The Hindu Business Line : Sky is not the limit for political contributions

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 directors, managerial remuneration, borrowing powers and investments.

1) The maximum limit on political contribution in any financial year shall not exceed:

i) 1 per cent of the average profits during the preceding three financial years.

ii) 3per cent of the average profits during the preceding three financial years.

iii) 10 per cent of the average profits during the preceding three financial years.

iv) 5 per cent of the average profits during the preceding three financial years

2) The notice proposing appointment of small shareholder's director shall be signed by at least:

i) 7 small shareholders.

ii) 10 small shareholders.

iii) 1,000 small shareholders.

iv) 100 small shareholders.

3) Issue of debentures cannot be authorised by:

i) Circular resolution.

ii) Board resolution.

iii) Ordinary resolution.

iv) Special resolution.

4) Decrease in the number of directors of a public company has to be authorised by:

i) Board resolution.

ii) Ordinary resolution.

iii) Special resolution.

iv) Unanimous board resolution.

5) Appointment of an alternate director has to be authorised by:

i) Special resolution.

ii) Ordinary resolution

iii) Unanimous board resolution.

iv) Board Resolution.

6) Which of the following are considered as "Officer in default":

a) Managing director

b) Whole time director

c)Manager

i) (a), (b); ii) (a), (b), (c); iii) (b), (c), iv) (a), (c).

7) The ceiling on the Board's powers for contributions for charitable purposes in the case of a public company is:

i) Rs 50,000 or 5 per cent of the average profits during the preceding 3 financial years, whichever is higher.

ii) Rs 100,000 or 10 per cent of the average profits during the preceding 3 financial years, whichever is higher.

iii) Rs 50,000 or 5 per cent of the average profits during the preceding 3 financial years, whichever is lower.

iv) Rs 100,000 or 10 per cent of the average profits during the preceding 3 financial years, whichever is lower.

8) A small shareholder is one who holds shares of a maximum nominal value of:

i) Rs 10,000.

ii) Rs 15,000.

iii) Rs 20,000.

iv) Rs 25,000.

9) For resignation of a Director, which Form has to be filed with the Registrar of Companies:

i) Form No. 23.

ii) Form No. 25A.

iii) Form No. 25B.

iv) Form No. 32.

10) Within how many days of making the inter-corporate investment, the entry has to made in the Register of investment:

i) 7 days.

ii) 14 days.

iii) 21 days.

iv) 30 days.

11) Making contribution to the national defence fund requires authorisation in the form of a:

i) General Meeting Ordinary Resolution.

ii) General Meeting Special Resolution.

iii) Board Resolution.

iv) Unanimous Board Resolution.

12) General Notice of disclosure of interest shall be given by the directors in:

i) Form No.24

ii) Form No.24 A

iii) Form No.24AA

iv) Form No.23.

13) The paid-up capital of XYZ Limited is Rs 250 million. Its free reserves are Rs 50 million. It wants to make inter-corporate investments to the extent of Rs 200 million. For making the investment, whose authorisation is required?

i) Ordinary resolution and approval of Central Government.

ii) Special resolution and approval of Central Government.

iii) Previous authorisation by special resolution.

iv) Special resolution.

14) Which Form has to be filed with the Registrar of Companies for appointment of a Whole Time Director in the case of a listed public company?

i) Form No.25A.

ii) Form No.25C.

iii) Form No.25B.

iv) Form No.25D.

15) Which of the following constitute eligible perquisite for the purpose of managerial remuneration:

a) Provident fund contribution.

b) Superannuation fund contribution.

c) Gratuity.

d) Leave encashment.

i) (a) to (d); ii) (a), (c); iii) (b), (c); iv) (a),(b),(c).

16) Which of the following is/are qualified to be appointed as manager of a company under Section 384:

a) Firm.

b) Non-resident in Special Economic Zone.

c) Body Corporate.

d) Association.

i) (a), (b), (c); ii) (b); iii) (d); iv) (c).

17) Appointment of a person as Managing Director in more than two companies requires:

i) Board approval.

ii) Committee of Board's approval.

iii) Approval by circular resolution.

iv) Board approval with unanimous consent of all directors present at the Board meeting.

18) Appointment of a director's relative to an office of profit where the monthly remuneration is Rs 60,000 requires approval by:

i) Ordinary resolution.

ii) Special resolution.

iii) Ordinary resolution and approval of Central Government.

iv) Special resolution and approval of Central Government.

19) Appointment of Manager with Unlimited Liability requires:

i) Special resolution and approval of Company Law Board.

ii) Special resolution and approval of Central Government.

iii) Ordinary resolution and approval of Company Law Board

iv) Authorisation by the company's memorandum of association.

20) The total number of directors in a listed public company is 12.

Three directors are interested in an item considered by the Board. The quorum of the Board shall be:

i) 2 directors.

ii) 3 directors.

iii) 4 directors.

iv) 9 directors.

21) The minimum effective capital of a company which would like to pay a minimum remuneration of Rs 1,75,000 to its Managing Director in case of inadequacy of profits shall be:

i) Rs 50 crore.

ii) Rs 25 crore.

iii) Rs 100 crore.

iv) Rs 75 crore.

22) How many days notice should be given for appointment of small shareholder's director:

i) 7 days.

ii) 14 days.

iii) 21 days.

iv) 30 days.

23) Form No. 25 C shall be duly certified by:

a) Secretary.

b) Practising Cost Accountant.

c) Practising Company Secretary.

d) Director.

i) (a) or (b); ii) (a) or (d); iii) (a) or (b) or (c); iv) (a) or (b) or (d).

24) An alternate director shall vacate office:

i) At the end of the financial year.

ii) 1 month before the expiry of the tenure of the original director.

iii) On the day of annual general meeting.

iv) When the original director returns to the State in which the board meetings are ordinarily held

Solution key:

1) (iv); 2) (iv); 3) (i); 4) (ii); 5) (iv); 6) (ii); 7) (i); 8) (iii); 9) (iv); 10) (i); 11) (iii); 12) (iii); 13) (iv); 14) (ii); 15) (i); 16) (ii); 17) (iv); 18) (iii); 19) (iv); 20) (ii); 21) (i); 22) (ii); 23) (iii); 24) (iv).

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