Finance and Company Law Quiz

Individuals or entities who own shares in a company, representing ownership and a right to share in profits.

Bonds are debt securities issued by companies to raise capital. Bondholders lend money to the company in exchange for regular interest payments and the repayment of the principal amount at maturity.

Shares that offer a fixed rate of dividend payment, regardless of company profits, and usually have priority over common shares in dividends and asset distribution.

New shares issued without any cost to existing equity shareholders, increasing their holdings.

A type of debt financing where the company borrows money by issuing bonds with a fixed interest rate and a maturity date.

The total amount of money a company can raise by issuing shares. It is the maximum capital that the company is authorized to raise.

The total funds invested in the company through equity shares and preference shares.

A term indicating that dividends on preference shares accumulate if not paid in a particular year. They are paid later, even if it means exceeding the annual dividend.

These shareholders can convert their shares into equity shares which gives them voting rights.

The representatives chosen by equity shareholders to lead and manage the company.

Trade credit refers to the practice of supplying goods or services where the payment for these goods or services is deferred to a future date.

This is the portion of capital that can be called upon by the company if needed.

This is the transfer of shares due to the death, insolvency, or mental incapacity of the shareholder.

A financial institution authorized by SEBI to handle the process of dematerializing and rematerializing securities, facilitating electronic trading and record keeping.

A company that provides trusteeship services for debentures, ensuring bondholders' interests are protected.

SEBI (Securities and Exchange Board of India) is the regulatory body that oversees the securities market in India, including IPOs.

A company's share price reflects the overall market sentiment and economic conditions, indicating growth or downturns.

The ease with which securities can be bought and sold in the market, ensuring quick transactions.

The amount of money a company needs to operate on a day-to-day basis, including inventory, accounts receivables, and cash.

The long-term assets a company uses to generate revenue, such as buildings, machinery, and equipment.

A company that provides essential services to the public, often regulated by the government, like electricity, water, or transportation.

A company's financial health is assessed by examining its assets (what it owns) and liabilities (what it owes). A financially sound company has more assets than liabilities.

The capital used to buy long-term assets that will be used for several years, like machinery or buildings.

Shares issued by a company to raise capital, giving investors ownership rights and a share in profits.

A company's decision to declare and pay a portion of its profits to its shareholders is known as dividend.

The process of a company raising capital by issuing debentures, which are debt securities representing a loan made to the company. This involves a series of steps to ensure the issuance process is compliant and efficient.

The initial step in the debenture issuance process where the company receives applications from investors interested in purchasing the debentures. They submit applications along with the funds to invest in the debt securities.

A formal meeting of the board of directors of a company to discuss and approve the allotment of debentures to investors who have applied for them.

A certificate issued to investors who have been allotted debentures, signifying their ownership of the debt securities and their right to receive interest payments and principal repayment on maturity.

The process of receiving funds from investors who are subscribing to the company's shares, marking the initial stage of raising equity capital.

The act of a company allotting shares to investors who have applied for them, officially making them shareholders of the company.

A document that certifies the ownership of shares in a company, representing the shareholder's rights and entitlements.

The maximum tenure for secured debentures is 10 years, but companies can issue debentures with shorter tenures if they have strong liquidity and the need for capital is for a shorter period.

To issue debentures exceeding the borrowing limit as per the company's Articles of Association requires shareholder approval, as it exceeds the board's authority. This protects minority shareholders.

A company must issue debenture certificates within 6 months of the debenture allotment. This ensures transparency and timely documentation for the debenture holders.

A public company can accept deposits from the public only if its net worth is at least 100 crores. This safeguard protects investors from smaller companies with a higher risk profile.

The maximum period for public deposits is 36 months. This limit aims to ensure companies don't rely too heavily on short-term borrowing, potentially causing financial instability.

Public deposit receipt must be issued within 21 days of receiving the deposit money. This ensures prompt and transparent communication with depositors.

An eligible public company is allowed to accept deposits from its members. This is beneficial as it provides an avenue for members to invest in the company.

A company accepting deposits from the public needs shareholder approval. Shareholders need to be informed and have the opportunity to vote on the company's decision to take public deposits. This helps protect the interests of shareholders and ensure transparency.