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Quiz
Q1. What shall be Quorum in case No. of Directors is 13:
3
4
5
2
Q2. How many Directors are required for making request that a resolution circulated for approval shall instead be passed by convening BM:
1/3rd or more
2/3rd or more
Minimum 2
1/2 or more
Q3. A. Ltd had 9 Directors on its Board. A Board Meeting was convened on 15th of the month. On that day, 7 of the Directors were on visit to a Regional Conference. The meeting was conducted by the remaining two and a letter jointly signed by the 7 absentee member Directors was obtained as a No-Objection for lack of Quorum. Is the BM legal if absentee Directors waive Quorum in writing?
No, as Quorum is fixed by the Act and cannot be reduced by Co (only specific businesses can be done when Quorum falls)
Yes, Quorum can be reduced if over 2/3rd Directors consent to do so
Yes, Quorum is a just a guiding principle and can be waived by written declaration
Yes, provided Independent Directors unanimously approve the same
Q4. Which of the following is correct: The resolution passed by circulation
Shall be noted at the next BM and made part of minutes thereof
Shall be noted at the immediate next GM held by the company and made part of minutes thereof
Shall be noted at the next BM but not recorded in Minutes
Shall be noted at the immediate next GM held by the company and ratified by shareholders
Q5. Notice was received by Mr. Traveller, Director of Wanderlust Ltd. for BM to be held on 15th of the month. On that day Mr. Traveller was to travel to New York and hence couldn’t be able to attend the meeting. Mr. Stationary told Mr. Traveller not to worry as the Companies Act, permits attendance through Video Conferencing as well: At the meeting that ensued following matters were discussed: I. Payment of Bonuses II. Selection of Transport Contractors III. Approval of Quarterly Financial Statements for Stock Exchange compliances In light of gravity of the decisions taken thereat, is the attendance of Mr. Traveller through Electronic mode valid under Companies Act
Yes for all matters
No for all matters
Yes for I & II only
No for I & II only
Q6. Mr A. Director of A. Pvt Ltd is also the partner in Alpha Traders. Alpha Traders is expecting to receive an order from A Pvt Ltd. The BM convened to grant this order has Mr. A present thereat. As an Interested Director can he participate?
Q7. Mr A. Director of A.Ltd is also the partner in Alpha Traders. Alpha Traders is expecting to receive an order from A Ltd. The BM convened to grant this order has Mr. A present thereat. As an Interested Director can he participate?
Q8. Mr A. Director of A.Ltd is also the partner in Alpha Traders. Mr. B. his partner in Alpha Traders is also a partner in Supersonic Traders. Supersonic is expecting to receive an order from A Ltd. The BM convened to grant this order has Mr. A present thereat. Is he an Interested Director?
Yes, as he is financially related with a partner of the beneficiary of the resolution.
Yes, as he is within two degrees of separation from the bidder i.e. Supersonic
No, as he is a mere partner to Mr. B (who is separately a partner in Supersonic Traders), and not an owner/partner himself.
No, since Mr. A is a partner of Mr. B , and as such the partnership assumes a different legal status and hence immune to provisions of Interested Directors
Q9. In a 3-person Board, with Mr. A, Mr. B, Miss C as the Directors, 3 resolutions were to be passed, but following Directors were Interested therein: Resolution Interested Directors I Mr A II Mr B & Miss C III Miss C On which Resolution the Board doesn’t hold a Quorum
I & III
II
None
All
Q10. Mr A. Director of A.Ltd is also the sole proprietor of Alpha Traders who are the leading supplier of Raw Material to Supersonic Traders. Supersonic is expecting to receive an order from A Ltd. The BM convened to grant this order has Mr. A present thereat. Is he an Interested Director?
Yes, as he is indirectly to benefit from a better financial position of Supersonic
Yes, as he is owner of an entity other than Directorship of A Ltd
No, as he is a mere supplier to Supersonic, not an owner/partner therein.
No, since Mr. A is a sole proprietor and as such has immunity from provisions of Interested Directors
Q11. What shall be Quorum in case No. of Directors is 12:
3
4
9
2
Q12. A meeting is convened on 19th of January, due to lack of Quorum it stands postponed to which of the following days?
Q13. ‘The First Step’ Ltd engages in selling souvenirs made by juvenile inmates and using the surpluses thereof only to impart vocational education to juveniles in jails, it is incorporated under special provisions applicable to Social Welfare entities under Companies Act and seeks advise in following case: A BM was called on 28th June, at the meeting Directors for District No..1 , 4, & 6 were in attendance. But the Directors for remaining 13 other districts could not make it in time. There is one Director for each district. Is the quorum at the meeting valid?
No as 6 Directors are minimum Quorum in above case
No as the requisite quorum is 4 members or more
Yes as 2 Directors are minimum Quorum in given case
A single Director can form Quorum in above case
Q14. NTPC Ltd. (NSE: NTPC) engaged in retail business has a paid up share Capital of 5.5 crore, with total outstanding liabilities incl. loans and debentures) of 11 crores. It made a turnover of 50 crores . Is it required to appoint an Audit Committee?
Yes, as it has turnover over minimum limit
Yes, as it has liabilities over minimum limit
Yes, as its share capital is over minimum limit
Yes, as it is a Listed Public Company
Q15. What provision of Quorum is applicable to OPC with more than 1 Director:
Quorum 2 or 1/3rd
25% or 8 members
No Quorum required for OPC in this case
No Quorum required at BM of OPC
Q16. Out of the 3 Directors on the Board of A Ltd. Mr A passed away and Mr B tendered his resignation before the BM scheduled for 15th of the month. At such a meeting Mr. C being the sole Director could no way achieve the Quorum and as such made business decision by passing resolutions himself. The Shareholders were displeased at such single handed approval system. Will the resolutions passed stand?
Yes, as there is no way to achieve the mandatory 2 person Quorum
Yes, but only if the resolutions passed are assented to by the Shareholders
No, as the Companies Act only allows continuing director/s to act in order to restore Quorum or call GM of Shareholders
Yes, as the BM was already notified before the events of retirement and death took place, hence decisions taken thereat are legally binding
Q17. Mr. A attending his daughter’s destination wedding joined a BM via Video Conferencing: At this meeting discussion was done regarding wide range of financial budgets and approval of the Board’s Report. Presence at BM via Video Conferencing is not permissible for which of these matters?
Q18. Mr. A attending his daughter’s destination wedding joined a BM via Video Conferencing: At this meeting discussion was done regarding financial budgets and approval of the Financial Statement. Presence at BM via Video Conferencing is not permissible for which of these matters?
Discussion for budgets are not permissible
Approval of annual Financial Statement is not permissible
Both are permissible
Both are not permissible
Q19. Of the 4 Directors on the Audit Committee of A. Ltd. 2 are illiterate and 2 are Chartered Accountants. This is done so as to bring about inclusivity of opinions. Is the constitution valid under Companies Act?
Yes, atleast 50% are able to read and understand financial statements
Yes, as the education is no criteria for selecting Directors for Audit Committee
No, as majority are required to read and understand financial statements
No, as Companies Act requires all Audit Committee members to be financially literate
Q20. What modes of attendance are available to a Director attending a BM
In person
Video Conference
Prescribed Audio Visual means
All of these
