SEBI Grade A 2022– Companies Act Practice Question | Set- 3

0

Companies Act Question for SEBI Grade A 2022

SEBI Grade A Companies Act Practice Question Test. Companies Act study material for SEBI Grade A Exam 2022. Costing, Companies Act, Economics, Commerce & Accountancy, Management and Finance Notes PDF for SEBI Grade A Preparation 2022. As we all know The Security Exchange Board of India (SEBI) has released the SEBI Grade A 2022 Notification for the recruitment of 120+ Assistant Managers across the country.

If you are preparing for SEBI Grade A 2022, you will come across a section on “Costing, Companies Act and Economics”. In this post, you will attempt the Companies Act for your SEBI Grade A Preparation 2022. If you prepare this thoroughly, you can very easily crack SEBI Grade A 2022.

SEBI Grade A 2022 – Companies Act Question | Set- 3

Solving the SEBI Grade A Companies Act Question will help the candidates to get acquainted with different types of questions. SEBI Grade A Companies Act Question will also increase the precision and accuracy which saves a good amount of time in the actual exam.


1. The subscribed capital of a company is:-

A. Never more than the issued capital

B. Never less than the issued capital

C. Always equal to the issued capital

D. Prescribed percentage of the issued capital

E. None of above

Show Correct Answers

Correct Answer – A. Never more than the issued capital

Explanation: Section 2(86) ―subscribed capital means such part of the capital which is for the time being subscribed by the members of a company; Section 2(50) ―issued capital means such capital as the company issues from time to time for subscription; Explanation: by design subscribed capital <= issued capital; As the public cannot subscribe to more share capital than that which was issued by the company.

2. A company may convert all or any of its fully paid-up shares into stock:

A. By passing a special resolution

B. By passing an ordinary resolution

C. With the approval of the Tribunal

D. All of the above

E. None of above

Show Correct Answers

Correct Answer – B. By passing a ordinary resolution

3. Part of the capital for which applications has been received from the public and shares allotted to them:

A. Nominal capital

B. Issued capital

C. Subscribed capital

D. Called up capital

E. None of above

Show Correct Answers

Correct Answer – C. Subscribed capital

Explanation: Section 2(86) ―subscribed capital means such part of the capital which is for the time being subscribed by the members of a company; Issued shares are the shares sold to and held by investors of a company. These investors can include large institutions or individual retail investors.

4. Shares that are issued by a company to its directors or employees at a discount or for consideration:

A. Equity Shares

B. Preference Shares

C. Sweat Equity Shares

D. Redeemable preference shares

E. None of above

Show Correct Answers

Correct Answer – C. Sweat Equity Shares

Explanation: Section 2(88) ―sweat equity shares‖ means such equity shares as are issued by a company to its directors or employees at a discount or for consideration, other than cash, for providing their know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called.

5. Which of the following statements is true regarding the issue of shares?

A. Companies cannot issue shares at discount under any circumstances

B. Securities premium reserve can be used for writing off expenses on issue of equity shares of the company.

C. Both a & b are true

D. Both a & b are false

E. All of the above

Show Correct Answers

Correct Answer – B. Securities premium reserve can be used for writing off expenses on issue of equity shares of the company

6. Which section of the Companies Act 2013 defines the word share?

A. Section 2(84)

B. Section 2(50)

C. Section 2(8)

D. Section 43

E. None of above

Show Correct Answers

Correct Answer – A. Section 2(84)

Explanation: Around 95 definitions are given in Section 2 and they are listed in alphabetical order. Since ‘share’ starts with ‘s’ which comes relatively late in alphabetical order Section 2(84) is the most likely answer.

7. Which of the following is called the maximum amount of share capital of the company?

A. Called up capital

B. Issued capital

C. Subscribed capital

D. Authorized capital

E. None of above

Show Correct Answers

Correct Answer – D Authorized capital

Explanation: Section 2(8) ―authorised capital or ―nominal capital means such capital as is authorised by the memorandum of a company to be the maximum amount of share capital of the company.

8. What should be the minimum subscription against the entire public issue?

A. 60%

B. 75%

C. 80%

D. 90%

E. None of above

Show Correct Answers

Correct Answer – D. 90%

Explanation: The minimum shares the company needs to get from the public out of the total issue by the date of closure. (Presently every company needs to raise 90% of the issued amount). Else, the company shall refund the whole amount received. This 90 % has to be exclusive of the cheques that are not cleared.

9. What is the maximum period of redemption of preference shares issued by Company?

A. 10 years

B. 20 years

C. 30 years

D. No limit

E. None of above

Show Correct Answers

Correct Answer –B. 20 years

Explanation: Section 55(2): A company limited by shares may, if so authorised by its articles, issue preference shares which are liable to be redeemed within a period not exceeding twenty years from the date of their issue subject to such conditions as may be prescribed: Provided that a company may issue preference shares for a period exceeding twenty years for infrastructure projects, subject to the redemption of such percentage of shares as may be prescribed on an annual basis at the option of such preferential shareholders

Some students feel that the answer should be 30 years as such period is allowed for infrastructure projects. We are of the opinion that since it is an exception, unless explicitly specified… It should be taken as a company other than an infra company and hence, the answer should be 20 years. It is up to you what answer you chose.

10. What is the actual time period for completion of buy back from the date of passing the special resolution?

A. 6 months

B. 1 year

C. 2 years

D. No time limit

E. None of above

Show Correct Answers

Correct Answer – B. 1 year

Explanation: Section 68(4): Every buy-back shall be completed within a period of one year from the date of passing of the special resolution, or as the case may be, the resolution passed by the Board under clause (b) of subsection (2).

SEBI Grade A Free Study Material- Download Free PDF
Commerce & Accountancy Practice Questions Management Practice Questions Finance Practice Questions
Companies Act Practice Questions Costing Practice Questions Economics Practice Questions

SEBI Grade A (Assistant Manager) 2022 Preparation Book  (VOL. II) – Costing, Companies Act and Economics

Note: If you have any suggestion through which we can improve the quality of this “A Complete Book for SEBI Grade A (Assistant Manager) 2022 (VOL. I)”, then please tell us in the comment, we are looking forward to know your suggestions and make corrections. For any questions, suggestions, feedback, please E-mail us at support@gsspecial.com  and letsstudytogether01@gmail.com

SEBI Grade A Officer Exam 2022 – Important Links

Official Notification Exam Pattern and Syllabus Preparation Tips & Tricks
Previous Year Paper PDF Best Preparation Books Exam Date
Admit Card SEBI Result Complete Study Material
SEBI Grade A Complete Book (VOL. I) of Commerce Accountancy, Management, and Finance
SEBI Grade A Complete Book (VOL. II) of Costing, Companies Act and Economics