Joint Stock Company

A Joint Stock company is referred to a company where there are some shareholders in the company; those shareholders can buy and sell the stocks. But the only factor over there is they need to keep in mind that the company should remain intact. The value of the share or the stock remains changed as per the profit or loss of the company. It is always possible to have a trade of those stocks between all the shareholders of that particular company. Not only that, but there are some more factors while forming a company. Also, there are several stages of the formation with approvals. Along with that, different rules are there for managing a company, also by deciding on the board of directors.

Here are some MCQs regarding the topic of Joint Stock companies.

1. Who forms a company?

1. 1. The Directors
   2. The Promoters
   3. The Government
   4. The Owners

Ans. B) The Promoters

2. What is the name of the signature of the company, which is considered the official one?

1. 1. A Prospectus
   2. A Common seal
   3. A Share
   4. A Debenture

Ans. B) A Common seal

3. After which name does “Limited” should appear?

1. 1. A Registered Company
   2. A Chartered Company
   3. A Partnership
   4. A Statutory Company

Ans. A) A Registered Company

4. Who is the artificial person who creates the joint-stock company?

1. 1. The Register
   2. The Employees
   3. The Law
   4. The Provincial Government

Ans. C) The Law 

5. Who manages a company?

1. 1. The Owners
   2. The Directors
   3. The Promoters 
   4. The Public

Ans. B) The Directors

6. What is the term for discounts on the shares on the balance sheet?

1. 1. An Asset
   2. A Liability
   3. A Deducted from the asset side.
   4. A Deduction in the capital on the paid upside

Ans. A) An Asset

7. What is the other term for debentures?

1. 1. A Bonus
   2. A Certificate of credit
   3. The Dividend
   4. The Bonds

Ans. D) The Bonds 

8. How can you share premium money?

1. 1. By paying the bonus share fully per issue
   2. By writing the goodwill
   3. By Paying the debentures
   4. By paying the dividends

Ans. A) By paying the bonus share fully per issue

9. To whom deferred shares can be generally issued?

1. 1. To the Managing agents
   2. To the Promoters
   3. To the Managing agents
   4. To the Owners

Ans. B) To the Promoters

10. Which are known as preliminary expenses?

1. 1. The Current liability
   2. The Current asset
   3. The Fictitious asset
   4. The Non current liability

Ans. C) The Fictitious asset

11. What should be the minimum number of members for a limited company?

1. 1. 6 people
   2. 7 people
   3. 9 people
   4. 12 People

Ans. B) 7 people

12. For signing a memorandum, how many numbers of members are needed?

1. 1. 6 People
   2. 7 People
   3. 3 People
   4. 2 People

Ans. D) 2 people

13. What will be the excess of the common stock credited to when that is issued with a more value than the par value?

1. 1. To the retained earnings
   2. To the cash
   3. To the legal capital
   4. Paid-in in the capital which is excess of the par value

Ans. D) Paid-in in the capital which is excess of the par value

14. How can you show the share premium on the balance sheet?

1. 1. Deduction in the capital, which is paid up
   2. The asset
   3. The equity of shareholders
   4. Deduction from the side of the asset

Ans. B) The equity of shareholders

15. What is the other name of the face values?

1. 1. The market values
   2. The book values
   3. The par values
   4. None of them

Ans. C) The par values.

16. What is the other name of the discount which is on the share accounts which is having a loss?

1. 1. The expenditure
   2. The capital
   3. The revenue
   4. None of the above

Ans. B) The capital

17. What is the term for the distribution of the earnings among the shareholders and the rest of the board of directors?

1. 1. The income
   2. The capital
   3. The reserve
   4. The dividends

Ans. D) The dividends

18. What is the name of the document, which has all the rules, laws, and regulations of the internal management system of the company?

1. 1. The Article of association
   2. The memorandum of association
   3. The Prospectus
   4. The Statement, instead of the prospectus

Ans. A) The Article of association 

19. What can be called to the debenture holders of the company?

1. 1. The Supplier
   2. The Creditor
   3. The Owner
   4. The Debtors 

Ans. B) The Creditor

20. What is the private invitation to the public to buy the shares of a particular company?

1. 1. The audit reports
   2. The articles of association
   3. The memorandum of association
   4. The prospectus

Ans. D) The prospectus

21. Who is the person who takes the complete risk while issuing the shares of a company?

1. 1. The underwriter
   2. The promoter
   3. The owner of the company
   4. The director

Ans. A) The underwriter

22. What is the name of the document which has the relationship of the company without the side world?

1. 1. The bond
   2. The Statement in lieu of a prospectus
   3. The memorandum of association 
   4. The prospectus

Ans. C) The memorandum of association

23. Where can a company issue the debenture?

1. 1. At the discount
   2. At the par
   3. At the premium
   4. All of them

Ans. D) All of them.

24. Who elects the board of directors for a particular joint-stock company?

1. 1. The employees
   2. The shareholders
   3. The government bodies
   4. The owners of the company

Ans. B) The shareholders

25. Who approves the name of a particular company?

1. 1. The SEBI
   2. The Government of India
   3. The Register of companies
   4. The promoters of the company

Ans. C) The Register of companies

26. What were the small parts when the capital of the company got divided into small parts?

1. 1. The debentures
   2. The interest
   3. The dividends
   4. The share

Ans. D) the share

27. In the stage of capital subscription, whose appointment is not necessary at all?

1. 1. The Underwriters
   2. The Brokers
   3. The Bankers
   4. All of them are necessary

Ans. A) The Underwriters

28. From the following, who can’t sign a declaration of the statutory?

1. 1. The chartered accountant
   2. The secretary of the company
   3. The advocate of the high court
   4. The promoters

Ans. D) The promoters

29. What is the second stage of company formation?

1. 1. The promotion
   2. The incorporation
   3. The capital subscription
   4. The agreement

Ans. B) The incorporation

30. Which of the following items is not at all required to submit to the Register of companies at the second stage?

1. 1. The Statement in lieu of a prospectus
   2. The consent of the proposed directors
   3. The payment of fees
   4. The statutory declaration.

Ans. A) The Statement in lieu of prospectus

31. For which feature a company that can be created by law can only be ended by a law?

1. 1. The formation
   2. The control
   3. The legal entity which is separated
   4. The perpetual succession

Ans. D) The perpetual succession

32. For a joint-stock company that doesn’t get considered as the merit?

1. 1. The scope for expansion
   2. The limited liability
   3. The lack of secrecy
   4. The professional management

Ans. C) The lack of secrecy

33. What is the document for which a company gets formed?

1. 1. The consent of the proposed directors
   2. The memorandum of association
   3. The articles of association
   4. None of the above

Ans. B) The memorandum of association

34. What can be the maximum number of members in a company that is publicly limited?

1. 1. 50 people
   2. 100 people
   3. 200 people
   4. No limit.

Ans. D) No limit

35. Who are the governing laws for a joint-stock company?

1. 1. The Indian companies act
   2. The Hindu session act
   3. The partnership acts
   4. The Indian co-operative society act.

Ans. A) The Indian companies act

36. When can a private company start working?

1. 1. After getting the certificate of incorporation
   2. After issuing share capital
   3. After signing the agreement
   4. After getting the certificate of business commencement

Ans. D) After getting the certificate of business commencement

37. What is the disadvantage of a joint-stock company from the following?

1. 1. It has a large expansion
   2. It has perpetual existence
   3. It has delayed decision-making
   4. It has the transferability of shares.

Ans. C) It has delayed decision-making

38. On what ground someone can transfer the shares of a particular company?

1. 1. With the consent of the board of directors
   2. With the help of the permission of that particular company
   3. After a period, it should be transferred, and that’s fixed
   4. Based on the discretion of the shareholders

Ans. D) Based on the discretion of the shareholders

39. What is the minimum paid-up of a private company?

1. 1. A minimum value of 50 thousand rupees
   2. A minimum value of 1 lakh rupees
   3. A minimum value of 5 lakh rupees
   4. A minimum value of 10 lakh rupees

Ans. B) A minimum value of 1 lakh rupees

40. What is the relationship between the shareholders and the company?

1. 1. They are the same
   2. Shareholders belong to the company
   3. They are separate
   4. They are not even related

Ans. B) they are separate

41. What is the law under which the legal status of a joint-stock company comes?

1. 1. A person who is artificial
   2. The association of profit sharing
   3. The recognized enterprise
   4. The place to spend the money.

Ans. A) an artificial person

42. How many members does a private company need to start?

1. 1. Only a single person
   2. At least 2 people
   3. At least 7 people
   4. At least 10 people

Ans. B) At least 2 people