CA Foundation Exam > CA Foundation Questions > Which of the following is not true-a)A meetin...
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Which of the following is not true-
- a)A meeting of the Board of Directors must be held at least once in every 3 months.
- b)Nobody corporate, association or firm can be appointed director of a company.
- c)The nominal value of qualification shares should not exceed Rs.5000.
- d)Directors are always liable for any misstatement in a prospectus.
Correct answer is option 'D'. Can you explain this answer?
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Which of the following is not true-a)A meeting of the Board of Directo...
False Statement: Directors are always liable for any misstatement in a prospectus.
Explanation:
Board of Directors:
- A meeting of the Board of Directors must be held at least once in every 3 months. This is stated in Section 173 of the Companies Act, 2013.
Appointment of Directors:
- Any corporate, association, or firm can be appointed as a director of a company. This is stated in Section 149 of the Companies Act, 2013.
Qualification Shares:
- The nominal value of qualification shares should not exceed Rs. 1,00,000. This is stated in Rule 4 of the Companies (Share Capital and Debentures) Rules, 2014.
Liability of Directors:
- Directors are liable for any misstatement in a prospectus. However, this liability is not absolute. Section 34 of the Companies Act, 2013 states that a director shall be liable only if he had knowledge of the misstatement or if he had acted with the intention to deceive the shareholders.
Therefore, the false statement is option D, as the liability of directors for misstatement in a prospectus is not absolute, but depends on the level of knowledge and intention of the director.
Explanation:
Board of Directors:
- A meeting of the Board of Directors must be held at least once in every 3 months. This is stated in Section 173 of the Companies Act, 2013.
Appointment of Directors:
- Any corporate, association, or firm can be appointed as a director of a company. This is stated in Section 149 of the Companies Act, 2013.
Qualification Shares:
- The nominal value of qualification shares should not exceed Rs. 1,00,000. This is stated in Rule 4 of the Companies (Share Capital and Debentures) Rules, 2014.
Liability of Directors:
- Directors are liable for any misstatement in a prospectus. However, this liability is not absolute. Section 34 of the Companies Act, 2013 states that a director shall be liable only if he had knowledge of the misstatement or if he had acted with the intention to deceive the shareholders.
Therefore, the false statement is option D, as the liability of directors for misstatement in a prospectus is not absolute, but depends on the level of knowledge and intention of the director.
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Which of the following is not true-a)A meeting of the Board of Directors must be held at least once in every3 months.b)Nobody corporate, association or firm can be appointed director of acompany.c)The nominal value of qualification shares should not exceed Rs.5000.d)Directors are always liable for any misstatement in a prospectus.Correct answer is option 'D'. Can you explain this answer?
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