18 Questions
What type of notice must be given by the company to the transferee in the case of transfer of partly-paid shares?
Notice mentioning that the shares are partly paid up
Why must a company issuing deposits open a Deposit Repayment Reserve Account?
To repay depositors when needed
When does a company accepting deposits have to deposit an amount in the Deposit Repayment Reserve Account?
On or before 30th April every year
What types of financial instruments are used in the capital market?
Equity shares, preference shares, debentures, bonds, government securities, public deposits, etc.
How do corporates use financial instruments in the capital market?
To solve problems of finance
What type of funds are borrowed and lent in the Capital Market?
Both short-term and long-term funds
What is the main difference between cash credit and cash loan?
Cash loan is for a fixed period, while cash credit has no fixed period.
What is the key feature of discounting a bill of exchange with a bank?
Discounting a bill involves selling it to the bank for slightly less than its face value.
Which type of financing allows the borrower to withdraw an amount up to a sanctioned limit?
Overdraft
What determines the limit of cash credit that a borrower can withdraw?
The value of goods pledged or hypothecated
Which type of financing charges interest on the actual balance outstanding?
Cash loan
In what scenario would a drawer choose to discount a bill of exchange with a bank?
To receive immediate funds before the due date of the bill
What is the practice of retaining a part of the profit during periods of high profit to be used in the future for meeting financial needs called?
Ploughing Back of Profit
What is another term for 'retained profits' or 'retained earnings'?
Ploughing Back of Profit
What is the primary purpose of 'ploughing back of profits' in a company?
To retain profits for future use
Which of the following best describes the concept of 'self-financing' mentioned in the text?
'Ploughing Back of Profit' from retained earnings
What rules govern the use of retained profits by a company?
Rules subject to certain conditions
'Ploughing Back of Profit' can be described as:
'Self-financing' using retained earnings
Test your knowledge on company regulations regarding the transfer of partly-paid shares and the opening of Deposit Repayment Reserve Account as per the Companies Act, 2013.
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