12.19.3 (Self-test Questions)

Meaning and Nature of a Comp any

1. Define a company.

2. What are the characteristics of a company?

3. (a) state the principles of law laid down in saromon v. saloman & co.(b) what are the statutory exceptions to the decision in Salomon’s case?

4. "The legal personality of a company is distinct and different from its members individually and collectively." Comment and point out the circumstances when the separate of a company is disregarded by the courts.

5. what do you understand by the concept of corporate personality? Under what circumstances is lifting of corporate veil possible?

6. Distinguish between a public limited company and private limited company.

7. what are the provisions of the Companies Act, 1956 for the conversion of (i) a private company into a public company; and (ii) a public company into a private company.

8. Explain clearly the meaning of lifting of the corporate veil of a company. Under what circumstances may the courts lift the veil of a company.

9. Explain the meaning of 'perpetual succession' and a 'common seal, in the case of a company.

10. Enumerate the circumstances under which a company may be allowed to

dispense with the word 'Limited' from its name.

11' Explain (i) a company limited by guarantee (ii) a one-man company and (iii) an association not for profit.

12. M/hat is your legal opinion on: "There are five members in a public company.”

13. IA/hen does a private company become a public company?

14. Write a short note on holding company and its subsidiary.

15. what are government companies? what are the special provisions in the

companies Act pertaining to this class of companies?

16. write short notes o1 the following: (i) minimum members of a company.

(ii) maximum members of a company.

17. Write a short note on 'Public Financial Institutions’.

Formation of a Company

1. Write a short note on certificate of incorporation.

2. Write a short note on commencement of business.

3. who is a promoter?

4. State the usual steps to be taken in the formation of a company under the companies Act, 1956.

5. Write a note on duties and liabilities of promoters.

6. Is a contract made before incorporation of a proposed company binding on It?

            7. Write a short note on 'consequences of incorporation of a company'.

8. Can a company be incorporated under the Companies Act without the words 'Limited' and / or 'Private Limited' as the case may be? if so explain.

Memorandum of Association

1. Define memorandum of association. What does it contain?

2. How are alterations made in a memorandum of association?

3, What are the clauses to be stated in the memorandum of association?

4. Explain the procedure for change of a registered office of a company from one state to another.

5. Discuss the provisions of the Companies Act with regard to alterations of objects of the company.

Articles of Association

1. Define articles of association.

2. Can articles of association be altered?

3. State the relation of a memorandum of association with the articles of association.

4. Explain the doctrine of ultra vires in the context of joint stock companies.

5. What do you understand by constructive notice of the memorandum and articles of association of a limited company?

6. Explain and illustrate the rule known as the Doctrine of indoor Management. What are the exceptions to this rule?

7. Explain the rule laid down in the Royal British Bank v . Turguand and state the exceptions to the rule.

8. Explain the interrelationship of Doctrine of Constructive Notice with the Doctrine  of  Indoor Management. State the exceptions, if any, to the Doctrine of indoor management.

9. Under what circumstance the doctrine of 'Indoor Management' is not applicable.

10. State the limitations on the powers of a company to alter its articles of association.

Prospectus

1. what is a prospectus? Who are liable for misstatements in a prospectus? Explain the extent of civil and criminal liability for such misstatements.

2. Write a short note on statement in lieu of prospectus.

3. What is a prospectus? How does it differ from a statement in lieu of prospectus?

4. State the restrictions and limitations on inviting and accepting deposits by companies.

5. (a) what is a misstatement in a prospectus? (b) V/hat is the defenses available to a director for any misstatement in a prospectus

6. (a) Explain the term brokerage under the Companies Act, 1956. (b) State the conditions which are to be fulfilled for the payment of underwriting commission under the Companies Act,1956.

7. Discuss the remedies available to an allot tee who had applied for shares on the faith of a false prospectus.

8, Mention cases in which a prospectus is not required to be issued by a public company.

9. In what way does the companies Act, 1956 regulate the acceptance of public deposits by the public companies?

10. Explain the provisions of the Companies Act regarding acceptance of depose By companies.

Share s and Share Capital

1. Define 'share' and 'stock' and distinguish between the two.

2. Write a short notes on the following: (i) Issue of shares at premium (ii) Issue of shares at discount.

3. Describe the procedure for alteration of share capital.

4. Distinguish between 'Reserve capital' and 'Capital reserve'.

5. Describe the procedure for reduction of share capital.

6. Write short notes on: (i) Right shares (ii) Bonus shares

7. A company limited by shares intends to buy some of its own shares. Advise.

8. How and subject to what conditions can loan and debentures be converted into shares.

9. Explain the provisions regarding the increase of the subscribed capital by a public company by allotment of further shares.

            10. Explain the right of preemption when further capital is issued.

            11. Can company purchase its own shares? Explain the provisions of the Companies Act, in this regard.

Allotment of Shares

1. Distinguish between share certificate and share warrant.

Membership

1. How is membership of a company acquired?

2. Can the following be members of a company? (i) a minor; (ii) a registered partnership firm; (iii) an unregistered partnership; (iv) a woman.

3. Distinguish between a member and a shareholder.

4. How does one cease to be a member of a company?

5. State the provisions of the Companies Act, 7956 relating to maintenance of the register of members and index of members of a company.

6. Write short notes on: (i) Annual Return (ii) Reissue of forfeited shares.

7. Distinguish between forfeiture and surrender of shares.

8. Explain the different ways through which a person may become member of a company.

Transfer and Transmission of Shares

1. The Articles of association of a public limited company empower the Board of Directors to refuse registration of transfer of its shares without assigning any reasons. Is it valid? Explain the provisions regarding refusal to tran'sfer shares.

2. Explain the circumstances under which a public limited company may refuse to register the transfer of shares.

3. Write a short note on transmission of shares.

4. Distinguish between transfer and transmission of shares.

Borrowings (Including Debentures) and Registration of Charges

1. What are the legal requirements which a company must comply with while borrowing?

2. What is ultra vires borrowing? What remedies are available to a lender if a company resorts to ultra vres borrowing.

3. What are the restrictions imposed on the borrowing powers of the Board of Directors?

4. What is a debenture? What are the different kinds of debentures that may be issued by a company?

5. Distinguish between share and debenture.

6. A Ltd Co. wants to issue debentures of Rs 50 lakhs with an option to debenture holders to convert 50% debentures into equity after two years. Advise the company.

7. What are the remedies available to debenture holders for the realisation of their security.

8. What is a floating charge?

9. Explain the circumstances in which a 'floating charge' becomes fixed.

10. Distinguish between floating and fixed charge.

11. What charges are registered under the Companies Act,1956?

12. What is the effect of non-registration of a registrable charge?

13. All investments made by a company must be held by it in its own name. Are there any exceptions to this rule.

General Meetings and Proceedings

1. What are the different kinds of general meetings of a company?

2. Define statutory meeting of a public company.

3. Give the contents of a statutory report.

4. Summarise the provisions as regards annual general meeting.

5. What are the provisions of the Companies Act, 1955 in respect of an extraordinary general meeting to be held on requisition?

6. Define extraordinary general meeting.

7. Write a short note on the powers of Company Law Board to call meetings.

8. Write short notes on: (i) Notice of a meeting (ii) Proxy (iii) Voting by poll (iv) Resolutions (v) Explanatory statement (vi) Quorum

9. Discuss the requisites of a valid meeting.

10. Discuss the provisions of the Companies Act, 1956 relating to resolution requiring special notice mentioning the matters for which special notice is required.

11. Explain the procedure for ascertaining the sense of general meeting of a company.

Account, Audit and Dividends

1. What books of account is a company incorporated under the Companies Act, 1956 bound to maintain?

2. Give the provisions of the Companies Act, 1956 relating to the preparation authentication, circulation, adoption and filing of the annual accounts of a company.

3. How is an auditor appointed? What are the matters to be stated in his report?

4. Write a short note on qualifications and disqualification of auditors.

5. State briefly the provisions of the Companies Act, 1956 relating to the appointment of the first auditor of a company.

6. State the law relating to appointment and remuneration of auditors.

7. Write notes on (i) special audit and (ii) cost audit. Discuss the powers and duties of auditors with reference to leading cases.

8. (a) What is dividend? (b) What are the conditions to be fulfilled before a company may declare and pay dividend? (c) To whom should such a dividend be paid.

9. Discuss the provisions of the Companies Act, 1956 relating to payment of dividends on shares.

10. What changes have been introduced by the Companies (Amendment) Act, 1999 in provisions relating to audit and accounts.

11. Write a short note on: (i) Invest of, Education and Protection Fund (ii) National advisory committee on Accounting standards.

Inspection and Investigation

1. Discuss the powers of the Central Government for Investigation and Inspection.

2. Distinguish between Inspection and Investigation.

3. When may the Central Government order investigation into the affairs of a company?

4. Enumerate the powers of the inspectors appointed by the Central Government to investigate into the affairs of the company.

5. Describe the manner in which the Central Government may dispose of an inspectors' report.

Management of Company

1. Are company directors trustees or agents of the company? Explain your answer with reasons.

2. How is a director (i) appointed and (ii) removed from office?

3. What are the disqualifications of a person for appointment as the director of a company?

4. Can a director resign from his office?

5. Who can be a director? State the modes of appointment of directors?

6. “The Companies Act does not lay down any academic or shareholding qualifications for a director”. Examine the statement critically.

7. state in relation to a public company: (i) Ia/hen additional directors can be appointed and for what period? (ii) when an alternate director can be appointed and for what period? (iii) How the office of a director is filled in case of a casual vacancy and for what period?

8. When can Board of Directors appoint directors?

9. State the circumstances under which a director would vacate office.

10. (a) can the directors delegate their powers? (b) Describe the provisions as regards qualifications of directors.

11. Total strength of the Board of Directors of a company is ten. How many directors are liable to retire by rotation at the next annual general meeting?

12. When can directors be appointed by the principle of proportional representation under s. 265? (a) What do you understand by an office or place of profit held by a director in a company? (b) What restriction have been imposed in respect of holding an office or place of profit by director. (c) Whether these restricts apply if a director of a private company is appointed as managing director of the company on a monthly salary of Rs 10,000.

13. Discuss the rights of members of a company to remove a director before the expiry of his tenure?

14. State the requirements of the Companies Act with respect to contracts in which particular directors are interested.

15. How many meetings of a Board of Directors of a company must be held in a year and at what intervals?

16. Define Managing Director and state the statutory provisions regarding his appointment and remuneration.

17. What are the powers of directors that cannot be exercised without the approval of members given in a general meeting?

18. Distinguish between managing director and whole-time director.

19. Discuss the-powers of the central Government to remove the managerial personnel on a reference made to the Company Law Board.

20. Can a director be paid compensation for loss of office?

21. What are the provisions of the Companies Act relating to the powers of the board of directors of a company, the manner of exercise of such powers and the restrictions on such powers?

22. What are the duties of directors of a company?

23. Discuss the liabilities of directors.

24. Write short notes on: (i) alternate director (ii) managerial remuneration.

Inter-Corporate Loans and Investments

1. What are the conditions imposed by s.372 A as regards investments of a company.

2. Discuss the provisions relating to inter-corporate loans and investments.

3. 'All investments made by a company must be held lay it in its own name' Discuss.

4. Discuss the law and state the procedure relating to inter-corporate loans.

Prevention of Oppression and Mismanagement

1. Explain the true scope of the rule in Foss v. Harbottle on the majority rule and minority rights state the exception to the rule.

2. "lt is an elementary principle of law relating to joint stock companies that the court will not interfere with the internal management of companies acting within their powers and in fact has no jurisdiction to do so". Elucidate.

3. State the provisions of the Companies Act on prevention of oppression and mismanagement.

4. Explain the remedies available to a member of a company against oppression and mismanagement.

5. What are the basic features of the principle of 'majority rule' and 'minority right' in a company?

6. State the powers of the Court and the Central Government of prevent oppression and mismanagement.

7. (a) What are the powers of the Company Law Board to prevent oppression and mismanagement? (b) Under what circumstances can these powers be exercised? (c) Who can apply to Company Law Board for relief in case of oppression and mismanagement.

8. Explain the powers of the Central Government to appoint directors on the Board of a company to prevent oppression and mismanagement.

Compromise and Arrangement

            1. Explain the meaning of 'compromise'. What procedure must be followed by a company to give effect to a compromises when such a company is a going concern.

            2. Explain the term 'compromise', 'arrangement', 'reconstruction' and 'amalgamation'.

            3. Who can apply to court for compromise or arrangement?

            4. Who is a dissenting shareholder in case of 'amalgamation' of companies? What are the provisions with regard to the acquisition of shares of dissenting shareholders?

            5. Summarise the provisions of s.395 relating to takeover of a company by acquisition of its shares.

            6. Write a short note on 'amalgamation in public interest'.

Winding up of Companies

            1. What is winding up?

            2. Discuss the circumstances in which a company may be wound up by the court.

            3. Explain the circumstances in which a company may be wound up by the court on the ground that the company is unable to pay debts.

            4. What are the circumstances in which a company may be wound up on the ground that it is just and equitable to wind up a company.

            5. State the grounds on which the registrar of companies may present a petition for winding up of a company.

            6. What is the effect of a winding up order passed by the court?

            7. Define the term 'contributory'. Discuss the liability of members of a company in the event of its being wound up.

            8. state the liabilities of contributories as present and past members.

            9. Explain the procedure to wind up a company voluntarily.

            10. what powers of the court to order winding up subject to its supervision? 14/hat are the consequence r of such an order?

            11. What are the powers of the official liquidator?

            12. Il/hat is a defunct company? what procedure is followed to dissolve it?

            13. What is the difference between winding up and dissolution?

            14. state the different modes by which a company maybe dissolved.

            15. Can a company dissolved be revived?