Unit VI · Topic 8Company law – Incorporation of a company, prospectus, shares and debentures – Previous Year Questions

Assertion (A): Doctrine of Indoor Management protects an outsider dealing with a company from irregularities inside a company. Reason (R): Doctrine of ultra vires protects an outsider dealing with a company for corporate capacity not mentioned in the objects clause. Code:

1. (a)(A) is true, but (R) is false
2. (b)(A) is false and (R) is true
3. (c)(A) and (R) are true, but (R) is not an explanation of (A)✓
4. (d)(A) and (R) are true, but (R) is an explanation of (A)

Role of doctrine of ultra vires is

1. (a)to fight virus of ultras
2. (b)to protect indoor managers
3. (c)to confine corporate action within fixed limits✓
4. (d)to protect directors for exercising their implied authority

Haward v. Patent Ivory manufacturing Co. (1888) 38 Ch. D. 156 is a case about

1. (a)Doctrine of ultra vires
2. (b)Doctrine of indoor management✓
3. (c)Doctrine of public notice
4. (d)Doctrine of social responsibility

If incidental objects are not stated in the memorandum, they would not be allowed by the principle of reasonable construction

The doctrine of indoor management operates to protect insiders against the company Codes:

1. (a)Only 1 and 2
2. (b)Only 2 and 3
3. (c)Only 1, 2 and 3
4. (d)1, 2, 3 and 4✓

Which of the following cases is about doctrine of indoor management?

1. (a)Ashbury Railway Carriage and Iron Co.Ltd v. Riche
2. (b)Rama Corpn. V. Proved tin and General Investment Co.✓
3. (c)London Country Council v. Attorney-General
4. (d)A. Lakshmana swamy Mudaliar v. L.I.C

Which of the following statement is correct? Answer using codes given below:

Doctrine of indoor management apply in case of knowledge of irregularity in company

Doctrine of indoor management does not apply in case of suspicion of irregularity

Doctrine of indoor management apply in case of forgery

Doctrine of indoor management does not apply if the act of an officer of a company is one which would ordinarily be beyond the powers of such an officer Codes:

1. (a)only 1 is correct
2. (b)only 2 is correct
3. (c)only 3 is correct
4. (d)only 4 is correct✓

Which of the following actions can be taken when an issue is made under the provisions of Section 42 of the Companies Act, 2013?

1. (a)An advertisement can be issued in a local newspaper having city coverage
2. (b)The money payable toward subscription can be received in cash
3. (c)The share can be allotted within sixty days of the date of offer
4. (d)The offer can be made to a maximum of fifty people✓

Choose the correct section of the Competition Act, 2002. Which provides that 'No enterprise shall abuse its dominant position:

1. (a)Section 4✓
2. (b)Section 9
3. (c)Section 8
4. (d)Section 6

Who among the following said that there is in essence, no difference between the legal personability of a company and that of an individual?

1. (a)Maitland
2. (b)Dicey
3. (c)Gierke
4. (d)Kelsen✓

Match List I with List II (Sections of the Companies Act, 2013): List-I A. Abridged Prospectus B. Deemed Prospectus C. Shelf Prospectus D. Red Herring Prospectus List-II (i) Section 31 (II) Section 32 (III) Section 2(1) (IV) Section 25 Choose the correct answer from the options given below:

1. (a)(A)-(III), (B)-(IV), (C)-(I), (D)-(II)✓
2. (b)(A)-(II), (B)-(III), (C)-(IV), (D)-(I)
3. (c)(A)-(I), (B)-(II), (C)-(III), (D)-(IV)
4. (d)(A)-(IV), (B)-(I), (C)-(II), (D)-(III)

Who among the following can remove the name of company from Register of Companies on suo moto basis in terms of Section 248(1) of Companies Act, 2013?

1. (a)Registrar of companies✓
2. (b)Securities and Exchange Board of India
3. (c)National Company Law Tribunal
4. (d)Ministry of Corporate Affairs

The company is not carrying on any business or operations as revealed after physical verification carried out under Section 12(9).

Endorsement of Negotiable instrument followed by delivery: (1) Transfers the property in instrument to endorsee (2) Transfers the right of further negotiation to the endorsee (3) May exclude or restrict the right of further negotiation by endorsee (4) May merely constitute the endorsee as an agent Choose the correct answer from the options given below:

1. (a)(1) and (2) only
2. (b)(3) and (4) only
3. (c)(1), (2), (3) only
4. (d)(1), (2), (3) and (4)✓

Match List I with List II: List-I A. Solomon v. Solomon B. Royal British Bank v. Turquand C. Ashbury Railway Carriage & Iron v. Riche (Ashbury) D. Vodafone International Holdings v. UOI List-II I. Voting rights II. Corporate Personality III. Doctrine of Ultra Virus IV. Doctrine of Indoor Management Choose the correct answer from the options given below:

1. (a)A-IV, B-II, C-III, D-I
2. (b)A-I, B-II, C-III, D-IV
3. (c)A-I, B-III, C-II, D-IV
4. (d)A-II, B-IV, C-III, D-I✓

_____ has to provide by making regulations for any class or class of companies which may file a shelf prospectus with the Registrar at the stage of first offer of securities.

1. (a)NCLT
2. (b)SEBI✓
3. (c)IBBI
4. (d)Director of a company

Every prospectus issued by or on behalf of a public company shall state the following information: A. Name and addresses of the registered office of the company B. Details about underwriting of the Issue C. Details of directors D. Details about Trustees and their interest E. Collateral objects of the business. Choose the correct answer from the options given below:

1. (a)A, B, C and D only
2. (b)C, D and E only
3. (c)A, B and C only✓
4. (d)A, B and D only

Which of the following are correct? A. A company may issue debentures with option to convert them to shares, either wholly or partly at the time of redemption. B. Such issue has to be approved by a special resolution passed at a general meeting. C. Debentures with voting rights can be issued. D. Debentures cannot be issued. E. The debenture trustee has to take steps to protect the interest of debenture holders. Choose the most appropriate answer from the options given below:

1. (a)B, C and E only
2. (b)A, B and E only✓
3. (c)A, C and D only
4. (d)C, D and E only

Arrange the following as per sections of the Companies Act, 2013 in descending order: A. Execution of Bills of Exchange, etc. B. Punishment in case of repeated default C. Annual reports on government companies D. Petition for winding up E. Functions of company Secretary Choose the correct answer from the options given below:

1. (a)C, D, E, A, B
2. (b)B, C, D, E, A✓
3. (c)C, A, E, D, B
4. (d)B, A, D, C, E

Red herring prospectus is a prospectus issued

1. (a)Prior to the issue of prospectus✓
2. (b)After the issue of main prospectus
3. (c)With the consent of shareholder
4. (d)On the behest of ROC (Register of Companies)

Match List - I with List - II

List-I

(A) Producer companies

(B) Statutory companies

(C) Section 8 company

(D) Small company

List-II (I) Do not necessarily require Memorandum of Association (II) Association not for profit (III) Formed to convert cooperative into a company (IV) Paid up share capital is between 50 lakh-5 crore and turnover is between 2 crore - 20 crore

Choose the correct answer from the options given below

1. (a)(A)-(I), (B)-(II), (C)-(IV), (D)-(III)
2. (b)(A)-(III), (B)-(1), (C)-(II), (D)-(IV)✓
3. (c)(A)-(IV), (B)-(III), (C)-(1), (D)-(II)
4. (d)(A)-(II), (B)-(IV), (C)-(III), (D)-(1)

Arrange following cases in sequence of year they were decided

(A) Ashbyry Rly Carriage Co. Ltd. v. Riche

(B) Royal British Bank v. Turquand

(C) Mohori Bibee v. Dharmodas Ghose

(D) State Trading Corporation of India Ltd. v. CTO, Vishakhaptnam

(E) Salomon v. Salomon Co. Ltd

Choose the correct answer from the options given below

1. (a)(B), (A), (E), (C), (D)✓
2. (b)(A), (B), (C), (E), (D)
3. (c)(C), (D), (A), (B), (E)
4. (d)(B), (C), (E), (A), (D)

The limitation of the doctrine of constructive notice is known as which of the following?

1. (a)Doctrine of indoor management✓
2. (b)Lifting the corporate veil
3. (c)Oppression and mismanagement
4. (d)Doctrine of ultra vires

Match List - I with List - II

List -I (Concepts/Doctrines)

(A) Lifting the corporate veil

(B) Invitation to public in the context of prospectus

(C) Doctrine of ultra vires

(D) Doctrine of indoor management

Choose the correct answer from the options given below

List - II (Cases)

(1) Nash v/s Lynde (II) Ashbury Rly Carriage and Iron Co. Ltd. v/s Riche (III) Royal British Bank v/s Turquand (IV) Salomon v/s Salomon

1. (a)(A)-(IV), (B)-(I), (C)-(I), (D)-(III)✓
2. (b)(A)-(1), (B)-(II), (C)-(III), (D)-(IV)
3. (c)(A)-(IV), (B)-(III), (C)-(II), (D)-(I)
4. (d)(A)-(III), (B)-(II), (C)-(IV), (D)-(1)

In which case was the golden rule for framing a prospectus formulated by V.C. Kindersley?

1. (a)Methodist Church v. Union of India
2. (b)R. v. Registrar of Companies
3. (c)New Brunswick Railway Co. v. Muggeridge✓
4. (d)Jubilee Cotton Mills Ltd. v. Lewis

Which provision of the Companies Act, 2013 identifies shares and debentures as movable property?

1. (a)Section 44✓
2. (b)Section 45
3. (c)Section 46
4. (d)Section 47

Which of the following is not a type of prospectus under the Companies Act, 2013?

1. (a)Shelf Prospectus
2. (b)Deemed Prospectus
3. (c)Yellow (Herring) Prospectus✓
4. (d)Abridged Prospectus

Arrange the following chapter of the Companies Act, 2013 in their ascending order

A. Share Capital and Debentures

B. Prospectus and Allotment of Securities

C. Audit and Auditors

D. Appointment and Qualification of Directors

Choose the correct answer from the options given below

1. (a)B, A, D, C
2. (b)A, B, D, C
3. (c)D, B, A, C
4. (d)B, A, C, D✓

Arrange the following landmark decision on the Concept of Lifting the Corporate Veil in ascending order

A. LIC, India v. Escorts Ltd

B. Singer India v. Chandra Mohan Chaddha

C. In re R.G. Films Limited

D. Connors Brothers v. Conners

E. Daimler Co. Ltd. v. Continental Tyre and Rubber Company

Choose the correct answer from the options given below

1. (a)E, D, C, A, B✓
2. (b)D, E, C, A, B
3. (c)E, C, D, B, A
4. (d)D, E, B, C, A