Incorporation Of Companies

Question 1

Who cannot become a promoter of the company?

Answer 1

A person acting merely in a professional capacity. E.g banker, solicitor, accountant.

Question 2

Which activities are prohibited to be carry out by an OPC?

Answer 2

Non-banking financial investment activities including investment in securities of any body corporate.

Question 3

Can OPC be incorporated or converted under section 8 of the companies act?

Answer 3

No, there’s prohibition on incorporation or conversion of an OPC under section 8.

Question 4

Two major restriction on section 8 company.?

Answer 4

1. ) Prohibiting the payment of any dividend to its members.

2. ) Have to apply it’s profit or income in promoting its object.

Question 5

Who can issue licence to a company incorporated under section 8?

Answer 5

Central government

Question 6

Three options to central government to revoke licence of a company registered under section 8.

Answer 6

1. ) Convert the status of the company and change its name
2. ) Wind up
3. ) Amalgamate with another company having similar object.

Question 7

Name the case which enunciated by the house of lords in a classic case.

Answer 7

Ashbury Railway carriage and iron co. Ltd v/s Riche

Question 8

Which section defines articles of association?

Answer 8

Section 2(5)

Question 9

Which section defines memorandum of association?

Answer 9

Section 2 (56)

Question 10

What does Provision for Entrenchment means?

Answer 10

To protect something

Question 11

Explain the manner of inclusion of Entrenchment provision in the articles.

Answer 11

In case of private company, all members to be agreed for such inclusion.
In case of a public company, special resolution is required.

Question 12

What is doctrine of indoor management?

Answer 12

Protects external members from the company. They are entitled to take it for granted that the company has gone through all the proceedings in a regular manner

Question 13

State the exceptions to the doctrine of indoor management.

Answer 13

1. ) Knowledge of irregularities
2. ) Negligence
3. ) Forgery

Question 14

Which section explains the procedure for incorporating a company?

Answer 14

Section 7 of the companies act.

Question 15

Which initiative have MCA taken for ease of setting up business or company?

Answer 15

Simplified Proforma for Incorporating Company electronically (SPICe)

Question 16

What are the various effect of registration under section 9?

Answer 16

1. ) Perpetual succession
2. ) legal person
3. ) Seperate entity
4. ) To sue and be sued

Question 17

The domicile and nationality of a company is determined by____

Answer 17

Place of the registered office of the company.

Question 18

When changing registered office from one jurisdiction to another within same state, whose confirmation is required?

Answer 18

Regional director

Question 19

When changing registered office from one State to another, whose confirmation is required?

Answer 19

Central government