40 Questions
When calculating the limit of twenty companies, which type of companies are excluded?
Section 8 companies and dormant companies
What is the limitation on holding directorships according to the companies act?
A person can hold a maximum of 20 directorships
Who shall be deemed to be the first Directors of a company when nothing is mentioned in the Articles?
Except the corporate subscribers, all other subscribers to the Memorandum of Association
A person cannot be appointed as Alternate Director for:
Independent Director
What is the maximum number of directorships a person can hold?
20
What type of company is excluded while calculating the limit of twenty companies?
Section 8 company
Who nominates the first Directors of a company when nothing is mentioned in the Articles?
The subscribers to the Memorandum of Association
What is the consequence of not mentioning the names of the first Directors in the Articles of Association?
The subscribers to the Memorandum of Association shall be deemed to be the first Directors
What is required for a resolution to be valid?
It needs to be circulated to all directors and ratified by at least two independent directors.
What happens to Ruby's office as a director if she remains absent in all the meetings of the Board?
Her office as a director shall become vacant.
How many directors need to consent to an investment of funds for a resolution to be passed?
Any four directors of the company need to consent.
What is required for a director to continue to hold the office of director?
The director needs to seek leave of absence in all the meetings of the Board.
How many independent directors need to ratify a resolution for it to be valid?
At least two independent directors need to ratify.
What happens if a director remains absent in all the meetings of the Board?
The director's office shall become vacant.
What is the minimum number of directors required to pass a resolution?
Any four directors of the company.
What is the requirement for a woman director to continue to hold the office of director?
She needs to seek leave of absence in all the meetings of the Board.
Who can be authorized by Andrezj to sign and file Form DIR-11 on his behalf?
His earlier co-director Kritika, a resident director of Ritika Hospitality Services Limited.
What is the consequence of a director not attending the Board Meetings?
The director is liable to vacate the office of directorship.
What is the minimum fine that Mr. Eknath is liable to pay for not vacating the office of directorship?
Rs 1,00,000
What is the maximum fine that Mr. Eknath is liable to pay for not vacating the office of directorship?
Rs 5,00,000
Who among the following directors of Elite Transporters Ltd. attended all the Board Meetings?
Mr. Anand, Mrs. Carol, and Mr. Dhruv
What is the number of Board Meetings conducted by Elite Transporters Ltd. in the FY 2020-21?
5
Who among the following directors of Elite Transporters Ltd. did not attend any of the Board Meetings?
Mr. Eknath
What is the consequence of Mr. Eknath not vacating the office of directorship despite attracting disqualification?
He is liable to pay a fine
What is the minimum number of days' notice required to be given to every director for a Board meeting?
7 days
How should the notice for a Board meeting be sent to every director?
By post or by electronic means
What is the quorum for a Board meeting of a company having 10 directors?
3 directors
How many directors are required to put a resolution in a Board Meeting, if the number of directors in the company is 15?
Two Directors
What is the maximum limit of remuneration payable to the Directors including Managing Director, Whole-time Director and Manager in a company?
3% of net profits
Who is required to be notified for a Board meeting?
Every director
What is the purpose of giving notice for a Board meeting?
To provide an opportunity to every director to participate in the meeting
What is the consequence of not giving notice for a Board meeting?
The meeting is invalid
What is the time period within which the Board of Directors must fill a vacancy created by the resignation of a Whole-time Director?
Three months from the date of creation of the vacancy
What is the minimum age requirement for a person to be appointed as a Managing Director or Whole-time Director?
Twenty-one years
What is the maximum age limit for a person to be appointed as a Managing Director or Whole-time Director?
Seventy years
Who is responsible for filling a vacancy created by the resignation of a Whole-time Director?
The Board of Directors
What is the consequence of appointing a person who is below the age of twenty-one years as a Managing Director or Whole-time Director?
The appointment is invalid and can be challenged in court
What is the reason for not appointing Mr. Vanilla Sequera as the Managing Director of Tasty Choco-Chips Limited?
He has attained the age of seventy years
What is the purpose of the rule that no company shall appoint or continue the employment of any person as Managing Director, Whole-time Director or Manager who has attained the age of seventy years?
To prevent the appointment of older persons who may not be able to perform their duties effectively
What is the significance of the rule that a company shall not appoint or continue the employment of any person as Managing Director, Whole-time Director or Manager who is below the age of twenty-one years?
To prevent the appointment of minors who may not have the necessary maturity and wisdom
Study Notes
Directorships and appointments
- Mr. Z can accept another directorship in RLP Mechanics Limited since Section 8 companies and dormant companies are excluded while calculating the limit of twenty companies.
- There is no limit on holding any number of directorships.
First Directors of KAL
- In the absence of naming the first Directors in the Articles of Association, the subscribers to the Memorandum of Association shall be deemed to be the first Directors of KAL, excluding Parivaar Agro Private Limited.
Alternate Directors
- A person cannot be appointed as an Alternate Director for an Independent Director.
Resignation of Andrezj
- In respect of signing and filing of DIR-11, Andrezj can be authorised by a practising Chartered Accountant, a Cost Accountant in practice, a Company Secretary in practice, or his cousin Bartek residing in India and holding directorship in an unlisted company, namely, Mithila Dairy Products Limited.
Disqualification of Mr. Eknath
- Mr. Eknath shall be punishable with a fine which shall not be less than ₹1,00,000 but which may extend to ₹5,00,000 for attracting disqualification but not vacating the office of directorship.
Attendance of Ruby in Board Meetings
- Ruby, a woman director, remained absent in all four board meetings but sought leave of absence; her office as a director shall not become vacant.
Quorum for Board Meeting
- The quorum for a Board Meeting is one-third of the total strength of the Board or two directors, whichever is higher.
Calling of Board Meeting
- A meeting of the Board shall be called by giving not less than 7 days' notice in writing to every director, and the notice shall be sent to his last known address.
Resolution by Circulation
- A resolution by circulation needs to be ratified by at least one independent director to be valid.
Remuneration of Directors
- The overall remuneration payable to the Directors, including the Managing Director, Whole-time Director, and Manager, shall not exceed 3% of net profits.
Appointment of Managing Director
- A company cannot appoint or continue the employment of any person as Managing Director, Whole-time Director, or Manager who has attained the age of seventy years.
This quiz tests knowledge on Companies Act, specifically Section 152, regarding directorship limits and company types.
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