11th Std Commerce EM 2nd Assignment Chapter-6 – Joint Stock Company This is the second assignment answer key for 11th commerce full assignment for the month of July.
Chapter-6 – Joint Stock Company
Part-A
I.One Mark Questions
1.The relationship between outsiders and the company is defined in …..
a) Prospectus
b) Articles of Association
c) Memorandum of Association
d) Certificate of Incorporation
Answer:- a) Prospectus
2.Table A of the Companies Act is a …….
a) Model minutes book.
b) Model form of Balance Sheet.
c) Model of AOA.
d) Model of MOA.
Answer:- c) Model of AOA
3. Which of the following is created by a Special Act of Parliament or in State
Assemblies?
a) Chartered company.
b) Foreign company.
c) Government company
d) Statutory company.
Answer:- d) Statutory company.
4.The Board of directors of a company is elected by …….
a) Creditors
b) Debtors.
c) Debenture holders.
d) Shareholders (members).
Answer:- d) Shareholders (members).
5. Companies established as a result of a charter granted by the King or Queen of a country is called …….
a) Chartered companies.
b) Statutory companies.
b) Registered companies.
d) Foreign companies.
Answer:- a) Chartered companies.
6. …. is separate entity.
a) Company.
b) Organisation.
c) Business.
d) None of these.
Answer:- a) Company.
7…….. is a company are freely transferable.
a) Members
b) Shares
c) Both
d)None of these.
Answer:- b) Shares
8.A private limited company can be formed in……. variations.
a) 2
b) 3
c) 4
d)5
Answer:- b) 3
9.Which one of the following demerits of companies?
a) Dishonest management.
b) Speculation.
c) Lack of interest.
d) All of these.
Answer:- d) All of these.
10. Minimum paid-up capital private company is —————.
a) 1 Lakh.
b) 2 Lakhs
c) 3 Lakhs
d) Above 5 Lakhs
Answer:- a) 1 Lakh.
Part-B
II.Very Short Answer.
11.What are the different types of companies?
- Incorporation
- Membership
- Member liability
- Control
- Nationality
12.Define a company.
According to L.H. Haney, “ A company is an artificial person created by law having a separate legal entity with a perpetual succession and a common seal.”
13.What is meant by limited company?
14.Explain any two characteristics of a company.
- Separate Legal Entity: Under Incorporation, a company becomes a separate legal entity as compared to its members. The company is distinct and different from its members. It is considered an artificial person.
- Capacity to sue and be sued: A company can sue or be sued in its own name as distinct from its members.
15.What is meant by chartered company?
Chartered companies are established by the King or Queen of a country. The powers and privileges of the chartered company are specified in the charter. Power to cancel the charter is vested with King/Queen.
Part-C
III. Short Answer.
16.What are the advantages of companies?
1. Large Capital:
A company can secure large capital compared to a sole trader or partnership. A large amount of capital is necessary for conducting business on a large scale.
2. Limited Liability:
The liability of a shareholder is limited. The risk of loss is limited to the unpaid amount on the face value of shares held. In the case of a company limited by shares, the liability of a shareholder is restricted to the unpaid amount on the shares held by him.
3. Transferability of Shares:
Transaction of Shares between two individuals is easy. So there is the liquidity of the investment. Any shareholder can easily convert his shares into money by selling his shares.
17.What is meant by Private Company?
Private Limited Company is a type of company which is formed with minimum of two shareholders and two directors. The minimum requirement with respect to authorized or paid-up capital of Rs. 1,00,000 has been omitted by the Companies Act 2015. Maximum 200 persons can become shareholders in a private company.
18.What is meant by Government Company?
A public enterprise incorporated under the Indian Companies Act, 1956 is called a Government company. These companies are owned and managed by the central or the state government.
Section 617 of the Companies Act, 1956 defines “Government Companies” as any company in which not less than 51% of the paid-up share capital is held by the Central Government or any State Government or Governments or partly by the Central Government and partly by one or more State Governments. A subsidiary of a Government company shall also be treated as a Government company.
19.What is meant by Foreign Company?
Foreign company means a company which is incorporated in a country outside India under the law of that country. After the establishment of business in India, the necessary documents must be filed with the Registrar of Companies within 30 days from the date of establishment.
20.What is meant by Holding Company?
As per Section 2(87) “subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company:
- Controls the composition of the Board of Directors; or
- Exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies:
Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed.
Part-D
IV.Write in detail.
21.What is meant by Prospectus?
According to Section 2(36) of the Companies Act, any document inviting the public to buy its shares or debentures comes under the definition of a prospectus. It also applies to advertisements inviting deposits from the public. A prospectus is “the only window through which a prospective investor can look into the soundness of a company’s venture”. Hence it must specify at least the following matters as per Schedule II:
- The prospectus contains the main objectives of the company, the name, and addresses of the signatories of the Memorandum of Association, and the number of shares held by them.
- The name, addresses, and occupation of directors and managing directors.
- The number and classes of shares and debentures issued.
- The qualification share of directors and the interest of directors for the promotion of the company.
- The number, description, and the document of shares or debentures which within the two preceding years have been agreed to be issued other than cash.
22.What is meant by Multi National Company?
A Multi-National Company (MNC) is a huge industrial organization which,
- Operates in more than one country
- Carries out production, marketing, and research activities on an international Scale in those countries.
- Seeks to maximize profits the world over.
- A domestic company or a foreign company can be an MNC.
Examples:
Microsoft Corporation, Nokia Corporation, Nestle, Coca-Cola, International Business Machine, Pepsi Co, Sony Corporation.
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