What is the role of a promoter in the formation of a company?

To manage the company's day-to-day operations.

To provide financial resources for the company.

To initiate the process of forming the company and take necessary steps.

To audit the company's financial statements.

What does the term "promotion" refer to in the context of company formation?

Selling company shares to the public.

Registering the company with the government.

Bringing the company into existence through incorporation.

Initiating the process of forming a company.

How can a promoter receive remuneration for their role in forming a company?

By secretly receiving payment from the company's competitors.

By selling their personal property to the company at an inflated price.

By charging a fee to potential shareholders for company information.

By receiving a salary from the government for company promotion.

In the process of incorporation, what is the primary purpose of filing the Memorandum of Association?

To outline the company's day-to-day operations.

To provide details about the company's shareholders.

To declare the company's financial statements.

To define the company's objectives and scope of activities.

Why is a promoter considered to have a fiduciary relationship with the company?

Because promoters are employees of the company.

Because promoters invest their personal funds in the company.

Because promoters are responsible for registering the company's trademarks.

Because promoters have a relationship of trust and confidence with the company and its prospective shareholders.

What is the significance of the declaration of compliance of the Act and Rules in the process of company incorporation?

It ensures that the company has obtained sufficient funds.

It confirms that the company's products are compliant with industry standards.

It certifies that the requirements of the Companies Act and relevant rules have been met.

It establishes the company's legal ownership of its assets.

What is the primary advantage of the limited liability feature in a company?

Members can take unlimited loans from the company.

Members are not required to contribute to the company's capital.

Members' liability is limited to the amount of their shareholding.

Members can transfer their shares without restrictions.

What happens to a company's existence upon registration and issuance of the certificate of incorporation?

The company's existence becomes temporary.

The company becomes a separate legal entity.

The company becomes a subsidiary.

Formation of Company - 1 Free MCQ Practice Test with Solutions

	Company Law 81 docs\|44 tests

	Company Law 81 docs\|44 tests

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