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B Com Exam  >  B Com Test  >  Company Law  >  Test: Share Capital- 2 - B Com MCQ

Share Capital- 2 - Free MCQ Practice Test with solutions, B Com Company


MCQ Practice Test & Solutions: Test: Share Capital- 2 (10 Questions)

You can prepare effectively for B Com Company Law with this dedicated MCQ Practice Test (available with solutions) on the important topic of "Test: Share Capital- 2". These 10 questions have been designed by the experts with the latest curriculum of B Com 2026, to help you master the concept.

Test Highlights:

  • - Format: Multiple Choice Questions (MCQ)
  • - Duration: 10 minutes
  • - Number of Questions: 10

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Test: Share Capital- 2 - Question 1
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In the context of dematerialization, what does ASBA stand for?

Detailed Solution: Question 1

ASBA stands for "Application Supported by Blocked Account." It is a mechanism where investors apply for shares in a public issue through their bank accounts, with the application amount blocked until the allotment is finalized. This makes Option B the correct answer.

Test: Share Capital- 2 - Question 2
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What is the role of a Depository Participant (DP) in dematerialization?

Detailed Solution: Question 2

A Depository Participant (DP) is responsible for facilitating the process of converting physical shares into electronic format during dematerialization. The DP helps investors open demat accounts and processes the request for converting physical shares into electronic form. This makes Option C the correct answer.

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Test: Share Capital- 2 - Question 3
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What is the main purpose of an information memorandum?

Detailed Solution: Question 3

An information memorandum serves as a comprehensive document that provides a holistic view of a company's affairs to potential investors. It acts as a resume for the company, outlining its goals, financial position, and benefits for investors. It helps investors understand the company's vision, mission, and potential for growth, making Option B the correct answer.

Test: Share Capital- 2 - Question 4
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What advantage does dematerialization offer regarding share certificates?

Detailed Solution: Question 4

Dematerialization offers the advantage of reducing the risk of share certificate loss and forgery. By converting physical share certificates into electronic format, the hassles associated with managing and securing physical certificates are eliminated. This makes Option C the correct answer.

Test: Share Capital- 2 - Question 5
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What is the purpose of issuing replacement share certificates in case of defacement or loss?

Detailed Solution: Question 5

The purpose of issuing replacement share certificates is to ensure that shareholders can maintain accurate ownership records, even in cases of defacement, loss, or damage to the original certificates. Replacement certificates help in maintaining the integrity of ownership records. This makes Option D the correct answer.

Test: Share Capital- 2 - Question 6
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Which of the following is a key difference between an information memorandum and a prospectus?

Detailed Solution: Question 6

The key difference between an information memorandum and a prospectus is that an information memorandum is considered a commercial document that presents a comprehensive view of the company's vision and goals, whereas a prospectus is a legal document that provides detailed information about securities being offered for sale. This makes Option C the correct answer.

Test: Share Capital- 2 - Question 7
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In the context of share certificates, what is meant by "nominal value"?

Detailed Solution: Question 7

The "nominal value" of shares refers to the face value of the shares as mentioned in the company's articles of association. It represents the initial value assigned to the shares when they are issued by the company. This makes Option A the correct answer.

Test: Share Capital- 2 - Question 8
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When can shareholders apply through the ASBA process for a rights issue?

Detailed Solution: Question 8

Shareholders can apply through the ASBA process for a rights issue if they have applied for entitlements in dematerialized form. This helps streamline the application process and ensure accurate record-keeping. This makes Option C the correct answer.

Test: Share Capital- 2 - Question 9
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What is the significance of the Company's Common Seal in the context of share certificates?

Detailed Solution: Question 9

The Company's Common Seal affixed to a share certificate confirms the authenticity of the certificate. It adds a level of security and assurance to the document, indicating that the certificate is issued by the company. This makes Option B the correct answer.

Test: Share Capital- 2 - Question 10
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What is the purpose of the Depository Participant (DP) in the depository system?

Detailed Solution: Question 10

The role of the Depository Participant (DP) in the depository system is to hold the securities of shareholders in electronic form. DP facilitates the dematerialization of physical shares and ensures that shareholders' securities are securely stored and managed in electronic format. This makes Option B the correct answer.

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About this B Com Practice Test

This test contains 10 MCQs on Share Capital- 2 with detailed solutions for each question. It is part of the Company Law course on EduRev, designed to align with the current B Com syllabus. Each solution explains not just the correct answer but also gives you an understanding of the topic — not just to attempt the question but also help you prepare for the exam with practice.

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