Maharashtra Board Class 11 Secretarial Practice Important Questions Chapter 5 Members of a Company

Balbharti Maharashtra State Board Class 11 Secretarial Practice Important Questions Chapter 5 Members of a Company Important Questions and Answers.

Maharashtra State Board 11th Secretarial Practice Important Questions Chapter 5 Members of a Company

1A Select the correct answer from the options given below and rewrite the statements.

Question 1.
Every person domiciled in India will be a major when he completes ____________ years of age.
(a) 16
(b) 20
(c) 18
Answer:
(c) 18

Question 2.
____________ is an institution where securities are held in electronic form.
(a) Depository
(b) Partnership
(c) One person company
Answer:
(a) Depository

Question 3.
____________ is a legal person.
(a) Company
(b) Trust
(c) Partnership firm
Answer:
(a) Company

Question 4.
____________ person is eligible for membership of a company.
(a) Foreigner
(b) Lunatic
(c) Insolvent
Answer:
(a) Foreigner

1B. Match the pairs.

Question 1.

Group ‘A’	Group ‘B’
(a) Member	(1) Ownership of shares of the company
(b) Shareholder	(2) Cannot become a member
(c) Register of member	(3) List of members
(d) Partnership Firm	(4) Transfer of shares by operation of law
(e) Forfeiture of shares	(5) Persombelow the age of 18 years
	(6) Voluntary sale of shares
	(7) Termination of membership
	(8) Entry of the name in Register of members
	(9) Transfer of shares
	(10) Record of particulars of all the members of the company

Answer:

Group ‘A’	Group ‘B’
(a) Member	(8) Entry of the name in Register of members
(b) Shareholder	(1) Ownership of shares of the company
(c) Register of member	(10) Record of particulars of all the members of the company
(d) Partnership Firm	(2) Cannot become a member
(e) Forfeiture of shares	(7) Termination of membership

1C. Write a word or a term or a phrase that can substitute each of the following statements.

Question 1.
A person can enter into a share purchase transaction on behalf of a minor.
Answer:
A guardian

Question 2.
The firm cannot be a member of the company.
Answer:
Partnership firm

Question 3.
In this family, shares can be registered only in the name of its ‘Karta’.
Answer:
Hindu Undivided Family

Question 4.
Being a registered entity, it can be a member of the company.
Answer:
Co-operative society

Question 5.
They can buy shares of an Indian company.
Answer:
Foreigner

Question 6.
Transfer of shares by operation of law.
Answer:
Transmission of Shares

Question 7.
Cancellation of shares by a company.
Answer:
Forfeiture of Shares

Question 8.
Shares are paid back after a certain period of time.
Answer:
Redeemable Preferences Shares

Question 9.
Holding securities in Electronic form.
Answer:
Dematerialization

Question 10.
Share of profit distributed to shareholders.
Answer:
Dividend

1D. State whether the following statements are True or False.

Question 1.
The member who is the subscriber to the Memorandum of Association of a company is a shareholder.
Answer:
True

Question 2.
A person below the age of 18 years is called a minor.
Answer:
True

Question 3.
The process of removing the name of a member from the Register of member is call admission of a partner.
Answer:
False

Question 4.
A person who has been allotted shares of the company is called a shareholder.
Answer:
True

Question 5.
Transfer of shares is by operation of law.
Answer:
False

1E. Find the odd one.

Question 1.
Minor, Not completed 18 years, Membership of a Company
Answer:
Membership of a company

Question 2.
Co-operative society, Limited Liability, Partnership Firm
Answer:
Partnership Firm

Question 3.
Operation of Law, Death, and Insolvency, Wrongly entered in the Register of members.
Answer:
Wrongly entered in the Register of member

1F. Complete the sentences.

Question 1.
Member invest money in company in return of ____________
Answer:
dividend

Question 2.
Shareholder has right to attend ____________
Answer:
all General Meeting

Question 3.
Member also have right to remove the ____________
Answer:
Auditors

Question 4.
Member means a person whose name is entered in ____________
Answer:
the Register of Members

Question 5.
The investor who owns securities in electronic form is called ____________
Answer:
Beneficial owner

Question 6.
Depository is an institution where securities are held in ____________
Answer:
electronic form/dematerialised form

Question 7.
Foreigner can buy shares subject to provision of ____________
Answer:
FEMA, 1999

1G. Select the correct option from the bracket.

Question 1.

Group ‘A’	Group ‘B’
(1) Transmission of shares	………………………
(2) ……………………..	The foreigner can buy shares

(Compulsory transfer of shares, FEMA Act, 1999)
Answer:

Group ‘A’	Group ‘B’
(1) Transmission of shares	Compulsory transfer of shares
(2) FEMA Act, 1999	The foreigner can buy shares

Question 2.

Group ‘A’	Group ‘B’
(1) Major	……………………….
(2) Limited Liability Partnership	………………………
(3) Hindu Undivided Family	……………………..
(4) …………………..	Official Receiver
(5) Depository	……………………..

(Juristic person, Insolvency of a member, Can hold companies share, NSDL/CDSL, Karta)
Answer:

Group ‘A’	Group ‘B’
(1) Major	Can hold companies share
(2) Limited Liability Partnership	Juristic person
(3) Hindu Undivided Family	Karta
(4) Insolvency of a member	Official Receiver
(5) Depository	NSDL/CDSL

Question 3.

Group ‘A’	Group ‘B’
(1) Owns securities in Electronic-form	……………………
(2) ………………………..	Legally competent to manage one’s own affair
(3) Cannot be a member	…………………….
(4) ……………………….	Voluntary return of shares by member
(5) Additional shares offered free of cost	…………………….

(Lunatic/Insolvent, Bonus Shares, Beneficial owner, Sui-juris, Surrender of Shares)
Answer:

Group ‘A’	Group ‘B’
(1) Owns securities in Electronic-form	Beneficial owner
(2) ‘Sui-Juris	Legally competent to manage one’s own affair
(3) Cannot be a member	Lunatic/Insolvent
(4) Surrender of Shares	Voluntary return of shares by member
(5) Additional shares offered free of cost	Bonus Shares

1H. Answer in one sentence.

Question 1.
What do you mean by Forfeiture of shares?
Answer:
Forfeiture means the cancellation of shares by a company.

Question 2.
What do you mean by Dematerialized form?
Answer:
It means holding Financial Securities in Electronic form and not in physical form.

Question 3.
What does FEMA stand for?
Answer:
Foreign Exchange Management Act 1999.

Question 4.
Who is a depository?
Answer:
The depository is an institution that holds securities in electronic form/dematerialized form and NSDL and CDSL.

Question 5.
Who is the beneficial owner?
Answer:
The beneficial owner is an investor who owns securities in electronic form and has an interest in the securities.

Question 6.
What is FEMA?
Answer:
FEMA 1999, is an Act that aims at facilitating external trade and promote the foreign exchange market in India.

Question 7.
What is the transmission of shares?
Answer:
Compulsory transfer of shares to the legal heir of deceased shareholders is called as the transmission of shares.

Question 8.
Who looks after the shares of an insolvent member?
Answer:
Official Receiver or Assignee looks after the shares of an insolvent member.

Question 9.
What is Class Action Suit?
Answer:
When a group of people with similar harm caused to them sue the opposition party for redressal of harm, is called a Class Action Suit.

Question 10.
What do you mean by the membership of Principal of Estoppel?
Answer:
A member who has disposed (sold) of his shares and yet knowingly allows his name to remain on the register of members and otherwise exercises his membership is estopped from denying that he is a member and is held responsible for the liabilities of membership.

1I. Correct the underlined word and rewrite the following sentences.

Question 1.
Co-operative Society cannot be a member of a company.
Answer:
Karta of HUF cannot be a member of a company.

Question 2.
A foreigner can buy shares subject to provisions of FERA, 1999.
Answer:
A foreigner can buy shares subject to provisions of FEMA, 1999.

Question 3.
Partnership firm is a juristic person.
Answer:
Limited Liability Partnership is a juristic person.

Question 4.
Beneficial owner is an institution that holds a share in electronic form.
Answer:
Depository is an institution that held a share in electronic form.

Question 5.
Transfer of shares is compulsory to transfer of shares to the legal heir of the deceased member.
Answer:
Transmission of shares is compulsory to transfer of shares to the legal heir of the deceased member.

Question 6.
Surrender of Shares means cancellation of shares by the company.
Answer:
Forfeiture of Shares means cancellation of shares by the company.

Question 7.
Right Issue means shares given to existing shareholders free of cost.
Answer:
Bonus Issue means shares given to existing shareholders free of cost.

Question 8.
Part of the profit given to its shareholder is called Interest.
Answer:
Part of the profit given to its shareholder is called a Dividend.

2. Explain the following Terms/Concepts.

Question 1.
Class Action Suit
Answer:
A group of people with similar harm caused, when sues the oppositions party jointly is called Class Action Suit.

Question 2.
Dividend
Answer:
It means a share in the profit of a company which is distributed to equity shareholders and preference shareholders.

Question 3.
Right Issue
Answer:
Right issue means an issue of additional shares to exist equity shareholder again certain price. It is not issued at free of cost.

Question 4.
Bonus Issue
Answer:
Bonus issue means, issue of additional shares to existing equity shareholders free of cost. It is generally done to capitalize the reserves of the company.

Question 5.
Covenants of the Article
Answer:
It means the contents and clauses of the Articles of Association of the company.

3. Answer in brief.

Question 1.
Who can become a Member of the Company?
Answer:

1. A Person: Any person who is competent to enter into a contract i.e. he is above the age of 18 years, and not an insane/lunatic or not an insolvent can become a member of a company.
2. Partnership Firm: A partnership firm can not be registered as a member of the company but the partners may hold the shares of a company in their individual name or as Joint Shareholders.
3. Hindu Undivided Family: As Karta is the head of the Hindu Undivided family business, he can buy shares of the company on behalf of the Hindu Undivided Family, but HUF itself cannot be a member of the company.
4. A Company: If the Memorandum of Association grants, then one company can buy the shares of another company and become a member, but the company itself cannot invest in the shares of its own company.
5. Society: A society that is registered under the Societies Act, can buy the shares of a company and become a member.
6. Trust: A registered trust can become a member of a company in its own name.
7. Non-Resident/Foreigner: A non-resident Indian (NRI) can buy shares in a company. It has to fulfill the conditions specified in the FEMA Act, 1999.
8. Limited Liability Partnership: LLP can become a member of a company as it is a juristic person.