. C 86. A 87. D 88. C 89. C 90. C 91. A

92. A 93. B 94. C 95. C 96. C 97. C 98. C

99. C 100. C 101. B 102. A 103. A 104. A 105. B

106. B 107. A 108. B 109. B 110. B 111. A 112. D

113. C 114. A 115. B 116. D 117. B 118. B 119. C

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 CA Kishan Kumar MCQs –Management and Administration May & Nov 2021

120. C 121. B 122. C 123. D 124. C 125. B

C A
e P ro
y Th
e d B
pi l
C o m

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C o m
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Taking Break From Law

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 CA Kishan Kumar MCQs – Declaration and Payment of Dividend May & Nov 2021

ICAI Study Material MCQs

1. After Declaration of dividend it should be paid within

a) 14 days
b) 21 days
c) 30 days
d) 45 days

2. Which of the following amount is not credited to IEPF Account?

a) Unpaid dividend account of company
b) Matured deposit with company
c) Profit on sale of asset
d) Matured debentures with companies.

A
3. In how many days from the date of declaration of interim dividend, it shall be deposited in a separate bank

C
account

ro
a) 5 days

e P
b) 7 days

Th
c) 15 days
d) 21 days

B y
4. In how many years the amount of unpaid dividend account should be transferred to Investor Education and

d
Protection Fund

pi le
a) 3 years
b) 5 years

m
c) 7 years

o
d) 10 years

C
5. Amount to be transferred to reserves out of profits before any declaration of dividend is ___________

a) 5%
b) 7.5%
c) 10%
d) at the discretion of the company.

6. If declared dividend has not been paid or the warrant in respect thereof has not been posted within 30 days from
the date of declaration to any entitled shareholder, the company shall be liable to pay simple interest at the rate
of ___________ p.a. during the period for which such default continues.

a) 5%
b) 6%
c) 15%
d) 18%

Sample MCQs

7. XP Ltd declared 12% dividend to its Equity Shareholders. However, Company missed to transfer unpaid
dividend to bank account even after 40 days from declaration of Dividend. In such case how much interest will
be payable?

a. 8% p.a.

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 CA Kishan Kumar MCQs – Declaration and Payment of Dividend May & Nov 2021

b. 16% p.a.
c. 10% p.a.
d. 12% p.a.

ICAI RTPs and MTPs

8. ABC Ltd., a listed company proposed a dividend @ 15% on equity shares for the financial year ended on 31 st
March 2018. The Annual General Meeting (AGM) of the company was held on 15 th July 2018 and the proposed
dividend was approved and declared in the same. Due to some technical issues, dividend on 600 shares neither
be paid within the time limit prescribed by the Act nor was transferred to unpaid dividend account. In such a
situation which regulatory authority can take action against the company and its officers in default?

a) Central Government

A
b) SEBI

ro C
c) Tribunal

P
d) Investor Education and Protection Fund Authority

Th e
9. Sumitra Healthcare and Hospitality Limited has issued 9% non- convertible debentures which matured four

y
years back. However, 1000 such debentures of INR 100 each are still remaining unclaimed and unpaid even

B
after the maturity. State the period after which the company needs to transfer them to Investor Education and

d
Protection Fund (IEPF) if they remain unclaimed and unpaid.

pi le
a) After the expiry of five years from the maturity date.
b) After the expiry of six years from the maturity date.

o m
c) After the expiry of seven years from the maturity date.

C
d) After the expiry of eight years from the maturity date.

MCQs for Practice

10. The rate of Dividend proposed by the Board may be _____________ by the members.

a. Increased
b. Reduced
c. Both (a) and (b)
d. None of these

11. Statement (1): The Declaration of dividend at an annual general meeting is an item of Ordinary Business.
Statement (2): A Company may pay dividend in proportion to the amount paid up on shares, if the company
is authorized by Board.

a. Only Statement (1) is Correct

b. Only Statement (2) is Correct
c. Both the Statements are Correct
d. None of the statement is correct

12. The Dividend for any Financial year can be Declared or paid out of ___________

a. Profits for that Financial Year

b. Profits for any Previous Financial Year

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 CA Kishan Kumar MCQs – Declaration and Payment of Dividend May & Nov 2021

c. Both (a) and (b)

d. Both (a) and (b) and out of free reserves

13. A company shall not declare any dividend on ____________, if it has failed to comply with the provisions of
Section 73 or Section 74.

a. Equity Shares
b. Preference Shares
c. Any Shares, whether Equity or Preference
d. None of these

14. In case of Joint Holders, the dividend shall be paid to _____________

a. The Joint Holder, who is authorized by all the Joint Holders in this regard

C A
b. All the Joint Holders, equally

ro
c. The Joint Holders, who is first named in the register

e P
d. All the joint holder in proportion of money invested by them

Th
15. The amount of dividend shall be deposited by the company in ____________ in a separate account within

y
_____________ of declaration of such dividend.

d B
a. A nationalized bank; 5 days

pi le
b. A scheduled bank; 5 days
c. State bank of India; 7 days

o m
d. A nationalized bank; 7 days

C
16. If a Company fails to transfer the unpaid or unclaimed dividend to the Unpaid Dividend Account, the company
shall be liable to pay interest @_________ per annum.

a. 9%
b. 12%
c. 15%
d. 18%

17. All such shares in respect of which dividend has not been paid or claimed for __________ shall be transferred
by the company in the name of Investor Education and Protection fund.

a. Any 7 Years
b. 7 consecutive years
c. Any 5 Years
d. 5 consecutive years

18. The Central Government shall constitute, by notification, any Authority for administration of the Investor
Education and Protection fund consisting of chairperson and such other members; not exceeding __________
and a chief executive officer, as the Central Government may appoint.

a. 5
b. 7

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 CA Kishan Kumar MCQs – Declaration and Payment of Dividend May & Nov 2021

c. 10
d. 12

19. The amount accumulated in the Investor Education and Protection fund shall not be used for _____________

a. Reimbursement of legal expenses incurred in pursuing class action suits under section 37 and 245
b. Refunds in respect of unclaimed dividends, matured deposits, matured debentures, application money due
to refund and interest thereon
c. Grants or donations by the Central Government
d. Distribution of any disgorged amount along eligible and identifiable applicants who have suffered losses

20. Where a transfer deed has been delivered to the company for registration, but the transfer of shares has not yet
been registered by the company, the company shall –

A
a. Pay the dividend to the registered shareholder, if it is so authorised by the articles

ro C
b. Pay the dividend to the transferor, if the transferee has authorized the company to do so

P
c. Transfer the dividend in relation to such shares to the Investor Education and Protection fund

Th e
d. Transfer the dividend in relation to such shares to the Unpaid Dividend Account.

y
21. Where a transfer deed has been delivered to the company for registration, but the transfer of shares has not been

B
registered by the company, any offer of right shares or bonus shares made by the company __________

le d
a. Shall belong to the transferor

pi
b. Shall belong to the transferee

m
c. Shall remain pending

C o
d. Shall be transferred to the fund

22. The dividend shall be paid within _________ days from the date of _________ of dividend.

a. 30; declaration
b. 7; declaration
c. 30; recommendation
d. 7; recommendation

23. Dividend (other than interim dividend) is declared by ___________

a. The Board
b. The members
c. Either (a) or (b)
d. Both (a) and (b)

24. Ram, a member of Ayodhya Ltd. had given directions to the company regarding payment of dividend, but those
direction could not be complied with. Consequently, dividend could not be paid to Ram. Consider the following
Statements:

Statement (1): Ayodhya Ltd. has contravened the provisions of section 127, and is therefore, liable for penalty
under section 127.

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Statement (2): In case a company contravenes the provisions of section 127, it shall be liable to pay simple
interest@ 12% per annum during the period for which the default continues.

a. Only statement (1) is correct

b. Only statement (2) is correct
c. Both the statements are correct
d. None of the statements is correct

25. Statement (1): The Board may declare interim dividend out of surplus in the profit and loss account.

Statement (2): The Board may declare interim dividend out of profits of the financial year for which interim
dividend is sought to be prepared.

Statement (3): The Board may declare interim dividend out of profits generated in the financial year till the

A
quarter preceding the date of declaration of the interim dividend.

ro C
Statement (4): The Board may declare interim dividend out of profits which have been transferred to reserves.

e P
a. Statement (1) and (3) are correct

Th
b. Statement (2) and (3) are correct

y
c. Statement (1), (2) and (3) are correct

d B
d. All the statements are correct

pi le
26. If company has incurred loss upto__________ immediately preceding the date of declaration of interim
dividend then, the rate of interim dividend shall not be higher than the average rate of dividends declared by the

m
company during immediately preceding __________ financial years.

C o
a. The end of the financial year; 3
b. The end of the quarter; 3
c. The end of the financial year; 5
d. The end of the quarter; 5

27. Statement (1): The Board may declare the interim dividend whether or not it is authorized by the articles.
Statement (2): The amount of interim dividend is to be compulsorily deposited in a scheduled bank in a
separate bank account, within 7 days of passing the Board Resolution declaring the interim dividend.

a. Only statement (1) is correct

b. Only statement (2) is correct
c. Both the statements are correct
d. None of the statements is correct

28. A Ltd. proposes to declare dividend out of accumulated profits earned by it in the previous years and transferred
to the free reserves. The rate of dividend declared by it shall not exceed the average of the rates at which dividend
was declared by it in the immediately preceding ___________ financial years, and the total amount to be
drawn from reserves shall not exceed ___________ of the sum of its paid-up share capital and free reserves
as per the latest audited financial statements.

a. 3; 1/5th
b. 5; 1/5th
c. 3; 1/10th

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 CA Kishan Kumar MCQs – Declaration and Payment of Dividend May & Nov 2021

d. 5; 1/10th

29. B Ltd. has incurred loss for the financial year 2017-18. However, for the financial year 2017-18, B Ltd. promises
to declare dividend out of accumulated profits earned by it in the previous years and transferred to the free
reserves.

Consider the following statements:

Statement (1): The total amount to be drawn from reserves shall not exceed 1/20 th of the sum of its paid-up
share capital and free reserves as per the latest audited financial statements.

Statement (2): Any amount drawn from reserves shall first be utilized to set off the losses incurred in the
financial year for which the dividend is declared.

Statement (3): The balance of reserves after withdrawal from reserves shall not fall below 10% of its paid-up

A
share capital as per the latest audited financial statements.

ro C
a. Statement (1) and (2) are correct

P
b. Only statement (2) is correct

Th e
c. Statement (2) and (3) are correct
d. All the statements are correct

B y
30. Statement 1: Revocation of dividend is a valid ground for non- payment of dividend.

e d
Statement 2: Where the company ceases to be a going concern, declared dividend may be revoked.

pi l
a) Only statement (1) is correct

m
b) Only statement (2) is correct

C o
c) Both the statements are correct
d) None of the statements is correct

31. Statement 1: The accounts of the Fund shall be audited by the CAG or CA authorised by CAG.
Statement 2: The audited accounts and audit report shall be forwarded quarterly by the authority to CG.

a) Only statement (1) is correct

b) Only statement (2) is correct
c) Both the statements are correct
d) None of the statements is correct

32. Statement 1: Dividend is payable only in cash.

Statement 2: The dividend may be paid by cheque / dividend warrant/ electronic mode.

a) Only statement (1) is correct

b) Only statement (2) is correct
c) Both the statements are correct
d) None of the statements is correct

33. The dividend shall be paid to –

a) The registered shareholder of shares

b) The order of the registered shareholder

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 CA Kishan Kumar MCQs – Declaration and Payment of Dividend May & Nov 2021

c) The bankers of the registered shareholder

d) Any of the above.

34. Shreyas Mechanics Limited owns a plot of land which was purchased long before. As the property rates are going
up, it is decided to revalue the plot at fair value which is moderately ten times the original price, thus resulting
in a revaluation profit of INR 20,00,000. The Board of Directors is keen to utilize INR 20,00,000 along with
free reserves of INR 24,00,000 for declaration of dividend at the forthcoming Annual General Meeting (AGM)
to be held on 28th September, 2019. Advise the company.
a) 20,00,000 are to be excluded from the distributable profits as the same cannot be utilized towards
declaration of dividend.
b) Only 25% of INR 20,00,000 can be utilized as distributable profits towards declaration of dividend.
c) Up to 50% of INR 20,00,000 can be utilized as distributable profits towards declaration of dividend.
d) Up to 60% of INR 20,00,000 can be utilized as distributable profits towards declaration of dividend

C A
Answer Key

ro
1. C 2. C 3. A 4. C 5. D 6. D 7. D

h e P
8. B 9. C 10. B 11. A 12. D 13. A 14. C

y T
15. B 16. B 17. B 18. B 19. C 20. D 21. C

B
22. A 23. B 24. A 25. C 26. B 27. A 28 C

le d
pi
29. B 30. B 31. D 32. C 33. D 34. A

C o m

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e Pro
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pi l
C o m
 This Is a Farewell Gift

o C A
eP r
Th
B y
d
From CA KishaneSir Law
i l
for
p
Fully amended for

C o m
May / Nov 21

Taking Break From Law

To Focus on Tax & EIS-SM

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r o C
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Extensive Written Practice
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 CA Kishan Kumar MCQs – Accounts of Companies May & Nov 2021

ICAI Study Material MCQs

1. The books of accounts of every company shall be maintained in order for

a) 3 Years
b) 5 years
c) 8 years
d) 10 years

2. A company can re- open / recast its book of accounts on an application to Tribunal made by:
a) Registrar
b) Member
c) Board of Directors
d) Income –tax authorities

C A
3. CSR Committee of the Board shall consist of:

ro
rd

P
a) Directors forming 1/3 of the total no. directors.

Th e
b) At-least 2 directors
c) 3/ more directors

B y
d) 3/ more directors, out of which at-least 1 director shall be an independent.

e d
4. Provisions of CSR are applicable to:

pi l
a) Companies with net worth of 500 cr/more
b) Companies with turnover of 1000 cr/more

o m
c) Companies with net profit of 5 cr/ more in any financial year

C
d) All of the above

5. OPC shall file a copy of the duly adopted financial statements to registrar in:
a) 30 days of the date of meeting in which it was adopted
b) 90 days of the date of meeting in which it was adopted
c) 90 days from the closure of the financial statement
d) 180 days from the closure of the financial statement

6. Who can be appointed as an internal auditor?

a) Chartered Accountants
b) Cost accountants
c) Any other professional
d) All of the above

ICAI Sample MCQs

7. From the following information in respect of company ABC Ltd, compute the amount the company is required
to spend on account of Corporate Social Responsibility:

Financial Year Net Profit (in crores)

2014-15 30
2015-16 22
2016-17 27

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 CA Kishan Kumar MCQs – Accounts of Companies May & Nov 2021

a) 26 Crore
b) 52 Lacs
c) 55 Lacs
d) 26 Lacs

ICAI RTPs and MTPs

8. Amex limited is a public company having a net- worth of Rs. 950 crores, turnover of 200 crores (the company is
just 5 years since the date of its incorporation) during the immediately preceding financial year, has to constitute
a Corporate Social Responsibility (CSR) Committee. It has 9 Directors (A, B, C, D, E, F, G, H and I). Further, Mr.
F, G, H and I are independent directors. Out of the following statements which statement is correct:

a) CSR committee may constitute of A, B and C

A
b) CSR committee may constitute of A, B and D

ro C
c) CSR committee may constitute of A, F and G

P
d) There is no need to constitute a CSR committee as the turnover is just 200 crores during the immediately

e
preceding financial year

y Th
9. From the following information in respect of BMR Consultants Pvt. Ltd., compute the amount company is

B
required to contribute on account of CSR:

le d
Financial Year Net Profit (in Lacs)

pi
2015-16 15

m
2016-17 50

o
2017-18 70

C
a) Nil. If in any of the three financial years company has incurred losses, then company is not required to
spend amount towards CSR but explain the reason for not spending the amount.
b) Rs. 2.4 Lacs
c) Rs. 90,000/-
d) Rs. 2.1 Lacs

MCQs for Practice

10. The registered office of Law Ltd. is situated at Chennai. It has a branch office at Noida. It is desired by the Board
of Directors of Law Ltd. to keep the books of Noida office at Delhi. As per the Companies Act,2013, Law Ltd. is
required to keep the books of account of Noida office at __________________

(a) Chennai only

(b) Noida only
(c) Chennai or / and Noida
(d) Chennai or / and Noida / and Delhi

11. As per Regulation 89 of Table F, a member of a company (not being a director) shall have a right to inspect books
of account if he is so authorized by ---

(a) The law

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 CA Kishan Kumar MCQs – Accounts of Companies May & Nov 2021

(b) The Board

(c) The General Meeting
(d) The law or the Board or the General Meeting

12. Mr. Ram is a director of Law Ltd. has a branch situated at Canada. Mr. Ram requires some detailed information
relating to assets and liabilities of Canada Branch. He authorizes Mr. Laxman to obtain such detailed financial
information from Law Ltd. Mr. Laxman requests Law Ltd. to furnish him the required financial information.
Law Ltd. is bound to furnish to Mr. Laxman the required financial information.

(a) No
(b) Yes, if a power of attorney is executed by Mr. Ram in favour of Mr. Laxman
(c) Yes, if the Articles of Law Ltd. so provide
(d) Yes, if Mr. Laxman submits an undertaking that he shall not use such financial information for passing on
to any rival of the company

C A
ro
13. Where the books of account and other relevant papers are kept in electronic mode, the company shall intimate
to the Registrar on _______ basis, the name and internet protocol of the service provider, the location of the

e P
service provider (wherever applicable), where the books of account and other books and papers are maintained

Th
on cloud and such address as provided by the service provider.

y
(a) Monthly basis

B
(b) Quarterly basis

e d
(c) Annual basis

pi l
(d) None of these

m
14. All or any of the books of account and other relevant papers may be kept at such place in India, other than the

o
registered office, as the Board of directors may decide. In such a case, the company shall within ______ of the

C
decision of the Board, file with the Registrar, a notice in writing.

(a) 7 days
(b) 14 days
(c) 15 days
(d) 30 days

15. Every company shall preserve in good order the books of account together with the relevant vouchers. The time
period of preservation shall not be less than _______ financial years immediately preceding the relevant
financial year.

(a) 5
(b) 7
(c) 8
(d) 10

16. _______ are responsible for compliance with the provisions relating to maintenance of proper books of
account.

(a) Managing Director

(b) Whole-time director in charge of finance
(c) Chief Financial Officer
(d) All of these

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 CA Kishan Kumar MCQs – Accounts of Companies May & Nov 2021

17. The books of account etc. maintained within India shall be open for inspection by _______

(a) Any director

(b) Managing Director and whole-time director
(c) Any director other than managing director or whole-time director
(d) None of these

18. If any default is made in complying with the provisions relating to maintenance of books of account, all such
person who are responsible for ensuring such compliance shall be liable to imprisonment upto _________ or
fine which shall not be less than Rs. ___________ but which may extend upto Rs. ___________ or both.

(a) 1 year; Rs. 50,000; Rs. 5 lakhs

(b) 1 year; Rs. 25,000; Rs. 2.5 lakh

A
(c) 6 months; Rs. 25,000; Rs. 5 lakhs

ro C
(d) 6 months; Rs. 50,000; Rs. 5 lakhs

e P
19. If the financial statements do not comply with the accounting standards, the company shall disclose in its

Th
financial statements, _________

y
(a) The deviation from the accounting standards

B
(b) The reasons for such deviation

le d
(c) The financial effects, if any, arising out of such deviation

pi
(d) All of these

o m
20. The financial statements shall be in the form or forms as may be provided for different class or classes of

C
companies in _________

(a) I
(b) II
(c) III
(d) IV

21. At every _______, the Board shall lay the financial statements of the company and consolidated financial
statement of the company and of all the subsidiaries and associate companies, if any,

(a) Annual General Meeting

(b) Extraordinary General Meeting
(c) General Meeting
(d) None of these

22. Statement (1): Where a company has one or more subsidiaries, it shall prepare a consolidated financial
statement of the company and of all the subsidiaries.

Statement (2): Where a company has one or more subsidiaries as well as one or more associate companies, it
shall prepare a consolidated financial statement of the company and of all the subsidiaries and associate
companies.

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct

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(c) Both the Statements are correct

(d) None of the Statements is correct

23. Where a company has one or more subsidiaries, it shall prepare _________

(a) Financial statement of the company

(b) A consolidated financial statement of the company and of all its subsidiaries
(c) Both (a) & (b)
(d) Either (a) or (b)

24. Where a company has one or more subsidiaries or associate companies, the company shall attach along with its
financial statement, a separate statement containing the salient features of the financial statement of its
subsidiaries and associate companies in Form No. _________

A
(a) AOC-1

ro C
(b) AOC-2
(c) AOC-3

e P
(d) AOC-4

Th
25. An application for reopening of accounts under section 130 may be made by________

B y
(a) CG or SEBI or the Income tax authorities

e d
(b) Any Statutory regulatory body or authority

pi l
(c) Any person concerned
(d) Any of these

C o m
26. ________ is empowered to make an order for reopening of accounts under section 130

(a) The court

(b) The Tribunal
(c) The court or / and the Tribunal
(d) The Central Government

27. Under section 130, no order shall be made in respect of reopening of books of account relating to a period earlier
than ______ financial years immediately preceding the current financial year

(a) 3
(b) 5
(c) 7
(d) 8

28. Under section 131, the Board of directors may decide to prepare revised financial statement or a revised Board’s
report in respect of any of the preceding ________ financial years.

(a) 3
(b) 5
(c) 7
(d) 8

29. Under section 131, the Board of directors may decide to prepare revised financial statement or a revised Board’s

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 CA Kishan Kumar MCQs – Accounts of Companies May & Nov 2021

report after obtaining approval of ________

(a) The court

(b) The Tribunal
(c) The court or / and the Tribunal
(d) The Central Government

30. Under section 131, the revised financial statements or the Revised Board’s report shall not be prepared more
than ________

(a) Once in financial year

(b) Twice in financial year
(c) Once in every 3 financial years

A
(d) Once in every 5 financial years

ro C
31. Before granting approval for preparing the revised financial statement or a revised Board’s report under section

P
131, the Tribunal shall give notice to _________ and shall take into consideration their representations, if any.

Th e
(a) Central Government and Income tax authorities
(b) SEBI and any statutory regulatory body or authority

B y
(c) Any person concerned

d
(d) All of these

pi le
32. Detailed reasons for revision of financial statement or Board’s report shall be disclosed in _________.

o m
(a) The Board’s report

C
(b) The Audit Report
(c) All of these
(d) None of these

33. The NFRA shall make recommendations to _________ on the formulation and laying down of accounting and
auditing policies and standards for adoption by companies or class of companies or their auditors, as the case
may be

(a) The Institute of Chartered Accountants of India

(b) The Central Government
(c) Both (a) & (b)
(d) The Accounting Standards Board

34. The NFRA shall monitor and enforce the compliance with _______

(a) The accounting standards

(b) The auditing standards
(c) Both (a) and (b)
(d) Secretarial standards

35. The NFRA shall monitor and enforce the compliance with _______

(a) The professions

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 CA Kishan Kumar MCQs – Accounts of Companies May & Nov 2021

(b) The Ministries of the Central Government

(c) The office of Comptroller and Auditor General of India
(d) All of these

36. The NFRA shall consist of a chairperson and such other part-time and full-time members, not exceeding
_______, as may be prescribed.

(a) 10
(b) 12
(c) 15
(d) 20

37. The chairperson and members, who are in full-time employment with NFRA shall not be associated with any
audit firm (including related consultancy firms) during the course of their appointment and ________ after

A
ceasing to hold such appointment

ro C
(a) 1 year

e P
(b) 2 years

Th
(c) 3 years

y
(d) 5 years

d B
38. Where NFRA has initiated an investigation, _______ shall not initiate or continue any proceedings in such

le
matters of misconduct

pi
(a) The Central Government

o m
(b) The SEBI

C
(c) The Tribunal
(d) Any institute or body

39. Where professional or other misconduct is proved, NFRA shall have the power to impose penalty of not less than
_______ but which may extend to_______ of the fees received, in case of individuals, and not less than
_______, but which may extend to ________ of the fees received, in case of firms

(a) Rs. 1 lakh; 10 times; Rs. 5 lakhs; 20 times

(b) Rs. 10 lakhs; 5 times; Rs. 50 lakhs; 10 times
(c) Rs. 1 lakh; 5 times; Rs. 5 lakhs; 10 times
(d) Rs. 10 lakhs; 10 times; Rs. 50 lakhs; 20 times

40. Where professional or other misconduct is proved, NFRA shall have the power to debar the member or the firm
from engaging himself or itself from practice as member of ICAI for a minimum period of ________ or for
such higher period not exceeding _______ as may be decided by NFRA

(a) 3 months; 5 years

(b) 3 months; 10 years
(c) 6 months; 5 years
(d) 6 months; 10 years

41. Any person aggrieved by any order of NFRA may prefer an appeal before ________

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 CA Kishan Kumar MCQs – Accounts of Companies May & Nov 2021

(a) The Tribunal

(b) The Appellate Tribunal
(c) The Central Government
(d) The High Court

42. The _____________ may prescribe the standards of accounting, as recommended by ______________, in
consultation with and after examination of the recommendations made by the _____________________.

(a) ICAI; NFRA; CG

(b) CG; ICAI; NFRA
(c) NFRA; ICAI; CG
(d) CG; NFRA; ICAI

C A
43. The financial statement, including consolidated financial statement, if any, shall be submitted to the _______

ro
after they have been ________ by the Board and ________ on behalf of the Board.

e P
(a) Managing Director; approved; signed

Th
(b) Auditor; approved; signed

y
(c) Auditor; signed; approved

B
(d) Registrar; signed; approved

le d
44. The auditor’s report shall be attached to ________

pi
(a) Annual report

o m
(b) Board’s report

C
(c) Cost audit report
(d) Financial statement

45. Board’s Report shall contain explanations or comments by the Board on every qualification, reservation or
adverse remark or disclaimer made in the _______

(a) Audit report

(b) Secretarial audit report
(c) Both (a) & (b)
(d) Report of internal auditor

46. The director’s responsibility statement shall disclose as to whether the directors had taken proper and sufficient
care for ________

(a) Maintenance of adequate accounting records

(b) Safeguarding the assets of the company
(c) Preventing and detecting fraud and other irregularities
(d) All of these

47. In the case of _________, the directors’ responsibility statement shall disclose as to whether the directors, had
laid down internal financial controls to be followed by the company and whether such internal financial controls
are adequate and were operating effectively.

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 CA Kishan Kumar MCQs – Accounts of Companies May & Nov 2021

(a) A listed company

(b) Prescribed classes of companies
(c) Both (a) and (b)
(d) Every company

48. In the case of ________, the Board’s Report shall contain the prescribed information and details with respect
to conservation of energy, technology absorption, foreign exchange earnings and outgo.

(a) A listed company

(b) Prescribed classes of companies
(c) Both (a) and (b)
(d) Every company

A
49. The provisions relating to corporate social responsibility apply to a company (including a foreign company) if it

C
has _________ in the immediately preceding financial year.

P ro
(a) Net worth of Rs. 100 crore or more

e
(b) Turnover of Rs. 500 crore or more

Th
(c) Net profit of Rs. 50 crore or more

y
(d) None of these

d B
50. ________ shall recommend the amount of expenditure to be incurred on the CSR activities to be undertaken

le
by the company.

pi
(a) The Central Government

o m
(b) The Board

C
(c) CSR Committee
(d) None of these

51. The Board shall ensure that the company spends in every financial year, at least _______ of the average net
profits of the company made during the 3 immediately preceding financial years, in pursuance of its CSR Policy.

(a) 1%
(b) 2%
(c) 3%
(d) 5%

52. CSR projects or programs or activities _______ shall not amount to CSR Activities for the purpose of Section
135

(a) Undertaken outside India

(b) That benefit only the employees of the company and their families
(c) Both (a) & (b)
(d) None of these

53. Contribution of any amount, directly or indirectly, to _______ shall not amount to CSR activities for the
purpose of Section 135

(a) Any political party

(b) Any charitable trust
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 CA Kishan Kumar MCQs – Accounts of Companies May & Nov 2021

(c) Both (a) & (b)

(d) Prime Minister National Relief Fund

54. Statement (1): Any activity undertaken in pursuance of normal course of business of a company shall not
amount to CSR Activities for the purpose of Section 135

Statement (2): The Board shall ensure that activities included by a company in its CSR Policy fall within the
purview of the activities included in Schedule VI

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct
(c) Both the Statements are correct
(a) None of the Statements is correct

A
55. Companies may build CSR capacities of their own personnel as well as those of their implementing agencies

C
through Institutions with established track records of at least _______ financial years but such expenditure

ro
including expenditure on administration overheads, shall not exceed _______ of total CSR expenditure of the

P
company in one financial year.

Th e
(a) 5; 3%

y
(b) 3; 3%

B
(c) 5; 5%

e d
(d) 3; 5%

pi l
56. A company may collaborate with other companies for undertaking projects or programs or CSR activities in such

m
a manner that the CSR Committees of respective companies are in a position to report ________ on such

o
projects or programs

C
(a) Consolidatedly
(b) Separately
(c) Consolidatedly as well as separately
(d) Accurately

57. The Financial Statement, consolidated Financial Statement, if any, auditor’s Report and all the documents which
are required to be annexed or attached to the financial statement shall be sent at least _______ before the date
of the Annual General Meeting.

(a) 7 days
(b) 14 days
(c) 21 days
(d) 30 days

58. If any default is made in complying with the provisions relating to circulation of financial statement and other
documents to the members and others, the company shall be liable to a penalty of ________ and every officer
of the company who is in default shall be liable to a penalty of _______.

(a) Rs. 25,000; Rs. 5,000

(b) Rs. 2,50,000; Rs. 50,000
(c) Rs. 5 lakhs; Rs. 1 lakh
(d) Rs. 50,000; Rs. 10,000

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 CA Kishan Kumar MCQs – Accounts of Companies May & Nov 2021

59. _______ shall place its financial statements and other documents on its website

(a) Every listed company

(b) Every public company
(c) Every company
(d) Every public company having net worth of more than Rs. 1 crore and turnover of more than Rs. 10 crores

60. _________ having a subsidiary or subsidiaries shall place separate audited accounts in respect of each of
subsidiary on its website.

(a) Every listed company

(b) Every public company
(c) Every company

C A
(d) Every public company having net worth of more than Rs. 1 crore and turnover of more than Rs. 10 crores

P ro
61. Every company shall allow _______ to inspect the financial statement and other documents at its registered

e
office during business hours.

Th
(a) Every member

B y
(b) Every debenture trustee

d
(c) Both (a) & (b)

le
(d) None of these

pi
62. Adoption of financial statement and other documents is an item of ________, and requires ________.

C o m
(a) Ordinary business; an ordinary resolution
(b) Special business; a special resolution
(c) Ordinary business; a special resolution
(d) Special business; ordinary resolution

63. The Financial Statement, Consolidated Financial Statement, if any, auditor’s Report and all the documents
which are required to be annexed or attached to the financial statement shall be filed with the Registrar within
_______ of the date of AGM.

(a) 7 days
(b) 14 days
(c) 21 days
(d) 30 days

64. If a company fails to file the financial statements before the expiry of the period specified in section 137, the
company shall be punishable with the penalty of _______ for every day during which the failure continues and
any such director shall be liable to penalty of __________ and in case of continuing failure, with a further
penalty of ________ one hundred rupees for each day after the first during which such failure continues,
subject to a maximum of ___________.

(a) Rs. 10,000; Rs. 10 lakhs; Rs. 1ooo; Rs. 10 lakhs

(b) Rs. 1,000; Rs. 1 lakh; Rs. 100, Rs. 5 lakhs
(c) Rs. 5,000; Rs. 5 lakhs; Rs. 500; Rs. 25 lakhs
(d) Rs. 10,000; Rs. 10 lakhs; Rs. 200; Rs. 10 lakhs

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 CA Kishan Kumar MCQs – Accounts of Companies May & Nov 2021

65. Where the financial statements are not adopted at the AGM, but are adopted in the adjourned AGM, the financial
statements and other documents shall be filed with the Registrar within 30 days of __________

(a) The date of the original AGM

(b) The date of the adjourned AGM
(c) The last date upto which the AGM should have been held
(d) None of these

66. Where AGM is not held, the financial statements and other documents and a statement of facts and reasons for
not holding the AGM shall be filed with the Registrar within 30 days of

(a) The date of the original AGM

(b) The date of the adjourned AGM

A
(c) The last date upto which the AGM should have been held

ro C
(d) None of these

e P
67. One Person Company shall file the financial statements and other documents, within _______

Th
(a) 30 days of the date of AGM

B y
(b) 60 days of the date of AGM

d
(c) 180 days of close of the financial year

le
(d) 210 days of close of the financial year

pi
68. The financial statements shall be filed together with Form No. _________, and the consolidated financial

o m
statement, if any, shall be filed together with Form No. ________

C
(a) AOC-3; AOC-3CFS
(b) AOC-4; AOC-4CFS
(c) AOC-5; AOC-5CFS
(d) AOC-6; AOC-6CFS

69. The provisions relating to internal audit shall apply to _________

(a) Unlisted public companies

(b) Private companies
(c) All companies
(d) Prescribed classes of companies

70. The provisions relating to internal audit shall apply to every unlisted public company having paid up share
capital of _______ or more during the preceding financial year.

(a) 25 crores
(b) 50 crores
(c) 100 crores
(d) 200 crores

71. The provisions relating to internal audit shall apply to every unlisted public company having turnover of
_________ or more during the preceding financial year

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 CA Kishan Kumar MCQs – Accounts of Companies May & Nov 2021

(a) 25 crores
(b) 50 crores
(c) 100 crores
(d) 200 crores

72. The provisions relating to internal audit shall apply to every unlisted public company having outstanding
deposits of _________ or more at any point of time during the preceding financial year

(a) 25 crores
(b) 50 crores
(c) 100 crores
(d) 200 crores

A
73. The provisions relating to internal audit shall apply to every unlisted public company having outstanding loans

C
or borrowings from banks or public financial institutions exceeding ________ or more at any point of time

ro
during the preceding financial year

e P
(a) 25 crores

Th
(b) 50 crores

y
(c) 100 crores

B
(d) 200 crores

le d
74. Statement (1): The internal auditor may or may not be an employee of the company

pi
Statement (2): A chartered accountant or cost accountant may be appointed as internal auditor whether or
not he is engaged in practice.

C o m
(a) Only Statement (1) is correct
(b) Only Statement (2) is correct
(c) Both the Statements are correct
(d) None of the Statements is correct

75. The books of account etc. must-

i. give a true and fair view of the state of the affairs of the company, including its branch office(s).

ii. Must be prepared on accrual basis.

iii. May be prepared on accrual or cash basis but whatever method once selected must be followed consistently.

iv. Must be prepared according to the double entry system of accounting.

v. May be prepared according to the double entry system of accounting or single entry but whatever system is
once selected must be followed consistently.

Which of the following Statement is correct?

a) (i), (ii), (iv)

b) (i), (iii), (v)
c) (i), (ii), (v)
d) (i), (ii), (iv), (v)

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 CA Kishan Kumar MCQs – Accounts of Companies May & Nov 2021

76. Statement 1: The back-up of the electronic records shall be kept in servers physically located in India on a
periodic basis.

Statement 2: The FS of a bank shall be in the form or forms as may be provided for different class or classes of
companies in schedule III.

a) Only Statement (1) is correct

b) Only Statement (2) is correct
c) Both the Statements are correct
d) None of the Statements is correct

77. Preparation of CFS shall not be required if:

A
a) The company is a wholly-owned subsidiary or is a partially-owned subsidiary of another company and all

C
its other members, having been intimated in writing and for which the proof of delivery of such intimation

ro
is available with the company, do not object to the company not preparing the CFS.

e P
b) It is a company whose securities are not listed and are not in the process of listing on any stock exchange,

Th
whether in India or outside India.

y
c) Its ultimate or any intermediate holding company files CFS with the RoC which follow the applicable AS.

d B
d) All of the above

pi le
78. The Board of Directors may decide to prepare the revised FS or a revised Board’s Report, if the Board is of the
opinion that-

C o m
a) the FS do not comply with the provisions of sec. 129
b) The Board’s Report does not comply with the provisions of sec. 134
c) Either of (a) or (b)
d) Both (a) and (b)

79. Statement 1: The financial statements or the Board’s Report may be revised only in respect of any of the
preceding 8 financial years.

Statement 2: The revised financial statements or the revised Board’s Report shall not be prepared more than
once in a financial year.

a) Only Statement (1) is correct

b) Only Statement (2) is correct
c) Both the Statements are correct
d) None of the Statements is correct

80. Statement 1: The Board’s Report and any annexures thereto shall be signed by the chairperson of the company,
if he is authorized by the Board or at least 2 directors one of whom shall be a managing director, if the
chairperson of the company is not so authorized.

Statement 2: Corporate Social Responsibility (CSR)’ means and includes but is not limited to Projects or
programs relating to activities specified in schedule VIII to the Act;

a) Only Statement (1) is correct

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 CA Kishan Kumar MCQs – Accounts of Companies May & Nov 2021

b) Only Statement (2) is correct

c) Both the Statements are correct
d) None of the Statements is correct

81. A company shall, along with its financial statements to be filed with the Registrar, attach the accounts of

a) its subsidiaries incorporated outside India and which have established their place of business in India.
b) its subsidiaries incorporated outside India and which have not established their place of business in India.
c) Both (a) and (b)
d) Neither (a) and (b)

82. G Ltd. (a company having CSR Committee as per the provision of Section 135 of the Companies Act, 2013)
decides to spend and utilize half of the amount of Corporate Social Responsibility on the activities for the benefit

A
of all the employees of G Limited and the remaining half of the amount of Corporate Social Responsibility on

C
the activities for the benefit of family members of employees of G Limited As per the provision of Companies

ro
Act, 2013 this would mean that:-

e P
a) This is the total amount spent on Corporate Social Responsibility activities by G Limited for that FY

Th
b) No amount spent on Corporate Social Responsibility activities by G Limited for that financial year

y
c) Half amount spent on Corporate Social Responsibility activities by G Limited for that financial year

B
d) Half amount spent on Corporate Social Responsibility activities and remaining half amount spent on

d
Other Activities by G Limited for that financial year.

pi le
Answer Key

m
1. C 2. D 3. D 4. D 5. D 6. D 7. B

C o
8. C 9. C 10. D 11. D 12. A 13. C 14. A

15. C 16. D 17. A 18. A 19. D 20. C 21. A

22. C 23. C 24. A 25. D 26. C 27. D 28. A

29. B 30. A 31. A 32. A 33. B 34. C 35. A

36. C 37. B 38. D 39. C 40. D 41. B 42. B

43. B 44. D 45. C 46. D 47. A 48. D 49. D

50. C 51. B 52. C 53. A 54. A 55. D 56. B

57. C 58. A 59. A 60. A 61. C 62. A 63. D

64. B 65. B 66. C 67. C 68. B 69. D 70. B

71. D 72. A 73. C 74. C 75. A 76. C 77. D

78. C 79. B 80. A 81. B 82. B

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May / Nov 21

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 CA Kishan Kumar MCQs – Audit and Auditors May & Nov 2021

ICAI Study Material MCQs

1. For appointing an auditor other than the retiring auditor,

a) Special notice is required.

b) Ordinary notice is required.
c) Neither ordinary nor special notice is required
d) Approval of Central Government is required

2. The auditors of a company can be removed by the

a) Board of directors of the company

b) Audit committee
c) Company in general meeting by ordinary resolution and previous approval of CG

C A
d) Company in general meeting by special resolution and previous approval of CG

ro
3. After registration of a company, first auditors shall be appointed within

e P
Th
a) 30 days
b) 90 months

B y
c) 180 days

d
d) One year

pi le
4. The auditor of a Government Company shall be appointed or re-appointed by

m
a) The Central Government

C o
b) Comptroller and Auditor General of India.
c) Central Government on the advice of Comptroller and Auditor General of India.
d) None of the above

5. Which of the following is a prohibited service to be rendered by the auditor of the Company?

a) design and implementation of any financial information system

b) making report to the members of the company on the accounts examined by him
c) compliance with the auditing standards
d) Reporting of fraud against the company by officers or employees to the Central Government

ICAI RTPs and MTPs

6. Excellent Art Private Limited, has a paid-up capital of Rs. 50 crores, Turnover of Rs. 25 crores and borrowing of
Rs. 25 crores and outstanding deposits of Rs. 30 crores. Decide if the Company needs to comply with internal
audit requirements under the Act?

a) No. The provisions of Internal audit are not applicable on private companies.
b) Yes. Company is having Paid up capital of Rs. 50 Crore and outstanding deposits more than Rs. 25 crore.
c) No. Because the borrowings are less than Rs.100 crore and Turnover is less than Rs.200 crore
d) None of the above

7. Advise whether the auditor appointed by a private limited company with paid up capital of Rs.30.00 Crore, in
the following cases are valid for the financial year 2017-18:

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a) Amanpreet (an Individual auditor) who has been the auditor since the Financial Year 2011-12
b) Firm MGA & associates, was appointed as auditor in the Financial Year 2011 -12.
c) Firm MGA & associates, who completed 10 years continuously as auditor in company. Now company
wants to appoint VGA & associates wherein Mr. V is a partner who is also partner is MGA & Associates.
d) The provisions of rotation of auditor are not applicable on private companies

8. For appointing an auditor other than the retiring auditor,

a) Special notice is required.

b) Ordinary notice is required.
c) Neither ordinary nor special notice is required
d) Approval of Central Government is required

C A
9. BSP Ltd appointed XPP & Co LLP as their statutory auditors for the year ended 31 March 2018 on 18 June 2018,

ro
as per Section 139(8) of the Companies Act 2013, to fill the casual vacancy caused by resignation of previous

P
statutory auditors to hold office till the conclusion of next Annual General Meeting (AGM) of BSP Ltd. BSP Ltd

e
is listed with Bombay Stock Exchange and National Stock Exchange. BSP Ltd is covered under auditors’ rotation

Th
requirements and wants to re-appoint XPP & Co LLP at their next AGM. Please advise.

B y
a. XPP & Co LLP can be re-appointed for a term of five consecutive years at the AGM and after that can be

d
considered for re-appointment for another five consecutive years.

pi le
b. XPP & Co LLP can be re-appointed for a term of four consecutive years at the AGM and after that can be
considered for re-appointment for another five consecutive years.

m
c. XPP & Co LLP can be re-appointed for a term of five consecutive years at the AGM.

C o
d. XPP & Co LLP cannot be re-appointed at the AGM.

10. NTW Ltd is listed on National Stock Exchange and has a turnover of INR 4500 crores. NTW Ltd has 12
subsidiaries, 3 associate companies and 5 joint venture companies (collectively referred to as NTW Group). AKW
& Co LLP is the statutory auditor of NTW Ltd. NTW Ltd wants to appoint AKW as the statutory auditors for
entire NTW Group. In respect of this, please advise the management of NTW Group.

a. AKW & Co LLP can be appointed as statutory auditors for only 10 companies of NTW Group.
b. AKW & Co LLP can be appointed as statutory auditors for only 20 companies of NTW Group.
c. AKW & Co LLP can be appointed as statutory auditors for all the companies of NTW Grou p.
d. AKW & Co LLP can be appointed as statutory auditors for all the companies of NTW Group provided they
meet the limits requirements as per the Companies Act 2013.

MCQs for Practice

11. The word firm for the purpose of section 139 shall include-

a. An individual auditor
b. A limited liability partnership
c. An individual auditor and LLP both
d. A company

12. ____________ his appointment as auditor under section 139 (1) the auditor shall furnish to the company his
written consent.

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a. Within 7 days of
b. Within 15 days of
c. Within 30 days of
d. Before

13. _______ the meeting in which the auditor is appointed under section 139(1) the company shall inform the
auditor concerned of his or its appointment

a. Within 7 days of
b. Within 15 days of
c. Within 30 days of
d. Before

A
14. _______ the meeting in which the auditor is appointed under section 139(1) the company shall file a notice of

ro C
such appointment with the registrar

P
a. Within 7 days of

Th e
b. Within 15 days of
c. Within 30 days of

B y
d. Before

e d
15. The provisions contained in section 139(1) are not applicable to ________

pi l
a. Government companies

m
b. One person companies and small companies

C o
c. Dormant companies
d. All of these

16. At the _______ every company shall appoint an individual or a firm as an auditor, who shall hold office till the
conclusion of _______

a. 1st EGM; 6th EGM

b. 1st AGM; 6TH AGM
c. 1ST AGM; 1ST AGM
d. 1ST EGM; 6TH AGM

17. Law Ltd. was incorporated on 15th April 2012. The company ended its first financial year on 31 st March 2013 and
held its first AGM on 30th September 2013 wherein Mr. Ram was appointed as an auditor. In the AGM held on
30th September 2014 for the financial year 2013-14, Mr. Ram reappointed as auditor. Mr. Ram shall hold his
office till the conclusion of AGM held for the financial year _____

a. 2017-18
b. 2018-19
c. 2019-20
d. 2023-24

18. The audit committee of Law Ltd. recommends to the board, the name of Mr. Ram, for appointment as auditor
from the conclusion of 1st AGM till the conclusion of 6th AGM. The Board disagrees with the recommendation of
the Audit committee. The Board shall _____

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(a) Recommend to the members in the AGM, the name of Mr. Ram for appointment as auditor
(b) Refer back the recommendation of Mr. Ram to the Audit committee for reconsideration citing reasons
for such disagreement.
(c) Send its own recommendation for consideration of the members in the AGM.
(d) Either (a) or (b) or (c), at the discretion of the Board

19. The Audit committee of Y Ltd. recommends to the Board, the name of Mr. B, for appointment as auditor from
the conclusion of 1st AGM till the conclusion of 6th AGM. The Board agrees with the recommendation of the
Audit Committee. The Board shall _____.

(a) Recommend to the members in the AGM, the name of Mr. B, for appointment as auditor
(b) Refer back the recommendation of Mr. B to the Audit committee for reconsideration citing reasons for
such disagreement

A
(c) Send its own recommendation for consideration of the member in the AGM.

ro C
(d) Either (a) or (b) or (c), at the discretion of the Board

P
20. A company to which the concept of rotation is applicable, shall not appoint or reappoint any individual as an

Th e
auditor for more than ______ of 5 consecutive years, and such individual shall not be eligible for reappointment
as auditor in the same company for ______ from the completion of his term.

B y
(a) 1 term; 10 years

d
(b) 2 terms; 10 years

pi le
(c) 1 term; 5 years
(d) 2 terms; 5 years

o m
21. A company to which the concept of rotation is applicable, shall not appoint or reappoint any firm as an auditor

C
for more than _______ of 5 consecutive years, and such firm shall not be eligible for reappointment as auditor
in the same company for _______ from the completion of its term.

(a) 1 term; 10 years

(b) 2 terms; 10 years
(c) 1 term; 5 years
(d) 2 terms; 5 years

22. M/s XYZ and Associates, a partnership firm having 3 partners, viz. X, Y and Z, has completed 2 consecutive
terms of 5 years each as auditor of A Ltd, a listed company. Mr. Y is also a partner in REX and Associates, a
partnership firm having R, E and X as partners. REX and Associates is not eligible to be appointed as auditor in
_______ for a period of 5 years.

(a) A Ltd.
(b) Any Subsidiary of A Ltd.
(c) Any holding company of A Ltd.
(d) All of these

23. The concept of rotation of auditors is applicable to _______

(a) Listed companies

(b) Prescribed classes of companies
(c) Both (a) and (b)

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(d) None of these

24. The concept of rotation of auditors is applicable to _______

(a) Listed companies

(b) All private limited companies having paid up share capital of Rs. 10 crore or more
(c) All unlisted public companies having paid up share capital of Rs. 50 crore or more
(d) All of these

25. The concept of rotation of auditors is applicable to all companies having public borrowings from financial
institutions, banks or public deposits of _______ or above

(a) Rs. 10 crores

(b) Rs. 20 crores

A
(c) Rs. 50 crores

ro C
(d) None of these

e P
26. The concept of rotation of auditors does not apply to _________________.

Th
(a) One Person Companies and Small Companies

B y
(b) One Person Companies and Dormant Companies

d
(c) Small Companies and Dormant Companies

le
(d) One Person Companies, Small Companies and Dormant Companies

pi
27. M/s PQR and Associates, a partnership firm having 3 partners, viz. P, Q and R has completed 2 consecutive

o m
terms of 5 years each as auditors of B Ltd., a listed company. The 2 firms, viz. PQR and Associates and ST &

C
Associates, operate under the same brand name. ST & Associates, being the_______, and associated with PQR
& Associates, being the ________, under the _______, is not eligible for appointment in B Ltd. for a period
of 5 years.

(a) Outgoing audit firm; incoming audit firm; same network of audit firms
(b) Incoming audit firm; outgoing audit firm; same network of audit firms
(c) Incoming audit firm; outgoing audit firm; common partners
(d) Outgoing audit firm; incoming audit firm; common partners

28. M/s ABC & Associates has completed 2 consecutive terms of 5 years each, as auditors of EF Ltd., a listed
company. Six months before the completion of 2nd term, one of the partners of M/s ABC & Associates, viz. Mr.
A, retired from ABC & Associates and joined another firm of chartered accountants viz. GH & Associates. The
firm GH & Associates shall be ineligible to be appointed as auditor of EF Ltd. for a period of 5 years, if _____

(a) Mr. A was in charge of M/s ABC & Associates

(b) Mr. A used to certify the financial statements of EF Ltd.
(c) Both (a) and (b)
(d) Either (a) or (b)

29. The concept of rotation is applicable to GHI Ltd. The audit committee of GHI Ltd. shall _______ to the Board
the name of the auditor or an audit firm who may replace the auditor on expiry of term of such auditor, and the
Board ______ make its own recommendation for appointment of the next auditor by the members in the AGM

(a) Recommend; shall not

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(b) Order; shall not

(c) Recommend; shall
(d) Order; shall

30. In the case of Government company, the appointment of first auditor shall be made by the Comptroller and
Auditor General of India, within ______

(a) 30 days
(b) 60 days
(c) 90 days
(d) 120 days

31. Statement (1): In the case of Government company, if the Comptroller and Auditor General of India fails to
appoint the first auditor, the Board shall appoint the first auditor within next 60 days

C A
ro
Statement (2): In the case of Government company, if the Board fails to appoint the first auditor, the Board
shall inform the members of the company who shall appoint the first auditor within 60 days at the Annual

e P
general Meeting

Th
(a) Only Statement (1) is correct

y
(b) Only Statement (2) is correct

B
(c) Both the Statements are correct

e d
(d) None of the Statements is correct

pi l
32. The first auditor shall hold office till _______

o m
(a) The conclusion of first AGM

C
(b) The conclusion of 6th AGM
(c) He submits his audit reports
(d) None of these

33. In the case of a Government company, appointment of an auditor, other than the first auditor, shall be made
_______

(a) By the Comptroller and Auditor General of India, at an AGM

(b) By the members, at an AGM
(c) Within 180 days from the commencement of the financial year, by the CAG of India
(d) Within 180 days from the commencement of the calendar year, by the CAG of India

34. In the case of Government company, an auditor, other than the first auditor, shall hold his office till ______

(a) The conclusion of 6th AGM

(b) The conclusion of the AGM
(c) He submits his audit report
(d) He is removed

35. In the case of a Government company, any casual vacancy that arises in the office of an auditor shall be filled
______

(a) Within 30 days by the Comptroller and Auditor General of India

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(b) Within 60 days by the Comptroller and Auditor General of India

(c) Within 30 days, by the Board of directors
(d) Within 60 days, by the members, at an EGM

36. An auditor appointed to fill a casual vacancy shall hold his office till _______

(a) The conclusion of 6th AGM

(b) The conclusion of next AGM
(c) He submits his audit report
(d) He is removed

37. Mr. A was appointed as an auditor in the AGM held on 25 th September, 2018. Mr. A resigned from the office of
auditor on 15th January, 2019. The casual vacancy in the office of Mr. A shall be filled within ______ by the
Board of directors, and the appointment made by the Board shall be approved in a general meeting convened

A
within ______ of the recommendation of the Board.

ro C
(a) 30 days; 60 days

e P
(b) 60 days; 30 days

Th
(c) 3 months; 1 month

y
(d) 30 days; 3 months

d B
38. Consider the following conditions:

le
Condition (1): He is not disqualified for reappointment

pi
Condition (2): He has not given to the company a notice in writing of his unwillingness to be reappointed

m
Condition (3): A special resolution has not been passed at the AGM appointing some other person as auditor

C o
A retiring auditor may be re-appointed at an AGM, if ____________.

(a) Any one of the above conditions is satisfied

(b) Any two of the above condition is satisfied
(c) All the above conditions are satisfied
(d) None of the above conditions is satisfied

39. If at an AGM, no auditor is appointed or reappointed, _______

(a) The Board shall appoint the auditor

(b) The Central Government shall appoint the auditor
(c) The Comptroller and Auditor General of India shall appoint the auditor
(d) The existing auditor shall continue to be the auditor of the company

40. Prior approval of _______ is required for removal of an auditor before the expiry of his term

(a) The Central Government

(b) The Comptroller and Auditor General of India
(c) The Registrar of Companies
(d) The Tribunal

41. An application for obtaining prior approval for removal of an auditor before the expiry of his term, shall be made
in Form No. _______

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(a) ADT-1
(b) ADT-2
(c) ADT-3
(d) ADT-4

42. For removal of auditor before expiry of his term, the following sequence of events is correct:

(a) Board meeting – General meeting for passing SR – Application to CG – Grant of approval by CG
(b) Application to CG - Grant of approval by CG – Board Meeting - General meeting for passing SR
(c) General meeting for passing SR - Board meeting – Application to CG – Grant of approval by CG
(d) Board meeting – Application to CG - Grant of approval by CG - General meeting for passing SR

A
43. If an auditor resigns from his office, he shall file a statement indicating the reasons and other facts with respect

C
to his resignation, with ______

ro
(a) The company

e P
(b) The Registrar

Th
(c) The CAG (in case of a Government company)

y
(d) All of these

d B
44. If an auditor resigns from his office, he shall file a statement indicating the reasons and other facts with respect

le
to his resignation, within _____ of his resignation

pi
(a) 15 days

o m
(b) 30 days

C
(c) 60 days
(d) 90 days

45. An auditor who resigns from his office but fails to file a statement indicating the reasons and other facts with
respect to his resignation within the stipulated time, shall be punishable with a minimum penalty of ______
and a maximum penalty of ______.

(a) Rs. 50,000; Rs. 5 lakhs

(b) Rs. 50,000; Rs. 5 lakh or the remuneration of the auditor, whichever is less
(c) Rs. 50,000 or the remuneration of the auditor, whichever is less; Rs. 5 lakhs
(d) Rs. 50,000 or an amount equal to the remuneration of the auditor, whichever is less; five lakh rupees

46. At an AGM, special notice shall be required for ______, except where the retiring auditor has completed his
tenure of 5 consecutive years / 10 consecutive years as provide under section 139(2)

(a) Appointing as auditor a person other than the retiring auditor

(b) Providing expressly that the retiring auditor shall not be reappointed
(c) Either (a) or (b)
(d) None of these

47. Where a special notice is given for appointing as auditor a person other than the retiring auditor or for providing
expressly that the retiring auditor shall not be re-appointed, the retiring auditor is entitled to ______

(a) Make a written representation against his removal

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(b) Sue the company

(c) Claim compensation for loss of his office
(d) Both (a) & (c)

48. The special notice shall be given to the company at least ______ before the date of the Annual General Meeting.

(a) 7 days
(b) 14 days
(c) 21 days
(d) 30 days

49. _______ may order that the written representation made by the auditor shall not be circulated to members
and need not be read out at the meeting.

A
(a) The Comptroller and Auditor General of India

ro C
(b) The Registrar

P
(c) The Tribunal

Th e
(d) The Central Government

y
50. _______ is empowered to direct the company to change its auditors

d B
(a) The Comptroller and Auditor General of India

le
(b) The Registrar

pi
(c) The Tribunal

m
(d) The Central Government

C o
51. An auditor who is removed by the Tribunal, shall be disqualified to be appointed as auditor in ______ for a
period of ______

(a) Any company; 10 years

(b) The same company; 10 years
(c) Any company; 5 years
(d) The same company; 5 years

52. A firm shall be eligible for appointment as auditor of a company if _______

(a) All of its partners are chartered accountants

(b) At least 2 of its partners are chartered accountants
(c) Majority of its partners are chartered accountants
(d) Majority of its partners practicing in India are chartered accountants

53. Mr. Saiyam holds equity shares of nominal value of Rs. 10 lakhs in Allen Ltd. _______ is disqualified for
appointment as auditor in Allen Ltd.

(a) Mr. Saiyam

(b) Any relative of Mr. Saiyam
(c) Any partner of Mr. Saiyam
(d) All of these

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54. Mr. Saiyam holds equity shares of nominal value of Rs. 20 lakhs in Ridhi Ltd. Consider the following Statements:

Statement (1): Mr. Saiyam is disqualified for appointment as auditor in Ridhi Ltd.

Statement (2): Mr. Saiyam is disqualified for appointment as auditor in any holding, subsidiary or associate
company of Ridhi Ltd.

Statement (3): Mr. Saiyam is not disqualified for appointment as auditor in a subsidiary of holding company
of Ridhi Ltd.

(a) Only one of the above Statements is correct

(b) Only two of the above Statements is correct
(c) All the above Statements are correct
(d) None of the above Statements is correct

C A
55. A person shall not be disqualified for appointment as an auditor if his relative holds any security in the company

ro
of _______ not exceeding Rs. _______

e P
(a) Market value; Rs. 1 lakh

Th
(b) Face value; Rs. 1 lakh

y
(c) Market value; Rs. 10,000

B
(d) Face value; Rs. 10,000

le d
56. If a relative of an auditor acquires any security exceeding the prescribed limit in the company, the auditor shall

pi
take corrective action within _____

o m
(a) 15 days

C
(b) 30 days
(c) 60 days
(d) 120 days

57. For the purpose of determining as to whether a person is disqualified for appointment as auditor, ‘business
relationship’ means any transaction entered into for a commercial purpose except ______

(a) Commercial transaction which are in the nature of professional services permitted to be rendered by an
auditor
(b) Commercial transactions which are in ordinary course of business of the company at arm’s length price
(c) Both (a) and (b)
(d) None of these

58. A person whose _______ is a _______ in the company shall be disqualified to be appointed as auditor of the
company.

(a) Relative; director

(b) Relative; director or Key Managerial Personnel
(c) Relative or partner; director or Key Managerial Personnel
(d) Relative or partner; Key Managerial Personnel

59. For the purpose of determining the ceiling limit on number of audits, audit of _______ shall not be considered

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(a) One-person company

(b) Dormant company
(c) Small company
(d) All of these

60. For the purpose of determining the ceiling limit on number of audits, audit of ______ having a paid-up capital
of less than Rs. 100 crores shall not be considered

(a) Any company

(b) Any public company
(c) Any private company
(d) Any unlisted company

A
61. A person who has been convicted by a court of an offence involving fraud and a period of _______ years has

C
not been elapsed from the date of such conviction shall be disqualified for appointment as auditor

P ro
(a) 5 years

e
(b) 7 years

Th
(c) 10 years

y
(d) 15 years

d B
62. Where the appointment of auditor is made by the Comptroller and Auditor General of India, the remuneration

le
shall be fixed by _______

pi
(a) The Comptroller and Auditor General of India

o m
(b) The Central Government

C
(c) The members, in the general meeting
(d) The Board of directors

63. Auditor’s right to access to books of accounts a voucher of the company extends to all such books as are kept at
the registered office and at _______

(a) Any other place, outside India

(b) Any other place, in India
(c) Both (a) & (b)
(d) Such other place as may be determined by the members

64. An auditor has the duty to make inquires with respect to certain transactions. He is required to include in his
audit report, the result of his inquires _______

(a) Only if he has anything special to comment

(b) Only if he is satisfied with the result of such enquiries
(c) Both (a) & (b)
(d) None of these

65. The auditor shall make his report to _______

(a) The Board of Directors

(b) The Members

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(c) The Central Government

(d) The Comptroller and Auditor General of India

66. The auditor has no duty to report on the internal financial controls, in case the company is a _______

(a) Private company

(b) One-person company
(c) Dormant company
(d) All of these

67. In case of audit of Government companies, the auditor shall submit a copy of his audit report to _______

(a) The Comptroller and Auditor General of India

(b) The Central Government

C A
(c) The Board of Directors

ro
(d) All of these

e P
68. In case of audit of Government companies, CAG has the right to ________

Th
(a) Order conduct of a supplementary audit

B y
(b) Comment upon the audit report

d
(c) Supplement the audit report

pi le
(d) All of these

m
69. The accounts of any branch office in India shall be audited by

C o
(a) The Company’s auditor
(b) Any person qualified for appointment as an auditor of the company
(c) The Comptroller and Auditor General of India
(d) Either (a) or (b)

70. To comply with the Auditing Standards is _________ of the auditor

(a) A right
(b) A duty
(c) A moral responsibility
(d) None of these

71. An auditor shall report to the Central Government, every fraud involving an amount of _______

(a) Rs. 10 lakh or more

(b) Rs. 1 crore or more
(c) Rs 10 crore or more
(d) Rs. 100 crore or more

72. When an auditor comes to know about a fraud in the company, he shall report such fraud to the Board / Audit
Committee within ----

(a) 1 day

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(b) 2 days
(c) 3 days
(d) 7 days

73. The provisions with respect to reporting of fraud shall apply to ---

(a) Statutory auditor appointed under section 139

(b) Cost auditor appointed under section 148
(c) Secretarial auditor appointed under section 204
(d) All of these

74. The auditor of the company shall not ______

(a) Provide advice on taxation matters

C A
(b) Review interim financial information

ro
(c) Provide actuarial services

P
(d) All of these

Th e
75. The qualifications, observations or comments on financial transactions or matters, which have any adverse effect

y
on the functioning of the company mentioned in the auditor’s report shall be _______

d B
(a) Read before the company in general meeting

le
(b) Open to inspection by any member of the company

pi
(c) Both (a) & (b)

m
(d) Published in 2 newspapers

C o
76. To attend the general meetings, is ______ of the auditor

(a) A right
(b) A duty
(c) A moral responsibility
(d) None of these

77. Where an auditor is convicted for contravention of section 139, 143, 144 or 145, the auditor shall be liable to
refund to the company _______

(a) The remuneration received by him

(b) Twice the amount of remuneration received by him
(c) Thrice the amount of remuneration received by him
(d) Five times the amount of remuneration received by him

78. Appointment of a cost auditor of a company is made by –

(a) The Comptroller and Auditor General of India

(b) The Central Government
(c) The members
(d) The Board of Directors

79. Statement (1): Where a company is required to constitute an audit committee, the Audit Committee shall

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 CA Kishan Kumar MCQs – Audit and Auditors May & Nov 2021

recommend to the Board, the remuneration of the cost auditor.

Statement (2): Whether or not a company is required to constitute an audit committee, the remuneration of
the cost auditor shall be approved by the Board, and it shall be subsequently approved by the members.

(a) Only Statement (1) is correct

(b) Only Statement (2) is correct
(c) Both the Statements are correct
(d) None of the Statements is correct

80. Within 30 days of receipt of cost audit report form the cost auditor, the company shall, within ______, furnish
it to ______

(a) 30 days; the Comptroller and Auditor General of India

A
(b) 60 days; the Comptroller and Auditor General of India

ro C
(c) 30 days; the Central Government

P
(d) 60 days; the Central Government

Th e
81. The cost auditor shall comply with _______________.

y
(a) Auditing Standards

B
(b) Cost Auditing Standards

le d
(c) Accounting Standards

pi
(d) All of these

o m
82. The cost Auditor shall submit the cost audit report to ________________.

C
(a) The Board of Directors
(b) The Comptroller and Auditor General of India
(c) The Central Government
(d) All of these

83. Statement 1: The auditor shall attend the general meeting.

Statement 2: The auditor may attend the general meeting himself or through his authorised representative,
who shall also be qualified to be an auditor.

Statement 3: The company may exempt an auditor from attending the general meeting.

Which of the following Statement is correct?

a) (i), (ii)
b) (i), (iii)
c) (i)
d) All the three

84. Which of the following is a prohibited service to be rendered by the auditor of the Company?

i. Internal audit
ii. Actuarial services

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iii. Investment advisory services

iv. Investment banking services
v. Rendering of outsourced financial services
vi. Management services
vii. Tax Audit services

Which of the following Statement is correct?

a) (i), (ii), (v), (vi)

b) (i), (ii), (v), (vi), (vii)
c) (i), (ii), (iii), (iv), (v), (vi)
d) (i), (ii), (iii), (iv), (v), (vi), (vii)

A
85. Statement 1: CAG may order conduct of a supplementary audit of the financial statement of the company

C
within 60 days from the date of receipt of the audit report.

P ro
Statement 2: CAG may Supplement or comment on the audit report of the financial statement of the company

e
within 60 days from the date of receipt of the audit report.

Th
a) Only Statement (1) is correct

B y
b) Only Statement (2) is correct

d
c) Both the Statements are correct

pi le
d) None of the Statements is correct

86. The remuneration of the auditors of a company shall

o m
i. be fixed in the general meeting

C
ii. be fixed in the Board meeting
iii. include the expenses, if any, incurred by the auditor in connection with the audit of the company; and any
facility extends to the auditor
iv. shall not include any remuneration paid to the auditor for any other service rendered by him at the request
of the company.

Which of the following Statement is correct?

a) (i), (iii), (iv)

b) (ii), (iii), (iv)
c) (i), (iii)
d) (i), (iv)

87. Statement 1: An auditor, being individual is appointed for 1 term of 5 consecutive years provided such
appointment is ratified every year in the AGM by members.

Statement 2: An auditor, being individual is appointed for 1 term of 5 consecutive years.

a) Only Statement (1) is correct

b) Only Statement (2) is correct
c) Both the Statements are correct
d) None of the Statements is correct

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88. Which of the non financial matter, Statutory auditor is required to report in his report:

a) Whether employees appointed during the period covered by audit meet the requisite
educational/professional qualification at the time of appointment.
b) Whether every page of minute book of General meetings bears full signature of Chairman as per provisions
of Companies Act, 2013.
c) Whether the incorporation documents are managed properly.
d) Whether any director is disqualified from being appointed as a director under section 164(2).

Answer Key

1. A 2. D 3. A 4. B 5. A 6. C 7. B

8. A 9. A 10. D 11. B 12. D 13. B 14. B

C A
15. A 16. B 17. B 18. C 19. A 20. C 21. D

ro
22. A 23. C 24. A 25. C 26. A 27. B 28. C

h e P
29. C 30. B 31. D 32. A 33. C 34. B 35. A

y T
36. B 37. D 38. C 39. D 40. A 41. B 42. D

d B
43. D 44. B 45. D 46. C 47. A 48. B 49. C

pi le
50. C 51. C 52. D 53. D 54. B 55. B 56. C

m
57. C 58. B 59. D 60. C 61. C 62. C 63. C

C o
64. A 65. B 66. B 67. A 68. D 69. D 70. B

71. B 72. B 73. D 74. C 75. C 76. B 77. A

78. D 79. C 80. C 81. B 82. A 83. D 84. C

85. C 86. C 87. B 88. D

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From CA KishaneSir Law
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Fully amended for

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May / Nov 21

Taking Break From Law

To Focus on Tax & EIS-SM

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 CA Kishan Kumar Case Study Based MCQs

C HAPTER 10
C ASE S TUDY B ASED MCQ S
MCQ 1

A private company by the name of Neha Pvt. Limited was incorporated in the year 2002. The registered office of
the company Neha Pvt. Limited was situated in city K of state Y.

During the financial year beginning on 01/04/2018 and ending on 31/03/2019 the turnover of the company Neha
Pvt. Limited was INR 1010 crore. The net profit of the company Neha Pvt. Limited for the financial year 2018-19
was INR 4 crore.

The Board of Directors of Neha Pvt. Limited consisted of only two directors namely Mr. M and Mr. N. Mr. M and

A
Mr. N were the only directors of company Neha Pvt. Limited since its incorporation in the year 2002.

ro C
Mr. M one of the two directors of Neha Pvt. Limited was of the opinion that no Corporate Social Responsibility

P
Committee of the Board was required to be formed as for the financial year 2019-20 due to the reason that net profit

e
of the company Neha Pvt. Limited for financial year 2018-19 was INR 4 crore which was less than INR 5 crore.

Th
Mr. N the other director of Neha Pvt. Limited was not having the same opinion as Mr. M. He was of the opinion that

y
Corporate Social Responsibility Committee of the Board must be formed for the company Neha Pvt. Limited.

B
The net profit of the company Neha Pvt. Limited for the financial year 2015-16, 2016-17 and 2017-18 were INR 1

d
crore, INR 2 crore and INR 3 crore respectively.

pi le
Keeping the basic provisions of Companies Act in mind answer the following multiple-choice questions: (4 MCQ of
2 Marks each: Total 8 Marks)

o m
i) Mr. M one of the directors of Neha Pvt. Limited was of the opinion that no Corporate Social Responsibility

C
Committee of Board was required to be formed for financial year 2019-20 but Mr. N other director was of
opinion that it was required to be formed. According to your understanding which one of the two directors is
right and why:

a) Mr. M because net profit of Neha Pvt. Limited for financial year 2018-19 was less than INR 5 crore.
b) Mr. N because turnover of Neha Pvt. Limited for financial year 2018-19 was more than INR 1,000 crore.
c) Mr. N because net profit of Neha Pvt. Limited for financial year 2018-19 was more than INR 2 crore.
d) Mr. M because turnover of Neha Pvt. Limited for financial year 2019-19 was less than INR 1,500 crore.

ii) The company Neha Pvt. Limited must give preference to spend the amount of contribution towards Corporate
Social Responsibility in area of:

a) City O of State Y
b) City A of State Z
c) City G of State Z
d) City K of State Y

iii) According to law Corporate Social Responsibility Committee shall consist of three or more directors, so for
company Neha Pvt. Limited the Corporate Social Responsibility Committee will:

a) Not be formed as it has only two directors namely Mr. M and Mr. N
b) Be formed only after appointing one more director apart from Mr. M and Mr. N
c) Be formed with two directors only namely Mr. M and Mr. N
d) Be formed only after appointing two more directors apart from Mr. M and Mr. N

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iv) The company Neha Pvt. Limited shall spend during financial year 2018-19 on Corporate Social Responsibility
an amount of at least:

a) INR 0.04 crore

b) INR 0.12 crore
c) INR 0.18 crore
d) INR 0.06 crore

MCQ 2

Mr. Mohit Aggarwal is the director of Superior Carbonates and Chemicals Limited (SCCL). SCCL was incorporated
by Mr. S. K. Aggarwal (father of Mr. Mohit) on 05th July 1995 as a public company. SCCL accepts a loan from Mr.
Mohit of INRs 1.5 crores for short term purpose and expected to repay after 24 months. SCCL in its book of accounts,
records such receipt as loan and borrowing under non-current liabilities. At the time of advancing loan, Mr. Mohit
affirms in writing that such amount is not being given out of funds acquired by him by borrowing or accepting loans
or deposits from others and complete details of such loan transactions are furnished in the board report.

C A
SCCL has its registered office in Paonta-sahib (Himachal Pradesh) and corporate office is situated in Dehradun

ro
(Uttarakhand) but around 15% of members whose name is entered in members’ register are residents of Nainital
(Uttarakhand). At Nainital, SCCL has Liaison Office. Management of the company is willing to place, register of

e P
members at Nainital Liaison Office.

Th
SCCL convene its 7th AGM on 10th September, 2020 at the registered office of the company. Notice for same was

y
served on 21st August, 2020. More than 78% of members gave consent to convening AGM at shorter notice due to

B
ambiguity and possibility of another lockdown starting from 11th September 2020 on account of the second wave of

d
COVID-19.

pi le
On the basis of above facts, answer the following MCQs (3 MCQ of 2 Marks each: Total 6 Marks)

i) With reference to the loan advanced by Mr. Mohit to SCCL, apprise whether same is classified as deposit or

o m
not?

C
a) Deposit, because any sum advanced by the director whether loan or otherwise is always classified as a
deposit
b) Deposit, because the length of the loan is for a period; more than six months.
c) Not a deposit, because such amount is recorded as loan in books of account of SCCL
d) Not a deposit, because the written declaration is provided by Mr. Mohit that said sum of loan is not being
given out of funds acquired by him by borrowing or accepting loans or deposits from others.

ii) Pick the right statement regarding SCCL’s willingness to keep and maintain the register of members at the
Nainital liaison office.

a) Register of members shall be kept at either registered office or within the same city that too after passing
the resolution, hence SCCL can’t place it at Nainital liaison office
b) Register of members can’t be kept at any other place by SCCL, without passing an ordinary resolution
c) Register of members can be kept at Nainital liaison office, after passing a special resolution, because more
than 1/10th of the total members entered in the register of members reside there
d) Register of members can’t be kept at Nainital liaison office, even after passing a special resolution, because
less than 1/5th of the total members entered in the register of members reside there

iii) Considering the provision dealt with length of Notice of AGM, pick the right option depicting the validity of
notice served by SCCL.

a) Notice served by SCCL is not valid, because shorter length needs to be consented by all the members
entitled to vote at AGM.
b) Notice served by SCCL is not valid, because shorter length needs to be consented by at-least 95% of

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 CA Kishan Kumar Case Study Based MCQs

members entitled to vote thereat.

c) Notice served by SCCL is valid because the shorter length is consented by 75% of members entitled to vote
thereat.
d) Notice served by SCCL is not valid, because shorter length needs to be consented by at-least 50% of the
members entitled to vote at AGM that too in writing.

MCQ 3

GHWX Private Limited was incorporated in the year 2009. The registered office of the company GHWX Private Limited
was situated in city T of state V. The Board of Directors of GHWX Private Limited comprised of five directors namely
Mr. K, Mr. N, Mr. R, Mr. U and Mr. W.

During the financial year beginning on 01/04/2018 and ending on 31/03/2019 the second meeting of Board of
Directors of GHWX Private Limited was held on 7 September, 2018 Out of 5 directors, Mr. K, Mr. N, Mr. R and Mr.
W were present for the said meeting. During the meeting of Board of Directors, a resolution on one of the important
matters was passed. While three directors namely Mr. K, Mr. N and Mr. R agreed with the resolution and voted in

A
favour of resolution, however, Mr. W did not agree with the resolution and voted against the resolution.

ro C
The minutes of the second meeting of Board of Directors of GHWX Private Limited held on 7 September, 2018 were
prepared and they were entered in Minutes Book of meeting of Board of Directors of GHWX Private Limited. One

e P
of the director Mr. K was of the opinion that minutes of second meeting of Board of Directors of GHWX Private

Th
Limited must be prepared and entered in Minute Book of meeting of Board of Directors of GHWX Private Limited
by end of October, 2018. The remaining four directors namely Mr. N, Mr. R, Mr. U and Mr. W did not agree with

y
the opinion of Mr. K because they thought that it was not within the time limit as prescribed by the law.

d B
One of the directors, Mr. N. opined that minute books of meetings of Board of Directors of GHWX Private Limited

e
for the years starting with 2009 to 2015 should be shredded to ruins as these papers were taking a lot of space. He

pi l
further added that since the Companies Act, 2013 is silent as to maintaining the minute book of meetings of Board
of Directors, it is not necessary to maintain such minute books.

o m
The Board of Directors of GHWX Private Limited did not decide any place where minute book of meetings of Board of

C
Directors of GHWX Private Limited will be kept.

Keeping the provisions of the Companies Act, 2013, in mind answer the following multiple-choice questions:

i) The second meeting of Board of Directors of GHWX Private Limited was held on 7 September, 2018 for the
financial year 2018-19. The minutes of second meeting of Board of Directors of GHWX Private Limited for
financial year 2018 -19 must contain:
a) Name of director Mr. U who was absent from the meeting of Board of Directors held on 7 September, 2018.
b) Names of all the directors Mr. K, Mr. N, Mr. R, Mr. U and Mr. W comprising Board of Directors of GHWX
Private Limited.
c) Name of one director Mr. U who was absent and at least one director who was present in the meeting of
Board of Directors held on 7 September, 2018.
d) Names of directors Mr. K, Mr. N, Mr. R and Mr. W who were present in the meeting of Board of Directors
held on 7 September, 2018.

ii) In case of the resolution talked in the case study, the minutes of second meeting of Board of Directors of GHWX
Private Limited for financial year 2018 -19 held on 7 September, 2018 must contain:
a) Name of any two directors who were present in meeting and voted in the resolution.
b) Name of director Mr. W who voted against the resolution.
c) Name of directors Mr. K, Mr. N and Mr. R who voted in favour of the resolution.
d) Names of all the directors Mr. K, Mr. N, Mr. R, Mr. U and Mr. W who all had the right to attend the meeting
and vote in the resolution.

iii) The opinion of one of the directors, Mr. K was that minutes of second meeting of Board of Directors of GHWX

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Private Limited for financial year 2018-19 must be prepared and entered in minutes book of meeting of Board of
Directors of GHWX Private Limited by the end of October, 2018 is incorrect. The opinion of Mr. K is incorrect
because:
a) Minutes of second meeting of Board of Directors of GHWX Private Limited for financial year 2018-19 must
be entered in minute book of meeting of Board of Directors within thirty days of the conclusion of meeting
on 7 September, 2018.
b) Minutes of second meeting of Board of Directors of GHWX Private Limited for the financial year 2018-19
must be entered in minute book of meeting of Board of Directors within sixty days of the conclusion of
meeting on 7 September, 2018.
c) Minutes of second meeting of Board of Directors of GHWX Private Limited for the financial year 2018-19
must be entered in minute book of meeting of Board of Directors within ninety days of the conclusion of
meeting on 7 September, 2018.
d) Minutes of second meeting of Board of Directors of GHWX Private Limited for financial year 2018-19 must
be entered in minute book of meeting of Board of Directors within one twenty days of the conclusion of
meeting on 7 September, 2018

C A
MCQ 4

P ro
Mr. B R Mohanty, around two-decade back; along with two of his elder brothers and few friends, who are pharma

e
and chemical engineers by profession promoted two companies; first being Well-Mount Limited (WML) dealing in

Th
wellness products and pharmaceuticals; whereas other is Tex-Mount Limited (TML) dealing in textile products.
During these two decades, both WML and TML has grown magnificently as both the sectors expanded beyond

y
imagination. Both companies went public and stock of same listed on leading stock exchanges of countries.

d B
TML did well in the past and emerged as a major export unit but in recent years the textile sector witness stiff

le
competition due to new entrants. The increased cost of the workforce and other input materials is also made sector

pi
unprofitable and recent lockdown hit the sector further adversely. TML’s bottom line for the current financial year
is red. TML was declaring dividends since the very first year of operation and willing to continue the tradition

m
considering dividend as signaling effect to an investor for valuation purpose. Rate of dividend for the recent five

o
years was 9%, 10%, 8%, 5% and 2% (9% being five years ago and 2% being the previous year) respectively. The

C
management at TML decided to declare dividends out of the profit of previous years. TML deals in export hence
came under the scanner of enforcement authority, who seek financial statements and books of accounts of TML for
scrutiny for the last 10 preceding financial years. In response to notice, TML furnish financial statements and books
of accounts for last 8 immediately preceding financial years only, stating as per its Article of Association; TML is
required to maintain and keep the books of accounts for 8 immediately preceding financial years only and that too
without any record of vouchers pertaining to such accounts.

WML is doing well, it seizes outbreak of COVID-19 as a business opportunity and registers significant growth in
both top and bottom line. For the past many years, WML declare a dividend at a constant rate of 20%. During the
financial year 2019-20, WML earns a profit of 580 Crores. Board of directors of WML declares 25% dividend without
transferring any % to reserve on 15th June, 2020. On 14th July, 2020 some of the amount remaining unpaid, due
to operation of law; has been transferred to unpaid dividend account on 20th July, 2020. CA. Dev was appointed as
auditor under section 139 of Companies Act, 2013 of WML in individual capacity during 17th AGM for against the
financial year 2018-19.

i) In case of TML, which of the following statements are correct regarding the declaration of dividend?
a) TML can’t declare the dividend because it earns a loss in the current financial year.
b) TML can declare the dividend but only up to 9%
c) TML can declare the dividend but only up to 5%
d) TML can declare the dividend but only up to 6.8%

ii) CA. Dev, who is the auditor of WML have to vacate the office of the auditor in and can be reappointed again only
in
nd th
a) 22 AGM and 27 AGM

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27 AGM and 32 AGM

th nd
b)

22nd AGM and 23 AGM

rd
c)
nd
d) 22 AGM and can’t be re-appointed again.

iii) In case of WML, which of the following statements is correct regarding the declaration of dividend?
a) WML can’t declare the dividend at a rate more than 20%
b) WML can declare the dividend out current year’s profit but it needs to transfer sum equal to 20% to reserve
first.
c) WML can declare the dividend out current year’s profit but it needs to transfer sum equal to 10% of paid-
up share capital to reserve first.
d) WML can declare the dividend out of current years’ profit without transferring any % to reserve.

iv) In case of TML, regarding maintenance and keeping the books of account; which of the following statements
hold truth?

C A
a) TML needs to maintain and keep the books of account for 10 preceding financial years, hence TML violate

ro
the law.

P
b) TML doesn’t violate the provision of law because it keeps the books of account for 8 immediately preceding

e
financial years.

Th
c) TML violate the provision of law because it keeps the books of account for 8 immediately preceding

y
financial years without keeping relevant vouchers in the record pertaining to such books of account.

B
d) TML doesn’t violate the provision of law because it is complying to its Article of Association.

le d
v) Regarding declaration and distribution of dividend by WML, which of the following statements is correct from

pi
the view of the timeline?

m
a) WML violates the law, because some of the dividend remain unpaid; irrespective of reason for non-

o
payment

C
th
b) WML violates the law, because unpaid dividend needs to transfer to unpaid dividend account by 19 July
2020.
c) WML doesn’t violate the law, because an unpaid dividend transferred to unpaid dividend account prior to
21st July 2020.
d) WML doesn’t violate the law, because an unpaid dividend can be transferred to unpaid dividend account
at any time within 90 days from the date of declaration.

MCQ 5

Mr. Purshottam Prasad, a business graduate from leading B-School, running the chain of restaurants; as sole
proprietor concern; based in Chennai. Mr. Prasad being dynamic businessman, in order to develop the business;
decided to give corporate form to his business; but concerned with dilution of the control over business decisions.

Mr. Prasad, during some journey met Mr. Chinmay Dass; who is school days friend of Mr. Prasad and presently
working in one of leading corporate advisory firm. Mr. Prasad seeks advice from Mr. Dass, regarding conversion of
sole proprietorship concern to company and also explain his intention to keep the entire control in h is hand. Mr.
Dass told, about new type of company; which can be formed under Companies Act, 2013; One Person Company
(OPC). Mr. Dass quoted section 2 (62), which define 'one-person company’, a company which has only one person
as a member.

Mr. Prasad, felt OPC is correct form of business for him, hence promotes an OPC ‘Casa Hangout Private Limited’
(One Person Company) on 14th September 2019, to which he sold his sole proprietor business and himself became
sole member. Mr. Prasad, appointed his younger son Mr. Vijay, who was 21-year-old then; as Nominee to OPC. Mr.
Anand who is old friend of Mr. Prasad was appointed as director of OPC, Mr. Prasad himself also become director
of company.

Mr. Vijay is professional photographer, and for some certification course went to abroad on 23rd October 2019. He

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 CA Kishan Kumar Case Study Based MCQs

came back on 1 st of March 2020. He established photo-studio in form of OPC ‘Best Click (OPC) Private Limited’ on
20th March 2020, in which Mr. Prasad is nominee and he became sole member. In mean time, Mr. Vijay also gave
his consent as nominee to another OPC in which his elder brother Mr. Shankar is sole member.

Mr. Prasad met an accident on 25th March, 2020, in which he lost his life. Nominat ion clause invoked, resultantly
Mr. Vijay has to take charge over ‘Casa Hangout (OPC) Private Limited’ (One Person Company) as member with
immediate effect. On 30 th March, 2020 Mr. Shankar was appointed as new nominee to ‘Casa Hangout (OPC) Private
Limited’, who gave written consent on 31st March 2020. Mr. Shankar who is investment banker by profession, is of
opinion that ‘Casa Hangout (OPC) Private Limited’ need to amend its object clause and add ‘carry out investment
in securities of body corporate’ as one of object.

Financial Period closed on 31 st March 2020. Financial statements of ‘Casa Hangout (OPC) Private Limited’, which
is not containing cash flow statement; signed by Mr. Anand (who left as only director after death of Mr. Prasad).

i) With reference to appointment of Mr. Vijay and Mr. Shankar as nominee to ‘Casa Hangout (OPC) Private
Limited’, out of followings, who is eligible to be nominee of OPC?
a) Any natural person excluding minor

C A
b) Any legal person excluding minor

ro
c) Any natural person, who is resident of India; but excluding minor

e P
d) Any natural person, who is resident as well as citizen of India; but excluding minor

Th
ii) Mr. Shankar if wish to withdraw his consent as nominee, can do so; by giving written notice to

y
a) Director of OPC and to sole member of company

B
b) Director of OPC and to Registrar of companies

le d
c) Sole member of company and to OPC

pi
d) Sole member of company and to Registrar of companies

m
iii) With reference to legal position of Mr. Vijay as member/s and nominee/s to various OPCs, which of the

C o
following statement is correct in reference to ceiling limit in relation to membership and being nominee to
OPC? A person, other than minor; at specific point of time;
a) Can be member in any number of OPCs but nominee in one OPC
b) Can be member in one OPC and nominee in any number of OPCs
c) Can be member in one OPC and nominee in another one OPCs
d) Can be member and nominee both in any number of OPCs

iv) Which of following statement is correct, in reference to requirement for financial Statements of ‘Casa Hangout
(OPC) Private Limited’?
a) Must be signed by one director
b) Must be signed by at-least by two directors
c) Must contain cash flow statement as part of financial statements
d) None of the above

v) With reference to opinion of Mr. Shankar to add ‘carry out investment in securities of body corporate’ object,
‘Casa Hangout (OPC) Private Limited’
a) Can’t carry out non-banking financial investment activities & investment in securities of body corporate
b) Can’t carry out non-banking financial investment, but can invest in securities of body corporate

c) Can carry-out non-banking financial investment & invest in securities of body corporate’
d) None of the above

MCQ 6

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 CA Kishan Kumar Case Study Based MCQs

Vishal crockery Limited was incorporated on 24th September, 2010 under the jurisdiction of Registrar of companies,
Rajasthan with its registered office located in Jaipur and its manufacturing units spread out in Mumbai, Kanpur, Delhi
and Ludhiana. Under the dynamic leadership of Hans Rajpal, the chairman and Managing Director (CMD) of the
company, it could easily be ascertained that the company had reached the new heights of success. The directors of the
company numbered eight including CMD of which two were the independent directors.

The turnover of the company of the financial year 2018-2019 was Rs. 750 crores- a whooping rise of more than 20%
from the previous year and net profit stood at a prestigious figure of Rs. 6.60 crores- also increased by Rs. 1.80 crores
compared to the net profit of previous year. The company had a net worth Rs. 250.00 crores; and it was noticed that
the net worth had also registered a northern trend by more than 15%. The authorized and paid – up share capital of
the company was Rs. 8.00crores. keeping in view the applicability of forming a CSR Committee for the current
financial year 2019-20, CSR Committee was formed with four directors as members of which one was the independent
member. The committee was, among others, given the responsibility to formulate and recommend to the Board, a
corporate social responsibility policy which shall indicate the activities to be undertaken by the company as specified
in schedule VII.

The company plans to diversify its business by adding another segment to manufacture steel utensils and therefore, is

A
desirous to shift its registered office to Mumbai from the present one at Jaipur which will help the company in easing

ro C
out the new business. Another strategically important segment which the company tapped earlier and now wishes to
engage itself on a large scale relates to manufacturing of stationery items.

e P
The company hopes that with the shifting of registered office to Mumbai, it shall be able to target international markets

Th
to export its quality products. As on date, the export turnover of the company is not that much significant. The
directors, Janardhan Mittal (Finance) and Ratish Jain (marketing). However, have in depth knowledge of export

y
markets, particularly those existing in UK and Singapore, where they can place their products successfully and achieve

B
laurels for the company in terms of wealth maximization.

le d
During the current Financial year 2019-20, the company under the CSR activities provided ample support for

pi
improvement of infrastructure in school established at Mumbai, Kanpur, Delhi and Ludhiana. Not only this, the
company contributed towards establishment of Digital Smart Classroom, Libraries and computer labs in these cities.

o m
The company also developed mobile medical units equipped with medical facilities and qualified doctors. In addition

C
to this, a large number of public health and sanitation activities had been initiated under Swachh Bharat Abhiyan. The
total amount spent on activities was, till date, almost equal to the minimum spendable amount and it is hoped that as
the current financial year 2019-20 approaches its end, the total spending on CSR activities will certainly exceed the
budgeted figure.

Multiple Choice Questions (2 marks each*3= Total6 marks)

i) Which of the following criterion prompted Vishal Crockery Limited to mandatorily form a Corporate Social
Responsibility (CSR) Committee for the current financial year?

a) The net profit had increased to Rs. 6.60 crores and it was more by Rs. 1.80 crores in comparison to previous
year’s net profit.
b) The turnover was Rs. 750.00 crores which was increased by more than 20% as compared to the previous
year.
c) The net worth was Rs. 250.00 crores which when compared to the previous year had registered an increase
by more than 15%.
d) The paid- up share capital was Rs. 8.00 crores

ii) What is the minimum amount (in percentage form) that Vishal Crockery Limited is required to spend during the
Financial Year 2019-20 on the CSR activities after it formed a Corporate Social Responsibility Committee?

a) Minimum 2% of the average net profits made during the two immediately preceding financial years.
b) Minimum 2% of the average met profits made during the three immediately preceding financial years.
c) Minimum 2.5% of the average met profits made during the two immediately preceding financial years.
d) Minimum 2.5% of the average net profits made during the three immediately preceding financial years.

iii) In the given case scenario, Vishal Crockery Limited decide to undertake CSR activities at its own. In case, it had

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decided to engage an external section 8 company for undertaking its CSR activities and such charitable company
is not establishment by Vishal or not it is established by the Central/ state Government or by any entity
established under an act of parliament or a state Legislature, then what should be the established track which its
section 8 company should have in undertaking similar programs or projects which Vishal Crockery Limited wants
it to accomplish?

a) Track record of minimum one year

b) Track record of minimum two years
c) Track record of minimum three years
d) None of the above

MCQ 7

Vivek shah is the chief Finance Officer (CFO) and Sachin Bhatt is the company Secretary of Jitendra Iron works private
Ltd (JIWPL), in Manipal, Karnataka. JIWPL is an integrated set up of foundries and machine shops that add value by
machining more than 75% of the castings manufactured to fully finished condition. JIWPL is one of the largest jobbing

A
foundries producing grey iron castings required for automobile, farm equipment sector and diesel engines industry.

C
JIWPL serve customers globally. The turnover of JIWPL is about Rs. 600 Crores, including export turnover of about

ro
Rs. 250 Crores.

e P
During the year 2019, JIWPL planned expansion to enhance its production capacity to meet the increasing demand

Th
from its customers, by importing fully automatic plant and equipment from Germany for the unit at Manipal. The
means of finance of the expansion project: -

B y
a) JIWPL received an amount of Rs 25 crores from Malini Shetty, wife of one of the promoter director of JIWPL,

d
Mahesh Shetty, wanted to know from Sachin Bhatt any compliance needed from the perspective of acceptance of

e
Deposits.

pi l
b) The Board and the CFO also approached the main banker of the company viz.., Bank of Baroda. The Bank after
proper credit analysis, sanctioned an amount of Rs. 50 crores for meeting the working capital needs of the

m
expansion project, which included interchangeable limits of cash credits, foreign and inland bills for negotiation

o
and acceptance. The security cover was floating charge on the book debts, inventory and other current assets of

C
the expansion project in Manipal OF JIWPL.

The CFO and the CS together coordinated with the legal department of the Bank on procedures relating to creation of
security and registration of charges.

The registered office of JIWPL is located in Manipal. Out of the company’s 180 members, 20 members, who are
entered in the Register of Members reside in Mangaluru, a nearby city, requested the company for some reasons to
maintain the Registrar of Members in the company’s liaison office in Mangaluru, instead of Manipal henceforth.

i) JIWPL received an amount of RS 25 crores from Malini Shetty, wife of one of the promoter directors Mahesh
Shetty of JIWPL. Mahesh Shetty wanted to know from Sachin Bhatt any compliance needed from the perspective
of acceptance of deposits. The CS has to ensure: -

a) That the particulars of amount received are immediately entered in the register of deposits maintained in
such manner and in such format as prescribed.
b) To issue immediately a circular to the members of the company with a statement of deposits accepted as on
date with the names of each depositor, amount(s) received as on date, the due date(s) and the liability (ies)
on the due date (s) in respect of each depositor
c) That a declaration is to be obtained to the effect that the amount given is not sourced from borrowed funds
or accepting loans or deposits from others and disclose the details in the Board’s Report;
d) To file the particulars of deposits received within 30 days from the date of its receipt with the Registrar.

ii) JIWPL was also sanctioned an additional amount of Rs. 50 crores for meeting the working capital needs of the
expansion project, which interchangeable limits of cash credit, foreign and Inland bills for negotiation and
acceptance. The security cover was floating charge on the book debts, Inventory and other current assets of the
expansion project of JIWPL. A floating charge, in general is created by way of:

a) Passing a board resolution

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b) Signing and acknowledging the credit Sanction letter

c) Mortgage
d) Hypothecation or lien

iii) The registered office of JIWPL is located in Manipal. Out of the company’s 180 members, 20 members, who are
entered in the register of members (ROM) reside in Mangaluru, a nearby city. These members requested the
company for some reasons to maintain the Register of members (ROM) in the company’s liaison office in
Mangaluru, instead of Manipal henceforth.

a) The ROM shall be maintained only at the registered office in Manipal and maintaining in a place other than
the registered office is not permitted under the companies Act 2013 and the relevant Rules thereunder.
b) By passing a Special Resolution in a General Meeting, the ROM can be maintained in Mangaluru.
c) The Board of directors by passing a Board Resolution in one of its meetings, may direct the company
secretary to maintain the ROM in Mangaluru.
d) If more than 1/3rd of the members, whose names are entered in the ROM request for the change, then only
the ROM can be maintained at Mangaluru after passing a Special Resolution in a General Meeting.

A
MCQ 8

ro C
Mr. Abhinav Gyan is a tech expert and one among the promoter of Doon Technology Limited (DTL). He did his

P
engineering from one of the prestigious IIT in CSE and then perused masters in management from IIM. He started

e
DTL fifteen years back. DTL is famous for advance technologies such as artificial intelligence, block-chain solutions

Th
and many others. The company went public a decade ago but not listed. Since DTL is expanding its operations in
wake of opportunities arises out of industrial revolution, hence willing to retain the profit for growth of the

y
company, but shareholders are seeking dividend; because for shareholders larger the bottom line means larger the

B
dividend. The outbreak of COVID-19 is another reason which forced the directors to retain the earnings. After the

d
closure of books of account for year 2019-20, directors proposed the dividend of 10% against the expectation of 20%

le
by shareholders. But considering the extended lock-down which causes a delay in delivering the projects (results in

pi
deferment of revenue and additional cost), directors are of the opinion to revoke the dividend. Shareholders seeks
appointment of internal auditor for audit on a concurrent basis, whereas management of DTL states it does not

o m
require to appoint an internal auditor under the law and it will cause an unnecessary financial burden on the

C
company. The excerpts from financial statements of the preceding financial year 2019-20 are as under.

Particulars Amount in Crores

Paid-up share capital 45
Turnover 495
Outstanding loans or borrowings* 105
Outstanding deposits 22#
*Includes inter-corporate loan of INRs 25 crores
# up-till 31st January, 2020 the outstanding deposit was INRs 30 crores

Mr. Gyan, one of the shareholders of DTL, out of his savings bought 40,000 shares of another company Time
Consultancy Services (TCS) of face value 10 each. On such shares, the final call of 2 is due but unpaid by Mr. Gyan.
In the meantime, TCS declared the dividend at a rate of 15%. Out of total dividend of INRs 8.4 crores declared on
31st August 2020, INRs 0.42 crores remain unpaid as on 30th September 2020 at the end of TCS. Out of such INRs
0.42 crores, INRs 12 lakhs are on account of the operation of law and INRs 3 lakhs on account of legal disputes of
right. The unpaid dividend was finally paid on 12th December, 2020 in full.

Mr. Gyan came from humble background, hence as part of ethical commitment to uplift the society by promoting
education to children of the economically weak section, he decided to form a section 8 company around 2 years
back with the support of fellow professional, who later become a member of such a company. Receipts are excess of
expenditure hence it was decided that Gyan foundation will declare some dividen d to its members.

i) Regarding un-paid call money by Mr. Gyan, in light of dividend due to him from TCS, state which of following
statements hold truth?
a) Dividend can’t be adjusted against the unpaid call money

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b) The dividend of INRs 48,000 can be adjusted against unpaid call money
c) The dividend of INRs 48,000 can be adjusted against unpaid call money, if consent is given by Mr. Gyan
d) The dividend of INRs 64,000 can be adjusted against unpaid call money, if consent is given by Mr. Gyan

ii) Does DTL is required to appoint Internal Auditor under section 138 of Companies Act, 2013?
a) No, because DTL is unlisted company
b) No, because paid-up share capital is less than INRs 50 crores
c) Yes, because turnover is more than INRs 200 crores
d) Yes, because outstanding loan is above INRs 100 crores

iii) With reference to the declaration of dividend by Gyan Foundation, state which of following statements hold
truth?
a) Gyan Foundation can declare dividend out of the capital as well.

A
b) Gyan Foundation can declare dividend either out of current years or previous year’s’ profit, but need to

C
transfer a certain % to reserve.

ro
c) Gyan Foundation can’t declare the dividend because three years has not been elapsed since its

P
incorporation.

Th e
d) Gyan Foundation can’t declare the dividend in any case.

iv) What will be the amount of penalty which TCS needs to pay under section 127 of the Companies Act, 2013?

B y
a) Up-to INRs 1000 per day till the default continues

d
b) INRs 64,800

pi le
c) INRs 97,200
d) INRs 1,08,000

C o m
Answer Key

MCQ 1 1. B 2. D 3. C 4. A

MCQ 2 1. D 2. C 3. B

MCQ 3 1. D 2. B 3. A

MCQ 4 1. C 2. A 3. D 4. C 5. C

MCQ 5 1. D 2. C 3. C 4. A 5. A

MCQ 6 1. A 2. B 3. C

MCQ 7 1. C 2. D 3. B

MCQ 8 1. B 2. C 3. D 4. C

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 C A
e Pro
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ed B
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C o m