Question 1

Which of the following is not a negotiable instrument

Accepted Answer

Negotiable instruments are financial instruments that guarantee the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document. Examples include bills of exchange, promissory notes, and cheques. Postal orders and currency notes, however, do not fall under the category of negotiable instruments as defined by financial and legal standards. Postal orders are more akin to prepaid vouchers, and currency notes are legal tender for the payment of debts but are not negotiable instruments in the traditional sense because they do not require endorsement to transfer value and do not carry the rights and obligations that instruments like cheques or bills of exchange do.

Question 2

Features of Negotiable instruments are -

Accepted Answer

Negotiable instruments must be in writing and signed by the maker or drawer, they allow for the recovery of the amount mentioned, and they are freely transferable, making all of the provided options correct features of negotiable instruments.

Question 3

Holder in due course means any person-

Accepted Answer

A holder in due course refers to someone who has obtained a promissory note, or similar negotiable instrument, for value, in good faith, and without notice of any defects. This definition aligns with option B, which mentions a person becoming the possessor of a promissory note for consideration, implying they have acquired it legitimately and are entitled to collect on it.

Question 4

Cheque can be of types and crossing of cheques can be of types.

Accepted Answer

Cheques can be of two main types: bearer cheques and order cheques. Crossing of cheques can also be of two types: general crossing and special crossing.

Question 5

What are the limits of number of members in a Private Company?

Accepted Answer

The limit for the number of members in a private company is two hundred, as per the Companies Act, 2013.

Question 6

A public company must have at least----- directors whereas a private company must have at least -------

Accepted Answer

A public company must have at least 3 directors, while a private company must have at least 2 directors according to most jurisdictions' corporate laws.

Question 7

The registered office clause of memorandum of association contains

Accepted Answer

The registered office clause of the memorandum of association specifies the state in which the company's registered office is located, as per legal requirements.

Question 8

Which documents contains the regulations relating to the internal management of a

Accepted Answer

The Articles of Association contain the regulations relating to the internal management of a company, detailing the roles of directors, the kind of business to be undertaken, and the means by which the shareholders exert control over the board of directors.

Question 9

………….meeting is the first meeting of the members of the public company after

Accepted Answer

The statutory meeting is the first meeting of the members of a public company after its incorporation. It is a legal requirement and must be held within a specified period, typically within six months from the date of the company's incorporation, to inform the members about the company's affairs, including the shares allotted, the amount of cash received, and the contracts entered into by the company.

Question 10

Who can endorse the negotiable

Accepted Answer

The maker of a negotiable instrument and the holder of the instrument can endorse it. The maker is the person who creates the instrument, and the holder is the person who currently possesses it with the right to enforce it. The drawee, typically involved in instruments like drafts, is not in a position to endorse the instrument.

Question 11

A Bill of exchange contains -

Accepted Answer

A Bill of exchange contains an unconditional order to pay a certain sum of money, not a conditional one.

Question 12

Memorandum of Association does not include.

Accepted Answer

The Memorandum of Association includes the Subscription Clause, Capital Clause, and Liability Clause, but not the Assets Clause. The primary purpose of the Memorandum is to define the company's structure and powers, not to list its assets.

Question 13

Quorum for general meeting for private and public companies.

Accepted Answer

The quorum for a general meeting in a private company is two members and for a public company is five members, as per standard regulations in many jurisdictions.

Question 14

What do you mean by symbolic possession ?

Accepted Answer

Symbolic possession refers to a form of possession where the transfer of ownership or control over goods or property is represented by something symbolic, such as the delivery of keys to a warehouse or godown, rather than the physical handing over of the goods themselves. This is often used in situations where actual physical delivery is impractical at the time of the transaction.

Quiz 2: Negotiable Instruments, Company Law, and Legal Terminologies