Question 1. What Are The Essential Characteristics Of A Company?
The important traits of a enterprise are:
It is a voluntary association of folks.
It is a separate criminal entity.
It has a not unusual seal.
It has a perpetual succession.
It is created with the aid of law with restrained legal responsibility.
Question 2. What Is The Statutory Company?
A enterprise that's shaped by the special Act exceeded by the Central or State legislature is known as Statutory employer. This form of employer isn't always required to border their Memorandum or Articles of Association. They are also not required to apply the word limited as a part of their name. Their running is managed, checked and reviewed via Lok Sabha and the Comptroller. Auditor General of India conducts the annual audit of its very last bills. Some examples of statutory organizations are State Bank of India, Life Insurance Corporation of India, Reserve Bank of India.
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Question 3. Define Registered Company And On What Basis They Are Categorized?
Registered organization is the one that is registered underneath the Companies Act. These agencies are categorized on the premise of liability and range of members.
On the basis of legal responsibility corporations may be categorized inside the following three classes:
Company limited by stocks.
Company confined through guarantee.
On the idea of quantity of participants businesses may be of sorts:
Question 4. Define Subsidiary Company?
A corporation is a subsidiary of a holding corporation, if a maintaining corporation controls most of the people composition of its board of directors, having an object to govern the control of the subsidiary or that other agency this is the preserving corporation holds most people of its stocks or the conserving employer’s subsidiary has its own subsidiary, it turn out to be the subsidiary of the first referred to employer on the primary holding business enterprise.
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Question five. What Are Key Differences Between A Partnership Firm And A Company?
Registration is not obligatory under Indian Partnership Act, 1932 while company comes into life after the registration underneath Companies Act, 1956.
In the case of partnership company the variety of members ought to no longer exceed 20 in any business and minimum is 2 whereas in a personal constrained corporation minimum is 2 and maximum is 50 and in public restrained business enterprise minimal 7 and no maximum restrict.
Partnership company do now not have an independent felony function or repute while agency is unbiased legal popularity.
In partnership company companions have limitless liability while liability of shareholders is restrained to the quantity of the shares they preserve.
In partnership company switch of hobby isn't transferable without consent of different companions while in a corporation shares are freely transferable with out consent of other contributors.
Audit isn't always mandatory for a partnership firm while money owed of a organisation must be audited yearly.
In a partnership company balance of enterprise isn't tormented by demise or insolvency of accomplice whereas within the case of a company shareholder's death or insolvency might not affect the charter of the company.
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Question 6. What Are The Important Stages Involved In Formation Of A Company?
Filing of documents: Following files are required:
Memorandum of Association duly stamped, signed and witnessed;
Articles of Association duly stamped, signed and witnessed;
A listing of humans who've consented to become directors of the business enterprise.
A written and duly signed consent of the directors agreeing to act as directors and to pay for qualification stocks, if any.
A be aware of the cope with of the registered workplace of the organization.
A statutory assertion to the effect that every one the requirements of the regulation for registration have been duly complied with. Payment of charges and issue of certificate of incorporation
Question 7. When Can A Company Commence Its Business?
Private agencies or corporations having no percentage capital can start their enterprise right now after they are integrated. But public agencies with share capital are required to attain the necessary certificate from the registrar of businesses to comment the enterprise.
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Question eight. What Is Articles Of Association And Memorandum Of Association?
Articles of Association is the internal regulations of the company which assist to manipulate the control of the inner affairs of the business enterprise and the conduct of its commercial enterprise.
Memorandum of Association consists of the charter and the items of the employer for which it's miles shaped. The enterprise cannot exceed the powers conferred on it by its memorandum.
Question nine. What Is The Difference In The Main Objects Of Articles Of Association And Memorandum Of Association?
Memorandum controls external operations of the business enterprise while articles control inner operations of the business enterprise.
Memorandum are the conditions brought for the advantages of creditors, shoppers, debtors, sellers and out of doors public while articles govern the relationship between the agency and the shareholders, participants among the contributors. It is similar to the partnership deed in a partnership.
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Question 10. How Can Memorandum Be Altered?
Memorandum of association can be altered handiest beneath certain condition and inside the manner provided in teh Companies Act. IT calls for the sanction of shareholders and the Central Government or the Company law board or the Court as the case can be. The procedure of alteration or memorandum is extra hard.
Question 11. Can Articles Of Association Of A Company Be Altered After Its Incorporation?
Yes, Articles of affiliation of a organization can be altered because the method of alteration or modification of articles of affiliation is relatively simple. It can be altered via the members via passing a special resolution issue to the provisions of the Companies Act.
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Question 12. What Do You Understand By Company Limited By Shares?
Companies wherein the legal responsibility of the shareholders of a corporation is restrained to the volume of the unpaid quantity at the stocks held through them the agency is known as a corporation limited through shares. In n agencies, whatever may be the liabilities of a organisation, shareholders aren't bound to pay anything greater than the face value of the shares held by using them. Thus, the legal responsibility of every of the shareholders of this type of business enterprise is constantly constrained to the quantity of the quantity unpaid on his stocks. A organisation limited through stocks may be a public organisation or non-public enterprise.
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Question 13. Explain Company Limited By Guarantee?
Companies wherein liability of members is continually restrained to a fixed amount agreed by using its contributors to make a contribution closer to the assets of the company is is referred to as a employer restrained by using assure. In such organizations the articles shall nation the variety of individuals with which the organization is to be registered. Thus, the quantity promised to pay through a member of a employer restricted by guarantee is referred to as the guarantee.
Question 14. Explain The Term Unlimited Companies?
Companies registered without constrained legal responsibility is known as an infinite agency. The liability of such company is unlimited like an everyday partnership company and each member of such enterprise is answerable for money owed of the organization in proportion to his interest inside the employer. In such companiesm the articles shall kingdom the number of participants with which the agency is to be registered and if the organization has a proportion capital the amount of the share capital with which the company is to be registered.
Question 15. What Is Ultravires Acts?
Ultravires is any act carried out outdoor the limits of memorandum of affiliation. It is void and can't be ratified even by using the entire body of the shareholders whereas inside the case of Articles of affiliation the acts finished by the business enterprise past the articles may be ratified with the aid of the shareholders if such acts aren't past the memorandum and illegal.
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Question sixteen. What Is Annual General Meeting?
It is an annual assembly of the body of contributors. Every agency is required to hold the Annual General meeting. The first annual general assembly ought to be held within eighteen months from the date of incorporation of a corporation. The gap between two AGMs need to not be extra than fifteen months.
Question 17. What Are The Rights And Duties Of Directors?
Rights of Directors:
Right to participate in the affairs of the corporation
Right to have remuneration
Right to compensation.
Duties of Directors:
Duty of best proper religion of fiduciary obligations.
Duty of reasonable care, ability and diligence.
Duty to wait Board Meetings.
Duty to make investments Company's cash.
Duty not to delegate features.
To see that every one cash obtained from applicants are deposited in a scheduled bank.
To call an extra regular general meeting whilst demanded via a valid requisition.
To present annual money owed and balance sheet.
To forward a statutory report to every member of the organisation.
To name and hold the statutory meeting.
To reveal their hobby whilst stepping into any transaction with the enterprise.
Not to enter into any agreement with the enterprise without the consent of the Board of Directors for the sales, purchase or supply of any goods, substances and many others.
Question 18. What Are The Different Types Of Capital?
Nominal Capital or Authorized Capital: is the full price price of the stocks which the employer is permitted to trouble.
Issued Capital: is that part of authorized capital that's virtually supplied to the public for sale.
Subscribed Capital: is that a part of issued capital that's taken up and universal through the general public.
Paid up Capital: is the quantity of cash sincerely paid by the subscribers or credited as so paid.
Uncalled Capital: is the unpaid portion of the subscribed capital.
Reserved Capital: is that a part of the uncalled capital that may only be known as up at the time of and for the purposes of winding up for the business enterprise.
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Question 19. What Is The Importance Of Certificate Of Incorporation?
The certificate of incorporation is a conclusive evidence approximately various topics noted underneath:
A evidence of legal lifestyles of a business enterprise.
A evidence showing that every one the felony necessities were complied with.
Certificate of incorporation and pre-incorporation contracts.
Company acquires a perpetual succession after the issuance of certificate of incorporation is issued to the agency.
The assets or assets acquired inside the call of the agency grow to be the belongings, property of the organization and not of its members.
Question 20. Define Prospectus. Explain Legal Requirements Of Prospectus?
Prospectus is defined as any report defined or issued as a prospectus and includes any notice, round, advertisement or different report inviting deposits from the public or inviting offers from the public for the subscription or purchase of any stocks in, or debentures of a frame corporate.
Following are the prison requirements of a prospectus:
It is to be issued after the incorporation of the employer.
It need to comprise all of the details indexed in schedule II to the Companies Act.
It need to be dated.
It need to be signed by means of every person mentioned therein as a director or a proposed director.
Every utility form for stocks, issued through the organisation ought to be followed via a copy of the prospectus.
A statement referring to a organization with the aid of an expert can be blanketed in the prospectus.
Deposits should be invited after issuing an advertisement.
No prospectus may be issued greater than 90 days after a replica of it's far filed for registration.
Penalty for non compliance of any ot the above rules shall be punishable with best which may additionally exten to Rs. 5000.
Question 21. Distinguish Between Prospectus And Statement In Lieu Of Prospectus?
Prospectus is prepared for submitting with the registrar of groups and exposure while Statement in Lieu of Prospectus is ready simplest for submitting cause.
Prospectus does exposure and has a promoting technique while Statement in Lieu of Prospectus is prepared for pleasant the criminal formality of filing with the Registrar of the companies and has an informative approach.
Publication of prospectus is necessary for the organizations for raising the capital from public while Statement in Lieu of Prospectus is appropriate for agencies which raise the capital from Known resources wherein shares aren't offered to the public for subscription.
Prospectus is vital whilst a compnay wants to boost the capital from the general public while Statement in Lieu of Prospectus is not supposed for trendy public. It is to be filed with the registrar of the businesses.