MCQ on Joint Stock Company
1. What is Joint Stock Company?
(1) A joint stock company is referred to as the form of business organisation where the company's stock can be purchased and sold by the shareholders of the company.
(2) A joint-stock company is a business owned by its investors, with each investor owning a share based on the amount of stock purchased.
(3) Both 1 and 2
(4) None of these
Answer: (3) Both 1 and 2
Explanation: A joint stock company is a form of business organization where the company's capital is divided into shares that can be bought and sold by shareholders. Each shareholder owns a portion of the company based on the number of shares held.
2. Why joint stock company is also called______
(1) Artificial person
(2) Synthetic Person
(3) Natural Person
(4) None of these
Answer: (1) Artificial person
Explanation: A joint stock company is referred to as an artificial person because it is a legal entity distinct from its members, capable of owning property, entering contracts, and engaging in legal actions in its own name.
3. A Joint stock company is governed by______
(1) Companies Act 2013
(2) Companies Act 2017
(3) Companies Act 2011
(4) Companies Act 2014
Answer: (1) Companies Act 2013
Explanation: The governance and regulations for joint stock companies in India are primarily governed by the Companies Act, 2013.
4. Which is smallest part of share capital of joint stock company?
(1) equity shares
(2) preference shares.
(3) Both
(4) Can't Say
Answer: (3) Both equity shares and preference shares
Explanation: Share capital of a joint stock company can be divided into equity shares and preference shares, which represent different rights and obligations of shareholders.
5. What is the characteristics of a joint stock company?
(1) Independent legal entity.
(2) Limited liability.
(3) Common seal.
(4) All of these
Answer: (4) All of these
Explanation: A joint stock company exhibits characteristics such as being an independent legal entity, limited liability for shareholders, and the use of a common seal for official purposes.
6. The ownership capital of Joint Stock Companies is dividend in its------------
(1) Equity shares
(2) Debentures
(3) Bonds
(4) Debentures and preference shares
Answer: (4) Debentures and preference shares
Explanation: The ownership capital of joint stock companies comprises equity shares, debentures, and preference shares, representing different types of ownership interests and debt securities.
7. What are the types of joint stock company?
(1) Chartered company
(2) Statutory Company
(3) Registered Company
(4) All of these
Answer: (4) All of these
Explanation: Joint stock companies can be classified into chartered companies, statutory companies, and registered companies based on their incorporation and governance structures.
8. What is the advantages of joint stock companies_______
(1) Liability is Limited
(2) Since the Shares are Transferable
(3) Companies are Run by a Board of Directors
(4) All of these
Answer: (4) All of these
Explanation: Joint stock companies offer advantages such as limited liability for shareholders, transferability of shares, and professional management by a board of directors.
9. Which of the following is a joint stock company ?
(1) Tata Motors Limited.
(2) Reliance Industries Limited
(3) State Bank of India
(4) All of these
Answer: (4) All of these
Explanation: Tata Motors Limited, Reliance Industries Limited, and State Bank of India are all examples of joint stock companies.
10. ---------------- audit is compulsory for joint stock companies
(1) Statutory
(2) Final
(3) Continuous
(4) none
Answer: (1) Statutory
Explanation: Statutory audit is mandatory for joint stock companies to ensure compliance with legal and financial regulations.
11. Which of the following is disadvantage of Joint-Stock Company_______
(1) A very long gestation period since a lot of regulatory red tape has to be crossed.
(2) Such firms have a complete lack of secrecy because their financial records must be provided to registrars under the Companies Act (Amended), 2013.
(3) There are latent chances of conflict of interest between a firm’s shareholders, promoters and the BoD.
(4) All of these
Answer: (4) All of these
Explanation: Disadvantages of joint stock companies include lengthy regulatory procedures, lack of financial privacy due to disclosure requirements, and potential conflicts of interest among shareholders, promoters, and the board of directors.