Company Law & Corporate Veil

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Questions and Answers

What is a reason for the courts to pierce the corporate veil according to exchange control law?

To punish individuals who have violated the law. (correct)

To enhance the legal status of corporations.

To protect shareholders from personal liability.

To promote corporate transparency.

In which situation might the Court disregard the legal personality of a company?

In instances of market competition.

When the company is being used to avoid legal obligations. (correct)

When there are conflicts among shareholders.

In cases of employee misconduct.

What type of companies can be classified based on incorporation?

Sole proprietorships.

Statutory companies. (correct)

Non-profit companies.

Venture companies.

What defines public sector companies in India?

They include government departments and statutory corporations. Signup and view all the answers

Which classification of companies is based on liability?

Companies limited by shares. Signup and view all the answers

What is a characteristic of joint sector companies?

They can have government investment between 26 to 50%. Signup and view all the answers

Which of the following is NOT a basis for classifying companies?

Color. Signup and view all the answers

What type of company is defined by having only one member?

One Person Company. Signup and view all the answers

What is the duration for which a company's name is registered after approval for a new company?

20 days Signup and view all the answers

What penalty may a person face for applying with incorrect information if the company has not been incorporated?

One lakh rupees Signup and view all the answers

How long can the reservation of a name be extended with an additional fee of one thousand rupees?

40 days Signup and view all the answers

What action may the Registrar take if a name is reserved based on incorrect information for an incorporated company?

Strike off the name from the register Signup and view all the answers

What is the fee for extending the reservation of a name by 60 days?

2,000 rupees Signup and view all the answers

What is required for the reservation application of a company name?

A web service application to the Registrar Signup and view all the answers

What is the maximum penalty for providing incorrect information when applying for a reserved name if the company is incorporated?

One lakh rupees Signup and view all the answers

What is the web service used for extending the reservation of company names?

SPICe+ Signup and view all the answers

What is one of the primary purposes of a company registered under Section 8?

To promote various charitable and social objectives Signup and view all the answers

Which of the following is NOT a restriction imposed on Section 8 companies?

Mandatory registration as a Private Limited company Signup and view all the answers

What could lead to the revocation of a license granted to a Section 8 company by the Central Government?

Fraudulent conduct or violation of objects Signup and view all the answers

Which condition must a company meet if it wishes to convert its status from Section 8 to another type of company?

Comply with prescribed conditions Signup and view all the answers

Who may be a member of a company registered under Section 8?

Any firm or individual Signup and view all the answers

What happens if a company registered under any company law has objectives aligned with Section 8 characteristics?

It may be registered under Section 8 with conditions Signup and view all the answers

What condition is necessary for the alteration of a company’s memorandum or articles under Section 8?

Prior approval from the Central Government Signup and view all the answers

What is the distinction in naming for a company registered under Section 8 compared to one that is 'Limited'?

It can omit 'Limited' or 'Private Limited' Signup and view all the answers

What is the first step a company must take to convert to a different class under the Companies Act, 2013?

Alter its memorandum and articles of association Signup and view all the answers

Which statement about the debts and liabilities of a company after conversion is correct?

They may still be enforced as if conversion had not occurred Signup and view all the answers

In the context of not-for-profit organizations, what is the primary use of surplus revenues?

To further achieve the organization's objectives Signup and view all the answers

What must the Registrar do after receiving the application for conversion?

Close the former registration if all provisions are complied with Signup and view all the answers

What is NOT a consequence of the company’s conversion process under the Companies Act?

Cancellation of existing contracts Signup and view all the answers

Which of the following best defines a not-for-profit organization?

An entity that uses surplus to achieve its mission without distributing profits Signup and view all the answers

Which of the following is a limitation of the doctrine of Indoor Management?

Outsiders cannot claim protection based on information they could have known Signup and view all the answers

What must a company do to ensure compliance before its conversion is finalized?

Ensure all documents are in order and compliant with the law Signup and view all the answers

What action can the Central Government take if a licence is revoked under Sub-Section (6)?

Direct that the company be wound up or amalgamated Signup and view all the answers

What must be specified in the order of amalgamation according to the content?

Liabilities, duties, and obligations of the new entity Signup and view all the answers

What happens to the assets remaining after the winding up of a company registered under this Section?

They may be transferred to another company or credited to the Rehabilitation Fund Signup and view all the answers

Which companies can amalgamate under this section?

Companies registered under this Section with similar objects Signup and view all the answers

What is the obligation of a member in a company limited by guarantee in the event of winding up?

To contribute to the company's assets for settling debts Signup and view all the answers

When registering a company having a share capital, what must be included in the memorandum?

The amount of share capital and the number of shares subscribed Signup and view all the answers

What is the minimum fine imposed on a company for defaulting on the requirements laid out in this Section?

Ten lakh rupees Signup and view all the answers

What is the penalty for each officer in default of the company?

Fine not less than <code>25,000 but which may extend to </code>25 lakh Signup and view all the answers

Which of the following is NOT a restriction placed on the name stated in the memorandum of a company?

It must include the word 'Limited' Signup and view all the answers

Which form must persons apply with to get a licence under Section 8?

Form INC-12 Signup and view all the answers

What happens if a member ceases to be a member within one year before winding up?

They must still contribute for debts contracted before cessation Signup and view all the answers

What is a requirement for a company name that contains certain prescribed words?

The Central Government approval is mandatory Signup and view all the answers

Which document must contain an estimated income and expenditure statement for the next three years?

Application Form INC-12 Signup and view all the answers

Under what condition can a company's name suggest a connection to the government?

If obtaining prior consent from the Central Government Signup and view all the answers

For One Person Companies (OPC), what must be stated in the memorandum?

The successor in case of subscriber's death Signup and view all the answers

In registering a company, which of the following is considered undesirable for a company name?

Names implying a government endorsement Signup and view all the answers

Study Notes

BCCA Paper 13: Corporate and Economic Laws

The document is a study guide for BCCA Paper 13, Corporate and Economic Laws.
It covers topics from the Companies Act, 2013, SEBI, FEMA, competition law and more.

Part 1: Company Law

Introduction to Companies Act: Covers the basic definitions and features of companies, including perpetual existence and separate legal personality. Includes the Companies Act, 2013 and previous company law. Details the incorporation process and specifics of company types.
Accounts & Audit: Focuses on the accounting and auditing aspects of company law, including board meetings, inspections, and investigations.
Board of Directors & KMP: Focuses on board members, their roles and responsibilities, and key managerial personnel. Covers board meetings.
Board meetings: Procedures and requirements for board meetings. Covers minutes, actions, and quorum requirements.
Inspection, Inquiry, Investigation: Procedures for company inspections, inquiries, and investigations. Covers what may cause such actions.
Compromises, Arrangements and Amalgamation: Describes compromises, arrangements, and amalgamation processes in companies. Covers the procedures.
Dividends : Procedures and legal aspects related to dividend payments in companies.
IBC: Covers the Insolvency and Bankruptcy Code, 2016, likely its procedures and outcomes.
Corporate governance: General overview of corporate governance principles.

Part 2: Economic Laws

SEBI: Details SEBI laws and regulations relating to the stock market and securities.
Competition act: Details competition laws and regulations intended to promote competition.
FEMA: Focuses on the Foreign Exchange Management Act, 1999, dealing with financial transactions and exchange of foreign currency.
Law and Regulations related to Banking sector: Covers laws and regulations for the banking sector.
Law and regulating related to Insurance sector: Covers laws and regulations related to the insurance sector.
Specific provisions related to MSME sector: Covers specific legal provisions for Micro, Small and Medium Enterprises (MSMEs).
Laws and regulations related to Cyber security and data privacy: Covers laws and regulations protecting cyber security and data privacy, including related offences, and the role of the Information Technology Act of 2000.
Laws and regulations related to Anti Money laundering Act: Details laws and regulations covering money laundering.

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Description

This quiz explores key concepts in Company Law, focusing on the circumstances under which courts may pierce the corporate veil, classify different types of companies, and understand regulations for company name reservation in India. Test your knowledge of company types, liabilities, and legal nuances related to corporate identity.