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Objective Questions

Latest Company Law Exam Question (Objective Questions), MCQ in English

Subjects : Company Law

Question Bank Company Law - English
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Company Law

Question 1Single Answer
The term “Company” in Company Law generally refers to?
  1. A
    An artificial legal person created by law
  2. B
    A natural person business
  3. C
    A partnership firm only
  4. D
    A sole proprietorship Correct
Question 2Single Answer
A company is best described as?
  1. A
    A temporary association of persons
  2. B
    A religious organization Correct
  3. C
    An informal business group
  4. D
    A voluntary association incorporated under law
Question 3Single Answer
The essential nature of a company is that it is?
  1. A
    A statutory creation having legal personality
  2. B
    A natural human entity
  3. C
    A family arrangement
  4. D
    A trust only Correct
Question 4Single Answer
The development of Company Law in India is mainly influenced by?
  1. A
    Common law principles
  2. B
    Customary tribal laws
  3. C
    Religious texts
  4. D
    Criminal law principles Correct
Question 5Single Answer
The Companies Act, 2013 replaced which earlier legislation?
  1. A
    Partnership Act, 1932
  2. B
    Companies Act, 1956
  3. C
    Contract Act, 1872
  4. D
    SEBI Act, 1992 Correct
Question 6Single Answer
One of the main objectives of the Companies Act, 2013 is?
  1. A
    Encouraging monopoly practices
  2. B
    Promoting corporate governance and transparency
  3. C
    Eliminating all businesses
  4. D
    Restricting trade activities Correct
Question 7Single Answer
A key feature of the Companies Act, 2013 is?
  1. A
    Simplified incorporation and compliance
  2. B
    No regulation of companies
  3. C
    Abolition of share capital
  4. D
    Ban on private companies Correct
Question 8Single Answer
A company is characterized by?
  1. A
    Unlimited liability of members
  2. B
    Informal structure Correct
  3. C
    No existence apart from members
  4. D
    Separate legal existence
Question 9Single Answer
Another important characteristic of a company is?
  1. A
    Transferable ownership rights
  2. B
    Lack of legal identity
  3. C
    No perpetual existence
  4. D
    Unlimited liability Correct
Question 10Single Answer
A company is considered a?
  1. A
    Natural person
  2. B
    Minor entity
  3. C
    Artificial legal person
  4. D
    Partnership body Correct
Question 11Single Answer
The concept of corporate personality means?
  1. A
    Members and company are identical
  2. B
    Company cannot own property Correct
  3. C
    Company has no legal rights
  4. D
    Company has a distinct legal identity
Question 12Single Answer
Corporate personality was established in which landmark principle?
  1. A
    Agency principle
  2. B
    Criminal liability principle
  3. C
    Separate legal existence principle
  4. D
    Partnership principle Correct
Question 13Single Answer
A company can own property in its own name due to?
  1. A
    Partnership rules
  2. B
    Contract law only Correct
  3. C
    Family law
  4. D
    Separate legal entity doctrine
Question 14Single Answer
The principle of separate legal entity was established in?
  1. A
    Salomon v Salomon case
  2. B
    Donoghue v Stevenson case
  3. C
    Carlill v Carbolic Smoke Ball case
  4. D
    Rylands v Fletcher case Correct
Question 15Single Answer
Under separate legal entity doctrine, shareholders are?
  1. A
    Owners of company assets directly
  2. B
    Not personally liable for company debts beyond their shares
  3. C
    Fully liable for company debts
  4. D
    Employees of company Correct
Question 16Single Answer
A company’s existence is independent of its?
  1. A
    Customers
  2. B
    Government Correct
  3. C
    Creditors only
  4. D
    Members
Question 17Single Answer
Separate legal entity implies that a company can?
  1. A
    Only sue but not be sued
  2. B
    Operate without law Correct
  3. C
    Act only through partners
  4. D
    Sue and be sued in its own name
Question 18Single Answer
The concept of perpetual succession means?
  1. A
    Company dies with members
  2. B
    Company exists for one year only
  3. C
    Company continues despite change in membership
  4. D
    Company depends on directors Correct
Question 19Single Answer
Perpetual succession ensures that a company is?
  1. A
    Immortal in law
  2. B
    Dependent on shareholders’ life
  3. C
    Dissolved automatically
  4. D
    A temporary body Correct
Question 20Single Answer
The death of a shareholder results in?
  1. A
    No effect on company existence
  2. B
    Dissolution of company
  3. C
    Liquidation immediately
  4. D
    Termination of business Correct
Question 21Single Answer
Perpetual succession is mainly linked with?
  1. A
    Companies
  2. B
    Partnership firms
  3. C
    Sole proprietorship
  4. D
    HUF only Correct
Question 22Single Answer
Limited liability means?
  1. A
    Members are fully liable for debts
  2. B
    Company has no liability
  3. C
    Members’ liability is restricted to unpaid share amount
  4. D
    Creditors are not protected Correct
Question 23Single Answer
In a limited liability company, shareholders risk is limited to?
  1. A
    Personal property
  2. B
    Government assets
  3. C
    Investment in shares
  4. D
    Company profits only Correct
Question 24Single Answer
Limited liability protects?
  1. A
    Creditors
  2. B
    Government revenue
  3. C
    Members from unlimited personal liability
  4. D
    Employees only Correct
Question 25Single Answer
The doctrine of lifting the corporate veil means?
  1. A
    Ignoring company identity completely
  2. B
    Closing the company
  3. C
    Looking beyond company to identify real persons controlling it
  4. D
    Merging companies Correct
Question 26Single Answer
The corporate veil is lifted mainly in cases of?
  1. A
    Normal business operations
  2. B
    Fraud or misuse of corporate personality
  3. C
    Routine meetings
  4. D
    Dividend declaration Correct
Question 27Single Answer
Lifting the corporate veil is an exception to?
  1. A
    Separate legal entity principle
  2. B
    Partnership law
  3. C
    Contract law
  4. D
    Criminal law Correct
Question 28Single Answer
A company differs from partnership mainly in?
  1. A
    No separate legal entity
  2. B
    No registration Correct
  3. C
    Unlimited liability always
  4. D
    Separate legal entity and limited liability
Question 29Single Answer
Compared to LLP, a company is?
  1. A
    Not a separate legal entity
  2. B
    Without shareholders Correct
  3. C
    Always unregistered
  4. D
    Governed under Companies Act, 2013
Question 30Single Answer
A Hindu Undivided Family (HUF) business is controlled by?
  1. A
    Board of Directors
  2. B
    Shareholders
  3. C
    Karta
  4. D
    Registrar Correct
Question 31Single Answer
In comparison to a company, HUF has?
  1. A
    Separate legal personality
  2. B
    Public ownership
  3. C
    No separate legal entity from family members
  4. D
    Limited liability structure Correct
Question 32Single Answer
A partnership firm differs from a company because it?
  1. A
    Has perpetual succession
  2. B
    Lacks separate legal existence
  3. C
    Has share capital
  4. D
    Has corporate personality Correct
Question 33Single Answer
A key difference between LLP and company is?
  1. A
    LLP has no legal identity
  2. B
    LLP is unregistered Correct
  3. C
    Company has no shareholders
  4. D
    LLP combines partnership flexibility with limited liability
Question 34Single Answer
Which feature best represents corporate personality?
  1. A
    Identity of members equals company
  2. B
    Company cannot own assets
  3. C
    Company is a distinct legal person
  4. D
    Company depends on partners Correct
Question 35Single Answer
The most important foundation of company law is?
  1. A
    Separate legal entity doctrine
  2. B
    Unlimited liability principle
  3. C
    Informal business structure
  4. D
    Family ownership principle Correct
Question 36Single Answer
A company acquires legal status upon?
  1. A
    Signing a contract
  2. B
    Registration and incorporation
  3. C
    Opening a bank account
  4. D
    Appointment of directors Correct
Question 37Single Answer
The word "incorporation" refers to?
  1. A
    Dissolution of a company
  2. B
    Merger of companies
  3. C
    Formation of a company as a legal entity
  4. D
    Liquidation of assets Correct
Question 38Single Answer
Which of the following is not a characteristic of a company?
  1. A
    Unlimited liability of members in all cases
  2. B
    Perpetual succession
  3. C
    Separate legal entity
  4. D
    Common seal (historically) Correct
Question 39Single Answer
The assets of a company belong to?
  1. A
    Shareholders jointly
  2. B
    Directors personally
  3. C
    Creditors Correct
  4. D
    The company itself
Question 40Single Answer
Shareholders are regarded as?
  1. A
    Owners of company property directly
  2. B
    Owners of shares in the company
  3. C
    Company agents always
  4. D
    Company creditors Correct
Question 41Single Answer
The liability of members in a company limited by shares extends up to?
  1. A
    Personal assets without limit
  2. B
    Entire company debt
  3. C
    Unpaid amount on shares
  4. D
    Double the face value compulsorily Correct
Question 42Single Answer
The legal identity of a company begins from the date of?
  1. A
    First board meeting
  2. B
    Commencement of business
  3. C
    First annual general meeting Correct
  4. D
    Incorporation
Question 43Single Answer
Which principle allows a company to continue despite insolvency of members?
  1. A
    Corporate governance
  2. B
    Ultra vires doctrine
  3. C
    Perpetual succession
  4. D
    Indoor management Correct
Question 44Single Answer
A company can enter into contracts because it is?
  1. A
    A partnership
  2. B
    A trust Correct
  3. C
    A family concern
  4. D
    A legal person in law
Question 45Single Answer
The concept that a company has rights and obligations separate from members is known as?
  1. A
    Separate legal entity
  2. B
    Mutual agency
  3. C
    Partnership doctrine
  4. D
    Joint ownership Correct
Question 46Single Answer
A company may be held liable for?
  1. A
    Personal debts of shareholders
  2. B
    Breach of contractual obligations
  3. C
    Family obligations of directors
  4. D
    Private liabilities of members Correct
Question 47Single Answer
Which landmark case established that a company is distinct from its members?
  1. A
    Foss v Harbottle
  2. B
    Hadley v Baxendale
  3. C
    Salomon v Salomon & Co. Ltd.
  4. D
    Ashbury Railway Case Correct
Question 48Single Answer
The doctrine of corporate personality primarily protects?
  1. A
    Directors only
  2. B
    Customers only Correct
  3. C
    Government only
  4. D
    Members from personal liability
Question 49Single Answer
Which of the following survives changes in ownership?
  1. A
    Sole proprietorship
  2. B
    Joint family business Correct
  3. C
    Agency
  4. D
    Company
Question 50Single Answer
The transfer of shares generally affects?
  1. A
    Company's legal existence
  2. B
    Company's legal identity Correct
  3. C
    Company's incorporation
  4. D
    Membership composition only
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