Legal Aspects of Finance SCDL

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LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Single Answer

Question For which activity FDI is not prohibited?

Correct Answer Insurance

Your Answer Insurance

Multiple Choice Multiple Answer

Question Remuneration to the director may be paid :-Correct Answer Monthly , Quarterly , Annually

Your Answer Quarterly , Annually , Monthly


Question Payment of wages act came into existence :-

Correct Answer To ensure regular and timely payment of wages to employed

persons

Your Answer To ensure regular and timely payment of wages to employed

persons


Question To safeguard the interest of the company or its shareholders or the public

interest, the central government, may appoint such number of person as directors to hold

office for a period not exceeding :-

Correct Answer 3 yearsYour Answer 3 years


Question Sole selling agent may be :-

Correct Answer An Individual , A firm , A Body corporate

Your Answer An Individual , A firm , A Body corporate


Question When was the factories act passed?

Correct Answer In 1948

Your Answer In 1948


Question Number of shareholders entitled to requisition a meeting shall be carrying

Correct Answer Not less than 10 per cent of voting power

Your Answer Not less than 10 per cent of voting powerTrue/False

Question Bonus is an ex gratia payment.

Correct Answer False

Your Answer False


Question Compliance Report is signed by :-

Correct Answer Company Secretary in practice

Your Answer Company Secretary in practice


Question The responsibility of placing the annual accounts before the AGM is on

Correct Answer Board of Directors

Your Answer Board of Directors

True/FalseQuestion Every company shall keep a register showing the particulars in respect of

every loan or investment made, guarantee given or security provided.

Correct Answer True

Your Answer True


Question Following are the points related to Qualification share that every director

has to take :-

Correct Answer Within two months of date of appointment , If fails to obtain then


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he has to resign from the post , Minimum Share value Rs.5000/-

Your Answer Minimum Share value Rs.5000/- , If fails to obtain then he has to

resign from the post

True/False

Question The loan to any body corporate shall be made at the rate of interest not

less than that prevailing bank rate as may be prescribed by Reserve Bank of India.

Correct Answer TrueYour Answer True

True/False

Question An independent Director is not an executive director of a Company.


Your Answer True

True/False

Question Owned foreign exchange is not permitted.


Your Answer True

Select The Blank

Question Copies of annual accounts are to be filed within ________ days from

AGM with ROC.

Correct Answer 30 daysYour Answer 30 days

True/False

Question A non executive director is not a substantial shareholder of the company.

Correct Answer True

Your Answer True

Match The Following

Question Correct Answer Your Answer

Bifurcation Voted for/ against Chairman

Ordinary resolution Simple majority Simple majority

Requisition of members Not less than 5 % voting power Not less than 5 %

voting power

Special resolution Form 23 Voted for/ against

Select The BlankQuestion ________ shall lay before the AGM, the statement of Income &

Expenditure in place of Profit & Loss a/c.

Correct Answer Charitable Trust

Your Answer Charitable Trust


Question What are the powers of the audit committee?

Correct Answer To investigate any activity within its terms of reference , To seek

information from any employee , To obtain outside legal or professional advice

Your Answer To investigate any activity within its terms of reference , To seek

information from any employee , To obtain outside legal or professional advice

Select The Blank

Question No loan or investment shall be made or guarantee given by company

unless ________ is passed at the meeting by the board.Correct Answer Resolution

Your Answer Resolution


Question Which committees are considered for calculating the limit of the

companies

Correct Answer Audit committees , Remuneration Committee , Shareholders

Grievance Committee

Your Answer Audit committees , Remuneration Committee , Shareholders


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Grievance Committee

Select The Blank

Question The minimum wages to the obligations created by the convention no 26 of

________.

Correct Answer International labour organisation

Your Answer International labour organisation

True/FalseQuestion A temporary workman is not entitled to bonus though he works for a few

days in the organisation.


Your Answer False


Question A person can not be appointed as director of the company if :-

Correct Answer He is found to be of unsound mind , He is declared as an insolvent

, He has not taken qualification shares

Your Answer He is found to be of unsound mind , He is declared as an insolvent

, He has not taken qualification shares


Question A company which restricts the right to transfer its shares is :-

Correct Answer Private Ltd. CompanyYour Answer Private Ltd. Company

Match The Following

Question Correct Answer Your Answer

Interim Dividend Board of Directors Board of Directors

Shorter notice for AGM Private Limited Company ROC

Books of Account Form 23AA Form 23AA

Accounting StandardsNational Advisory Committee National Advisory

Committee


Question Preference shares can be :-

Correct Answer Cumulative redeemable , Non- cumulative redeemable ,

Participatory

Your Answer Cumulative redeemable , Non- cumulative redeemableTrue/False

Question Only individuals can be appointed as directors of the company.

Correct Answer True

Your Answer True


Question Director can be appointed without counting the number in :-

Correct Answer Private limited company , Unlimited company , Charitable

association

Your Answer Charitable association


Question Who is not entitled to bonus?

Correct Answer An apprentice , Employee employed through contractors

Your Answer Employee employed through contractorsSelect The Blank

Question Subject to other provisions of this act every employer shall be bound to

pay every employee in respect of the accounting year commencing on any day in the year

________.

Correct Answer 1979

Your Answer 1959


Question To whom does the payment of wages act apply to ?


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Correct Answer Persons employed in any factory

Your Answer Persons employed in any factory

Select The Blank

Question Under the industrial disputes act 1947________is an appropriate

government.

Correct Answer Central government

Your Answer Central governmentMultiple Choice Single Answer

Question When was the minimum wages act passed ?

Correct Answer 1948

Your Answer 1948

True/False

Question Retiring director may be eligible for reappointment.

Correct Answer True

Your Answer True


Question In which case did the Bombay high court observe the general purpose of

the act?

Correct Answer Arvind mills ltd case

Your Answer Arvind mills ltd caseTrue/False

Question After completion of Ordinary business other business is transacted at Extra

ordinary General Meeting.


Your Answer False

Select The Blank

Question ________shall certify that they have reviewed the balance sheet and profit

and loss account.

Correct Answer CEO

Your Answer CEO

Select The Blank

Question ________ includes legal representative of deceased employer.

Correct Answer EmployerYour Answer Employer

Select The Blank

Question Any payment in respect on ________ can be deducted from the wages of

an employed person.

Correct Answer Fidelity guarantee bond

Your Answer Fidelity guarantee bond

Select The Blank

Question A member shall have right to apply for operations and mismanagement of

the company provided application is made by members not less than ________ or by the

members holding not less than one tenth of total number of shares in the share capital of

the company.

Correct Answer 100

Your Answer 100Select The Blank

Question A statement of all transactions with the related parties including the basis

shall be placed before the ________.

Correct Answer Audit committee

Your Answer Audit committee


Question The board of directors shall exercise these powers only at board meetings

:-


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Correct Answer Power to make calls on shares , Power to issue debentures , Power

to borrow money

Your Answer Power to make calls on shares , Power to issue debentures , Power

to borrow money


Question Explanatory Statement should be annexed to Notice for :-

Correct Answer Special businessYour Answer Special business


Question What is the board procedure ?

Correct Answer Meeting to be held 4 times in a year , Should not be a gap of more

than 4 months between 2 meetings , Minimum information should be made available

Your Answer Meeting to be held 4 times in a year , Should not be a gap of more

than 4 months between 2 meetings , Minimum information should be made available


Question Conditions on borrowings by PIO are :-

Correct Answer Non-repatriation basis , Loan by inward remittance , Account by

lender in India

Your Answer Current Account , Non-repatriation basis , Loan by inward

remittance

Legal Aspects of Finance - 3Legal Aspects of Finance - 3

True/FalseQuestionIndian companies are exempted from filing a return by ECB-2.Correct AnswerFalse

Select The BlankQuestionThe minimum wages act which determines the rate of wages in industries specified in theschedule attached to the act are called ________Correct AnswerScheduled employment

Match The FollowingQuestionCorrect Answer

Audit ReportOpinion on the examination of books of accounts

AuditorA person who conducts the audits

Qualified for audit


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Eligible to conduct the audit

Cost auditorA cost accountant, who is suppose to conduct cost audit of the company.

Multiple Choice Multiple AnswerQuestionSIA/FIPB approval is necessary in :-Correct Answer13 specified activities , Sector limits sought exceeded , Small scale sector items

Multiple Choice Single AnswerQuestionECB stands for :-Correct Answer

External Commercial Borrowings

Multiple Choice Single AnswerQuestion

A person cannot be appointed as a director in more than :-Correct Answer20 companies

Select The BlankQuestionBoard has power to receive of notice of ________.Correct AnswerDisclosure of interest

Multiple Choice Multiple AnswerQuestionFor registering certain resolutions, following documents are submitted :-Correct AnswerForm 23 , Certified copy of resolution , Copy of explanatory statement

Multiple Choice Single AnswerQuestionMaturity period for USD 5 million scheme is :-Correct AnswerThree years


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Multiple Choice Multiple AnswerQuestionBooks of account with respect to following are required to be kept :-Correct AnswerMoney received & expended , Sales & purchases of goods , Assets & liabilities

Multiple Choice Multiple AnswerQuestionThe register in respect of every investment or loan made, containsCorrect AnswerThe amount, terms & conditions & purpose of investment or loan or security or guarantee ,The date on which the investment or loan has been made , The name of body corporate

Select The BlankQuestion

________shall certify that they have reviewed the balance sheet and profit and lossaccount.Correct AnswerCEO


________ is a scheduled employment carried out under the authority of central government.Correct AnswerCompetent authority

Multiple Choice Single AnswerQuestionEvery auditor who has in receipt from the company of the intimation of his appointment, hasto inform Registrar in writing that he has accepted or refused to accept the appointmentwithin :-Correct Answer30 Days

Match The FollowingQuestion

Correct Answer

Indian company borrowingsRedemption more than 3 years

Borrowing by NRELoan less than 3 years


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Borrowings in RupeesRegulated ROI

NCD issuePublic issue

Multiple Choice Multiple AnswerQuestionBoard of directors have to take consent of general meeting for :-Correct AnswerSale, lease or dispose of company's property , Give time to repayment of debt due bydirector , Contribute to charitable funds exceeding Rs 50000/- or 5% of average net profits

True/False

QuestionPayment to a scheme of insurance of a post office is not a deduction.Correct AnswerFalse

True/FalseQuestionCompany may have nominee director.Correct AnswerTrue

Multiple Choice Multiple AnswerQuestionWhat sums are deductible from gross profit under section 8?Correct Answer

Amount by way of depreciation , Employment rebate or investment allowance , Direct tax


All transactions of the ________ with the company shall be disclosed in the annual report.

Correct AnswerNon executive chairman

Multiple Choice Single AnswerQuestionWhich companies have to comply with the provisions of Clause 49 of listing agreement ?Correct AnswerListed Companies


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Select The BlankQuestionThe Forms 8 &13 should be filed in ________ to ragistrar of companies.Correct AnswerTriplicate

Multiple Choice Single AnswerQuestionSingle director can sign the annual accounts if :-Correct AnswerOnly one director in India for the time being


QuestionForm No. 1 can be signed by :-Correct AnswerChartered Accountant , Cost & Works Accountant , Advocate

True/FalseQuestionFinancial year and calendar year are one and the same thing.Correct AnswerFalse

Multiple Choice Single AnswerQuestionIf date of incorporation is 1.1.2005, first AGM must be held before :-Correct Answer30.6.2006

Multiple Choice Single AnswerQuestionProxy form generally should be :-

Correct AnswerDuly stamped and signed by all the joint-holders


________ of the company has absolute discretion in regard to inclusion or non inclusion ofany matter in the minutes.Correct Answer


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Chairman

True/FalseQuestionNo additional fees is payable on increased authorised capital since already paid on originalauthorised capital.Correct AnswerFalse

Multiple Choice Multiple AnswerQuestionFollowing are the Forms to be submitted to ROC for incorporation of company :-Correct AnswerForm 32 , Form 29 , Form 1


________ includes legal representative of deceased employer.Correct AnswerEmployer

Multiple Choice Single AnswerQuestionIf there is any delay in filing Form- 8 &13 beyond 60 days from the execution of documentsfor the creation of charge, the company has to make petition to :-Correct AnswerCompany Law Board

Multiple Choice Multiple AnswerQuestionConditions on borrowings by PIO are :-Correct AnswerNon-repatriation basis , Loan by inward remittance , Account by lender in India

Select The BlankQuestionThe auditor has to give his report that the accounts of the company gives ________.Correct AnswerTrue & Fair view

True/False


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QuestionAfter completion of Ordinary business other business is transacted at Extra ordinaryGeneral Meeting.Correct AnswerFalse

Multiple Choice Single AnswerQuestionMaturity period for foreign currency credit by overseas suppliers is :-Correct AnswerMore than 6 months & less 3 years


________ of the company has a right to take inspection of the books of account.Correct Answer

Any Director

True/FalseQuestion

Acquiring foreign security on gift is allowed.Correct AnswerTrue

Multiple Choice Multiple AnswerQuestionBoard's Report shall include :-Correct AnswerDividend recommended , Financial position of the company , Amounts transferred toReserves

Multiple Choice Multiple AnswerQuestionWhat are the general provisions for punishment of other offences?Correct AnswerSection 22 provides for the provision , Punishable with fine , Rs 500 fine

Select The BlankQuestionRBI in consultation with ________ regulates the capital transactions.Correct AnswerCentral govt.



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QuestionBoard may by resolution passed at the meeting delegate the powers to :-Correct AnswerCommittee of directors , Managing director , Manager

True/FalseQuestionWages does not include any gratuity payable on discharge.Correct AnswerTrue

Multiple Choice Single AnswerQuestionIn each board meeting director is paid by remuneration, which is known as :-Correct Answer

Sitting fees

True/FalseQuestion

An independent director is an executive of a company in the immediately preceding 3financial years of the company.Correct AnswerFalse


After incorporation of the company, the first auditor is generally appointed within :-Correct AnswerOne Month

True/FalseQuestionDeductions for income tax, payable by the employed person is permissible.Correct AnswerTrue

Legal Aspects of Finance - 2Multiple Choice Single AnswerQuestionPayment of wages act came into existence :-Correct AnswerTo ensure regular and timely payment of wages to employed persons


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Multiple Choice Single AnswerQuestionIn which case did the Bombay high court observe the general purpose of the act?Correct Answer

Arvind mills ltd case


Any payment in respect on ________ can be deducted from the wages of an employedperson.Correct AnswerFidelity guarantee bond

True/False

QuestionDeductions for income tax, payable by the employed person is permissible.Correct AnswerTrueMultiple Choice Single AnswerQuestionThe responsibility of placing the annual accounts before the AGM is onCorrect AnswerBoard of Directors


Accounting Standards are issued by :-Correct AnswerInstitute of Chartered Accountants

Multiple Choice Single AnswerQuestionSingle director can sign the annual accounts if :-Correct Answer

Only one director in India for the time being

Multiple Choice Multiple AnswerQuestionThe annual accounts of the company are signed on behalf of the Board by :-Correct AnswerManaging director , Two Directors , Company Secretary


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Multiple Choice Multiple AnswerQuestionBooks of account with respect to following are required to be kept :-Correct AnswerMoney received & expended , Sales & purchases of goods , Assets & liabilities

Multiple Choice Multiple AnswerQuestionFollowing have the right to inspect books of account :-Correct Answer

Any Director of the company , Officer of SEBI (if authorised) , Authorised officer ofGovernment

Multiple Choice Multiple AnswerQuestionDirectors' Responsibility Statement refers to :-Correct AnswerGoing concern , Accounting policies , Accounting standards

Select The BlankQuestionIt is advisable to close the financial year on ________.Correct Answer31st March


________ of the company has a right to take inspection of the books of account.Correct Answer

Any Director

Select The BlankQuestionCopies of annual accounts are to be filed within ________ days from AGM with ROC.

Correct Answer30 days


________ of the company has absolute discretion in regard to inclusion or non inclusion ofany matter in the minutes.Correct Answer


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Chairman

True/FalseQuestionStatutory Meeting must be held on a working day.Correct AnswerFalse


Any contract or arrangement in which director is interested has to be recorded in :-Correct AnswerRegister of contracts

Multiple Choice Single AnswerQuestionThe notice of the meeting be sent to all the directors at their :-Correct AnswerUsual residential address


A person can not be appointed as managing or whole time director in more than :-Correct AnswerTwo companies

Multiple Choice Multiple AnswerQuestionDirector can be appointed without counting the number in :-Correct AnswerPrivate limited company , Unlimited company , Charitable association

Select The BlankQuestionDirector can cease to be a director, if he is absent himself from ________ consecutivemeetings.Correct AnswerThree

Select The Blank


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QuestionDirector has to vacate his office, if he has been ________ by a court of any offenceinvolving moral turpitude.Correct AnswerConvicted

True/FalseQuestionOnly individuals can be appointed as directors of the company.Correct AnswerTrue

Multiple Choice Single AnswerQuestionTo safeguard the interest of the company or its shareholders or the public interest, the

central government, may appoint such number of person as directors to hold office for aperiod not exceeding :-Correct Answer3 years

Multiple Choice Multiple AnswerQuestionIn calculating the limit of all the companies which companies are excluded?Correct AnswerForeign companies , Private Companies , Non Profit making companies

Multiple Choice Multiple AnswerQuestionWhich committees are considered for calculating the limit of the companiesCorrect Answer

Audit committees , Remuneration Committee , Shareholders Grievance Committee

Multiple Choice Multiple AnswerQuestionWhat are the powers of the audit committee?Correct Answer

To investigate any activity within its terms of reference , To seek information from anyemployee , To obtain outside legal or professional advice

Select The BlankQuestionThe management should clearly disclose ________ in auditors reportCorrect Answer


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Contingent liabilities

Select The BlankQuestionWhen a money is raised through ________ it shall disclose to the audit committee.Correct AnswerInitial public offering

True/FalseQuestionMeeting of the board of Directors shall be held at least 4 times in a year.Correct AnswerTrue

True/FalseQuestion

Every company shall have a qualified and independent audit committee.Correct AnswerTrue

True/FalseQuestionDebenture holders are creditors of the company.Correct AnswerTrue

Multiple Choice Multiple AnswerQuestionThe penalties are levied for which offences done?Correct AnswerPay less than minimum wages , Pay less than fixed wages , Contravenes any rule or order


________means all remuneration expressed in terms of money.Correct AnswerWages

Select The BlankQuestionThe minimum wages act came in force in the year________.Correct Answer1948

True/False


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QuestionThe act is undoubtedly a welfare legislation in favour of workers and more than an essentialmeasure for economic upliftment of the workers in the sweated industries.Correct AnswerTrue

Multiple Choice Single AnswerQuestionCap on investment by person resident outside India, for Housing & Real Estate Sector is :-Correct Answer1

True/FalseQuestionSectoral cap on investment by person resident outside India on Mass rapid Transport is

50%.Correct AnswerFalse

Multiple Choice Single AnswerQuestionLong - term borrowings schemes have which maturity period?Correct AnswerEight years

Multiple Choice Multiple AnswerQuestionConditions on borrowings by PIO are :-Correct AnswerNon-repatriation basis , Loan by inward remittance , Account by lender in IndiaNon-repatriation basis , Loan by inward remittance , Account by lender in India

True/FalseQuestionOwned foreign exchange is not permitted.Correct Answer

False


WOS


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Royalty payment

Technical collaborationForeign companies

Automatic routeRBI

Royalty continuationShare holding

Multiple Choice Single AnswerQuestionIn which of the companies the bonus act is applicable?Correct Answer

More than 20 persons employed


salarydoes not include travelling concession

public sector establishmentestablishment owned by government

interim and final determination of an industrial disputeaward

sallocable surplus67% surplus in the accounting year

True/FalseQuestionCompany can not issue shares with differential voting/ dividend rights.Correct AnswerFalse

Multiple Choice Single AnswerQuestionIf there is any delay in filing Form- 8 &13 beyond 60 days from the execution of documentsfor the creation of charge, the company has to make petition to :-Correct Answer


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Company Law Board

Multiple Choice Multiple AnswerQuestionCompany can take loan from :-Correct AnswerBanks , Financial Institutions , Debenture HoldersYour Answer

Legal Aspects of Finance - 1PART - I

Q.1 Explain the deductions which are authorized under the payment of wages Act, 1936.

Ans DEDUCTIONS FROM WAGES

According to section 7(1) every payment made by the employed person to the employer or

his agent shall be deemed to be a deduction from wages. Deductions authorized as persection 7(2) can be made from the wages. The list of the deduction are as under a) Finesb) Deduction for absence from dutyc) Deduction for damage to or loss of goods or loss of moneyd) Deduction for house accommodatione) Deduction for the amenities and servicesf) Deduction for recovery of advancesg) Deduction for recovery of loansh) Deduction for income taxi) Deduction under the order of a Court of authority

j) Deduction in respect of provident fundk) Deduction for payment to company-operative societies.l) Deduction for payment to a Scheme of Insurance of a Post officem) Deduction for payment of Life Insurance Premium.n) Deduction for the purchase of Government Securities.o) Deduction for payment to post office saving bank.p) Deduction for payment of contribution to certain funds.q) Deduction for payment of certain feesr) Deduction in respect of fidelity guarantee bond.s) Deduction for certain losses incase of railway administrationt) Deductions for payment to Prime Ministers National relief fund or any other fundu) Deductions for contribution to insurance scheme.

The total amount of all categories of deduction from the wages of any employed person, inany wage period, should not exceed the following limits prescribed by section 7(3).1) 75% of the wages payable in case where such deductions are wholly or partly made forpayments to company-operative societies under section 7(2)(i) of the Act.2) 50% of the wages payable in any other case-provided that where the total deductions authorized exceed 75% or as the case may be,50% of the wages the excess may be recovered in such manner as may be prescribed.


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Brief discussion on the above list of deductions are as under:-a) Fines Deductions by way of fine from the wages of an employed person shall be madeonly in accordance the provision of the Act. Section 8 lays down the general requirementsfor imposition and deduction of fine. The total amount of fine which may be imposed in anywage period on any employed person shall not exceed an amount equal to three percent ofthe wages payable to him in respect of the wage period. No fine shall be imposed on anyemployed person who is under the age of fifteen years. No fine imposed on any personshall be recovered from him by installments or after the expiry if sixty days from the day onwhich it was imposed. Every fine shall be deemed to have been imposed on the day of theact or omission in respect of which it was imposed. All realizations of fines shall be appliedonly to such purposes beneficial to the persons employed in the factory or establishmentsas are approved by the prescribed authority.b) Deduction for absence from duty Section 9 of the Act lays down that any suchdeductions may be made on account of the absence of employed person from the place orplaces where, by the terms of the employment, he is required to work. It is further providedthat such absence may be for the whole or any part of the period during which he is so

required to work. An employed person shall be deemed to be absent from the place wherehe required to work if, although present in such place, he refuses to carry out his work inpursuance of stay in strike or for any other cause which is not reasonable in thecircumstances. The amount of such deductions must bear to his wages the same proportionas his absence bears to the total within the wage period during which he was by the termsof his employment required to work.c) Deductions for damages to or loss of goods or loss of money Clause (C) of security 7(2) authorizes deduction for damage to or loss of goods expressly entrusted to theemployed persons for custody or for loss of money for which he is required to account,where such damage or loss is directly attributable to his neglect or default.d) Deduction for house accommodation supplied by the employer or by Government or anyhousing board set up under any law for the time being in force (whether the Government orthe board is the employer or not) or any other authority engaged in the business ofsubsidizing house accommodation which may be specified in this behalf by the stategovernment by notification in the official gazette.e) Deduction for the amenities and services supplied by the employer as the StateGovernment or any officer specified by it in this behalf may be general or special order,authorize.f) Deductions for recovery of advances of whatever nature (including advances for travellingallowance or conveyance allowance) and the interest due in respect thereof, or foradjustment of over payments of wages.g) Deduction for recovery of loans made from any fund constituted for the welfare of labourin accordance with the rules approved by the State Government, and the interest due in

respect thereof.h) Deduction for income tax payable by the employed person is permissible. It is the duty ofthe employer to deduct the income tax payable by the employee, subject to certainexceptions, and deposit the same in the account of the Government.i) Deductions from wages can be made under the order of a Court or other Authoritycompetent to make such order. The authority referred here is the Statutory Authority,authorized by some statutory provisions. Thus, a Private Roadways co. is not competentauthority to make order for the deductions of wages. Every employer is not authority, even


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where an employee agrees to the deductions to be made by the employer, the employerdoes not become an authority and therefore would not get benefit of this provision.

j) Deductions in respect of provident fund- an employed person may contribute to a schemeof provident fund. He may also be granted advance form such provident fund.k) Deductions for payment to co-operative societies Deductions for any payment to Co-operative societies is allowed under following conditions given in section 7 (2) (j) read withsection 13.1. the cooperative society is approved by the State Government or any official specified by itin this behalf.2. this deductions are in conformity with rules laid down by the State Government in thisrespect.

l) Deductions for payments to a scheme of insurance maintained by the Indian post office, isallowed under Section 7(2) (j), provided deductions are made subject to such conditions asthe State Government may impose under section 13.m) Deductions can be made for payment of any premium to the life insurance corporation ofIndia, on the life insurance policy of the employed person. But the deduction is subject to

following conditionsi) It shall be made only after obtaining written authorization of the employed person.ii) If the state Government has imposed any condition, no conditions can be made unlessthese conditions are complied with (section 13).n) Deductions are allowed for the purchase of securities of:i) The Government of India, orii) Any state Government

o) Section 7(2) authorizes deduction for being deposited in any post office saving bank infurtherance of any savings scheme of central or any State Government.p) Deductions for payment of contribution to certain funds Deductions can be made withthe written authorization of the employed person, for the payment of his contribution to anyfund constituted by the employer or a trade union registered under the Trade Union Act,1926 for the welfare of the employed persons or the members of their families or both, andapproved by the State Government or any officer specified by it in this behalf, during thecontinuance of such approval.q) Deductions for payment of certain fees Deductions can be made, with the writtenauthorization of the employed person, for payment of the fees payable by him formembership of any trade union registered under the Trade Union Act, 1926.r) Deductions in respect of Fidelity Guaranteed Bond Any payment of Insurance premiumof fidelity Guarantee Bond can be deducted from the wages of an employed person.s) Deductions can be made from the wages of a person employed in a railwayadministration for the recovery of losses sustained by a railway administration.

t) Deductions can be made with the written authorization of the employed person, forcontribution to the Prime Ministers National Relief Fund or to such other fund as the CentralGovernment may, by notification in the official gazette, specify.u) Deductions for contributions to Insurance scheme Deductions can be made forcontributions to any insurance scheme framed by the Central Government by the benefit ofits employees.


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Q.2 Define an Accident as given in the workmens Compensation Act, 1923. When it issaid to arise out of and in the course of an employment?

Ans ACCIDENTThe word Accident has not been defined in the Act. It means any unexpected mishap,untoward event or consequences brought about by an unanticipated act which could not beprovided against. Whether particular occurrence is accident or not it must be looked uponnot only from the point of view of the person who cause it but also from the point of view ofthe person who suffers it.

ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT:The expression arising out of suggests the cause of accident and the expression in thecourse of points out to the place and circumstances under which the accident takes placeand the time when it occurred. A Casual connection between the injury by accident and the

employment is necessary. The direct connection between the injury caused by an accidentand the employment of the workman is always not essential. The words arising out ofemployment are understood to mean that during the course of the employment injury hasresulted from some risk incidental to the duties of the service which unless engaged in theduty owing to the master it is reasonable to believe the workman would not otherwise havesuffered. The employee mush show that he was at the time of injury engaged in theemployers business or in furthering that business and was not doing something for his ownbenefit. In the course of employment refers to the period of the employment and the placeof work it is neither limited to the period of actual labour not includes acts necessitated bythe workmans employment. The employee mush show that he was doing something indischarge of a duty to his employer directly or indirectly imposed upon him by his contract ofservice.

In State of Rajasthan V Ram Prasad and another the workman died due to naturallightening while working at the site. It was held by the Supreme Court that in order thatworkman may succeed in his claim for compensation, it is no doubt true that the accidentmust have casual connection with the employment and arise out of it but if the workman isinjured as a result of natural force of lightening though it in itself has no connection withemployment of deceased Smt. Gita, the employer can still be held liable if the claimantshows that the employment exposed the deceased to such injury. In the present case thedeceased was working on the site and would not have been exposed to such hazard oflightening had she not been working so. Therefore the appellant was held liable to paycompensation.

Q.5.a) Gratuity when becomes payable?b) Who are entitled for payment of Gratuity?


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Ansa) When is Gratuity payable? :By Virtue of Section 4(1), Gratuity shall be payable to an employee on the termination of hisemployment after he has rendered continuous service for not less than five years-i) On his superannuation orii) On his retirement or resignation oriii) On his death or disablement due to accident or disease

It has been provided that the completion of continuous service of five years shall not benecessary where the termination of the employment of any employee is due to death ordisablement.

b) Who are entitled for payment of Gratuity?It is payable to the employee himself but in the case of the death of the employee, gratuitypayable to him shall be paid to his nominee or if no nomination has been made, to his heirsand where any such nominees or heirs is a minor, same for the benefit of such minor in

such bank or other financial institution, as may be prescribed until such minor attainsmajority.

Q.4 What is procedure for determination and recovery of dues from employer under theemployees provident fund and miscellaneous provision act?

Ans MODE OF RECOVERY OF MONEYS DUE FROM EMPLOYERSTo invoke section 8 of the Act, the employer must be under a legal liability to transfer theassets. An amount due may, if the amount is in arrear, be recovered in the mannerspecified in Section 8-B to 8-G. Recovery may be made from the employer in relation to anestablishment to which any scheme or, the Insurance scheme applies of any amount lyingin arrear in respect of the following:

1) Any contribution payable to the fund or as the case may be, the Insurance Fund; or2) Accumulations in any provident fund standing to the credit of the employees who becomemembers of the Fund or, as the case may be the Insurance fund established under theScheme or, the Insurance Scheme; or3) Accumulations to the credit of an employee exempted under section 17(1), 17(1-A) and17(2) of the Act; or4) Damages recoverable under Section 14-B; i.e., for default in the payment of any

contribution to the fund, family pension fund or the insurance fund or in the transfer ofaccumulation in any provident fund or in the transfer of accumulations to the credit of anemployee exempted under section 17(1), 17(1-A) and 17(2) of the Act; or5) Damages recoverable under section 14-B for default in the payment of any chargespayable under other provision of this Act or the scheme or the Insurance Scheme or underany of the conditions specified under section 17 of the Act.6) Any charges payable by the employer under any other provisions of the Act or scheme orthe Insurance Scheme.


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Similarly recovery may also be made, in the manner specified in Section 8-B to 8-G from anemployer in relation to an exempted establishment, of any amount remaining in arrear inrespect of the following:1) Damages recoverable under section14-B, as stated above in paras 4 and 5 of thissection.2) Any charges payable by the employer to the Appropriate Government under anyprovisions of this Act or under any of the conditions specified under section 17 or in respectof the contribution payable by him towards the Family Pension Scheme under the saidSection 17.

But for the collection of any arrears the Provident Fund Commissioner must send therecovery certificate to the collector of the district or the place where his office is situated.The collector and not the Provident Fund Commissioner shall send the recovery certificateto the collector of another district. In a proceeding to recover the employers contribution,the property of the employer attached by the court, subject only to the burden of the entiremortgage held by the Bank, notwithstanding the fact that the demand in respect of the

employers contribution amount of the employers contribution has not been determined, noproceedings for recovery can be taken under this section.

Q.6. What are the different kinds of benefits provided under the employees State InsuranceAct, 1948, discuss in brief.Ans BENEFITSSection 46 lays down the following benefits admissible to the insured persons on theirdependents on other persons as mentioned.a) Sickness benefits b) Maternity benefits c) Disablement benefits d) Dependents benefits e) Medical benefits f) Funeral Expenses

Brief discussions on above benefits are as under:a) Sickness Benefit:In terms of section 46(1)(a) Sickness benefits include, periodical payment to any insuredperson in case of his sickness certified by a duly appointed medical petitioner or any personpossessing prescribed qualifications, the sickness benefits shall be admissible at the rate

specified in the Schedule, but he shall not be entitled to the benefit for the first two days ofsickness. In the case of a spell of sickness following at an interval of not more than 15 days,the spell of sickness benefit was last paid. The sickness benefit shall not be paid to anyperson for more than 91 days in any two consecutive benefits periods.

b) Maternity Benefit:In terms of Section 46(1) (b), it includes periodical payment to an insured woman in case ofconfinement or miscarriage or sickness arising out of pregnancy, confinement, premature


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birth of child or miscarriage. Such women will be certified to be eligible for such payment byan authority specified in this behalf by the regulations.

c) Disablement Benefit:Sec 46 (1) (c) includes periodical payment to an insured person suffering from disablementas a result of an employment injury, sustained as an employee under this act and certifiedto be eligible for such payments by an authority specified in this behalf by the regulations. Aperson shall be qualified to claim benefits for temporary disablement for not less than 3days (excluding the day of accident) for the period of such disablement sustained as anemployee under the act. A person shall be qualified to claim periodical payment forpermanent disablement sustained as an employee under the Act, whether total or partial forsuch disablement. Sec 51, 51 A, 51 B, 51 C, 51 D and 52 A deal with the disablementbenefits.

d) Dependent Benefits:In terms of Sec 46 (1)(d), it includes periodical payments to such dependent of an insuredperson who dies as a result of an employment injury sustained as an employee under this

act. Section 52 provides for the payment of these benefit to the dependent of the deceasedperson, if an insured person dies as a result of an employment injury, sustained as anemployee under this act.

e) Medical Benefits:In terms of Sec 46(1)(e), it includes medical treatment for insured person or his dependents.Sec 56 provides that an insure person or a member of his family, whose conditions requiresmedical treatment and attendance shall be entitled to receive medical benefits. Suchmedical benefit may be given either in the form of out patient treatment and attendance in ahospital or dispensary, clinic or other institutions or by visits to home of the insure person ortreatment as in-patient in hospital or other institutions.

f) Funeral Expenses:Sec 46(1)(f) provides for funeral benefits to the eldest surviving member of the family of aninsured person, who had died, towards the expenditure on the funeral of the diseasedinsured person or where the insured person did not have a family or was not living with hisfamily at the time of his death to the person who actually incurs the expenditure on thefuneral of the diseased insured person, provided that the amount of such payments shallnot exceed Rs. 2500 and the claim for such payment shall be made within three months ofdeath of the insured person or with such extended period as the corporation or any officer,or authority authorized by it in this behalf may allow.


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PART II

Q.1. What is the procedure for the incorporation of the company?

Ans STEPS FOR INFORPORATION OF THE COMPANYIn order to register a company under Indian Companies Act the promoter of a company hasto make an application for availability of name by suggesting four names. The name should

indicate the activity of the company and has to mention the main object to be pursued bythe company on its incorporation. The applicant has to give the names of two subscribers incase of private companies and names of seven subscribers in public companies. In theapplication form the proposed authorized capital in case of Private company should beminimum rupees one lakh and in case of Public company it should be minimum rupees fivelakh. The application for availability of name should be in a Form 1A. Once registrar ofcompanies approves the name the papers for incorporation of company should be filedwithin six months for the date of issue of letter.

1) The promoters of the company have to prepare Memorandum of Association and Articlesof association of the company. In the memorandum of Association of the company theobject clauses of the company are divided into three categories;a) Main object to be pursued by the company on its incorporationb) Object incidental or ancillary to the attainment of main objectc) Other objects

In the MOA the company has to state that the liability of the members is limited and has tomention the Authorised capita of the company and the division of the Authorised capital.The MOA spells out the activities, which the company is Authorised, to do and the companycannot start any activity, which is outside the scope of MOA.

2) ARTICLES OF ASSOCIATION (AOA)The AOA of the company spells out the rules for the internal management of the company

such as shares, transfer of shares, board of Directors, procedure for Board meeting,borrowing powers of the company, meetings of the shareholders and procedure for holdingthe meeting of shareholders and the board.

3) At the time incorporation of the company the promoter of the company has to submit twoprinted copies of MOA and AOA duly signed and stamped by the subscribers along withForm 1, 18, 32 and 29 in case of public company.


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Q.2 What are the requirements for holding Annual General Meeting and Extra OrdinaryAnnual General Meeting?Ans Annual General Meeting: Every company has to hold in each year a general meetingcalled Annual General Meeting of the shareholders in addition to other meetings. Thereshould not be a gap of more than 15 months between two Annual General Meeting and the

Annual General Meeting must be convened on a working day and during the businesshours of the company. It should be held within 6 months from the closure of the financialyear.

The first Annual General Meeting of the company should be held within 18 months from thedate of incorporation of the company and within 9 months from the closure of the financialyear.

Annual General Meeting is considered for transacting the following ordinary business:a. To receive, consider and adopt the accounts of the company and the directors report andauditors report theron.b. Declaration of dividend if any.c. Re-appointment of directors retiring by rotation.d. Appointment of auditor and to fix their remuneration.

Any other business to be transacted at the Annual General Meeting is called a specialbusiness and the company has to give explanatory statement for passing special business.

Annual General Meeting should be held within the city, town or village where the registeredoffice of the company is situated and should be held within municipal limit or postal limitwhichever is greater.

If default is made in holding a Annual General Meeting the company and every officer of thecompany who is in default shall be punishable with a fine, which may extend to Rs. 50,000and in case of continuing default with a further fine which may extend to Rs. 2,500 for everyday after the first during which such default continues.

Extra Ordinary Annual General Meeting:Any general meeting other than the Annual General Meeting is called as the Extra OrdinaryAnnual General Meeting. When approval of shareholders is required for certain businessthat cannot be kept pending till the date of the ensuing Annual General Meeting. An Extra

Ordinary Annual General Meeting is convened the businesses transacted at the ExtraOrdinary Annual General Meeting are generally special businesses and the resolutions tobe passed are either special or ordinary resolution. Extra Ordinary Annual General Meetingcan be held at any place and not like the Annual General Meeting that can be held only atthe place where the registered office of the company is situated. The Directors on their ownor on requisition from the shareholders can convened Extra Ordinary Annual GeneralMeeting.


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If the company has received a requisition from the shareholders for calling Extra OrdinaryAnnual General Meeting to transact certain business, the Board of Directors of the companyhas to convene the meeting for transacting the business as per the requisition within twenty-one days from the date of requisition. If the Board of Directors fails to convene the ExtraOrdinary Annual General Meeting within forty-five days from the date of requisition and areentitled to be reimbursed the expenses incurred for calling Extra Ordinary Annual GeneralMeeting.

Q.7 What are the committees required to be formed under Corporate Governance and theirfunctions?

Ans1. Audit Committee: Every company shall have a qualified and independent audit committeeand shall comply the following:

a) The Audit committee shall have minimum three members and all the members shall benon-executive director with the majority of them being independent.b) All the members of the audit committee shall be financially literate and atleast onemember shall have accounting or related financial management expertise. The financiallyliterate means ability to read and understand basic financial statement i.e. balance sheet,profit and loss account and cash flow statement.

A member shall be considered to have accounting or related financial managementexpertise if he or she possesses experience in finance or accounting, or requisiteprofessional certification in accounting, or any other comparable experience or backgroundwhich results in the individuals financial sophistication, including being or having been achief executive officer, chief financial officer or other senior officer with financial oversightresponsibilities.

c) The chairman of the committee shall be an independent director.d) The chairman shall be present at Annual General Meeting to answer shareholderqueries.e) The audit committee should invite such of the executives, as it considers appropriate tobe present at the meetings of the committee, but on occasions it may also meet without thepresence of any executives of the company.f) The company secretary shall be the secretary of the committee.

ROLE OF AUDIT COMMITTEE:

a) Oversight of the companys financial reporting process and the disclosure of its financialinformation to ensure that the financial statement is correct, sufficient and credible.b) Recommending the appointment and removal of external auditor, fixation of audit fee andalso approval for payment for any other services.c) Reviewing with management the annual financial statements before submission to theboard, focusing primarily on;i. Any changes in accounting policies and practices.ii. Major accounting entries based on exercise of judgment by management.


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iii. Qualification in draft audit report.iv. Significant adjustments arising out of audit.v. The going concern assumption.vi. Compliance with accounting standards.vii. Compliance with stock exchange and legal requirements concerning financialstatements.viii. Any related party transactions.

d) Reviewing with the management, external and internal auditors, the adequacy of internalcontrol systems.e) Reviewing the adequacy of internal audit function, including the structure jof the internalaudit department, staffing and ip; olikkiosleniority of the official heading the department,reporting structure coverage and frequency of internal audit.f) Discussion with internal auditors any significant findings and follow up thereon.g) Reviewing the findings of any internal investigations by the internal auditors in to matterswhere there is suspected fraud or irregularity or a failure of internal control systems of amaterial nature and reporting the matter to the board.

h) Discussion with external auditors before the audit commences about nature and scope ofaudit as well as post-audit discussion to ascertain any area of concern.i) Reviewing the companys financial and risk management policies.

j) To look in to the reasons for substantial defaults in the payment to the depositors,debenture holders, shareholders and creditors.

2. Shareholders Committee:Name of non-executive director heading the committee.Name and designation of compliance officer.Number of shareholders complaints received so far.Number not solved to the satisfaction of shareholders.Number of pending share transfers.

3. Remuneration Committee:Brief description of terms of referenceComposition, name of members and Chairperson

Attendance during the year.Remuneration policy.Details of remuneration to all the directors as per format in main report.

Q.6 Whether charge is to be registered with the Registrar of Companies of loan granted tothe company? And if the charge is not registered, what is the position of the lender?

Ans REGISTRATION OF CHARGESEvery company taking loan from the banks or financial institutions has to create a charge onthe assets of the company in favour of the banks or the lending institute. The necessary


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Form 8 & 13 for creation of charge along with the certified copy of the charged documenti.e. Hypothecation Deed or Term Loan Agreement should be signed by both the companyand the chargeholder/lender and filed with Registrar of Companies. The form should be filedwithin 30 days from the date of execution of the document with registrar of companies.However with additional fees the Registrar of Companies has power to accept the Formwithin further period of 30 days. This forms 8 & 13 should be filed in triplicate.

After receipt of this form the Registrar of Companies take on record and register thecharges and return 2 (two) copies of the same form one for the company and other for thechargeholder.

If there is any delay in filing Form 8 & 13 beyond 60 days from the execution of domumentfor creation of charge, the company has to make a petition to the company law board forcondonation of delay. Usually when a Form is filed by the company with Registrar ofcompanies after 60 ddays from the date jof execution of the document the Registrar ofcompanies issues a notice to the company requesting to make a petition to the companylaw board for condonation of delay in filing the form. The company law board after hearing

the petiton passes an order in regard to condonation of delay.

Q.5 Who can apply to the High Court for oppression and mismanagement of the companyand what steps he has to take before filing petition before the High Court?

Ans Application to Company law Board for relief in cases of oppression:

Any member of the company who complain that the affairs of the company are beingconducted in a manner prejudicial to public interest or in any manner oppressive to anymember or members may apply to the company law board for an order provided suchmembers have right to apply.

If on any application the company law board is of the opiniona) that the companys affairs are being conducted in a manner prejudicial to public interestor in any manner oppressive to any member or members; andb) that to wind up the company would unfairly prejudice such member or members, but thatotherwise the facts would justify the making of a winding up order on the ground that it was

just and equitable that the company should be wound up; the company law board may, witha view to bringing to an end the matters complained of, make such order as it thinks fit.

Application to company law board for relief in cases of mismanagement:1) Any members of a company who complain:a) that the companys affairs are being conducted in a manner prejudicial to public interestor in any manner prejudicial to the interests of the company; orb) that a material change not being a change brought about by or in the interests of any


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creditors including debentureholders or any shareholders of the company has taken place int he management or control of the company whether by an alteration in its Board ofDirectors or in the ownership of the companys shares, or if it has no share capital, in itsmembership, or in any other manner and that by reason of such change, it is likely that theaffairs of the company will be conducted in a manner prejudicial to public interest or in anymanner prejudicial to the interests of the company ; may apply to the company law board foran order.

2) If on any application the company law board is of the opinion that the affairs of thecompany are being conducted as aforesaid any, with a view to bringing to an end orpreventing the matters complained of, make such order as it thinks fit.

Right to applyA member of the company shall have right to apply to the company law board foroppression and mismanagement of the company provided application is made by membersnot less than 100 or by the members holding not les than one tenth of the total number ofshare in the share capital of the company and in the case fof a company not having share

capital not less than one tenth of the total number of its member and the application can bemade by any one or more of its members having obtained consent in writing of the rest tomake an application on their behalf and for their benefit.

On the receipt of application the company law board hears both the companies as well aspetitioner and gives the suitable order to the company on the issue of oppression andmismanagement of the company. In the case of urgency the company law board passes aninterim order before passing final order for regularizing the conduct of the companys affairsupon such terms and conditions.

The Central Government may appoint such number of persons as the company law boardmay by order in writing specify as be necessary to effectively safeguard the interest of thecompany or its shareholders or the public interest to hold office as directors thereof for suchperiod not exceeding 3 years on any occasion as it may think fit.

Q.3 What are the limits for inter-corporate investments and loans and upto what extent

board has power to make investments and grant loans?Ans Inter-Corporate Investments And LoansNo company shall, directly or indirectly;a) make any loan to any other body corporateb) give any guarantee, or provide security, in connection with a loan made by any otherperson to, or to any other person, by any body corporate andc) acquire by way of subscription, purchase or otherwise the securities of any other bodycorporate, exceeding sixty percent of its paid-up share capital and free reserves, or hundred


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percent of its free reserves, whichever is more.

Provided that where the aggregate of the loans and investments so far made, the amountsfor which guarantee or security so far provided to or in all other bodies corporate, along withthe investment, loan, guarantee or security proposed to be made or given by the board,exceeds the aforesaid limits, no investment or loan shall be made or guarantee shall begiven or security shall be provided unless previously authorized by a special resolutionpassed in a general meeting.

No loan or investment shall be made or guarantee given by the company unless theresolution is passed at the meeting by the board with the consent of all the directors presentat the meeting and if there is any term loan subsisting with the prior approval of the financialinstitution.The loan to any body corporate shall be made at the rate of interest not less than thatprevailing bank rate as may be prescribed by the Reserve Bank of India from time to time. Ifthe company has made default for the payment of interest or repayment of deposit to thedeposit holder then it cannot give loan to anybody corporate or give guarantee or provide

security to any person or to make investment in the shares of any other company. Everycompany shall keep a register showing the following particulars in respect of everyinvestment or loan made, guarantee given or security provided.



Question

Director can be appointed without counting the number in :-

Correct Answer

Private limited company , Unlimited company , Charitable association

Your Answer

Unlimited company , Charitable association


Question

Who is entitled to bonus?

Correct Answer

Temporary workmen , Part time employee , Retrenched employee

Your Answer

Temporary workmen , Part time employee , Retrenched employee

True/False

Question

Payment to a scheme of insurance of a post office is not a deduction.

Correct Answer

False

Your Answer

True

True/False

Question

Deductions for income tax, payable by the employed person is permissible.

Correct Answer

True

Your Answer

True

Select The Blank


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Question

RBI in consultation with ________ regulates the capital transactions.

Correct Answer

Central govt.

Your Answer

Central govt.

Multiple Choice Multiple AnswerQuestion

Company can take loan from :-

Correct Answer

Banks , Financial Institutions , Debenture Holders

Your Answer

Banks , Financial Institutions , Debenture Holders


Question

Who is empowered to specify the Foreign Exchange transactions limits under

FEMA?

Correct Answer

Reserve Bank of India

Your AnswerExchange Control Board

Select The Blank

Question

The minimum wages act came in force in the year________.

Correct Answer

1948

Your Answer

1948

Select The Blank

Question

Under section ________ period in respect of which wages would be paid would be

determined.

Correct Answer3

Your Answer

5

Select The Blank

Question

________ includes legal representative of deceased employer.

Correct Answer

Employer

Your Answer

Employer


Question

For which activity FDI is not prohibited?Correct Answer

Insurance

Your Answer

Insurance


Question

Following Resolutions must be passed by Postal Ballot :-

Correct Answer


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Alteration in Object Clause , Buy-back of own shares , Variation in rights attached

to class of shares

Your Answer

Alteration in Object Clause , Buy-back of own shares

Select The Blank

Question

It is the primary ________ of the company to file the documets of creation ofcharge.

Correct Answer

Responsibility

Your Answer

Responsibility

Select The Blank

Question

It is advisable to close the financial year on ________.

Correct Answer

31st March

Your Answer

31st March


If an auditor after his appointment becomes subject to any of the disqualifications, it

is treated that the office is :-

Correct Answer

Vacated

Your Answer

Vacated


Question

Boards Report shall include :-

Correct Answer

Dividend recommended , Financial position of the company , Amounts transferred

to ReservesYour Answer

Dividend recommended , Taxes paid , Financial position of the company

Match The Following

Question

Correct Answer

Your Answer

Internal auditor

Employee of the company

Doing legal things

Insolvent

A person who is not in a position to pay his dues

A person who is not in a position to pay his dues

Moral turpitudeDoing immoral things

Doing immoral things

Call on share

Demand of remaining part of share capital value

Demand of remaining part of share capital value

Select The Blank

Question

For Special Resolution, votes cast in favour of the resolution should be ________


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times more than votes cast against the resolution.

Correct Answer

3

Your Answer

3

True/False

QuestionEvery company shall have a qualified and independent audit committee.

Correct Answer

True

Your Answer

True


Question

Who issues a certificate of compliance of conditions of corporate governance?

Correct Answer

Auditors or company secretaries

Your Answer

Registrar of companies

True/FalseQuestion

Wages includes the value of any house accommodation or supply of light and

water.

Correct Answer

False

Your Answer

False

True/False

Question

A temporary workman is not entitled to bonus though he works for a few days in the

organisation.

Correct Answer

FalseYour Answer

True


Question

Public limited companys directors have following conditions :-

Correct Answer

Minimum number is three , Should be individuals , Have sound mind

Your Answer

Minimum number is three , Should be individuals , Have sound mind

True/False

Question

Debenture holders are creditors of the company.

Correct AnswerTrue

Your Answer

True

True/False

Question

Any gratuity payable on termination of employment is included in wages.

Correct Answer

False


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Your Answer

False


Question

What is the optimum combination of Board of Directors?

Correct Answer

Managing Directors and SecretaryYour Answer

Executive and non executive Directors


Question

If date of incorporation is 1.1.2005, first AGM must be held before :-

Correct Answer

30.6.2006

Your Answer

30.6.2006

Match The Following

Question

Correct Answer

Your AnswerInterim Dividend

Board of Directors

Board of Directors

Shorter notice for AGM

Private Limited Company

ROC

Books of Account

Form 23AA

Registered Office

Accounting Standards

National Advisory Committee

Form 23AA

True/FalseQuestion

Wages includes any remuneration payable under any award or settlement between

the parties or order of court.

Correct Answer

True

Your Answer

True


Question

Present limit for giving details of employees in Directors Report is :-

Correct Answer

Rs. 2 lac p.m.

Your AnswerRs. 5 lac p.m.


Question

What is the role of the audit committee?

Correct Answer

Review the annual financial statements , Recommending and appointment of

external auditors , Reviewing the companys financial and risk management policies

Your Answer


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Review the annual financial statements , Recommending and appointment of

external auditors , Reviewing the companys financial and risk management policies


Question

What has the national labour omission described about passing of the act?

Correct Answer

Landmark in the history of labour legislation in the countryYour Answer

Landmark in the history of labour legislation in the country

Select The Blank

Question

As per section ________ it is obligatory on every person responsible for payment.

Correct Answer

4

Your Answer

2

True/False

Question

Financial year and calendar year are one and the same thing.

Correct AnswerFalse

Your Answer

False


Question

For public company, quorum for general meeting is :-

Correct Answer

5 members in person

Your Answer

5 members in person

True/False

Question

Only individuals can be appointed as directors of the company.Correct Answer

True

Your Answer

True


Question

FDI prohibited activities are :-

Correct Answer

Retail trading , Gambling & betting , Housing & real estate

Your Answer

Retail trading , Gambling & betting , Housing & real estate

Select The Blank

QuestionPreference shareholders have ________ to get dividend over equity share holders.

Correct Answer

Preferential right

Your Answer

Preferential right

True/False

Question

No person can be appointed as an auditor of the company who is in full time


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employment.

Correct Answer

True

Your Answer

True

True/False

QuestionAuthorized dealer is required to avail license under the exim policy in force.

Correct Answer

True

Your Answer

True

Select The Blank

Question

As per section 5 in case of railways if the persons employed is less than ________

the wages shall be paid before the expiry of 7th day.

Correct Answer

1000

Your Answer

1000Multiple Choice Single Answer

Question

As per section 3 who fixes the minimum rate of wages to be paid to the employees

?

Correct Answer

Appropriate government

Your Answer

Appropriate government


Question

Remittance completely prohibited on :-

Correct Answer

Dividend balancing , Telephone expanses , Interest on fundsYour Answer

Dividend balancing , Telephone expanses , Interest on funds

True/False

Question

Default in placing annual accounts before AGM may result in imprisonment.

Correct Answer

True

Your Answer

True


Question

A director of a company can be removed by :-

Correct AnswerOrdinary resolution

Your Answer

Ordinary resolution

True/False

Question

After completion of Ordinary business other business is transacted at Extra ordinary

General Meeting.

Correct Answer


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False

Your Answer

True

True/False

Question

Wages includes any travelling allowance for travel concession.

Correct AnswerFalse

Your Answer

False

Legal Aspects of Finance



Question

In which of the companies the bonus act is applicable?

Correct Answer

More than 20 persons employed

Your Answer

More than 20 persons employedSelect The Blank

Question

Authorized dealer may freely open ________ and allow remittance for

import of goods.

Correct Answer

Letter of credit

Your Answer

Letter of credit


Question

Which person is responsible for he payment of wages act ?

Correct Answer

ManagersYour Answer

Managers


Question

As per the provisions of Companies Act 1956, company can issue shares

with :-

Correct Answer

Differential voting rights

Your Answer

Differential voting rights


Question

To whom does the payment of wages act apply to ?Correct Answer

Persons employed in any factory

Your Answer

Persons employed in any factory


Question

What sums are deductible from gross profit under section 8?

Correct Answer


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Amount by way of depreciation , Employment rebate or investment

allowance , Direct tax

Your Answer

Amount by way of depreciation , Employment rebate or investment

allowance , Direct tax


QuestionWhat do you mean by wages?

Correct Answer

Remuneration by way of salaries , Allowances , Expressed in terms of

money

Your Answer

Remuneration by way of salaries , Allowances , Expressed in terms of

money


Question

What does an industrial or other establishment means as per section

2II?

Correct Answer

Tramway service or motor transport service engaged carryingpassengers of hire or reward , Dock wharf jetty , Plantation

Your Answer

Tramway service or motor transport service engaged carrying

passengers of hire or reward , Dock wharf jetty , Plantation

True/False

Question

A piece rated worker is entitled to bonus.

Correct Answer

True

Your Answer

True


Questions

Correct Answer

In 1936

Your Answer

In 1936


Question

No preference shares can be redeemed unless they are :-

Correct Answer

Fully paid up

Your Answer

Fully paid up


What do you mean by establishment on private sector?

Correct Answer

Any establishment other than public sector

Your Answer

Any establishment other than public sector


Question


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Person permanently resident in India can return foreign exchange by :-

Correct Answer

From AD , Travelling abroad , As a gift

Your Answer

From AD , Travelling abroad , As a gift

True/False

QuestionWages include any contribution paid by the employer to any pension

fund or provided fund.

Correct Answer

False

Your Answer

False


Question

ECB stands for :-

Correct Answer

External Commercial Borrowings

Your Answer

External Commercial BorrowingsMultiple Choice Single Answer

Question

Deductions are authorized under which section?

Correct Answer

Section 7(2)

Your Answer

Section 7(2)

Select The Blank

Question

Payment of ________ requires registration from RBI.

Correct Answer

Royalty

Your AnswerRoyalty


Question

Define an employed person under section 2 of the act.

Correct Answer

Includes legal representative of a deceased employed person

Your Answer

Includes legal representative of a deceased employed person


Question

Describe in brief what does the term wages include?

Correct Answer

Remuneration under any award , Settlement between the parties ororder of court , Overtime

Your Answer

Remuneration under any award , Overtime , Travelling allowance


Question

How can you compute available surplus under section 5?

Correct Answer

Gross profit less deductions , Direct tax calculated in accordance to


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provisions of section 7 in respect to amount equal to gross profits

of the employer for immediately preceding accounting year

Your Answer

Gross profit less deductions , Direct tax calculated in accordance to

provisions of section 7 in respect to amount equal to gross profits

of the employer for immediately preceding accounting year

True/FalseQuestion

Every company has to appoint an auditor to audit the accounts of the

company and has to fix remuneration to be paid to the auditor.

Correct Answer

True

Your Answer

True


Question

FEMA Norms are compatible with :-

Correct Answer

FERA

Your AnswerFERA

Match The Following

Question

Correct Answer

Your Answer

Section 2(vi)

Wages

Wages

Wages act

1936

1936

Factories act

19481948

Section 3 of wages act

Every employer responsible for payment to employed persons

Every employer responsible for payment to employed persons

Select The Blank

Question

The definition of ECB in India is partly in alignment with ________

Act.

Correct Answer

FERA

Your Answer

FERA


Articles of Association are rules for ________.

Correct Answer

Internal management

Your Answer

Internal management


Question


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Section 24 provides bar to entertain suits by the court for recovery

of wages in so far as the sum claimed falls within which of the

following categories :-

Correct Answer

For which any application claim has already been presented ,

Direction of claim already given , Amount adjudged is not due to

penaltyYour Answer

For which any application claim has already been presented ,

Direction of claim already given , Amount adjudged is not due to

penalty


Question

What is the minimum salary under which the persons are covered in

this act?

Correct Answer

Less than Rs 1600

Your Answer

Less than Rs 1600


________ of the company has a right to take inspection of the books

of account.

Correct Answer

Any Director

Your Answer

Any Director

True/False

Question

The minimum wages act came in force on 15 march 1968

Correct Answer

False

Your AnswerFalse

Select The Blank

Question

The recommendations of audit committee relating to financial

management shall be ________.

Correct Answer

Binding

Your Answer

Binding


Question

Who are governed by the payment of wages act?

Correct AnswerEmployed persons , Salary less than 1600 per month

Your Answer

Employed persons , Salary less than 1600 per month , Salary less than

1200 per month


Question

What do you mean by accounting year?

Correct Answer


45/189

Day on which books of accounts of the corporation are closed

Your Answer

Day on which books of accounts are open

True/False

Question

Directors Report may contain details/ state of affairs of its

subsidiaries.Correct Answer

True

Your Answer

True

True/False

Question

A part time worker as sweeper engaged in regular business is entitled

bonus.

Correct Answer

True

Your Answer

True


In which case did the Bombay high court observe the general purpose

of the act?

Correct Answer


Your Answer


Select The Blank

Question

First AGM should be held within ________ from closure of financial

year.

Correct Answer

9 monthsYour Answer

18 months


Question

Quorum required to hold a valid meeting can be prescribed in :-

Correct Answer

Articles of Association

Your Answer

Articles of Association

Select The Blank

Question

Private Company prohibits public to ________ for any shares.

Correct AnswerSubscribe

Your Answer

Subscribe


Question

Payment of wages act came into existence :-

Correct Answer

To ensure regular and timely payment of wages to employed persons


46/189

Your Answer

To ensure regular and timely payment of wages to employed persons

Match The Following

Question

Correct Answer

Your Answer

Interim DividendBoard of Directors

Board of Directors

Reduction of capital

Special Resolution

Special Resolution

Appointment of Managing Director

Ordinary Resolution

ROC

Accounting Standards



Select The Blank

QuestionFor making alterations before ROC, ________ is required.

Correct Answer

Power of Attorney

Your Answer

Resolution authorising alteration


Question

What is the main purpose of the payment of wages act 1936?

Correct Answer

Ensure payment of wages to the employed , Prevent unauthorised

deductions , Prevent arbitrary fines

Your Answer

Ensure payment of wages to the employed , Prevent unauthoriseddeductions , Prevent arbitrary fines

True/False

Question

Company can not issue shares with differential voting/ dividend

rights.

Correct Answer

False

Your Answer

False

True/False

Question

The Board has power to alter Articles of Association being internal

document.Correct Answer

False

Your Answer

True


Question

What is the board procedure ?

Correct Answer


47/189

Meeting to be held 4 times in a year , Should not be a gap of more

than 4 months between 2 meetings , Minimum information should be made

available

Your Answer

Meeting to be held 4 times in a year , Should not be a gap of more

than 4 months between 2 meetings , Minimum information should be made

availableMultiple Choice Single Answer

Question

When was the factories act passed?

Correct Answer

In 1948

Your Answer

In 1948

True/False

Question

No additional fees is payable on increased authorised capital since

already paid on original authorised capital.

Correct Answer

FalseYour AnswerFalse

Legal aspects of finance


Question When was the minimum wages act passed ?

Correct Answer 1948

Your Answer 1948

Select The Blank

Question For Special Resolution, votes cast in favour of the resolution should be

________ times more than votes cast against the resolution.

Correct Answer 3

Your Answer 3


Question For registering certain resolutions, following documents are submitted :-

Correct Answer Form 23 , Certified copy of resolution , Copy of explanatory statement

Your Answer Form 23 , Certified copy of resolution , Draft resolution


Question Who are governed by the payment of wages act?

Correct Answer Employed persons , Salary less than 1600 per month

Your Answer Employed persons , Salary less than 1600 per month , Salary less than

1200 per month



48/189

Question Under which circumstances will the worker not receive wages for full normal

working days ?

Correct Answer If failure to work is caused by unwillingness to work , Not by

omission of the employer to provide him with work

Your Answer If failure to work is caused by unwillingness to work , Not by omission

of the employer to provide him with work , He works for more than full working hours


Question What do you mean by wages?

Correct Answer Remuneration by way of salaries , Allowances , Expressed in terms of

money

Your Answer Remuneration by way of salaries , Allowances , Expressed i

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