The Hindu Business Line : Corporate law in capsule questions

THE following multiple-choice questions (MCQs) are basically meant for those appearing for the May 2003 CA (Final) examination. The questions cover company law provisions and secretarial practice pertaining to books of account, annual accounts, auditors, company secretary and board of directors.

1) The minimum number of directors of the audit committee in the case of a public company with 12 directors shall be: i) 2; ii) 3; iii) 4; iv) 5.

2) Which form has to be filed with the Registrar of Companies for keeping books of account at a place other than the registered office of the company? i) Form No 23A; ii) Form No 23AA; iii) Form No 23; iv) Form No 5

3) Which of the following are disqualified for appointment as auditor of a company?: i) employee of the company; ii) a body corporate; iii) officer of the company; iv) a person holding a security in the company which does not carry voting rights: I — (i), (ii) (iii); II — (i) to (iv); III - (ii), (iii), (iv); IV - (i), (iii), (iv)

4) The appointment of a company secretary is compulsory if the company's paid-up capital is: i) Rs 25 lakh or more; ii) Rs 50 lakh or more; iii) Rs 20 million or more; iv) Rs 10 million or more

5) The report of the board of directors under Section 217 shall include a statement showing the names of every employee of the company who was in receipt of monthly remuneration of: i) Rs 75,000; ii) Rs 1,00,000; iii) Rs 1,50,000; iv) Rs 2,00,000

6) The maximum period to which the annual accounts comprising the balance-sheet and profit and loss account can be extended under the Companies Act, 1956: i) 12 months; ii) 15 months; iii)

18 months; iv) 24 months

7) The National Advisory Committee on Accounting Standards shall consist of representatives of: i) the Central Government; ii) the RBI; iii) the Comptroller and Auditor General of India; iv) the Securities and Exchange Board of India. I — (i), (iii), (iv); II — (ii), (iii), (i); III — (i), (ii), (iii); IV — (i) to (iv)

8) Secretarial compliance certificate is mandatory where the company's paid-up capital is at least: i) Rs 5 lakh; ii) Rs 10 lakh; iii) Rs 25 lakh; iv) Rs 50 lakh

9) Match the following: i) Table E — (a) Memorandum and Articles of Association of a company limited by guarantee and not having a share capital

ii) Table C — (b) Form of Statement to be published by limited banking companies, insurance companies and deposit, provident or benefit societies

iii) Table D — (c) Memorandum and Articles of Association of an unlimited company

iv) Table F — (d) Memorandum and Articles of Association of a company limited by guarantee and having a share capital

I - (i) - (c), (ii) - (d), (iii) - (a), (iv) - (b)

II - (i) - (c), (ii) - (d), (iii)- (a), (iv) - (b)

III- (i) - (d), (ii) - (a), (iii)- (c), (iv)- (a)

IV- (i) - (c), (ii)- (a), (iii)- (d), (iv)- (b)

10) Which of the following is not correct with regard to board meetings?: i) may be held on a public holiday; ii) may be held at any place as determined by the board from time to time; iii) shall be held at least once in three months; iv) the minutes need not be confirmed at the next board meeting.

11) The cost audit report shall be submitted to the Central Government within: i) 90 days of the close of the financial year; ii)

120 days of the close of the financial year; iii) 150 days of the close of the financial year; iv) 180 days of the close of the financial year

12) Which of the following is not correct? i) if a company has two directors only, neither of them can act as the secretary of the company; ii) a company can appoint more than one secretary; iii)

only individual can be appointed as secretary of the company; iv)

a person with a degree in law can be appointed as secretary in a company where appointment of a whole-time company secretary is compulsory under Section 383A.

13) The Central Government may exempt any class of companies from complying with the provisions of Schedule VI if it is necessary to grant the exemption in the: i) national interest; ii) public interest; iii) social interest; iv) company's interest

14) The secretarial compliance certificate shall be filed with the: i)

regional director; ii) Company Law Board; iii) Department of Company Affairs; iv) Registrar of Companies

15) The expenses of special audit Section 233A shall be paid by the: i) regional director; ii) company; iii) CLB; iv) DCA

16) The first auditors of a company can be removed by the: i)

board of directors of the company; ii) audit committee; iii) company in general meeting by ordinary resolution; iv) company in general meeting by special resolution

17) In a listed public company with 12 directors, what is the quorum for the board meeting? i) two directors; ii) three directors; iii) four directors; iv) five directors

18) Where the company fails to appoint the auditors in the annual general meeting, the auditors of a company can be appointed by the: i) Central Government; ii) regional director; iii) CLB; iv) RoC

19) Automatic exemption from branch audit is available if the average quantum of activity during the relevant financial year does not exceed: a) Rs 2 lakh or 2 per cent of the average total turnover of the company, whichever is higher: i) Rs 5 lakh or 2 per cent of the average total turnover of the company, whichever is higher; ii)

Rs 10 lakh or 5 per cent of the average total turnover of the company, whichever is higher; iii) Rs 25 lakh or 5 per cent of the average total turnover of the company, whichever is higher

20) The auditors can be removed by giving a special notice of: i)

7 days; ii) 14 days; iii) 21 days; iv) 30 days

21) For removal of a company secretary, the following Form should be filed with the RoC: i) Form No. 23; ii) Form No. 23B;

iii) Form No. 32; iv) Form No. 23C

22) A casual vacancy arising out of the resignation of the company's auditor can be filled by: i) company in general meeting by ordinary resolution; ii) company in general meeting by special resolution; iii) bard of directors; iv) audit committee

23) The intimation to RoC appointment of auditors shall be filed in: i) Form No. 23B; ii) Form No. 23A; iii) Form No. 23; iv)

Form No. 23C

24) Secretarial Standard I issued by the Institute of Company Secretaries of India deals with: i) transfer of shares; ii) AGM; iii)

EGM; iv) board meetings

25) Which of the following is legally permitted? i) appointment of the statutory auditors as the company's internal auditor; ii) appointment of the statutory auditors as the company's cost auditor; iii) appointment of a person already holding appointment as auditor of 20 companies having a paid-up capital of more than Rs 25 lakh; iv) appointment of the statutory auditor as the company's branch auditor

26) Application for approval for appointment of cost auditor shall be made in: i) Form No. 23A; ii) Form No. 23C; iii) Form No. 23B; iv) Form No. 23D

27) Constitution of the audit committee is compulsory where the paid-up capital of the public company is not less than: i) Rs 25 lakh; ii) Rs 500 lakh; iii) Rs 50 lakh; iv) Rs 100 lakh

28) To whom does the special auditor appointed under Section 233A report to: i) CLB; ii) board of directors of the company; iii) shareholders of the company; iv) the Central Government

29) A copy of the balance sheet, P&L account and auditor's report shall be sent to every member of the company before: i) 21 days of the general meeting; ii) 14 days of the general meeting; iii) 30 days of the general meeting; iv) 60 days of the general meeting

30) Inquiry by an auditor as to whether personal expenses have been charged to revenue comes under the purview of: i)

Section 227 (2); ii) Section 227 (4A); iii) Section 227 (1A); iv) Section 227 (4)

Solution: 1), ii); 2), ii); 3) I; 4) (iii); 5) (iv); 6) (iii); 7) IV; 8) (ii); 9) IV; 10) (iv); 11) (iv); 12) (iv); 13) (ii); 14) (iv); 15) (ii); 16) (iii); 17) (iii); 18) (ii); 19) (i); 20) (ii); 21) (iii); 22) (i); 23) (i); 24) (iv); 25) (iv); 26) (ii); 27) (ii); 28) (iv); 29) (i); 30) (iii)

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