Students can find the most related topics which helps them to analyse the concepts if they practice according to the chapter-wise page. It is necessary for the students to practice more Questions and Answers for Tamilnadu State Board Solutions of 11th Commerce are given in the pdf format in chapter 6 Joint Stock Company Questions and Answers so that students can prepare in both online and offline modes. So, Download Samacheer Kalvi 11th Commerce Book Solutions Questions and Answers, Notes Pdf, to score good marks.

Samacheer Kalvi 11th Commerce Solutions Chapter 6 Joint Stock Company

Get the Questions and Answers, in Tamilnadu State Board 11th Commerce Solutions for Chapter 6 Joint Stock Company. Learn the concepts of 11th Commerce Chapter-Wise by referring to the Tamilnadu State Board Solutions for Chapter 6 Joint Stock Company Questions and Answers. Hence we suggest the students to Download Samacheer Kalvi 11th Commerce Book Solutions Questions and Answers pdf to enhance your knowledge.

Samacheer Kalvi 11th Commerce Joint Stock Company Textbook Exercise Questions and Answers

I. Choose the Correct Answer

Question 1.
The relationship between outsiders and the company is defined in …………………..
(a) Prospectus
(b) Articles of Association
(c) Memorandum of Association
(d) Certificate of Incorporation
Answer:
(a) Prospectus

Question 2.
Table A of the Companies Act is a …………………..
(a) Model minutes book
(b) Model form of Balance Sheet
(c) Model of AOA
(d) Model of MOA
Answer:
(c) Model of AOA

Question 3.
Which of the’following is created by a Special Act of Parliament or in State Assemblies?
(a) Chartered company
(b) Foreign company
(c) Government company
(d) Statutory company
Answer:
(d) Statutory company

Question 4.
The Board of directors of a company is elected by
(a) Creditors
(b) Debtors
(c) Debenture holders
(d) Share holders (members)
Answer:
(d) Share holders (members)

Question 5.
Companies established as a result of a charter granted by the King or Queen of a country is called
(a) Chartered companies
(b) Statutory companies
(c) Registered companies
(d) Foreign companies
Answer:
(a) Chartered companies

II. Very Short Answer Questions

Question 1.
What are the different types of companies?
Answer:

  1. Incorporation
  2. Membership
  3. Member liability
  4. Control
  5. Nationality

Question 2.
Define a Company.
Answer:
“A company is an artificial person created by law having a separate entity with a perpetual succession and a common seal.” – L.H. Haney.

Question 3.
What is meant by Limited liability?
Answer:
The liability of a shareholder is limited. The risk of loss is limited to the unpaid amount on the face value of shares held.

Question 4.
Explain any two characteristics of a company.
Answer:
1. Separate Legal Entity:
Under Incorporation a company becomes a separate legal entity as compared to its members. The company is distinct and different from its members.

2. Limited Liability:
The liability of the members of the company is limited to contribution to the assets of the company upto the face value of shares held by him. A member is liable to pay only the uncalled money due on shares held by him.

Question 5.
What is meant by Chartered Company?
Answer:
Chartered companies are established by the King or Queen of a country. Powers and privilege of chartered company are specified in the charter. Power to cancel the charter is vested with King/Queen.

III. Short Answer Questions

Question 1.
What are the advantages of Companies? (Any 3)
Answer:
1. Large Capital:
A company can secure large capital compared to a sole trader or partnership. Large amount of capital is necessary for conducting business on a large scale.

2. Limited Liability:
The liability of a shareholder is limited. The risk of loss is limited to the unpaid amount on the face value of shares held. In the case of a company limited by shares, the liability of a shareholder is restricted to the unpaid amount on the shares held by him.

3. Transferability of Shares:
Transaction of Shares between two individuals is easy. So there is liquidity of investment. Any shareholder can easily convert his shares into money by selling his shares.

Question 2.
What is meant by Private Company?
Answer:
Private limited company is a type of company which is formed with minimum two shareholders and two directors, the minimum requirement with respect to authorised or paid up capital of Rs. 1,00,000 has been omitted by the Companies (Amendment) Act, 2015 w.e.f. 29th of May, 2015.

Another crucial condition of a private limited company is that it by its articles of association restricts the right to transfer its shares and also prohibits any invitation to the public to subscribe for any securities of the company.

Question 3.
What is meant by Government Company?
Answer:
A public enterprise incorporated under the Indian Companies Act, 1956 is called a Government company. These companies are owned and managed by the central or the state government.

Section 617 of the Companies Act, 1956 defines “Government Companies” as any company in which not less than 51% of the paid – up share capital is held by the Central Government or any State Government or governments or partly by the Central Government and partly by one or more State Governments. A subsidiary of a Government company shall also be treated as a Government company.

Question 4.
What is meant by Foreign Company?
A Foreign company means a company which is incorporated in a country outside India under the law of that country. After the establishment of business in India, the following documents must be filed with the Registrar of Companies within 30 days from the date of establishment:

  1. A certified copy of the charter or statutes under which the company is incorporated, or the memorandum and articles of the company translated into English.
  2. The full address of the registered office of the company.
  3. A list of directors and secretary of the company.
  4. The name and address of any person resident of India who is authorised to accept, on behalf of the company, service of legal process and any notice served on the company.

IV. Long Answer Questions

Question 1.
What are the contents of Memorandum of Association?
1. Name Clause:
The name clause requires you to state the legal and recognized name of the company. You are allowed to register a company name only if it does not bear any similarities with the name of an existing company.

2. Situation Clause:.
The registered office clause requires you to show the physical location of the registered office of the company. You are required to keep all the company registers in this office in addition to using the office in handling all the outgoing and incoming communication correspondence.

3. Objective Clause:
The objective clause requires you to summarize the main objectives for establishing the company with reference to the requirements for shareholding and use of financial resources. You also need to state ancillary objectives; that is, those objectives that are required to facilitate the achievement of the main objectives.

4. Liability Clause:
The liability clause requires you to state the extent to which shareholders of the company are liable to the debt obligations of the company in the event of the company dissolving. You should show that shareholders are liable only their shareholding and/or to their commitment to contribute to the dissolution costs upon liquidation of a company limited by guarantee.

5. Capital Clause:
The capital clause requires you to state the company’s authorized share capital, the different categories of shares and the nominal value (the minimum value per share) of the shares. You are also required to list the company’s assets under this clause.

6. Association Clause:
The association clause confirms that shareholders bound by the MOA are willingly associating and forming a company. You require seven members to sign an MOA for a public company and riot less than two people for a MOA of a private company. You must conduct the signing in the presence of witness who must also append his signature.

Question 2.
What are the contents of Articles of Association?
Answer:
Contents of Articles of Association (AOA):

  1. Amount of shares, capital, value and type of shares.
  2. Rights of each class of shareholders regarding voting, dividend, return of capital.
  3. Rules regarding issue of shares and debentures.
  4. Procedures as well as regulations in respect of making calls on shares.
  5. Manner of transfer of shares.
  6. Declaration of dividends.
  7. Borrowing powers of the company.
  8. Rules regarding the appointment, remuneration, removal of directors.
  9. Procedure for conducting proxy, quorum, meetings etc.,
  10. Procedures concerning keeping of books and audits.
  11. Seal of the company.
  12. Procedures regarding the winding up of the company.

Question 3.
What is meant by Prospectus?
Answer:
According to Section 2(36) of the Companies Act, any document inviting the public to buy its shares or debentures comes under the definition of prospectus. It also applies to advertisements inviting deposits from the public. Aprospectus is “the only window through which a prospective investor can look into the soundness of a company’s venture”. Hence it must specify at least the following matters as per Schedule II:

  1. The prospectus contains the main objectives of the company, the name and addresses of the signatories of the Memorandum of Association and the number of shares held by them.
  2. The name, addresses and occupation of directors and managing directors.
  3. The number and classes of shares and debentures issued.
  4. The qualification share of directors and tfye interest of directors for the promotion of company.
  5. The number, description and the document of shares or debentures which within the two preceding years have been agreed to be issued other than cash.

Question 4.
What is meant by Multi National Company?
Answer:
A Multi National Company (MNC) is a huge industrial organisation which:

  1. Operates in more than one country.
  2. Carries out production, marketing and research activities on international Scale in those countries.
  3. Seeks to maximise profits world over.
    Examples: Micro Soft Corporation, Nokia Corporation, Nestle, Coca – Cola, International Business Machine, Pepsico, Sony Corporation.

Question 5.
What is meant by Holding and Subsidiary company?
Answer:
1. Holding Company:
As per Section 2(87) “subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company

  • Controls the composition of the Board of Directors; or
  • Exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies:

Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed.

2. Subsidiary Company:
“Subsidiary company” or “Subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company:

  • Controls the composition of the Board of Directors; or
  • Exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies:

Examples:
H Ltd., holds more than 50% of the equity share capital of S Ltd. Now H Ltd., is the holding company of S Ltd., and S Ltd., is the subsidiary of H Ltd.

Samacheer Kalvi 11th Commerce Hindu Undivided Family and Partnership Additional Questions and Answers

I. Choose the Correct Answer:

Question 1.
The maximum number of members in a private limited company is ……………..
(a) 25
(b) 50
(c) 100
(d) 200
Answer:
(d) 200

Question 2.
…………….. is considered as an artificial person.
(a) Sole trader
(b) Joint Hindu family business
(c) Joint stock company
(d) Co – operative society
Answer:
(c) Joint stock company

Question 3.
A new class of company is of “One Person Company” and it is included in …………….. Act.
(a) 1956
(b) 1952
(c) 2013
(d) 2015
Answer:
(c) 2013

Question 4.
One share – one vote principle is followed in ……………..
(a) Company
(b) Partnership
(c) Co – operative
(d) Sole trading concern
Answer:
(a) Company

Question 5.
…………….. companies are established by a Special Act made in Parliament/State Assembly.
(a) Chartered
(b) Statutory
(c) Private
(d) Unlimited
Answer:
(b) Statutory

Question 6.
East India Company is an example of …………….. companies.
(a) Chartered
(b) Statutory
(c) Public
(d) Private
Answer:
(a) Chartered

Question 7.
The share capital of the government company must not be less than ……………..
(a) 75%
(b) 60%
(c) 95%
(d) 51%
Answer:
(d) 51%

Question 8.
…………….. company operates in more than one country.
(a) Multinational
(b) Foreign
(c) Domestic
(d) Private
Answer:
(a) Multinational

Question 9.
…………….. is a document containing rules and regulations for the internal management of a company.
(a) Table A
(b) Memorandum
(c) Prospectus
(d) Statutory declaration
Answer:
(a) Table A

Question 10.
…………….. is “the only window through which a prospective investor can look into the soundness of a company’s venture”.
(a) Prospectus
(b) Memorandum
(c) Articles
(d) Minutes
Answer:
(a) Prospectus

II. Very Short Answer Questions

Question 1.
What is Perpetual succession?
Answer:
A company does not cease to exist unless it is specifically wound up or the task for which it was formed has been completed. Membership of a company may keep on changing from time to time but that does not affect life of the company.

Question 2.
What is Common seal?
Answer:
A company is an artificial person and does not have a physical presence. Thus, it acts through its Board of Directors for carrying out its activities and entering into various agreements. Such contracts must be under the seal of the company. The common seal is the official signature of the company.

Question 3.
What is Domestic company?
Answer:
A company which cannot be termed as foreign company under the provision of the Companies Act should be regarded as a domestic company.

Question 4.
What is Situation clause?
Answer:
The registered office clause requires you to show the physical location of the registered office of the company. You are required to keep, all the company registers in this office in addition to using the office in handling all the outgoing and incoming communication correspondence.

Question 5.
What is Objective clause?
Answer:
The objective clause requires you to summarize the main objectives for establishing the company with reference to the requirements for shareholding and use of financial resources. You also need to state ancillary objectives; that is, those objectives that are required to facilitate the achievement of the main objectives.

III. Short Answer Questions

Question 1.
What is meant by Joint and Several Liability?
Answer:
Every partner is jointly and severally liable for all acts of the firm. It means that in case the assets are inadequate for meeting the claims of creditors, even their personal properties should be made available. The creditors can recover their claims from all the partners.

Question 2.
What do you mean by Company limited by Guarantee?
Answer:
A company limited by guarantee is a company in which the liability of its members is limited by its memorandum to such an amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up. Such companies are generally formed for the promotion of Commerce, Art, Science, Religion, Charity or any other useful object. The companies limited by guarantee may be either private companies or public companies.

Question 3.
What do you mean by Holding Companies?
Answer:
As per Section 2(87) “subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company –

  1. Controls the composition of the Board of Directors; or
  2. Exercises or controls more than one – half of the total share capital either at its own or together with one or more of its subsidiary companies.

Case Study

Case 1:
Ashok is an industrial designer by training. He had the opportunity to learn the technology of fibre glass manufacture while he was in Germany for his training. He plans to set up a plant for the manufacture of fibre glass in India and is able to interest some financiers and technologists. It is estimated that the initial investment in the plant will be of the order of ₹ 50 lakhs. Ashok and others decide to set up a company for the purpose. Should they set up a public limited company for the purpose? If so, how should they go about it? If not, what alternative would you suggest? What formalities will be required of Ashok and his associates if they choose the alternative form of organization suggested by you?
Answer:
1. If he and his friends selected to start public limited company. They can start with more formalities.

  • Issue of prospectus
  • Huge capital
  • Shares can be issued and substituted in huge level of capital (i.e. Authorized capital)
  • Minimum 7 members to start a public company.
  • Maximum number of limit
  • The public company does not restrict the right to transfer its share

2. If he decides to start private limited company, my suggestions are as follows

  • Investment arranged privately with his friends
  • He can collect capital with limited capital
  • Private company cannot issue prospectus
  • One person company also can start, but capital of initial investment can be arranged privately.

Case 2:
Collect any 10 items of daily use (Packed items) and list the names of the companies manufacturing those items. Classify those companies as public and private limited companies. Which of them are Multinational Companies?

Edible items:

  1. Milk – AAVINFSSAT, Chennai – 98.
  2. Tea powder – Brook Bond – Red Label
    Hindustan Unilever Ltd., (HUL)
    Mumbai – 400099
  3. Bread – Modem Foods Enterprises Private Ltd.
    Haryana, India – 122002
  4. Biscuit – Britannia Industries Ltd., Chennai.

Other uses:

  1. Toothpaste – Anchor Health & Beauty Care Private Ltd.,
  2. Tooth Brush – Uttarkhand – 249404
  3. Soap – Hamam
    Hindustan Unilever Limited
    Himachal Pradesh – 174103
  4. Detergent powder – Ariel – The Procter & Gamble
    Home Products Private Ltd.,
    Mumbai – 400099
  5. Shampoo – Oriflame,
    Oriflame India Private Ltd.,
    New Delhi – 110076
  6. Hand wash – Cosmic Product Private Ltd.,
    Palghar (E) – 401404.

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