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

The correct answer is Section 41

Key Points Global Depository Receipt (GDR): 

• Global Depository Receipt (GDR) is an instrument in which a company located in a domestic country issues one or more of its shares or convertibles bonds outside the domestic country.
• According to Section 41 of Companies Act 2013, a company may, after passing a special resolution in its general meeting, issue depository receipts in any foreign country in such manner, and subject to such conditions, as may be prescribed.

Important Points Advantages of using GDRs:

• GDR provides access to foreign capital markets.
• GDR can be freely transferred.
• GDR increases the shareholders base of the company.

Disadvantages of Using GDRs:

• Violating any regulation can lead to serious consequences of the company.
• Dividends are paid in the domestic country's currency, which is subject to volatility in the forex market.
• GDR is one of the expensive sources of finance.

The correct answer is Company limited by guarantee. 

Key Points

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

Additional Information

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

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

Key Points

Small Company

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

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

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

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

The correct answer is Foreign company.
Key Points

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

Additional Information

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

The correct answer is 200.
Key Points

• The Companies Act, 2013:
  • Under the Companies Act, 2013, a private company is defined as one which by its articles restricts the right to transfer its shares and limits the number of its members to 200.
  • This limit is set to ensure that private companies remain closely held and do not have a large number of shareholders like public companies.
• Implication for Financial Enterprises:
  • For financial enterprises operating as private companies, this member limit ensures that ownership remains within a small, controlled group, thereby simplifying governance and decision-making processes.
  • It also helps in maintaining confidentiality and reducing regulatory compliances compared to public companies.

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

Key Points

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

The correct answer is the next AGM.
Key Points

• A director appointed to fill a casual vacancy holds office until the next AGM:
  • In a financial enterprise, the Annual General Meeting (AGM) is a crucial event where shareholders meet to discuss and decide on key aspects of the company's operations.
  • When a director is appointed to fill a casual vacancy, they hold office only until the next AGM, at which point shareholders have the opportunity to confirm the appointment or elect a new director.
  • This ensures that the shareholders retain control over the composition of the board and can make decisions based on the company's current needs and performance.

Additional Information

• The end of their term:
  • This is incorrect because a director appointed to fill a casual vacancy does not serve the full term of the original director. They serve only until the next AGM, ensuring that shareholders have a say in the appointment.
• A new director is appointed:
  • This is incorrect as it implies that the director could serve indefinitely until a new appointment is made, which is not in line with governance practices that require shareholder approval at the AGM.
• The director resigns:
  • This option is incorrect because it suggests that the director could hold the position until they choose to resign, bypassing the need for shareholder approval at the AGM.

The correct answer is 51%

Key Points

The correct answer is Profit and Loss Statement.
Key Points

• Profit and Loss Statement:
  • A Profit and Loss Statement (P&L) is a financial report that summarizes the revenues, costs, and expenses incurred during a specific period, usually a fiscal year.
  • It provides a snapshot of a company's financial performance, showing whether the company made a profit or incurred a loss over the period.
  • The P&L statement is crucial for stakeholders, including investors, creditors, and regulatory bodies, as it provides insight into the company's operational efficiency and profitability.
  • Filing the P&L statement annually with the Registrar of Companies is often a legal requirement to ensure transparency and compliance with financial regulations.

Additional Information

• Articles of Association:
  • The Articles of Association are a document that specifies the regulations for a company's operations and defines the company's purpose. They are filed at the time of incorporation and do not need to be filed annually.
• List of Debtors:
  • A list of debtors details the individuals or entities that owe money to the company. While important for internal management, it is not a document that is typically required to be filed annually with the Registrar of Companies.
• Company’s Asset Register:
  • An asset register is a record of all the assets owned by a company. It helps in tracking the value and condition of the assets but is not required to be filed annually with the Registrar of Companies.