MCQs for CA Final Exam - CAFinal[dot]Org: Complete Learning Portal for CA Final Students

Quiz

Q1. Mr. A and Mr. B, members of company ABC Developers Private Limited filed two different applications under section 245 to the Tribunal requesting suitable action against the auditor of the company for the improper and misleading statements in audit report regarding the company. Advice the company on the following application of class action

Both the application shall be filed and proceeded by making it a joint application

Two class action applications for the same cause of action shall not be allowed;

Both the application shall be rejected and filled with the appellate tribunal

None of the above

Q2. The tribunal by order terminated the agreement of PKL Enterprises Pvt. Ltd. with ABC Ltd. ABC Ltd, and then sued the PKL Enterprises Pvt. Ltd for damages caused due to termination of agreement. Advice on such petition filled by other party for damages

The company will have to pay basic damages caused to the other party on termination of the agreement

As the contract was terminated on orders of Tribunal, no claims or damages can be claimed by other party and hence the petition is not maintainable

All of above

None of above

Q3. Which of the following is an act of oppression & mismanagement

Continuous losses to the company inspite of the efforts by the members and directors

Payment of no dividend or low dividend

Payment of salary to the directors and not declaring the dividend

Sale of asset for the benefits of directors themselves

Q4. What penalty is levy if the company does not abide by the orders of Tribunal?

Company In default: Fine: 5 to 25 Lac and to Officer in default: imprisonment upto 3 years and fine 25000 to 1 Lac

Company In default: Fine 1 lac Rs but which may extend to 5 Lac Rs and officer in default: imprisonment which may extend to 1 years and fine 25000 Rs but may extend to 50000 Rs

Also penalties under section 337 to 341 shall also apply

a and c

Q5. Who shall bear the cost and expenses connected with the class application:

Applicant

Company or person responsible for oppressive act

Cost and expenses shall be borne by all the members or applicants collectively

Partly by both the parties

Q6. Following is not the exception to the general rule of “one who holds the majority rule the company”

Ultravires or illegal acts

Transactions requiring special majorities

The fraud on the minority exception

Payment of Interim Dividend

Q7. Mr. X a minority shareholder and wanted to file an application for oppression and mismanagement but before he could file an application he died. Advice whether the legal heir of Mr. X can file an application to the Tribunal?

Yes the application can be filed by legal heir of the deceased who stands under the criteria of minority

No the application can be filed only by the victim i.e. the minority holder

All of above

None of above

Q8. In terms of prevention of oppression and mismanagement, what does issue share capital mean?

Issued share capital includes only equity share capital

Issued share capital is that part of share capital only which is fully paid up

Issued share capital includes both equity and preference share capital

None of the above

Q9. The members of XYZ Limited filed the case of oppression against the directors saying that despite sufficient reserves and profits they hadn’t declared dividend to the members. Advice whether the allegation filled falls under the category of oppression?

Yes, non-payment of dividend is the matter of oppression

Failure to declare the dividend does not amount to oppression

All of above

None of above

Q10. When would the act of further issues of shares amount to be oppression and needs to be prevented?

When the issues of shares was not done for the benefit of the company

When the issue benefited only the directors and small group of people

The only purpose for further issue of shares was to convert the majority into minority

All of the above

Q11. Can the decision of BOD for writing off bad debts be considered as the matter of mismanagement and oppression and does it require a judicial interference?

The decision of BOD is a commercial decision and does not require any judicial interference

The writing off of bad debts is the decision of members and BOD does not have any power to do so, and can file a petition

All of above

None of above

Q12. Examine the following: after the petition being filed to the Tribunal u/s 241, some of the petitioners have withdrawn their consent and the criterion of minimum members was breached. What will be the result of such fall in requisite number of applicants on the petition filed to the tribunal

The Tribunal can dispose off the petition

The validity of the petition is judged on the facts as they were at the time of presentation of petition, and hence the petition would proceed further

Again a fresh petition with the minimum number of members need to be filled

Both c and b (order would be first c and then b)

Q13. What are the circumstances under which the Central Government make an application to the Tribunal for its order under section 241

Can suo motu make an application if the affairs of the company are conducted in the matter prejudicial to the stakeholders

Can suo motu make an application if the affairs of the company are conducted in the manner prejudicial to the members

Can suo motu make an application if the affairs of the company are conducted in the matter prejudicial to the public interest

All of the above

Q14. Comment on the following: Can a single act of renting out the premises without the knowledge of members be termed as oppression or mismanagement?

Single act without knowledge of members is inherently oppressive

A single act cannot be termed as oppression

All of above

None of above

Q15. Within how many days should the certified copy of order of Tribunal be filled with Registrar

30 days

As per specified in order

60 days

90 days

Q16. The Board of directors of Relay Industries Private Limited sold the asset of the company at a price lower than the market price and not according to the required provision. Advice whether this act of BOD would attract mismanagement or not?

Yes this act of selling the asset amount to mismanagement

This act amount to oppression of the interest of member

The act is a commercial decision and does not mean oppression or mismanagement

None of the above