ICFAI Business Environment & Law, Exams of Environmental Law

Download ICFAI Business Environment & Law and more Exams Environmental Law in PDF only on Docsity!

Business Environment & Law: Practice Paper

MULTIPLE CHOICE QUESTIONS

1. Environment is

a. Surrounding external objects b. Plants, trees, and animals around us c. Includes business and society d. Includes risk, external and internal factors. e. Organization, operation, marketing and legal factors.

2. Non-economic environment includes

a. Social, cultural, legal and technological factors b. Price and income c. Technical capabilities of the organization d. Skill and dexterity of employee e. Effective decision making capacity of the manager

3. SWOT analysis means

a. Opportunity, threat, strength and weakness b. Opportunity, social, trade and weakness c. Technology, strategy, organisation and weakness d. Operation, structure, tax and weakness e. Socio-cultural, organization, weakness and tax

4. Demographic environment include

a. Family size, education levels and economic stratification of the population b. Density of the population in an given area c. Size of the area d. Size and knowledge of the people in a given area e. Demand and supply of goods in a given area

5. Economic environment is the study of business at two levels

a. Micro and macro level b. Policy and regulatory level c. Ethical and competition level d. Tax and profit level e. Incentives and disincentives offered by the government

6. The word „strategia‟ in general sense means

a. The art and science of directing military forces b. Planning for better profit making c. Planning for better manufacturing d. Planning for the fighting challenges in the business environment e. Determining the human resources in the organization.

Multiple Choice Questions

7. Stratification helps in understanding

a. Consumer behaviour b. Consumption behaviour of the goods and services c. Develop marketing strategies and d. Segment markets appropriately e. All the above

8. Social classes are

a. Multidimensional b. Restrictive c. Homogeneous d. Dynamic e. All the above

9. Referrent power is based on

a. Person, firm and product‟s attractiveness b. Feeling of belongingness c. Degree of personal involvement d. Organization e. Influence of a person

10. Role means

a. Learned behaviour b. Part played by person in a drama c. Achieved position d. Recognized position e. Behaviour of an individual in an organization

11. Family is

a. Social unit living together b. Two or more persons related by blood, marriage or adoption who reside together c. Group with an extension of parent – child relationship d. Individuals unilaterally descended from a single common ancestor e. Husband, wife and children.

12. Culture is

a. Total pattern of behaviour b. Learned behaviour c. Not transmitted by biology d. Distinctive way of life of people e. All the above

13. Elements of culture

a. Language b. Aesthetics c. Religion d. Education e. All the above

14. Functions of Family

a. Economic well being b. Emotional support c. Suitable family life style d. Socialization of children and other family members e. All the above

Multiple Choice Questions

23. Government Company

a. Has at least 51% of the paid-up share capital by Central or State Government b. Has at least 49 % of the paid-up share capital by Central or State Government c. Has 50 % of the paid-up share capital by Central or State Government d. Has 75 % of the paid-up share capital by Central or State government e. Has 80 % of the paid-up share capital by Central or State government

24. Ordinary Share Capital is also known as

a. Equity share capital b. Preferential share capital c. Deferred share capital d. Participating preference share capital e. All the above

25. The Monopolies and Restrictive Trade Practice Act was repealed by :

a. Competition Act b. Consumer Protection Act c. Foreign Trade (Development and Regulation) Act d. Indian Contract Act e. Liberalisation Policy of the Government.

26. The general meeting that can be held by the shareholders other than Annual General Meeting of the company is a. Statutory meeting b. General body meeting c. Special meeting d. Annual General meeting e. Extraordinary General meeting
27. Every company is required to call at least a meeting of its shareholders every year. And this meeting is known as a. Statutory meeting b. Annual general meeting c. General body meeting d. Extraordinary meeting e. None of the above
28. Dividends is to be paid in the form of

a. Cash b. Kind c. Share d. Interest e. All of the above

29. In which of the following case the independent corporate entity of the company was discussed

a. Salomon Vs. Salomon & Co. Ltd. b. Lee Vs. Lee Air Farming Ltd. c. Jones Vs. Lipman d. PNB Finanace Vs. Shital Pd. Jain e. Gilford Motor Company Vs. Horne.

Business Environment & Law: Practice Paper

30. A public company cannot commence its business unless

a. The certificate of incorporation is obtained b. The certificate of the commencement of business is obtained c. The certificate of registration is obtained d. The certificate of registration and commencement of business is obtained e. Any of the above.

31. Memorandum of Association means

a. Memo issued to the company b. Document of the Association c. Document required to incorporate a company d. Type of the company e. List of documents for forming the company

32. Articles of Association contains

a. Rules that govern the management b. Rules for the conduct of the business c. Byelaws d. Powers of the officers e. All of the above

33. Memorandum of Association contains

a. Name clause b. Registered office clause c. Object clause d. Liability clause e. All of the above

34. The activities that ultravires the memorandum of association of a company ______.

a. Cannot be ratified even by all the shareholders of the company b. Can be ratified if approved by all the shareholders of the company c. Results into Compulsory winding up of the company d. Results in to Voluntary winding up of the company e. Amounts to Oppression/mismanagement of the company

35. Doctrine of Indoor Management was discussed in

a. Royal British Bank Vs. Turquand b. Pramatha Nath Sanyal Vs. Kali Kumar Dutt c. New Brunswick and Canada Rly. Land & Co. Vs. Muggeridge d. Free Wheel (India) Limited Vs. Dr. Veda Mitra e. None of the above

36. Prospectus is an

a. Invitation for subscription of securities b. Advertisement for subscription of debentures c. Notice of issue of securities d. Document inviting deposits e. All of the above

Business Environment & Law: Practice Paper

45. Economies have been classified into

a. Capitalist, Socialist and Mixed b. Developed c. Under developed d. Developing e. All of the above

46. Agriculture sector provides employment to

a. 70% of the total workforce b. 30% of the total workforce c. 25 % of the total workforce d. 50% of the total workforce e. 18% of the total workforce

47. Service sector includes services of

a. Communication b. Bank c. Financial institution d. Real estate e. All of the above

48. Kinds of Insurance

a. Life insurance b. General insurance

c. Motor Vehicle Insurance d. Health Insurance

e. All of the above

49. New Economic Policy (NEP) was introduced in

a. June 1991 b. December 1992 c. July 1996 d. May 1997 e. November 1992

50. In terms of the Companies Act, 2013, what is the full form of „OPC‟?

a. One Person Company b. One Person Corporation c. Another person company d. Open Platform Company e. Open Platform Communication

51. A company over which control is exercised is known as

a. Subsidiary company b. Holding company c. Foreign company d. Joint stock company e. None of the above

52. Debentures are generally

a. Redeemable b. Irredeemable c. Perpetual d. Cumulative e. Any of the above

Multiple Choice Questions

53. In terms of the Companies Act, 2013, „NCLT‟ stands for

a. National Company Law Tribunal b. National Company Law Tribune c. National Corporation Law Tribunal d. National Corporation Tribune e. National Company Law Treaty

54. Which of the following is not included within the meaning of Intellectual Property

a. Patents b. Copyrights c. Trade mark d. Property of an intellectual e. Geographical Indication

55. For the supply of necessaries the agreement with a minor is

a. Valid b. Void c. Illegal d. Not enforceable by law e. None of the above

56. A minor‟s agreement is void. This proposition is made in

a. Nihal Chand Vs. Jan Khan b. Sreekrishnan Vs. Kurukshethra University c. Mohari Beevi Vs. Dharmodas Ghosh d. Nanjappa vs. Muthuswamy e. Raman Bhai Vs. Ghasi Ram

57. Maslow‟s hierarchy of needs did not have one of human needs, that is

a. Self actualization b. Esteem c. Social needs d. Financial needs e. Physiological needs

58. Cultural adaptation refers to

a. Business decision making appropriate to the cultural traits of a society b. Changing the culture c. Accepting new culture d. Adopting the native custom e. None of the above

59. Which of the following constitute political system?

a. Parliamentary and absolutist forms of government b. Multi party system c. Single party system d. Dominant party system e. All of the above

60. Types of Economic system are

a. Communism b. Socialism c. Capitalism d. All of the above e. None of the above

Multiple Choice Questions

70. The Indian Companies Act, 2013 was passed in the year

a. 2014 b. 1950 c. 1974 d. 2011 e. 1920

71. Prior to its incorporation a company has

a. No status b. No existence c. No income d. All of the above e. None of the above

72. A company has a

a. Nationality b. Domicile c. Residence d. All of the above e. b and c only

73. A company may change its name

a. By passing a special resolution b. With the approval of central government c. With the approval of the company law board d. With the approval of the registrar e. Either a or, a and b

74. If a company wishes a business included in the other objects, it shall have to obtain the approval of

a. Registrar of companies b. Its subscribers to the memorandum c. Its shareholders by a special resolution d. The central government e. Either of the above

75. In which of the following case, a company can issue shares at a discount?

a. Sweat Equity Shares b. Initial Public Offering c. Bonus Issue d. Rights Issue e. Global Depository Receipts

76. A Share in a Company is a

a. Unit of share capital b. Unit of profit c. Unit of a preference share capital d. Unit of a debenture e. All of the above

77. Identify the key managerial person of a company from the given options.

a. Chief Executive Officer b. Chief Financial Officer c. Managing Director d. Whole time Director e. All of the above

Business Environment & Law: Practice Paper

78. Assets exempted from tax are:

a. Property held under trust b. Coparcenary interest in Hindu Undivided family c. Residential building of a former ruler d. Jewellery of a former ruler e. All of the above

79. Assets does not include

a. Building and land b. Motor cars c. Jewellery d. Furniture and e. Dividend

80. The rule of Indoor Management has no application where there is

a. Knowledge of irregularity b. Suspicion of irregularity c. Forgery d. Representation through articles e. All of the above

81. No application for shares of a public company can be invited for subscription unless it is accompanied by

a. Property draft b. Prospectus c. Statement in lieu of prospectus d. Balance sheet e. All of the above Prospectus is an invitation but not an appeal. It is in relation to securities where debenture is not a security but a secured debt.

82. Identify the „Charter of the Company‟ from the following:

a. Prospectus b. Memorandum c. Articles d. Statement in lieu of prospectus e. None of the above

83. Prospectus is defined under Section ______ of Companies Act , 2013

a. Sec 2 (70) b. Sec 2 (45) c. Sec 2 (22) d. Sec 2 (32) e. Sec 2 ( 28)

84. ______ is a person who brings about the incorporation and organisation of a company

a. Subscriber b. Director c. Shareholder d. Promoter e. Debenture holder

85. Allotment of Shares must be

a. Absolute b. Flexible c. Conditional d. Need not be absolute e. a and b

Business Environment & Law: Practice Paper

94. Into how many ways a company can limit its liability?

a. Two b. Three c. Four d. Five e. Six

95. The first Indian case on the principle that company is independent from its members is

a. Kandoli Tea Co.Ltd., Re b. Dinshaw Maneckjee Petit, Re c. Bacha F. Guzdar Vs CIT, Bombay d. CIR Vs. Meenakshi Mills Pvt. Ltd. e. All the above

96. In order to drop the word “Limited” from its name a company has to obtain permission from the

a. Company law board b. Registrar c. Central government d. State government e. Shareholders

97. Which of the following Company must have Articles of Association?

a. Unlimited Companies b. Companies limited by guarantee c. Private companies limited by shares d. All the above e. a and c only

98. „Corporate Social Responsibility Committee of the Board‟ is dealt under section _____________ of the Companies Act, 2013. a. Section 13 b. Section 14 c. Section 111 d. Section 130 e. Section 135
99. The last clause of the memorandum must state the --------- of the company.

a. Objects b. Capital c. Liability d. Subscription e. Registered office

100. Criminal liability for mis-representation in Prospectus is dealt in section

a. 58 – A b. 61 – C c. 34 d. 62 e. 60

Multiple Choice – Answers and Explanations

MULTIPLE CHOICE – ANSWERS AND EXPLANATIONS

1. (a) : Surrounding external objects Environment is read in relation to the surrounding external objects related to the business. 2. (a) : Social, cultural, legal and technological factors Non-economic environment include other environment in which the business is undertaken. 3. (a) : Opportunity, threat, strength and weakness SWOT analysis is done to understand opportunity, threat, strength and weakness of the company. 4. (a) : Family size, education levels and economic stratification of the population Demographic environment is taken into consideration before doing the business. 5. (a) : Micro and macro level To understand the economic environment it has to be studied at two levels. 6. (a) : The art and science of directing military forces Initially the word strategy meant the art and science of directing military forces. 7. (e) : All the above Stratification is the study of various levels of hierarchy. The stratification helps in understanding the various aspects of business and the risk involved. 8. (e) : All the above Social classes contains the features such as it is multidimensional, restrictive, homogeneous and dynamic. 9. (a) : Person, firm and product’s attractiveness Referrent powers are used to promote the product and encourage consumers, which in turn flows the feelings of belongingness. 10. (a) : Learned behaviour Role actually means the part played by the person in an given situation hence it is considered as a learned behaviour. 11. (a) : Social unit living together Family is considered as the social unit and an institution where people live together due to birth or marriage. 12. (e) : All the above Culture is the learned behaviour, it is also considered as a socialisation process into any group by following a particular pattern of that group. 13. (e) : All the above Culture includes all the learned behaviour in a given situation. It is considered to begin from birth and end only by death of a person. 14. (e) : All the above Family contains many functions and few have been listed in this question. 15. (a) : Three Cultural analysis includes three approaches and they are: ethnocentrism, assimilation and primacy of host country approach.

Multiple Choice – Answers and Explanations

30. (b) : The certificate of the commencement of business is obtained A public company can commence its business after it has obtained the certificate of commencement of business. 31. (c) : Document required to incorporate a company Memorandum of Association is one of the documents necessary for incorporation of a company, it is a public document. 32. (e) : All of the above Articles of Association contains bye-laws, means rules and regulation for the smooth functioning of the company. 33. (e) : All of the above The memorandum of association is a charter of the company. It contains five clauses, the fifth clause is the capital clause. These clauses are contained before registration to help the registrar to have details and after the incorporation it will help the shareholders and any investors. **(for deletion)

34. (a) : Cannot be ratified even by all the shareholders of the company** In terms of the Companies Act, 2013, any act that ultravires the memorandum of association of the company cannot be ratified even with the approval of all the shareholders of the company. 35. (a) : Royal British Bank Vs. Turquand This is the landmark case pertaining to the „Doctrine of Indoor Management‟. 36. (a) : Invitation for subscription of securities In terms of the Companies Act, 2013, Prospectus is a document inviting public for purchase or subscribe the securities of the company. 37. (b) : Two The Companies Act, 2013 provides two types of shares – Equity shares and Preference shares. 38. (a) : Patents In terms of the Patent Act, 1970, Patent is a legally obtained right on one‟s innovation or invention. 39. (e) : All of the above Director is considered as a trustee, agent and managing partner as the company runs on the fiduciary relation.The concept of qualification shares for a director is no more applicable, in terms of the Companies Act, 2013. 40. (e) : All of the above The appointment shall be done in accordance with the procedures laid under the respective sections of the Companies Act, 2013. 41. (e) : All of the above The given are the different kinds of meetings that are specified under the Companies Act, 2013. 42. (a) : Special resolution In terms of Section 271 of the Companies Act, 2013, a company through its special resolution can resolve itself for winding up by NCLT. 43. (e) : All of the above The Competition Act, 2002 main objective is to protect the consumers from unfair trade practises of the business class and to ensure freedom of trade for all participants in the market.

Business Environment & Law: Practice Paper

44. (b) : 2 members personally present in the meeting Section 103 of the Companies Act, 2013 specifies that quorum for a general meeting of a private limited company shall be two members personally present at the meeting. 45. (e) : All of the above These are the various types of economies that are explained by different economists in the world. 46. (a) : 70% of the total workforce As agriculture is the main occupation of our country men, they provide employment to 70% of our total work force. 47. (e) : All of the above The Chapter V of the Finance Act, 1994 is the dealing section for this. 48. (e) : All of the above The given are the various products of the insurance companies that are meant for sale on the basis of buyer requisites. 49. (a) : June 1991 Introduced by the then Finance Minister of India, Dr.Manmohan Singh, to bring trade liberalization thereby economic growth in the country. 50. (a) : One Person Company This type of company is newly introduced in the Companies Act, 2013. 51. (a) : Subsidiary company Subsidiary company is one which is under the control of its holding company. 52. (d) : Cumulative In terms of section 2(71) of the Companies Act, 2013, the minimum paid up capital for the company is five lakhs or such higher paid up capital as prescribed. 53. (a) : National Company Law Tribunal NCLT got replaced to CLB (Company Law Board). As these are the requirements according to the Companies Act, 1956 **(For deletion)

54. (d) : Property of an intellectual** Property of the intellects cannot be included in the intellectual property. As the intellectual property means anything produced out of the intellect. 55. (a) : Valid It is a quasi contract valid in terms of the Contract Act, 1872. 56. (c) : Mohari Beevi Vs. Dharmodas Ghosh This is a landmark case with respect to minor‟s contract. 57. (d) : Financial needs Maslow only speaks about the basic needs of human being and not about the financial needs of the human being. 58. (a) : Business decision making appropriate to the cultural traits of a society The business must adapt to the cultural requirement of the area so that they make good profit and sustain in the business. 59. (e) : All of the above