Deck 3: Company Law and Securities Issuance

Question 1

________are required to file prior to making second and subsequent issue of securities in case shelf prospectus are filed:

A)Information memorandum
B)Information articles
C)Form 13
D)None of the above

Answer 1

Information memorandum

Question 2

Information memorandum + shelf prospectus together constitutes ________

A)Memorandum
B)Articles
C)Prospectus
D)None of the above

Answer 2

Prospectus

Question 3

Validity period of information memorandum is _______

A)1 year
B)2 years
C)3 years
D)4 years

Answer 3

1 year

Question 4

_________ prospectus were issued in order to test the market before finalizing issue size/ price.

A)Deemed
B)Shelf
C)Red herring
D)None of the above

Question 5

What is the punishment for directors, promoters and other persons for Misrepresentation in prospectus

A)Fine 50,000
B)2 years imprisonment
C)Both of the above
D)None

Question 6

A statement in lieu of prospectus is required to be issued

A)by all companies which issue shares or debentures
B)by public companies when shares are issued among friends and relatives
C)by private companies as they do not issue shares to the public
D)by all companies

Question 7

A company must inform the registrar about redemption of preference shares with in

A)21 days
B)15 days
C)30 days
D)None of the above

Question 8

Share premium amount is treated as the __________ capital of a company

A)issued
B)Reserve
C)Subscribe
D)None of the above

Question 9

A company can create 'reserve capital' by passing__________

A)an ordinary resolution
B)a special resolution
C)a board resolution
D)None of the above

Question 10

The capital which is part of the uncalled capital of the company which can be called up only in the event of its winding up it is called

A)Issued capital
B)Nominal capital
C)Authorised Capital
D)Reserve capital

Question 11

XYZ Co. is a holding of XZ Pvt. Company. XZ Co. issued deferred shares. The issue is valid or void

A)Valid
B)Void
C)Situation does not arise
D)None of these

Question 12

What is the maximum period for redemption in case of preference shares issued by the company?

A)10 years
B)15 years
C)20 years
D)None of these

Question 13

Capital redemption reserve must be used for issue of

A)Fully paid bonus shares
B)Fully paid equity shares
C)Preference shares
D)None of the above.

Question 14

Part of the issued capital taken by public is called ___________

A)Subscribed
B)Called - up capital
C)Un called capital
D)Paid up capital

Question 15

Part of authorized capital which is offered by the company for subscription.

A)Subscribed
B)Issued
C)Un called
D)called up

Question 16

Stamp duty on registration of the company is payable based on _________capital.

A)Nominal
B)Authorised
C)Both a & b
D)None

Question 17

Deferred shares are also known as ____________ shares

A)Founders
B)Equity
C)Preference
D)None

Question 18

_________ Preference shares carry the right to cumulate the dividends

A)Converted
B)Cumulative
C)Nonconverted
D)None

Question 19

Paying back of capital is called

A)Redemption
B)Conversion
C)Participation
D)None

Question 20

Premium amount on the securities are transferred to ________account

A)Securities premium
B)Reserve fund
C)Capital Reserve
D)None

Question 21

____are the shares issued by the company to it employees or directors for consideration other than cash

A)Bonus
B)Sweat
C)Right
D)None of the above

Question 22

Cumulative preference share holders have voting right if dividends are in arrears for years

A)1
B)2
C)3
D)4

Question 23

_______ form is to be find in case of variation rights of share holders

A)23
B)19
C)18
D)20

Question 24

_________ is an aggregate of fully paid share that have been legally consolidated.

A)Share
B)Stock
C)Both a & b
D)None of the above