Test: Forms Of Business Organisations - 3 - Commerce MCQ

Preliminary contracts are contracts entered into by the promoters on behalf of the company before its incorporation with third parties. They generally enter into these contracts as agents or trustees of the company, which has not yet come into existence.

The Certificate of Incorporation is obtained from the ROC after completion of all the requirements. If the ROC is satisfied with all the documents and requirements the certificate of incorporation is provided. After the incorporation, the company becomes a separate legal entity with perpetual succession. The certificate of incorporation is a conclusive proof of the existence of the company. 

Correct Answer :- a

Explanation : A minor is incompetent to enter into a valid contract with others, he cannot become a partner in any firm.

However, a minor can be admitted to the benefits of a partnership firm with the mutual consent of all other partners.

In such cases, his liability will be limited to the extent of the capital contributed by him and in the firm.

He will not be eligible to take an active part in the management of the firm.

Thus, a minor can share only the profits and can not be asked to bear the losses.

However, he may inspect the accounts of the firm.

The status of a minor changes when he attains majority.

Co-operative housing societies are established to help people with limited income to construct houses at reasonable costs and giving the option of paying in installments.

These societies are formed to help the small producers in selling their products. Its members are the producers who want to obtain reasonable price for their output. ... The society also performs various marketing functions like transportation, warehousing, grading, etc.

The Registrar of Companies ( ROC ) is an office under the Ministry of Corporate Affairs (MCA), which is the body that deals with the administration of companies and Limited Liability Partnerships in India. The ROCs are tasked with the principal duty of registering both the companies and LLPs across the states and the union territories.

A prospectus is a legal document issued by companies that are offering securities for sale. Mutual funds also provide a prospectus to potential clients, which includes a description of the fund's strategies, the manager's background, the fund's fee structure and a fund's financials statements.

The correct answer is 10 .The new Companies Act 2013 has prescribed the maximum number of members in case of a partnership firm should not be more than 100 in case of partnerships. As per the previous Companies Act 1956, the maximum limit in case of partnerships was 10 and 20 for banking business and other businesses respectively.

The correct sequence of stages in the formation of a company is as follows:
A: Promotion, incorporation, capital subscription, commencement of business
- Promotion: The first stage involves promoting the idea for the company and generating interest among potential investors.
- Incorporation: Once the promotion is successful and there is enough interest, the company needs to be legally incorporated by registering with the appropriate regulatory authorities.
- Capital Subscription: After incorporation, the company seeks capital from investors through various means such as issuing shares or debentures. This stage involves securing the necessary funds for the business.
- Commencement of Business: Once the capital has been subscribed and all legal requirements have been fulfilled, the company can officially begin its operations.
Therefore, the correct sequence is A: Promotion, incorporation, capital subscription, commencement of business.

A prospectus is a document issued by the company inviting the public and investors for the subscription of its securities. A Prospectus is required to be issued only after the incorporation of the company. These documents describe stocks, bonds and other types of securities offered by the company.