History

During the last few decades, there has been unprecedented growth in Indian Capital Market amidst introduction of variety of economic reforms. As a result investor participation in the economic reforms process has accelerated. But a large and sustained investor participation will depend much on the presence and effectiveness of regulatory framework which aims to ensure overall fairness to investors and bring about a high degree of confidence in the market.

Introduction

Two Segments: Under the Companies Act, 2013 the powers have been divided between two segments: one is the Board of Directors and the other is of shareholders. The Directors exercise their powers through meetings of Board of directors and shareholders exercise their powers through Annual General Meetings/General Meetings.
Although constitutionally all the acts relating to the company can be performed in General Meetings but most of the powers in regard thereto are delegated to the Board of directors by virtue of the constitutional documents of the company viz. the Memorandum of Association and Articles of Association.
Section 179 : Under Section 179 of the Companies Act, 2013, a general power has been conferred on the Board of directors. Board of directors of a company shall be entitled to exercise all such powers and to do all such acts and things, as the company is authorised to exercise and do.”
Proviso to this section restricts the power of the Board of directors to do things which are specifically required to be done by shareholders in the General Meetings under the provisions of Companies Act or Memorandum of Association or the Articles of Association.

Thus the Companies Act has tried to demarcate the area of control of directors as well as that of shareholders. Basically all the business to be transacted at the meetings of shareholders is by means of an ordinary resolution or a special resolution.

Transacted at meetings of shareholders

Some of the businesses which can be transacted at meetings of shareholders are:
1. Alteration of Memorandum of Association and Articles of Association.

2. Further issue of share capital.
3. To transfer some portions of uncalled capital to reserve capital to be called up only in the event of winding up of the company.
4. To reduce the share capital of the company.
5. To shift the registered office of the company outside the state in which the registered office is situated at present.
6. To decide a place other than the registered office of the company where the statutory books, required to be maintained may be kept.
7. Payment of interest on paid-up amount of share capital for defraying the expenses on Construction when plant cannot be commissioned for a longer period of time.
8. To appoint auditors
9. To approach Central Government for investigation into the affairs of the company.
10. To allow Related Party Transaction
11. To allow a director, partner or his relative to hold office or place of profit.
12. Payment of commission of more than 1% of the net profits of the company to a managing or a whole time director or a manager.
13. To make loans, to extend guarantee or provide security to other companies or make investment beyond the limit specified.
14. To borrow money and to charge out the assets of the company to secure the borrowed money.
15. To appoint directors.
16. To increase or reduce the number of directors within the limits laid down in Articles of Association.
17. To cancel, redeem debentures etc.
18. To make contribution to funds not related to the business of the company.

certain obligations towards the shareholders

In view of the rights conferred on shareholders to be exercised at General Meetings, the Act casts an obligation on the directors to send notices for convening general meetings or else the meetings shall be declared to be void as also all proceedings transacted thereat.
Apart from the rights which are vested in the shareholders to be exercised in relation to the conduct of the business of the company, the directors of the company have certain obligations towards the shareholders.

Two Broad Duties

The courts have determined two broad duties to be performed by a director:
1. Duties of utmost care and skill in managing the affairs of the company or else be liable for damages.
2. Fiduciary duties to act bona fide in the interest of the company, not to exercise powers for collateral benefit and not to earn profit from the position as a director.

Conclusion

1. Despite the powerful weapons handed over to the shareholders by the Companies Act, the shareholders have not been able to use them and most of the provisions remain dead provisions and have not been used by the shareholders as potential weapons to correct any wrongful act on the part of the directors or to give them any directions.
2. Consequently, the Board of directors of a large number of companies are elected only by a few shareholders who attend the Annual General Meetings and those who can muster sufficient number of proxies and can demonstrate their voting power. Government Companies are an exception.
3. In Government Companies all the directors are appointed on the advice of the Government by the President of India or the Governor of concerned State. Hence, theoretically it can perhaps be said that the shareholders democracy is absolute in such companies.
4. In other companies, however, the shareholders democracy is dependent upon the voting strength of shareholders and also to a great extent on the availability of members attending their General Meetings either by themselves or through their proxy.
5. This again depends on the proximity of Registered Office of the company to the place of residence of the shareholders. Apart from this most of the shareholders do not have enough time to spare from their busy schedules to concern themselves with the affairs of the company in which they have invested.
6. Besides, they are not always educated enough and experienced enough to be conversant with the working of the joint stock companies.
7. Although the concept of shareholders’ democracy has been enshrined in the Companies Act, yet, because of the aforementioned deficiencies and flaws in the general body of shareholders as a whole, it is not reflected in the constitution of the Boards of directors of many companies in India.
8. The Companies Act provided an opportunity to shareholders to participate in the decision making process by introducing provisions relating to passing of resolutions in respect of certain matters through e-voting.

Achieving the shareholders’ democracy:

For achieving the shareholders’ democracy, the shareholders have to unite and organise themselves on national, state and district levels and get their associations registered under the Societies Registration Act or any other applicable statute so that their voice is heard and they can assert themselves and safeguard the interests of their members. Constitution of such associations should be suitably amended so as to insist upon all the non-Government companies to allot a minimum number of shares to such associations of shareholders so that these associations can attend the Annual General Meetings of all the companies and make sure that the directors elected to company Boards reflect a fair representation.

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Ques1: Which authority supervise the working of ROC located in different locations in the country?

Answer: Regional Directors

The Regional Directors supervise the working of the offices of the Registrars of Companies and Official Liquidators located in different locations in the country.

Ques 2: what is the fees to file an appeal to the Appellate Tribunal where the total income of the Assessee as computed by the Assessing officer is the One hundred thousand rupees or Less?

Answer: Rs 500

Reason: (a) where the total income of the assessee as computed by the Assessing Officer, in the case to which the appeal relates, is one hundred thousand rupees or less, five hundred rupees,

(b) where the total income of the assessee, computed as aforesaid, in the case to which the appeal relates is more than one hundred thousand rupees but not more than two hundred thousand rupees, one thousand five hundred rupees,

(c) where the total income of the assessee, computed as aforesaid, in the case to which the appeal relates is more than two hundred thousand rupees, one per cent of the assessed income, subject to a maximum of ten thousand rupees,

(d) where the subject matter of an appeal relates to any matter, other than those specified in clauses (a), (b) and (c), five hundred rupees.

Ques 3: In Case any Director requires his views or opinion on a particular item to be recorded verbatim in the minutes, then:

Answer: the decision of the Chairman whether or not to do so shall be final.

Reason: In case any Director requires his views or opinion on a particular item to be recorded verbatim in the Minutes, the decision of the Chairman whether or not to do so shall be final.

Ques4: Which one of the following is not an Invitation Etiquette?

Answer: Keep your Conversations short and to the Point.

Reason: How you respond to an invitation says volumes about your social skills. It reflects negatively on your manners if your response (or lack of response) to an invitation costs time or money for your host.

• Reply by the date given in the invitation, so that the host or hostess knows what kind of arrangements to make for the event, food is not wasted, and unnecessary expense is eliminated.
• If an RSVP card is not included, respond by calling or sending a brief note.
• If you cancel after initially accepting an invitation, phone your regrets as soon as possible. Send a note of regret following the phone conversation.
• Don’t ask for permission to bring a guest unless the invitation states.
• Arrive at the event promptly, but not too early.
• Mingle and converse with the other guests.
• Don’t overstay your welcome.
• Extend your thanks as you leave.

Ques 5: In case of an English Mortgage, a receiver may be appointed by the_________?

Answer: mortgagee.

Reason: Any person who has been named in the mortgage deed and is willing and able to act as a Receiver may be appointed by a mortgagee.

Ques 6: a sworn statement in writing made specially under oath before an authorized officer?

Answer: An affidavit

Ques 7: A deed between two or more parties where as many copies are made as there are parties, so that each may be in a possession of a copy.

Answer: This arrangement is known as deed pool.

Ques 8: If the case is being tried in a summary way, a person cannot be awarded a punishment of imprisonment for more than

Answer: three months

Ques 9: Sale deed is an example of:

Answer: Conveyancing

Ques 10: “an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking, signed by the maker to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument”.

Answer: Promissory Note

Reason: Promissory note is one of the negotiable instruments recognized under the Negotiable Instruments Act, 1881. A “promissory note” is defined under Section 4 of the Negotiable Instruments Act, 1881

Ques 11:Mr. Anand is usually of unsound mind, but occasionally of sound mind, may

Answer: make a contract when he is of sound mind.

Reason: Section 12 of the Indian Contract Act, 1872, provides that a person is said to be of sound mind for the purpose of making a contract if, at the time when he makes it, he is capable of understanding it and of forming a rational judgement as to its effect upon his interests. A person who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind. A person who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind.

Ques: 12 Upon expiration or earlier termination of the lease,

Answer: Lessee shall deliver to the Lessor the said Equipment

Reason: SURRENDER: Upon expiration or earlier termination of the lease, Lessee shall deliver to the Lessor the said Equipment at such a place as Lessor may specify in good repairable condition and working order, normal wear and tear resulting from the proper use of the Equipment and damage by fire not caused by the negligence of the Lessee shall be excepted.

Ques 13: As per ICSI guidelines for professional dress for Female while appearing before judicial/quasi-judicial bodies and tribunals

Answer: The professional dress for female members will be saree or any other dress of a sober colour with a navy blue jacket

Reason: To enhance the visibility and brand building of the profession and ensuring uniformity, the Council of the Institute of Company Secretaries of India has prescribed the following guidelines for professional dress for members while appearing before judicial/quasi-judicial bodies and tribunals:

(a) The professional dress for male members will be navy blue suit and white shirt with a tie (preferably of the ICSI) or navy blue buttoned-up coat over a pant or a navy blue safari suit.

(b) The professional dress for female members will be saree or any other dress of a sober colour with a navy blue jacket.

(c) Members in employment may wear the dress/uniform as specified by the employer for all employees or if allowed the aforesaid professional dress.

(d) Practising Company Secretaries appearing before any tribunal or quasi-judicial body should adhere to dress code if any prescribed for appearing before such tribunal or quasi-judicial body or if allowed the aforesaid professional dress.

Ques 14. a lessee is deemed to have defaulted if?

Answer: he fails to pay any instalment of Lease rental

Ques 15. which of the following statements is true in case of ‘equitable mortgage’?

Answer: Mortgage by deposit of title deeds is called in English law as equitable mortgage

Ques 16. The only exception to the third fundamental rule of pleadings is to be found in the case of

Answer: writ petitions and election-petitions.

In such petitions, it is necessary to state matters of evidence in support of the allegations made therein.

Reason: The four fundamental rules of pleadings are:

1) That a pleading shall contain, only a statement of facts, and not Law;

2) That a pleading shall contain all material facts and material facts only.

3) That a pleading shall state only the facts on which the party pleading relies and not the evidence by which they are to be proved,

4) That a pleading shall state such material facts concisely, but with precision and certainty.

Ques 17. SS-2 applicable to all the companies exempt

Answer: Small companies

Ques 18. In case of a Government company, the Annual General Meeting shall be held at its registered office or any other place

Answer: with the approval of the Central Government, as may be required in this behalf.

Ques 19. Order VI Rule 14 makes it obligatory that the pleading shall be signed by the party and his pleader (if any). exception

Answer: Pleading must be Signed. However, where a party pleading is, by reason of absence or for other good cause, unable to sign the pleading it may be signed by any person duly authorized by him to sign the same or to sue or defend on his behalf.

Ques 20. In a simple mortgage, the mortgagor ———————————of the mortgaged property

Answer: without delivering possession

Reason: binds himself personally to pay the mortgage money and agrees expressly or impliedly that if he fails to pay the debt and interest in terms of the mortgage deed, the property will be sold and the proceeds applied in payment of the mortgaged money

Ques 21. Minutes of the preceding Meeting shall be noted at a Meeting of the Board held

Answer: immediately following the date of entry of such Minutes in the Minutes Book.

Ques 22. As per Section 4(1) (b), the memorandum of the company should mention the_________ in which the registered office of the company is to be situated;

Answer: State

Ques 23. e contract through people purchase online goods through amazon, flipkart etc. are called?

Answer: online shopping agreement

Ques 24. what is not necessary for passing of a Resolution by circulation by Board of director’s?

Answer: necessary papers which explain the purpose of the resolution

Ques 25. In the case of a company mortgage of the property should be duly authorised by

Answer: ‘Object Clause’ of the Memorandum of Association

Reason: In the case of a company mortgage of the property should be duly authorised by ‘Object Clause’ of the Memorandum of Association and approved by a resolution of the Board of directors

Ques 26. Board of Director’s meeting can be convened even on Sunday and national holiday too. Even a meeting of Board of Director’s adjourned for want of quorum can be held on national holiday.

Answer: No restrictions

Ques 27. Under Section 154 of the Code of Criminal Procedure, FIR stands for _________?

Answer: First Information Report

Ques 28: In which of the following circumstances, the hire purchase agreement shall be voidable at the option of the owner?

1. If it is not in writing
2. If it not signed by all the parties thereto.
3. If it is associated with a contract of guarantee, it is signed by all the parties except surety.
4. If it is not associated with a contract of guarantee.

Answer : If it is associated with a contract of guarantee, it is signed by all the parties except surety.

Ques 29: The Statement that “ objectives for which the property is being purchased by the buyer should be lawful” implies:

1. Object is not forbidden by law
2. Object is not fraudulent
3. Object does not impart injury to the person
4. All of the above

Answer: Object is not forbidden by law

Ques 30: A married woman can execute Power of Attorney:

1. By a non-testamentary instrument only as if she were unmarried
2. Only for executing non-testamentary instrument
3. For those power, as if she were unmarried, by a non-testamentary instrument, to appoint an attorney on her behalf, for the purpose of executing any non-testamentary instrument
4. To appoint an attorney on her behalf, for the purpose of executing any Non-testamentary instrument only

Answer : For those power, as if she were unmarried, by a non-testamentary instrument, to appoint an attorney on her behalf, for the purpose of executing any non-testamentary instrument

Ques 31: immovable property does not include________.

1. Standing timber
2. Growing crops
3. Grass
4. All of the above

Answer: All of the above

Ques 32: A Bank note or currency note is

1. A promissory Note
2. A bill of exchange
3. A cheque
4. Not a promissory note

Answer : Not a promissory note

Ques 33: Which one of the following is not a good practice while drafting written pleadings?

1. Quote relevant provision in the petiion and excerpts of observations made by the courts
2. Suppress the facts
3. Prayers for interim relief
4. None of these

Answer: Quote relevant provision in the petiion and excerpts of observations made by the courts

Ques 34: Which company shalll prepare a report on Annual general Meeting in the prescribed form, including a confirmation that the meeting was convened, held and conducted as per the provisions of the Act and shall file with registrar of companies within thirty days of the conclusion of the Annual general meeting?

1. Every Listed Company
2. Every listed public company
3. Every Public Company
4. Every company to which SS-2 applies

Answer: Every company to which SS-2 applies

Ques 35: Latent deed is a deed kept for ____________ in man’s escritoire or strong box.

1. Ten Years or more
2. Twenty years or more
3. Thirty Years or more
4. Forty years or more

Answer : Twenty Years or More

Ques 36: In case of any default by the lessee, the lessor may____________.

1. Take action for recovery as liquidated damages
2. Terminate the lease deed upon notice to lessee
3. Sell the equipment leased out
4. All of the above

Answer : All of the above

Ques 37: When business is conducted by traders not directly with their counterparts but through the agency of independent agents appointed for the purpose, it is known as….

1. Commercial agency contract
2. Mercantile Agency Contract
3. Commission Agency Contract
4. Del-credere Agency Contract

Answer: Commercial agency contract

Ques 38: Which one of the foloowing is not a type of consumer forum?

1. District consumer Forum
2. State consumer Forum
3. National Consumer Forum
4. International consumer forum

 Answer: International Consumer forum

Ques 39:  who does the necessary preliminary work in connection with the formation and the stablishing of a company?

1. Director
2. Chairman
3. Auditor
4. Promoter

Answer: Promoter

Ques 40: As per Section 4(1)(a) of the Companies Act, 2013, in case of a Public limited company the name of the company should last with the word:

1. Limited
2. Public Limited
3. Private Limited
4. None

Answer: Limited

Ques 41: In terms of the Companies Act, 2013, The maximum period for which a person can be appointed as Managing director of a company is

1. One Year
2. Five Year
3. Ten Year
4. The companies act does not specify any time period

Answer : Five Year

Ques 42: Which of the following is operative part in Power of Attorney ?

1. KNOW ALL MEN BY THESE PRESENTS
2. THAT WHEREAS
3. NOW THIS DEED WITNESSES THAT I APPOINT ETC
4. THIS POWER OF ATTORNEY is made on the etc.

ANSWER:  KNOW ALL MEN BY THESE PRESENTS

Ques 43: Presumption of Law is an exception to the rule:

1. Every pleading must state facts and not law
2. A Pleading shall contain all material facts and material facts only
3. A Pleading shall state only the facts on which the party pleading relies and not the evidence by which they are to be proved
4. A Pleading shall state such material facts concisely, but with precision and certainty

Answer : A Pleading shall state only the facts on which the party pleading relies and not the evidence by which they are to be proved

Reference : ICSI Module

www.icsi.edu

https://www.icsi.edu/e-learning/

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Multi choice questions for Human Resource Management