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Corporate and Other Laws MCQs for CA Inter
Chapter-wise Corporate and Other Laws MCQs with answers and explanations. Try the sample questions below, then practise a set of 10 with instant right/wrong.
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Q1 · Audit and Auditors
Under Section 143 of the Companies Act, 2013, which of the following is NOT a matter the auditor is required to state in his report?
- (a) Whether he has sought and obtained all the information and explanations necessary for the audit.
- (b) Whether the company's accounts are in agreement with the books of account and returns.
- (c) Whether the auditor is a member of the company's Board of Directors.
- (d) Whether, in his opinion, the financial statements comply with the accounting standards.
Show answer ↓
Answer: (c) Whether the auditor is a member of the company's Board of Directors.
(c) is the one that is not required: the auditor must state the matters in Section 143(3), such as obtaining information, agreement with books and compliance with accounting standards, but being a Board member is a disqualification, not a reporting matter. (a), (b) and (d) are all matters the report must cover.
Q2 · Audit and Auditors
Under the Companies Act, 2013, which of the following statements about the appointment of an auditor of a company is correct?
- (a) The first auditor of a company is appointed by the Board within 30 days of incorporation and holds office till the conclusion of the first AGM.
- (b) The first auditor is appointed by the shareholders in the first general meeting only, and the Board has no power in this regard.
- (c) An auditor can be appointed for an unlimited number of consecutive terms of five years each.
- (d) The auditor is appointed by the Registrar of Companies for every company in every financial year.
Show answer ↓
Answer: (a) The first auditor of a company is appointed by the Board within 30 days of incorporation and holds office till the conclusion of the first AGM.
(a) is correct: under Section 139(6), the Board appoints the first auditor within 30 days of incorporation, who holds office till the conclusion of the first AGM. (b) is wrong because the Board makes the first appointment; (c) is wrong because a listed/prescribed company is limited to two terms of five years each; (d) is wrong as the ROC does not appoint auditors routinely.
Q3 · Audit and Auditors
Under Section 139 of the Companies Act, 2013, who appoints the first auditor of a company (other than a government company) in the case of a company that is not a one-person company?
- (a) The shareholders at the annual general meeting
- (b) The Board of Directors within 30 days of registration
- (c) The Central Government
- (d) The Registrar of Companies
Show answer ↓
Answer: (b) The Board of Directors within 30 days of registration
(b) is correct: under Section 139(6), the Board must appoint the first auditor within 30 days of registration, and shareholders must ratify it at the first AGM. The AGM option is wrong because shareholders ratify rather than initially appoint the first auditor, and the Central Government and the ROC have no role in this appointment.
Q4 · Incorporation of company and matters incidental Thereto
Under the Companies Act, 2013, which document must be filed with the Registrar to incorporate a company, along with the Memorandum of Association?
- (a) Prospectus
- (b) Articles of Association
- (c) Annual return
- (d) Balance sheet
Show answer ↓
Answer: (b) Articles of Association
(b) is correct: the Articles of Association must be filed along with the MOA and the SPICe+ application for incorporation. A prospectus is issued only when inviting public subscription, and annual returns and balance sheets are filed after incorporation.
Q5 · Share Capital and Debentures
Which of the following is NOT a permitted mode of issuing shares by a company under the Companies Act, 2013?
- (a) Issue of bonus shares
- (b) Rights issue
- (c) Issue of shares at a discount without the prescribed conditions
- (d) Preferential allotment
Show answer ↓
Answer: (c) Issue of shares at a discount without the prescribed conditions
(c) is correct: shares cannot be issued at a discount unless the conditions of Section 53 and the Rules (including a special resolution and minimum one-year dividend track record) are met, so the unconditional option is not permitted. Bonus shares, rights issues and preferential allotment are all valid modes.
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