Company Types Overview Quiz

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Questions and Answers

What is the maximum number of members allowed in a private company?

20 members

50 members (correct)

100 members

30 members

Which of the following must a public company do to convert to a private company?

Alter its constitution for AGM requirements

Issue new share certificates to all members

Submit a new company secretarial appointment

Lodge a copy of a special resolution (correct)

How much notice is required to pass a special resolution in a private company?

21 days

7 days

14 days (correct)

30 days

What is one advantage of being classified as a private company regarding AGM?

Can dispense with holding an AGM Signup and view all the answers

Which characterizes the ability of private companies to pass resolutions?

Can pass resolutions by written means Signup and view all the answers

What is a primary characteristic of a Section 19 company?

It is usually incorporated for not-for-profit purposes. Signup and view all the answers

What must a person do to incorporate a company under Section 19?

Submit the constitution and other prescribed documents. Signup and view all the answers

What characterizes an unlimited company?

There is no limit on the liability of members. Signup and view all the answers

Which statement is true about private companies?

They restrict the transfer of shares and can have pre-emptive rights. Signup and view all the answers

What happens during the winding up of an unlimited company?

Present and past members may be liable to contribute to company assets. Signup and view all the answers

What is a key requirement for a limited company to convert to an unlimited company?

It must provide a special resolution of members. Signup and view all the answers

Which of the following is NOT true about Section 19 companies?

They are automatically limited by shares. Signup and view all the answers

What must a company provide regarding its first financial year when incorporating?

The last day of its first financial year. Signup and view all the answers

What does the term 'constitution' refer to in relation to a company?

The registered constitution of the company as amended, and prior memorandum or articles for older incorporations. Signup and view all the answers

Under which section may a private company limited by shares adopt a model constitution?

Section 36(1) Signup and view all the answers

What legal effect does the constitution have as established in S39(1) CA?

It creates a contract between the company and its members, and among the members themselves. Signup and view all the answers

What happens to regulations that were in force for a company before January 3, 2016, according to S35(3) CA?

They continue to serve until the constitution is amended. Signup and view all the answers

Which entity must register a company’s constitution under Section 19?

The Registrar Signup and view all the answers

What personal right does S39(1) confer upon members regarding the constitution?

A member may bring an action to enforce a regulation. Signup and view all the answers

What is required for a company to adopt a model constitution according to S37(2) CA?

The model must be adopted in whole or in part. Signup and view all the answers

What action can a member take against another member according to the constitution?

Institute legal actions directly against the member. Signup and view all the answers

What is the primary source of a company's contractual status?

The act of registration Signup and view all the answers

Which of the following statements regarding the constitution of a company is correct?

The constitution can be altered by a special resolution. Signup and view all the answers

What is a significant characteristic of a company's constitution as stated in Section 35 of the Companies Act?

It may include regulations for the company. Signup and view all the answers

Under which condition might a non-member have the standing to sue related to a company’s constitution?

If the constitution allows it explicitly Signup and view all the answers

Which of the following can be considered a 'public character' in the context of a company's constitution?

The model constitutions prescribed under section 36(1) Signup and view all the answers

What does the 'qua-member rule' imply for rights conferred by a company's constitution?

Only specified rights in the capacity as a member are enforceable. Signup and view all the answers

What impact does misrepresentation have on a company's constitution according to the Companies Act?

It may not lead to rectification. Signup and view all the answers

What is the effect of registering a company's constitution with the Registrar?

It does not automatically give notice of its contents to non-members. Signup and view all the answers

What condition causes a corporation to cease qualifying as a small company?

When it fails to satisfy the criteria for two consecutive financial years. Signup and view all the answers

Which type of company is defined as having shares or securities listed on a recognized stock exchange?

Public Interest Company Signup and view all the answers

What must directors of a parent company do at the end of its financial year?

Present consolidated financial statements to the annual general meeting. Signup and view all the answers

For which of the following companies may an auditor resign by simply giving notice?

Non-Public Interest Company Signup and view all the answers

What relationship does the Companies Act deem between a holding company and its subsidiaries?

They are considered related to each other. Signup and view all the answers

If a corporate group undergoes incorporation, when does it initially qualify as a small company?

Provided it meets relevant criteria in the first or second financial year. Signup and view all the answers

What is one reason why a non-public interest company can be classified differently from a public interest company?

It cannot offer shares to the public. Signup and view all the answers

What is a characteristic of a listed company?

It offers its shares or security interests to the public. Signup and view all the answers

Study Notes

Unlimited Companies

An unlimited company places no limits on the liability of its members.
Members are liable to contribute to the company's assets upon winding up.
Every present and past member is at risk.
This type of company is rare.

Private Companies

Restricted right to transfer shares - members have pre-emptive rights.
Transfers require board approval.
Maximum of 50 members.
Must include the word "private" in its name.
Needs 14 days' written notice for special resolutions.
May dispense with AGM requirements.
Can pass resolutions via written means.

Exempt Private Companies

Must cease qualifying if it fails to meet criteria for two consecutive financial years.
New groups within their first or second year of incorporation qualify as small companies if they meet the applicable criteria.

Listed and Public Interest Companies

Listed companies have offered shares or security interests to the public, which are listed on a recognized stock exchange.
They must be on the official list of the exchange to be considered listed.
Non-public interest companies may have their auditors resign by giving notice.
Public-interest companies require auditors to resign before their term expires.

Constitution

Defined as the company's constitution registered with the Registrar, including amendments.
For companies incorporated before 3 January 2016, constitution includes the memorandum and articles of association.
Existing regulations before 3 January 2016 are deemed to be part of the company's constitution until amended.
The constitution is a contract between the company and its members, and between the members themselves.
The constitution is binding only on its members.

Member and Outsider Rights

Companies can choose to adopt all or part of the prescribed model constitution.
The constitution is binding on the company and its parties but not outsiders.

Conversion between Company Types

Unlimited companies can convert to limited companies.
Limited companies can convert to unlimited companies.
Public companies with share capital can convert to private companies.

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Description

Test your knowledge on various types of companies including unlimited, private, exempt private, and listed companies. This quiz covers key characteristics and regulations that differentiate these types. Perfect for business students and professionals alike!