CA Inter P2 · Chapter 6
Management and Administration MCQs with Answers
10 multiple-choice questions on Management and Administration for CA Inter P2 Corporate and Other Laws. Try each one before revealing the answer and explanation.
Practise this chapter interactivelyQuestion 1
Under section 91, a company may close its register of members, after giving at least seven days' notice, for periods aggregating not more than ______ in a year, and not more than ______ at any one time.
- A) Sixty days; forty-five days
- B) Forty-five days; twenty-one days
- C) Thirty days; fifteen days
- D) Forty-five days; thirty days
Show answer & explanation
Answer: D) Forty-five days; thirty days
Section 91(1) permits a company to close its register of members or debenture-holders or other security holders for any period or periods not exceeding forty-five days in the aggregate in a year. No single closure may exceed thirty days, and at least seven days' prior notice is required.
Question 2
Under section 92(4), a company must file its annual return with the Registrar within:
- A) Sixty days from the date on which the annual general meeting is held, or from the date on which it should have been held
- B) Thirty days from the date of the annual general meeting
- C) Thirty days from the date of the board meeting approving the financial statements
- D) Six months from the close of the financial year
Show answer & explanation
Answer: A) Sixty days from the date on which the annual general meeting is held, or from the date on which it should have been held
Section 92(4) requires every company to file a copy of the annual return with the Registrar within sixty days from the date on which the annual general meeting is held. Where no AGM is held in a year, the sixty days run from the date on which it should have been held.
Question 3
Lotus Ltd was incorporated on 15 February of Year 1. By which date must it hold its first annual general meeting under section 96?
- A) 30 September of Year 1
- B) 31 December of Year 2
- C) 31 December of Year 1
- D) 15 November of Year 1
Show answer & explanation
Answer: B) 31 December of Year 2
Under section 2(41), a company incorporated on or after 1 January has its first financial year ending on 31 March of the following year. Lotus Ltd's first financial year therefore runs from 15 February Year 1 to 31 March Year 2. Section 96(1) requires the first AGM within nine months of the close of the first financial year, which is 31 December Year 2.
Question 4
Garnet Ltd held its last AGM on 25 July of Year 1. Its financial year ended on 31 March of Year 2. Ignoring any extension by the Registrar, what is the latest date by which it must hold its next AGM?
- A) 25 July of Year 2
- B) 30 September of Year 2
- C) 31 December of Year 2
- D) 25 October of Year 2
Show answer & explanation
Answer: B) 30 September of Year 2
Section 96(1) requires a subsequent AGM within six months of the close of the financial year, and not more than fifteen months between two AGMs. Six months from 31 March Year 2 is 30 September Year 2. Fifteen months from 25 July Year 1 is 25 October Year 2. The earlier of the two, 30 September Year 2, is the deadline.
Question 5
The paid-up share capital of Opal Ltd carrying voting rights is ₹60 lakh. Some members holding ₹5 lakh of that capital deposit a requisition for an extraordinary general meeting under section 100. The requisition is:
- A) Not valid, because they hold less than one-tenth of the paid-up voting capital
- B) Not valid, because only the Tribunal can call an extraordinary general meeting
- C) Valid, because any member may requisition a meeting
- D) Valid, because they hold more than one-twentieth of the paid-up voting capital
Show answer & explanation
Answer: A) Not valid, because they hold less than one-tenth of the paid-up voting capital
Section 100(2)(a) requires the requisitionists of a company with share capital to hold at least one-tenth of the paid-up share capital that carries voting rights on the date of the requisition. One-tenth of ₹60 lakh is ₹6 lakh. A holding of ₹5 lakh is below this, so the Board is not bound to call the meeting.
Question 6
Under section 101(1), an annual general meeting may be called at shorter notice than twenty-one clear days if consent in writing or by electronic mode is given by:
- A) Not less than ninety-five per cent of the members entitled to vote at the meeting
- B) All the directors of the company
- C) A majority in number of the members entitled to vote
- D) Members holding not less than seventy-five per cent of the paid-up share capital
Show answer & explanation
Answer: A) Not less than ninety-five per cent of the members entitled to vote at the meeting
The proviso to section 101(1) allows an AGM to be called at shorter notice with the consent of not less than ninety-five per cent of the members entitled to vote. For any other general meeting, consent is needed from a majority in number of members entitled to vote who hold at least ninety-five per cent of the paid-up voting capital (or total voting power).
Question 7
Unless the articles require a larger number, what is the quorum for a general meeting of a public company with 3,200 members on the date of the meeting?
- A) Fifteen members personally present
- B) Five members personally present
- C) Two members personally present
- D) Thirty members personally present
Show answer & explanation
Answer: A) Fifteen members personally present
Under section 103(1)(a), the quorum for a public company is five members personally present if members do not exceed 1,000. It is fifteen if members exceed 1,000 but not 5,000, and thirty if members exceed 5,000. With 3,200 members, the quorum is fifteen. A private company needs two members personally present.
Question 8
Which of the following statements about proxies under section 105 is correct?
- A) A proxy must be a member, and may speak at the meeting
- B) The articles may require the proxy instrument to be deposited up to seventy-two hours before the meeting
- C) A proxy need not be a member, and the articles cannot require the proxy instrument to be deposited more than forty-eight hours before the meeting
- D) A proxy may vote on a show of hands as well as on a poll
Show answer & explanation
Answer: C) A proxy need not be a member, and the articles cannot require the proxy instrument to be deposited more than forty-eight hours before the meeting
Under section 105(1), a member entitled to attend and vote may appoint another person, whether a member or not, as his proxy. A proxy has no right to speak at the meeting and may vote only on a poll, not on a show of hands. Under section 105(4), any provision in the articles requiring the proxy instrument to be lodged more than forty-eight hours before the meeting has effect as if it specified forty-eight hours, so a seventy-two-hour requirement is not valid.
Question 9
At a general meeting of Coral Ltd, a resolution was proposed as a special resolution after due notice. 3,000 votes were cast in favour, 1,000 against, and 400 members present abstained. The resolution is:
- A) Not passed, because votes in favour must be more than three times the votes against
- B) Passed only as an ordinary resolution
- C) Passed as a special resolution
- D) Not passed, because votes in favour are less than three-fourths of all members present
Show answer & explanation
Answer: C) Passed as a special resolution
Under section 114(2), a special resolution needs votes cast in favour to be not less than three times the votes cast against, by members entitled and voting in person, by proxy or by postal ballot. Abstentions are ignored. Here 3,000 = 3 x 1,000, which meets the 'not less than three times' test, so the special resolution is passed.
Question 10
Under the Companies Act, 2013, special notice under section 115 is required for a resolution to:
- A) Remove a director before the expiry of his period of office under section 169
- B) Re-appoint a director retiring by rotation
- C) Declare a final dividend
- D) Adopt the financial statements at an annual general meeting
Show answer & explanation
Answer: A) Remove a director before the expiry of his period of office under section 169
Special notice is required where the Act or the articles so provide. Notable cases are the removal of a director under section 169(2), and appointing an auditor other than the retiring auditor or providing that the retiring auditor shall not be reappointed under section 140(4). Under section 115, the notice is given to the company at least fourteen days before the meeting.