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Practice each question, then open the answer or worked solution.
It is necessary to get every company incorporated, whether private or public.
Ans: True.
Every company must be incorporated since it can only lawfully begin doing business after it has been registered with the registrar of companies.
Statement in lieu of prospectus can be filed by a public company going for a public issue.
Ans: False.
A prospectus must be filed with the Registrar of Companies by a public limited company seeking applications from the general public to subscribe to its shares or debentures.
A private company can commence business after incorporation.
Ans: False.
After incorporation, not every firm is able to begin operations. Only when a private business is incorporated does it become a legal entity. As a result, only a private firm may start doing business right away after formation.
Experts who help promoters in the promotion of a company are also called promoters.
Ans: False.
A promoter is a person who comes up with the concept for forming a firm and takes actions to make it happen. Experts who assist promoters in marketing a firm, on the other hand, are not called promoters. They are just there to help the promoters.
A company can ratify preliminary contracts after incorporation.
Ans: False.
The company's preliminary contracts, often known as pre-incorporation contracts, are not legally enforceable. A preliminary contract cannot be ratified by a firm.
If a company is registered on the basis of fictitious names, its incorporation is invalid.
Ans: False.
A company's incorporation is null and void, if it is based on fake names. This is due to the fact that once a certificate of incorporation is granted, it cannot be challenged.
'Articles of association' is the main document of a company.
Ans: False.
The company's principal document is not the 'Articles of Association.' The memorandum of association, on the other hand, is a company's most significant document.
Every company must file Articles of Association.
Ans: False.
It is not necessary for every business to submit articles of association (AOA). The firm may use Table A of the Companies Act instead of AOA.
If a company suffers heavy issues and its assets are not enough to pay off its liabilities, the balance can be recovered from the private assets of its members.
Ans: False.
A company's shareholders are responsible only up to the amount of unpaid dividends on the shares they own.
Name the stages in the formation of a company.
Ans: The different stages in the formation of company are:
Promotion
Incorporation
Subscription of capital
Commencement of Business