Business and Commerce MCQ Questions and Solutions with Explanations | Commerce

A “Government company” is defined under Section 2(45) of the Companies Act, 2013 as “any company in which not less than 51% of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company”. Thus, the cardinal feature of a government company is not less than 51% ownership by Central/state government, either individually or jointly.

A Company is called an artificial person because It is invisible and intangible. Corporation is an artificial being, invisible, intangible and existing only in contemplation of law. It has neither a mind nor a body of its own.

The liability of members of a co-operative society is limited or unlimited depending upon what the society has opted for it.

Membership of a co-operative is voluntary. "Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, political, racial, or religious discrimination.”

A minimum of ten members are required to form a cooperative society. The Co operative societies Act do not specify the maximum number of members for any co-operative society. However, after the formation of the society, the member may specify the maximum number of members.

A member of a co-operative society can leave the society by withdrawing his capital from the society. Member who wants to quit the society has to return his shares back in order to get his money back.

Industrial Finance Corporation of India Ltd is an example of a company incorporated by a special act of parliament.

Dividend on preference capital will be paid only when directors recommend. The shareholders may approve the directors’ recommendation by passing a written resolution or at a general meeting. They may decide that a lower dividend should be paid, but they cannot declare a dividend that is higher than the amount recommended by the directors.

A public corporation means Statutory corporation. Statutory corporations are public enterprises brought into existence by a Special Act of the Parliament. The Act defines its powers and functions, rules and regulations governing its employees and its relationship with government departments.

The partnership entity is legal entity and accountable entity. A legal entity has legal capacity to enter into agreements or contracts, assume obligations, incur and pay debts, sue and be sued in its own right, and to be held responsible for its actions.