What is the purpose of issuing securities at a premium by a company?

To attract more investors by offering discounted shares.

To raise capital by selling shares at a price above par value.

To reduce the company's debt by converting it into equity.

To distribute profits among shareholders as dividends.

What are the permissible uses of the securities premium collected by a company?

Paying dividends to shareholders.

Writing off preliminary expenses.

Providing discounts on future securities issuances.

Funding company's research and development activities.

According to the Companies Act, 2013, who is eligible to participate in an Employees Stock Option Scheme?

Only permanent employees working in India.

Directors of the company, excluding independent directors.

Any individual holding more than ten percent of the outstanding equity shares.

Employees of associate companies located outside India.

What is a "call on shares"?

A demand made by the company to repay a loan.

A demand made by the company on shareholders to pay dividends.

A demand made by the company on shareholders to pay the remaining unpaid balance on shares.

A demand made by the company to increase the nominal value of its shares.

How should a company treat monies in the securities premium account?

Distribute them as dividends to shareholders.

Treat them as free reserves for future expenses.

Maintain them with the same sanctity as share capital.

Invest them in high-risk ventures for higher returns.

What is the purpose of a "lock-in period" in an Employee Stock Option Scheme?

To prevent employees from exercising their options.

To delay the vesting of employee stock options.

To restrict the sale or transfer of shares acquired through options.

To ensure employees exercise their options within a certain time frame.

How does the Employees Stock Option Scheme benefit employees?

By giving employees the right to purchase shares at a lower market price.

By granting employees the right to receive dividends before other shareholders.

By allowing employees to transfer their options to other eligible individuals.

By offering employees the benefit or right to purchase shares at a predetermined price in the future.

Why is there a minimum one-year vesting period in an Employees Stock Option Scheme?

To ensure employees remain with the company for at least one year.

To delay the exercise of options and maximize the company's profits.

To align employees' interests with the company's long-term performance.

To allow employees to exercise options immediately after they are granted.

What happens to employee stock options in the event of the death of an employee while in employment?

They are transferred to the legal heirs or nominees of the deceased employee.

They can be exercised by any other employee in the company.

They become fully vested and exercisable immediately.

How does the company disclose details of the Employees Stock Option Scheme?

In the company's annual report to shareholders.

In the company's financial statements to the regulatory authorities.

In the explanatory statement of the Directors' Report for the year.

In the company's prospectus for the initial public offering.

Share Capital- 4 Free MCQ Practice Test with Solutions

	Company Law 81 docs\|44 tests

	Company Law 81 docs\|44 tests

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