How Much Do You Know About Corporate Law?

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Questions: 10 | Attempts: 381 | Updated: Nov 16, 2023

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How Much Do You Know About Corporate Law? - Quiz

Corporate law is a set of company laws governing rights and conduct in business organizations. This quiz on corporate law will gauge your understanding of the various corporate laws and provide you with valuable information. The quiz contains various questions that extensively cover the various aspects of corporate law. Take this quiz and see for yourself how much you know about the topic. Share this quiz with your friends and family if you find it helpful. All the best!

Questions and Answers

1.

Who signs the Memorandum of Association in a company?
- A.
  
  Subscribers to the Memorandum of Association
- B.
  
  Directors
- C.
  
  Shareholders
- D.
  
  CEO
Correct Answer
A. Subscribers to the Memorandum of Association

Explanation
The subscribers to the Memorandum of Association are the individuals who initially invest in and establish a company. They are the ones who sign the document, which outlines the company's objectives, powers, and scope of activities. This document is a crucial legal requirement for the formation of a company, and it is signed by the subscribers as a declaration of their intention to form the company and abide by its rules and regulations. The directors, shareholders, and CEO may be involved in the company's operations, but they do not typically sign the Memorandum of Association.

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2.

What is Memorandum of Association?
- A.
  
  Laws of the company
- B.
  
  Charter of the company
- C.
  
  Contracts of the company
- D.
  
  All the of above
Correct Answer
B. Charter of the company

Explanation
The Memorandum of Association is a legal document that sets out the fundamental principles and objectives of a company. It defines the company's scope of activities, its relationship with shareholders, and the internal rules and regulations that govern its operations. The term "charter" refers to the document that establishes a company and outlines its purpose and powers. Therefore, the statement "Charter of the company" accurately describes the Memorandum of Association as it serves as the company's charter or constitution.

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3.

Combination of two or more businesses is called?
- A.
  
  Merger
- B.
  
  Acquistion
- C.
  
  Buying
- D.
  
  None of the above
Correct Answer
A. Merger

Explanation
A merger refers to the combination of two or more businesses. In a merger, two or more companies come together to form a new entity, pooling their resources and operations. This allows them to achieve synergies, increase market share, and enhance competitiveness. Unlike an acquisition, where one company takes over another, a merger involves a mutual agreement between the companies involved. Therefore, the correct answer to the question is merger.

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4.

Corporate law is subsection of
- A.
  
  Commercial Law
- B.
  
  Private law
- C.
  
  Statutory law
- D.
  
  None of the above
Correct Answer
A. Commercial Law

Explanation
Corporate law is a subsection of commercial law because it specifically deals with the legal aspects of corporations and their operations. Commercial law, on the other hand, encompasses a broader range of legal matters related to business and commercial transactions. Therefore, corporate law falls under the umbrella of commercial law as it focuses on the legal framework governing corporations and their activities within the commercial sphere.

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5.

When did the Companies Act come into effect in UK?
- A.
  
  2006
- B.
  
  2010
- C.
  
  2011
- D.
  
  2008
Correct Answer
A. 2006

Explanation
The Companies Act came into effect in the UK in 2006. This legislation was introduced to modernize and simplify company law, ensuring better corporate governance and protecting the interests of shareholders and stakeholders. It aimed to streamline company administration, enhance transparency, and promote responsible business practices. The Companies Act 2006 replaced previous legislation and brought significant changes to company formation, management, and reporting requirements in the UK.

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6.

Separate Legal Personality is a
- A.
  
  Statutory law concepy
- B.
  
  Common law concept
- C.
  
  Both
- D.
  
  Traditional law concept
Correct Answer
C. Both

Explanation
Separate Legal Personality is a concept that exists in both statutory law and common law. In statutory law, it is recognized through specific legislation that grants legal personality to certain entities such as corporations or limited liability companies. In common law, it is a concept that has evolved through judicial decisions and recognizes that certain entities have a separate legal identity from their owners or members. This means that these entities have rights and obligations separate from those of their owners, allowing them to enter into contracts, sue or be sued, and own property in their own name.

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7.

What does IPO mean?
- A.
  
  When the company listed on stock exchange for the first time
- B.
  
  When company is listed second time on the stock exchange
- C.
  
  When give lists itself final time on the stock exchange
- D.
  
  None of the above
Correct Answer
A. When the company listed on stock exchange for the first time

Explanation
IPO stands for Initial Public Offering, which refers to the process when a company offers its shares to the public for the first time. It is the initial sale of stock to the public by a private company. This allows the company to raise capital from public investors and become publicly traded on a stock exchange. It is a significant event for a company as it transitions from being privately owned to being publicly owned.

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1
0
8.

What does IPO stand for?
- A.
  
  Initial Public Offering
- B.
  
  Initial Private Offering
- C.
  
  Intensive Public Offering
- D.
  
  Intensive Private Offering
Correct Answer
A. Initial Public Offering

Explanation
An IPO stands for Initial Public Offering, which refers to the process of a private company going public by offering its shares to the general public for the first time. This allows the company to raise capital from public investors and enables them to become shareholders in the company. It is a common method for companies to raise funds and expand their operations.

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9.

Maximum number of members in case of public company is?
- A.
  
  1000
- B.
  
  Unlimited
- C.
  
  2000
- D.
  
  Not more than 5000
Correct Answer
B. Unlimited

Explanation
A public company is a type of business entity that is owned by shareholders and offers its shares to the general public. Unlike private companies, which have restrictions on the number of shareholders they can have, public companies have no such limitations. Therefore, the maximum number of members in a public company is unlimited.

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10.

Generally Company liability is
- A.
  
  Limited
- B.
  
  Unlimited
- C.
  
  Never limited
- D.
  
  Situation does not arise
Correct Answer
A. Limited

Explanation
Generally, company liability is limited. This means that the shareholders or owners of a company are only liable for the debts and obligations of the company up to the amount of their investment or shareholding. Their personal assets are protected and cannot be seized to settle the company's debts. This is one of the main advantages of operating a business as a company rather than as a sole proprietorship or partnership, where personal liability is unlimited.

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Current Version
Nov 16, 2023

Quiz Edited by
ProProfs Editorial Team
Sep 15, 2022

Quiz Created by
Amit Mangal

How Much Do You Know About Corporate Law?

Who signs the Memorandum of Association in a company?

What is Memorandum of Association?

Combination of two or more businesses is called?

Corporate law is subsection of

When did the Companies Act come into effect in UK?

Separate Legal Personality is a

What does IPO mean?

What does IPO stand for?

Maximum number of members in case of public company is?

Generally Company liability is