Commercial Law MCQ Quiz in தமிழ் - Objective Question with Answer for Commercial Law - இலவச PDF ஐப் பதிவிறக்கவும்

Key Points

Correct Answer Explanation:
A Red Herring Prospectus (RHP) is indeed issued prior to the issue of the main prospectus. It is a preliminary registration document filed with the securities regulator, which is not complete in terms of details on the price and number of shares to be issued. The purpose of the RHP is to gauge investor interest in the offering.
Overview of Incorrect Options:
After the issue of the main prospectus: This is incorrect because the Red Herring Prospectus comes before the final prospectus. The main prospectus is issued after the RHP and contains all final details including price and number of shares.
With the consent of shareholders: This is not accurate as the issuance of a Red Herring Prospectus is a regulatory requirement for companies seeking to go public and does not directly involve shareholder consent at this stage.
On the behest of ROC (Registrar of Companies): While the ROC plays a role in the registration of companies, the issuance of a Red Herring Prospectus is specifically related to securities regulation and is typically filed with securities regulators, not directly at the behest of the ROC.

Key Points

Statement A: To appoint an individual or a firm as an auditor  

This function is generally not within the purview of a Corporate Social Responsibility (CSR) Committee. Typically, the appointment of auditors is a responsibility of the company's board of directors or its shareholders. Hence, Statement A is incorrect.

Statement B: To recommend a CSR Policy  

One of the primary responsibilities of the CSR Committee is to formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified in the CSR rules or guidelines. Hence, Statement B is correct.

Statement C: To recommend the amount of expenditure for the indicated activities  

Another crucial function of the CSR Committee is to recommend how much of the company's earnings should be spent on CSR activities. This is in line with ensuring that the company meets its CSR expenditure obligations as per the legal requirements. Hence, Statement C is correct.

Statement D: To inspect the books of accounts during business hours  

Inspecting the books of accounts is typically not a function of the CSR Committee. This task is usually reserved for auditors and the audit committee of the company. Hence, Statement D is incorrect.

Statement E: To monitor the CSR policy of the company from time to time  

Monitoring the implementation of the company's CSR Policy is a key responsibility of the CSR Committee. This includes ensuring that the activities are being carried out as per the plan and making necessary recommendations for improvement. Hence, Statement E is correct.

Hence, the correct answer is option 3: Statements B, C, and E only.

Key Points

Statement I Analysis:
This statement addresses the minimum number of directors required for different types of companies under company law.
 For a public company, the minimum number of directors required is three.
For a private company, at least two directors are required.
This requirement is in place to ensure that there is sufficient oversight and governance within the company.
Conclusion: Statement I is correct as it accurately reflects the legal requirements for the minimum number of directors in public and private companies.
Statement II Analysis:
This statement pertains to the maximum number of directors a company can have without needing to pass a special resolution.
The statement says that a company can have up to 15 directors without the need for a special resolution.
For appointing more than 15 directors, the company must pass a special resolution.
This rule is designed to maintain a manageable board size while also allowing companies the flexibility to expand their board if necessary, provided there is sufficient justification and support from the shareholders.
Conclusion: Statement II is correct as it accurately states the legal provisions regarding the maximum number of directors and the requirement for a special resolution to exceed that number.
Overall Solution:
Upon analyzing both statements, we find that:
- Statement I correctly outlines the minimum number of directors required for public and private companies.
- Statement II correctly describes the maximum number of directors a company can have without a special resolution and the need for a special resolution to exceed this limit.
- Hence, both Statement I and Statement II are correct.
Therefore, the correct option is 1) Both Statement I and Statement II are correct.

Key Points

The given statements pertain to the provisions under the Companies Act of 2013 regarding the filing of documents in electronic form by companies. Here’s a detailed explanation of each statement and the relationship between them:
Assertion A: Under the Companies Act of 2013, the Central Government is authorized to implement a facility to file documents in electronic form.
This assertion is true. The Companies Act of 2013 in India allows for the modernization and digitalization of company filings and records maintenance. The Act empowers the Central Government to prescribe the manner of filing documents electronically with the Registrar of Companies (RoC). This move is aimed at ensuring ease of doing business, enhancing transparency, and making the compliance process more efficient.
Reason R: Central Government is authorized to make rules to implement this facility and section 398, 401, and 402 have been incorporated in the Act of 2013.
This reason is also true. The mentioned sections in the Companies Act of 2013 provide the Central Government with the authority to make rules regarding the filing of documents in an electronic format. Specifically:
- Section 398 empowers the Central Government to prescribe electronic modes of filing.
- Section 401 gives the Central Government the power to make rules for the electronic maintenance and inspection of documents in the registry.
- Section 402 deals with the electronic form of applications, declarations, returns, and other documents under the Act.
The relationship between Assertion A and Reason R is that Reason R provides the legal basis and specific sections of the Companies Act that empower the Central Government to implement the facility for filing documents electronically, which is what Assertion A states. Therefore, the reason is not only true but also accurately explains why the assertion is true.
Correct Option:
Given the explanations, the correct option is:
1) Both A and R are true and R is the correct explanation of A
This option is correct because both statements are accurate, and the reason directly explains the basis for the assertion, demonstrating the legal framework that allows the Central Government to authorize and regulate the electronic filing of documents under the Companies Act of 2013.

Key Points

Statement A (Central Government): Correct. The removal of members of the Company Law Appellate Tribunal involves the Central Government as it plays a pivotal role in the governance and administration of such tribunals. The Central Government has the authority to appoint and, under certain circumstances, remove members based on the provisions laid out in the laws governing these tribunals.
Statement B (Chief Justice): Correct. The involvement of the judiciary, specifically the Chief Justice, in the process ensures that the removal of members is not only an administrative procedure but also adheres to principles of justice and fairness. The Chief Justice’s consultation provides a judicial oversight that is crucial for maintaining the independence and integrity of the tribunal.
Statement C (Chairperson of Appellate tribunal): Incorrect. While the Chairperson of the Appellate Tribunal plays a significant role in the functioning and administration of the tribunal, their role does not typically extend to the consultation process for the removal of members. The removal process is designed to be independent of the tribunal's internal hierarchy to ensure impartiality and prevent conflicts of interest.
Statement D (Auditor General): Incorrect. The Auditor General's primary function is related to auditing the accounts of the Union and of the States. Their role does not encompass the administration or governance of judicial or quasi-judicial bodies such as the Company Law Appellate Tribunal. Therefore, the Auditor General is not involved in the consultation process for the removal of tribunal members.
Conclusion:
- The correct answer is option 1, which includes (A) Central Government and (B) Chief Justice only. These entities are involved in the consultation process for the removal of members of the Company Law Appellate Tribunal, ensuring that the process is carried out with administrative authority and judicial oversight. Hence, Statement A and B are correct, while Statement C and D are incorrect.

Key Points

Registrar of Companies:
The Registrar of Companies (RoC) has the authority to remove the name of a company from the Register of Companies under Section 248(1) of the Companies Act, 2013. This can be done suo moto if the RoC has reasonable cause to believe that a company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company.
Securities and Exchange Board of India (SEBI):
- SEBI is the regulator for the securities market in India but does not have the authority to remove the name of a company from the Register of Companies. Its role is primarily to protect the interests of investors in securities and to promote and regulate the securities market.
National Company Law Tribunal (NCLT):
- The NCLT is a quasi-judicial body in India that adjudicates issues relating to Indian companies. While it has wide-ranging powers concerning company law matters, the suo moto removal of a company's name from the Register of Companies is specifically vested with the Registrar of Companies as per Section 248(1) of the Companies Act, 2013.
Ministry of Corporate Affairs (MCA):
- The Ministry of Corporate Affairs oversees corporate governance and regulation in India through the Companies Act, among other laws. While it formulates policies and regulates corporate affairs, the direct authority to remove a company's name from the Register of Companies on a suo moto basis is delegated to the Registrar of Companies under the provisions of the Companies Act, 2013.
In summary, the Registrar of Companies is the correct authority with the power to remove the name of a company from the Register of Companies on a suo moto basis under Section 248(1) of the Companies Act, 2013. The other options listed do not have this specific power as it is not within their jurisdiction or mandate.

The correct option is 'A - II, B - I, C - III, D - IV'.

Key Points

• Unpaid seller (A - II: S.45 of Sale of Goods Act, 1930)
  • The unpaid seller is defined under Section 45 of the Sale of Goods Act, 1930.
  • An unpaid seller is a person to whom the whole of the price has not been paid or tendered.
• Caveat emptor and its exceptions (B - I: S.16 of Sale of Goods Act, 1930)
  • Caveat emptor means "let the buyer beware".
  • Section 16 of the Sale of Goods Act, 1930, deals with the principle of caveat emptor and its exceptions.
• Minor admitted to benefits of partnership (C - III: S.30 of Indian Partnership Act, 1932)
  • Section 30 of the Indian Partnership Act, 1932, deals with minors being admitted to the benefits of partnership.
  • A minor can be admitted to the benefits of an existing partnership with the consent of all the partners.
• Registration of partnership (D - IV: S.69 of Partnership Act, 1932)
  • Section 69 of the Indian Partnership Act, 1932, deals with the registration of firms.
  • It specifies the procedure and implications of registering a partnership firm.

Therefore the correct pairing is:

A - II: Unpaid seller - S.45 of Sale of Goods Act, 1930

B - I: Caveat emptor and its exceptions - S.16 of Sale of Goods Act, 1930

C - III: Minor admitted to benefits of partnership - S.30 of Indian Partnership Act, 1932

D - IV: Registration of partnership - S.69 of Partnership Act, 1932

The correct answer is 'may be a stipulation by way of penalty'

Key Points

• Stipulation for increased interest from the date of default:
  • A stipulation for increased interest from the date of default is a contractual clause that requires the defaulting party to pay a higher rate of interest if they fail to fulfill their obligations on time.
  • This can be seen as a measure to encourage timely payments and compensate the non-defaulting party for potential losses due to the default.
  • However, whether this stipulation is considered a penalty depends on the context and jurisdiction.

Additional Information

• Option 1: A stipulation by way of penalty:
  • This option is incorrect because not all stipulations for increased interest are automatically considered penalties. It depends on the intent and impact of the clause.
• Option 2: Not a stipulation by way of penalty:
  • This option is incorrect as well, since some stipulations for increased interest can indeed be seen as penalties, especially if they are punitive in nature.
• Option 4: May not be a stipulation by way of penalty:
  • While this option might seem correct, it is incomplete. The stipulation may or may not be a penalty based on the context, making Option 3 more accurate.

The correct answer is 'Lord Macnaghten'

Key Points

• Incorporation Certificate as Conclusive Proof:
  • The incorporation certificate issued by the Registrar of Companies serves as conclusive proof that all statutory requirements regarding registration have been complied with.
  • This principle was first established by Lord Macnaghten in the landmark case of "Jubilee Cotton Mills Ltd. v. Lewis" in 1924.
  • It signifies that once the certificate is issued, the existence of the company cannot be challenged on the grounds of procedural irregularities.

Additional Information

• Other Options:
  • Lord Dunnedt: There is no significant legal precedent attributed to Lord Dunnedt regarding the conclusive nature of the incorporation certificate.
  • Lord Cairns: Known for other legal contributions, particularly in equity and trusts, but not related to this specific principle.
  • Lord Chelmsford: His contributions were more towards parliamentary reforms and legal matters unrelated to company incorporation.

The correct answer is '146, 147'

Key Points

• Obligations of Co-Guarantees:
  • The obligations of co-guarantees are detailed in Sections 146 and 147 of the Indian Contract Act, 1872.
  • Section 146 specifies that when two or more persons are co-sureties for the same debt or duty, either jointly or severally, and in the same or different contracts, with or without the knowledge of each other, the co-sureties are liable to contribute equally, as per the terms of their respective contracts.
  • Section 147 covers the liability of co-sureties bound in different sums, stating that co-sureties who are bound in different sums are liable to pay equally as far as the limits of their respective obligations permit.

Additional Information

• Other Sections:
  • Section 143: This section deals with "Continuing Guarantee" and not specifically with the obligations of co-guarantees.
  • Section 145: This section pertains to the right of a surety to recover from the principal debtor, not the obligations among co-sureties.
  • Section 144: This section involves a guarantee obtained by misrepresentation, which does not directly relate to the obligations of co-sureties.