Joint Stock Company - Class 10 Elements Of Business - Extra Questions

Answer the following questions:
Mention any six features or characteristics of co-operative societies.

A cooperative society is an autonomous group of persons or group of association who united voluntarily to meet their common economic and social needs, goals and aspirations through a jointly-owned and democratically-controlled enterprise. 
Characteristics of a cooperative society  are :-
1. Autonomous group 
2. Voluntarily united 
3. Regulated by Cooperative Society  Act, 1912
4. Common goals including economic as well as social goals
5. Jointly owned by all the members 
6. Democratically controlled enterprise.


Mention the advantages of Joint stock companies.

A joint-stock company is a business entity regarded as an artificial person where the funds for running the business is raised through issuing shares to public and the shares of the company's stock can be bought and sold by shareholders.
The advantages of a joint stock company are :-
1. Separate legal entity 
2. Abundant Capital 
3. More Managerial efficiency 
4. Optimum utilization of resources 
5. Limited liability of the shareholders.


Fill in the blanks with appropriate words in the following statements.
The capital of joint-stock companies is divided into small units. They are called ____________.

Shares are the small units in which the capital of a joint stock company is divided into by quoting these shares at a certain price which keeps on fluctuating in the stock market. 


Fill in the blanks with appropriate words in the following sentences:
The most important documents required to start Joint companies are _________ and ________.

A joint-stock company is a business entity regarded as an artificial person where the funds for running the business is raised through issuing shares to public and the shares of the company's stock can be bought and sold by shareholders.
The most important documents required for the formation of a joint stock company are :-
1.Memorandum of Association 
2.Articles of Association 


Which are the stages to formulate Joint Stock Companies?

A joint-stock company is a business entity regarded as an artificial person where the funds for running the business is raised through issuing shares to public and the shares of the company's stock can be bought and sold by shareholders.
The stages require for the formation of a joint stock company are :-
1. Planning 
2. Feasibility analysis 
3. Incorporation 
    a) Naming of the company  
    b) Filling up Registration Form 
    c) Preparing documents  and submitting for registration 
    d) Obtaining commencement certificate  
4. Flotation Stage.


Match the pairs

The correct matches of the pairs are:
 1) Registrar of Companies is appointed by Central Government.
2) Alteration in articles is a special resolution.
3) Annual Returns is within 60 days of Annual General Meeting.
4) Extension of time for holding Annual General meeting is maximum three months.


Write Short Notes on the following:
Minutes of the Meeting

Minutes of a meeting are a formal summary of the meeting held at the registered office with all the necessary details and events that took place in the meeting in a orderly manner drafted by the secretary of the company. Minutes are written in past preference and it is just a report of what happened in the meeting. 



Write Short answers for the following:
Explain the rights of a member.

The term 'Member' denotes a person who holds shares in a company. The members of the shareholders are the real owners of a company
The rights of a member are as follows:-
1. To attend every member meeting held by the company. 
2. To raise any motion in the interest of the company's affairs and with the permission of the chair. 
3. To vote in the company's member meeting. 
4. To sell and buy the shares of the company. 


Name the following:
(a) A company in which the number of members cannot exceed 50:
(b) A company having at least seven members:

(a) Private company. 
(b) Public company. 


In terms of a joint stock company, what do you understand by common seal?

Joint stock company is an artificial person the company cannot sign, therefore there is a need for common seal with its name engraved on it. The activities of the company are carried through a group of people. Anyone acting on behalf of the company can use a common seal in place of signature of the company to bind the company. Any document which does not bear the common seal of the company is not binding on the company.


In a joint stock company, what do you mean by perpetual succession?

A firm exists continuously, regardless of its members. A company is created by law and only law can bring an end to its existence. The death, insolvency or incapacity of any member does not affect the existence of a company. Members may come and members may go but the company goes on forever. The life of the company can come to an end through legal procedure of winding up.


Define One Person Company.

The 2013 Act introduces a new type of entity to the existing list that is apart from forming a public or private limited company, the 2013 Act enables the formation of a new entity a 'one-person company' (OPC). As the name suggests, One-person company is a company that can be formed by just one person as a shareholder. {section 3 (1) of 2013 Act}.


What do you mean by a memorandum of association?

The Memorandum of Association is a company's most important document. It is considered as the charter of the company. It contains the powers and objectives of the company. It also describes the scope of operations of the company. It can be altered only according to the provisions made in the companies act regarding its alterations.
Memorandum of Association provides information to outsiders such as creditors, suppliers,etc to know the limitations and scope of a company's dealings. It is also known as the doctrine of outdoor management.


What exactly do you mean when you say "artificial person" in the context of a joint stock company?

A company does not have a physical body like a natural human being. It is an artificial person created by law. Its operation are performed by the elected representatives of members, known as directors, although business is run in the name of the company.


What do you mean by authorised capital?

Authorised capital or "nominal capital" Section 2(8) of the Act. It means such capital as is authorised by the memorandum of association of a company to be the maximum amount of share capital of the company.


 "It is said to be an artificial person created by law, having a separate entity with perpetual succession and common seal". What is it? Elaborate up highlighted features.
Explain the legal effect and significance of the 'Certificate of Incorporation' in the life of a Joint stock company. State any two privileges of a private company under the Companies Act, 2013.

Definition of a Company: Section 2 (20) of the Companies Act, 2013 defines a company as "a company incorporated under this Act or under any previous company law." Important previous companies laws are the companies laws passed in 1956. After passing of the Companies Act, 2013, all these acts have been repealed. The definition contained in the Act does not throw any light on the features of a company. A more comprehensive definition of a company has been given by Prof. Haney:

 "A "company is an incorporated association which is created by law, having a separate entity with a perpetual succession and a common seal. Two more features division of capital into transferable shares and limited liability of the members may be added to the definition given by Prof. Haney. 

Thus, a company may be defined as "an incorporated association which is an artificial -person created by law, having a separate entity, with a perpetual succession, a common seal, capital divided into transferable shares and carrying limited liability."

A joint-stock company (JSC) is a form of company or joint venture involving two or more individuals that own shares of stock in the business. Certificates of ownership ("shares") are issued by the corporation in return for each financial contribution, and the shareholders are free to relocate their ownership interest at any time by selling their shares to others.
Procedure of Formation of a Joint Stock Company :-

1. Promotional Steps:
The person who undertook the task of formation is called promoter or entrepreneur. For Public Limited Company there should be at least seven (7) and for Private Limited company, there should be at least two (2) promoters. These promoters undertook the following tasks:

a) Planning: Here the promoters decide about the objectives, area, type, capital structure of the new business. Based on these factors, the promoters go forward.

b) Feasibility Analysis: Here the promoters undertook the feasibility analysis for the new venture: both from existing and potential viewpoint. Promoters undertook different tools like SWOT (Strength, Weakness, Opportunity and Threat) Analysis; Competitive Analysis, etc. Being assured of the potentiality of the business the promoters go for the further.

c) Naming the Company: The name of the company should be such that is not used by any other existing company; it is not a name of the King or Queen or President. The Public Limited Company should use (pvt.) Limited and the Public Limited Company must use Limited at the end of the company name. The promoter upon deciding the name, they submit the name in black and white for Clearance in the registrar office. The registrar upon verifying the uniqueness of the proposed name gives clearance of using the name.

2. Registration or Incorporation:
To incorporate the new company the promoters needs go through the following steps:
a) Collecting Registration Form and Filling it up: The promoters have to collect the registration form and other papers for a fee from the registrar office. Then they should fill up it by themselves or should take the help of the consultants or advocates.

b) Preparing Documents and Submitting for Registration: The promoters have to submit the filled-up form with fees and the following documents in the registrar office:
• Memorandum of Association
• Articles of Association
• Capital Structure of the proposed Company

c) Obtaining Certificate of Commencement: Here the promoters should make the Prospectus for the company. This prospectus needs to be published in the daily newspaper. To get the Certificate of Commencement, the promoters need to submit the following documents to the registrar :-

• A copy of Prospectus
• Name, address, designation, occupation, etc. of Directors
• Directors’ written Letter of Agreement that they want to work as director of that company.
• Declaration that the directors have fully paid the minimum amount of sponsor share.
• Declaration by the company secretary or other authorized people that the above affairs have maintained all rules and regulation of Company Act 1994.

3. Flotation Stage :-
If the sponsor directors are unable to provide adequate capital to public limited company, can float their share in the capital market (Stock Exchange) to get required capital. By this time, the company can do its other functions.



What is the meaning of Joint Sector Enterprises?

Joint Sector Enterprises is an industry and business which is owned, controlled, and managed jointly by private entrepreneurs and the government. Mainly, day to day management lies in the hands of the private entrepreneurs and the government exercises control via its representatives present on the board of directors. For example:- Maruti Udyog Ltd.


What do you mean by issued capital?

Issued capital is defined in Section 2(50) of the Act. Issued capital is that part of authorised capital which is actually offered to the public for subscription. The remaining part of the Authorised Capital is known as 'Unissued Capital' which can be issued later on.


Fill in the blanks with appropriate words in the following sentences:
The first stage of the formation of a Joint stock company is ________.

A joint-stock company is a business entity regarded as an artificial person where the funds for running the business is raised through issuing shares to public and the shares of the company's stock can be bought and sold by shareholders.
The first stage of the formation of a joint stock company is planning and the feasibility analysis about the affairs of the company which is to be formed. 


Which are the small scale business organizations?

Small businesses are privately owned corporations, partnerships, or sole proprietorships which have fewer employees and/or less annual revenue than a regular-sized business or corporation. Businesses are defined as "small" in terms of being able to apply for government support and qualify for preferential tax policy varies depending on the country and industry. As per the Ministry of Micro, Small, and Medium Enterprises, any service sector unit with an investment in equipment of not more than Rs. 2 crores is classified as a small business. In the manufacturing sector, any unit with an investment in plant and machinery of less than Rs. 5 crores is classified as a small business. Many small businesses are sole proprietor operations consisting solely of the owner, but small businesses can also have a small number of additional employees. Some small businesses that offer an existing product, process or service, do not have growth as their primary objective. However, in contrast, a business that is created to become a big firm is known as a startup.


What are the functions of a secretary of Joint Stock Company ? 

Secretary of a company is required to perform some statutory duties like maintenance of books and register of companies,filing of returns with the registrar, issue of shares, attending meetings and recording their proceedings, ensuring safe custody and proper use of company's seal.


List the features of Joint Stock Company.

Joint stock company is an artificial person having a separate legal entity,common seal, perpetual existence, limited liability, transferability of shares and there exists a separation of ownership and management.


What are the merits of Joint Stock Company?

Joint stock company helps in the effective mobilisation of huge financial resources, provides limited liability to its shareholders, possibilities of growth and expansion, perpetual succession and also builds public confidence and social benefits.



Write demerits of Joint Stock Company.

Following are the disadvantages of Company form of Organisation: Costly and difficult to form, scope for dishonest management, nepotism, lack of good labor relations, high taxation, lack of secrecy, delay in decision making process, speculation and lack of interest.


Distinguish : 
Company Secretary and Personal Secretary.

Company  Secretary:-
Qualifications:- The company secretary should be qualified according to ICSI (Indian Company Secretaries of India).
Pay:- The pay paid to a company secretary will be on higher side as compared to a personal secretary.
Level of responsibility:- The level of responsibility of the company secretary is high as compared to the personal secretary.
Personal Secretary :
Qualifications:- There is no formal education or qualifications required for being a secretary.
Pay:- The paid to a personal secretary is less as compared to the company secretary.
Level of responsibility:- The level of responsibility of personal sercetary is less as compared to the company secretary.


Write short note on the following:
Features of Joint Stock Company.

(1) Voluntary Association: A company is a voluntary association of persona. Any person, irrespective of caste, religion, creed competent to enter into a contract can become its member. A person at his own wish can become or leave membership of the company.
(2) Incorporated Association: A company is an association of persons formed and registered under the Indian Company Act. Registration or incorporation is compulsory. After the certificate of incorporation, a company comes into existence. 
(3) An Artificial Person: A company is a creation of law. A company does not have a physical existence, but it can conduct various activities like any other human being. It can file a suit against third parties and can be sued in a court of law. A company has corporate existence. 
(4) Independent Legal Status: A company has legal entity (recognition) i.e. it enjoys a separate legal status. Its existence is different from its members and directors. Though the members are the owners yet they are not liable for the act of their company. 
(5) Perpetual Succession (Continuous Life): A company has a perpetual succession means continuous existence. The company can enjoy long, stable life as death, insolvency of the shareholder does not affect the working of a company. 
(6) Common Seal: A company has a common seal of its own and all its activities are conducted under this seal. A company being an artificial person, its seal is the substitute for its signature. This seal is a name or, any other recognition of a company engraved in a particular manner. 
(7) Limited Liability: The liability of members or shareholders of a Joint Stock Company is limited only to the extent of capital they invest in a public company i.e. the face value of shares which they invest into. The shareholders of a company are not liable for the debts of a company. 
(8) Separation of Ownership and Management: As per the provision of the Companies Act, 1956, a company is not managed by its owners (shareholders) but by the representative of shareholders (Directors). So, shareholders need not manage a company, and directors need not be the owners of a company. 
(9) Transferability of Shares: The shares of a public company are transferable. They can be transferred freely or with some restrictions. Transferability of shares brings about liquidity (conversion into cash) to the investment 
(10) Large Membership: A company is owned by a large number of members. For a private company, maximum membership is 50 (minimum 2) and for a public company, there is no limit over a maximum number of members (minimum 7). 
(11) Huge Capital: Due to a large number of members, a huge amount of capital can be collected by the company in the form of shares, debentures, bonds, public deposits, etc. It can also obtain loans from banks and financial institutions. 
(12) Strict Government Control: There is strict control and supervision by the Government on the working of the company. The company has to follow all rules and regulations of the Government Various fines and penalties are provided for the violation of legal provisions. 
(13) Separate Property of Company: The property of a company is different from the property of their shareholders. The shareholders are the owners of the company but they cannot own the property of the company as the company has separate legal status. 
(14) Scope of Activities: The management of business activities of the company is based on Memorandum of Association and Articles of Association. The aims and objectives of the company are given in Memorandum, while the Articles include rules and regulations for the internal administration of the company. Thus, the business of the Company is regulated by these documents.


Write Short notes on the following:
Limitations of Joint Stock Company.

The major limitations of a company form of organization are as follows:-

  1.  Complexity in Formation:- The formation of a company requires greater time, effort, and extensive knowledge of legal requirements and the procedures involved.
  2. Lack of secrecy:- The Companies Act requires each public company to provide from time to time a lot of information to the office of the registrar of companies. Such information is available to the general public also.
  3. Numerous regulations:- The functioning of a company is subject to many legal provisions and compulsions.
  4. Delay in decision making:- Companies are democratically managed through the Board of Directors which is followed by the top management, middle management, and lower-level management
  5. Conflict in interests:- There may be a conflict of interest amongst various stakeholders of a company.


Write short answers for the following:
Define Joint Stock Company and explain it's features.

A company or association consisting of individuals organized to conduct a business for gain and having a joint stock of capital represented by shares owned individually by the members and transferable without the consent of the group. The company form of organization is considered to be most suitable for organizing business activities on a large scale. It has the advantage of attracting huge capital from the public. With adequate capital, it can employ trained and experienced managers to run the business activities efficiently.
Following are the main characteristics of the company form of organization:- 
  1. Separate Legal Existence:- A company has a separate legal entity. A company can carry on business in its own name, it can buy and sell assets in its own name.
  2. Artificial Person:- A company does not have a physical body like a natural human being. It is an artificial person created by law. Its operations are performed by the elected representatives of members, known as directors, although business is run in the name of the company.
  3. Registration:- It is legally compulsory for a company to get itself registered under the Companies Act, 1956. Without registration, no company can come into existence.
  4. Common seal:- Being an artificial person the company cannot sign, Therefore there is a need for a common seal with its name engraved on it. The activities of the company are carried through a group of people. 
  5. Limited liability:- The liability of members of the company is limited to the extent of their share capital contribution to the company. For example, If a person has purchased 100 shares of values Rs 10 each, then his liability is limited up to rs 10000 only.


Write Short Notes on the following:
Resolution and its Types.

Resolution refers to the written form of a motion that was introduced by a group in a meeting which gets drafted after its successful discussion and approval in the meeting. There are two types of resolution: 

1. Ordinary Resolution: An ordinary resolution refers to such resolutions which are passed by the members of a company by a normal majority like  51% .

2. Special resolution- A special resolution refers to such resolutions which are passed by the members of a company by 3/4 majority. 



Write Short Notes on the following:
Amendment

Change in a  legal documents made by adding, altering, or ommitting, a certain part  or term. Amended documents , when properly executed (signed by all parties concerned), retain the legal validity of the orginal documents.For construction or supply contracts,amendement refers to change before the contract is awarded, any change made afterwards is called as modification.


Essay Type Question:
State and explain the different types of General Meetings of Company.

Types of meetings :
  1. Statutory meeting: The directors are required to prepare and send a report called the ‘Statutory Report’ to every member of the company at least 21 days before the date of the meeting. If the report is sent later it shall be deemed to have been duly forwarded if it is so agreed to by a unanimous vote of the members entitled to attend and vote at the meeting [Sec. 165 (2)]. A copy of this report should be sent to the Registrar.
  2. Annual general meeting: It is a meeting of shareholders which is held once in a year. The object of holding this meeting is to review the progress and prospects of the company and elect its office-bearers for the coming year.
  3. Extraordinary meeting: Extraordinary meeting is a general meeting which is held between two Annual General Meetings. Extraordinary General Meeting is Called to discuss any particular matter of urgent importance to the company. This meeting is called for the consideration of any specific subject, a decision of which cannot be postponed to the next Annual General Meeting.
  4. Class meeting: When the meeting of a particular class of shareholders takes place such as a preference shareholder meeting, it is known as a class meeting. Such a meeting can be attended only by that class of shareholders. The articles define the procedure for calling such meetings. Such a meeting is called for the alteration in the rights and privileges of the shareholders and for the purpose of conversion of one class of shares into another.


Write Short notes on the following:
Advantages of a Joint Stock Company.

1. Large capital: A company can secure large capital compared to a sole trader or partnership. A large amount of capital is necessary for conducting business on a large scale.

2. Limited liability: The liability of a shareholder is limited. The risk of loss is limited to the unpaid amount on the face value of shares held.

3. Transferability of shares: Transaction of Shares between two individuals are easy. So there is the liquidity of investment.

4. Economies of large-scale operation: A joint-stock company can undertake business on large scale. As a result, it can derive all the advantages of large-scale production.

5. Economic development: Joint Stock Companies have large financial resources, they are able to undertake large-scale production, satisfy the needs of more consumers, create large-scale employment opportunities, promote balanced regional development and contribute substantially to the government by way of taxes.


Write short answers for the following:
Explain the merits and demerits of a Joint Stock Company.

A company or association consisting of individuals organized to conduct a business for gain and having a joint stock of capital represented by shares owned individually by the members and transferable without the consent of the group. The company form of organization is considered to be most suitable for organizing business activities on a large scale. It has the advantage of attracting huge capital from the public. With adequate capital, it can employ trained and experienced managers to run the business activities efficiently.
  • The important advantages of a joint-stock company are:-
  1. Limited liability:- The liability of members of the company is limited to the extent of their share capital contribution to the company. The limited liability attracts many people to invest their money in a company form of business.
  2. Transfer of interest:- The shares of the company can be easily bought and sold in the market. If the owner of shares is in need of cash, he can easily sell the share and get cash. The easy transferability of shares brings liquidity to the investment.
  3. Perpetual Existence:- The company form of business enjoys perpetual succession. As it has a separate existence, it is formed by law and can end by a legal procedure of winding up only. 
  • The following are the main limitations of a company organization:- 
  1. Complexity in Formation:- The formation of the company involves a lengthy and complicated procedure, many legal formalities have to be completed, many documents have to be prepared and submitted. To perform these activities experts are hired, who charge high fees.
  2. Lack of Secrecy:- As per the companies act 1956, the company is required to provide a lot of information to the office of the registrar of companies. Such information is available general public also. So it is therefore difficult to maintain complete secrecy about the operation of a company.
  3. Numerous regulations:- The company form of business has to comply with various legal formalities at different stages and there is a penalty if the company fails to meet any of the formalities. A company has to file the return and annual reports with the registrar. The legal interference in day to day operation results in lack of secrecy and a lot of time and money speny.


Write shorts answer to the following questions:
Why are the services of a secretary required for a Joint Stock Company.

The company secretary will take care of a number of administrative tasks, including:-

  • Filing annual returns – A company secretary will take over this responsibility from the limited company director. This means they are responsible for the completion and timely submission of the company’s annual return and full accounts by the statutory deadline.
  • Informing Companies House of changes – Should company details change - such as the name of the director, changes in shareholders or share capital, a change in registered office address, and any other important appointments – the company secretary is responsible for communicating these changes to Companies House in a timely manner. They should also ensure these changes are reflected in company communications with staff, customers, and shareholders where applicable.
  • Updating the Company’s Statutory Books - any changes to the structure of the company need to be recorded in the company’s statutory registers, e.g. the Register of Directors and the Register of Members.
  • Communication with shareholders – As previously mentioned, the company secretary acts as a link between shareholders and the company. This means that any important announcements should be officially communicated. The Secretary will also send out notices and liaise with shareholders regarding any shareholder meetings and the Annual General Meeting if the company chooses to hold one.
  • Maintaining paperwork - A company secretary is responsible for the security and accuracy of important company documents, which include the certificate of incorporation, share certificates, and other important ones.
  • Signing paperwork – The duty of signing legal documents on behalf of the company director may sometimes fall to the company secretary. This can be anything from signing cheques and bank documents to other vital documents.
  • Compliance – The company secretary should take time to ensure the company remains compliant with legislation outlined in the Companies Act 2006 at all times.


Write short answers for the following:
What are the characteristics or features of a Joint Stock Company? 

Joint stock company has the following features of a company:-

1. Artificial person: A company is a creation of law and exists independent of its members. Like natural persons, a company can own property, incur debts, borrow money, enter into contracts, sue, and be sued.

2. Separate legal entity: From the day of its incorporation, a company acquires an identity, distinct from its members.

3. Control: The management and control of the affairs of the company is undertaken by the Board of Directors, which appoints the top management officials for running the business.

4. Common seal: The company being an artificial person acts through its Board of Directors. The Board of Directors enters into an agreement with others by indicating the company’s approval through a common seal.


Distinguish:
Motion and Amendment.

Motions  :
Meaning : Simply put, motions are proposals with the aim of making the members of the meeting deliberate on the issue at hand. Motions are proposed by directors that, more often than not, needs a “seconder” before the board can debate on the issue and consider voting for a decision. Moreover, it is not required that a motion be put down into writing, it can be done so verbally. Lastly, motions are well accepted as decisions of the board and does not reflect that of the whole organization.

Types of Motions:

Motions are of different types.

The classifica­tion is on the basis of importance and procedure of moving. They are:

(1) Primary Motion:

It means a motion related to some important function of the organisation. For example, a motion on the section of an individual as director of a company. It is also known as the original motion.

(2) Secondary Motion:

It means a motion related to some amendment of a motion. Sometimes some words are added as adden­dum to a primary motion or a rider is added as a further action.

(3) Substantive Motion:

When a proposed amendment to a motion is voted upon and passed, then the original motion has to be altered before it is put to vote. A motion, when amended, is called a substantive motion.

(4) Formal Motions:

Discussions at a meeting may be interrup­ted by raising various kinds of formal or dilatory motions.

Amendement :

Meaning:

An amendment is a formal or official change made to a law, contract, constitution, or other legal document. It is based on the verb to amend, which means to change for better. ... They are often used when it is better to change the document than to write a new one.
Types of amendment :
 1. Bills that are passed by Parliament by Simple Majority.

2. Bills that have to be passed by Parliament by Special Majority.

3. Bills that have to be passed by Special Majority and also to be ratified by not less than one-half of the State Legislatures.





Essay Type Questions:
What is the Feature of an effective business letter?

A business letter is a letter written in formal language, usually used when writing from one business organization to another, or for correspondence between the organization and its customers, clients, and other external parties.
Features of effective business letters.
  • Clarity:- 
1. No use of double meaning and short form of words.
2. The message should be correct and clear.
3. Use of simple and common words.
  • Conciseness:- 
1. The letter should be brief.
2. Minimum words are used.
3. Save time for readers.
4. Proves more effectiveness.
  • Completeness:- 
1. The letter should cover facts and figures. 
2. Give complete information.
3. The incomplete letter will not achieve desired result.
  • Courtesy:-
1. Courteous means polite language.
2. Gets favorable reply.
3. Harsh or rude and insulting words should be avoided.
  • Correctness:-
1. No grammar and spelling mistakes.
2. Should be correct information.
3. The mistake will create a problem.
  • Coherence (step by step):-
The letter should be in a logical sequence
1. Divided into the different paragraphs.
2. Arranged logically and connected to each other.
  • Consideration:-
1. Written from the reader's point of view.
2. Importance and consideration should be given to the reader.
3. Follow "You Attitude" means letter should motivate to act reader.
  • Cheerfulness:-
1. The letter should be positive.
2. Shows a spirit of hopefulness.
3. The letter should avoid negative words and sentences.


Match the group

A. Memorandum of association is the charter or the constitution of the company that defines the affairs of the company to the outside world. 
B. Articles of Association is the rules and regulations for the internal management of the company which is to be followed by all the employers as well as the employees of the company. 
C. Prospectus refers to the written invitation to the public with all the information regarding the company for the investment in company's shares.
D.  Statement in lieu of prospectus are the invitations for the purchase of shares for companies who cannot issue prospectus they have to file statement for the same purpose.
E. Table A schedule-I of the companies act, 1956 defines a model set of 99 articles that have all the specifications about the financial management of the company. 



Essay Type Questions :
Describe in brief the monitoring mechanism for a Joint Stock Company.

A joint-stock company is a business entity regarded as an artificial person where the funds for running the business is raised through issuing shares to public and the shares of the company's stock can be bought and sold by shareholders. Therefore, joint stock companies are known as corporations or limited companies. 



Define and explain the role of director in company.

Director are the group of members which are been appointed by shareholders for management of company as the shareholder cannot participate in the day to day activity of the organization. 
The following are role of director in the company :
1. Management of the company business.
2. Strategic and operational decision.
3. Company meet strategic obligations.
4. Determining and implementing policies and mankind decision.
5. Preparing filing statutory documents with companies office and agencies.
6. Binding the company to contracts with supplier, lenders and other dealing with the companies.


Distinguish:
Ordinary Resolution and Special Resolution. 

BASIS FOR COMPARISONORDINARY RESOLUTIONSPECIAL RESOLUTION
MeaningWhen at the general meeting, simple majority is required to move the resolution, it is called as Ordinary Resolution.When at the general meeting, super majority is required to pass the resolution, it is known as Special Resolution.
Consent of membersAt least 51% members should be in favor of the motion.At least 75% members should be in favor of the motion.
Registration with ROCA copy of OR should be filed with ROC, in certain cases.A copy of SR must be filed with ROC.
Business transactedOrdinary business or special business, depending on requirements of the Act.Special business
                                                                                                                                                                    


Write Short Notes on the following:
Proxy.

When the member is not in a position to attend the meeting personally, he can appoint his representative. This representative is called a proxy. Proxy can attend meetings and vote.
The term has two meanings:-
1. Proxy is a person appointed to attend and vote at a meeting.
2. Proxy is an instrument by which the appointment of a person is made i.e proxy form. 


Match the following:
AB
Minimum seven 
members		Private company
Maximum fifty 
members		Public company
Restriction on 
transfer of shares		Private company
Cannot issue 
prospectus		Private company

1) Minimum seven members : Required for public company 
2) maximum fifty members : Private company 
3)Restriction on transfer of shares : Private company 
Cannot issue prospectus : Private company 


Write a note on the provisions relating to requirements of the meetings.

Meaning and purpose :

Annual General Meeting is a regular meeting of the members of a company which is held annually. This meeting provides an opportunity for the members of the company to review the working of the company and express their views on the management of the company.

The purpose of calling the meeting is to transact the ordinary business of the company. The ordinary business consists of:

a) The passing of the annual accounts,

(b) Declaration of dividends,

(c) Election of directors in place of those who are retiring by rotation,

(d) Appointment and fixation of the remuneration of auditors of the company.

2) Statutory meeting :

It is a statutory requirement for every company to call and hold an annual general meeting every year. The first annual general meeting of a company must be held within 18 months of its incorporation. There can be no extension of this period even by the Registrar. A subsequent annual general meeting must be held by the company each year within 6 months after the close of the financial year but the interval between any two annual general meetings must not be more than 15 months.

Financial year refers only to a period in respect of which any profit or loss account is laid at an annual general meeting whether that period is a year or not. The financial year of a company relating to a particular period may be less or more than a calendar year but shall not exceed 15 months [Sec. 166 (1)].



Distinguish:
Agenda and Minutes.

Agenda means things to be done. It is usually sent along with the notice of the meeting. It is a list of the topics to be discussed in a meeting. it familiarizes participants with the topics to be discussed and issues to be raised. To indicate what prior knowledge would be expected from participants. It Indicates what outcomes the participants may expect from the meetings.

Minutes Also known as protocol or note, minutes are the live written record of a meeting. They include the list of attendees, issues raised, related responses, and final decisions taken to address the issues. Their purpose is to record what actions have been assigned to whom, along with the achievements and the deadlines.



Write Short Notes on the following:
Method of Voting.

There are three methods of voting in a meeting of a company: 
1. Voting by show of hands:- Voting by show of hands refer to voting that is cast for any resolution where the members use their hands to vote for or against the resolution and proxies cannot vote in such a case.
2. Voting by poll:- Voting by poll refers to a system where polling paper is distributed among the members present at the meeting, in person or by proxy, to have the voting right in the poll in the proportion of the number of shares held by each of them.
3. Voting by ballot:- Voting by ballot is a system where the vote is cast by every member of the meeting electronically using a device called ballot to vote for or against the resolution to the extent of shares held by each of them. Voting by ballot is usually done in companies having more than 1000 shareholders.


Write Short Notes on the following:
Importance of agenda ?

An agenda is much more than a list of things to do. An agenda is a meeting program designed to enable all important and relevant points to be dealt with in good order and good time.

An agenda is also a form of courtesy. It informs the chairperson and participants of the refined purpose of the meeting. This gives them time to prepare for the tasks, and enables them to make a meaningful contribution.

A well planned agenda can:

  • provide a logical guide for business and discussion 
  • bring harmony and efficiency to a meeting 
  • help restrain participants from speaking out of turn. 


Write Short Notes on the following:
Invalid Resolution.

A resolution of the board of directors may be incorrect either in form or in contents if the articles of association or regulations of the Limited Liability Companies Act have not been applied to the resolution. A resolution may be in violation of law or the articles of association as to its form, for instance, if:

  • It lacks a quorum.
  • The provisions on disqualification are breached.
  • The majority required for the decision-making is lacking.


Write a letter to the Director following cases.
Reporting to a director who was absent for a meeting.

                                                ALPHA INDUSTRIES LTD
                                            Gama House, Pune : 400001
Tel : 456321                                                                      Email : alpha@pune.com
Fax : 56784                                                                   Date : 24  September 2017
Ref :A/83638


Mr. S.K. Shah
A/56, Villa plaza,
Vile parle (West)
Mumbai :4087363
    
                                Sub : Report of meeting 
Sir, 
As per your request letter dated 14th August 2017. I am enclosing a copy of the minutes of the last board meeting held on 10th august 2017 for your information and record. 
I would like to draw your attention to Item No 5 of the minutes which relates to import some latest heavy duty machine as a part of mordernization of the company. This items was discussed in detail. The chairman point of view was finally accepted and decision was taken to import heavy duty machines. It was decided in detail. It was also decided to raise the required finance by raising 50000 equity shares of rs 10 each to public.
The other items in the meeting  being of routine nature require no explaination.
I shall be glad to give you any further details if you desire.
                                                                                                         Yours faithfully,
                                                                                            For Alpha industries ltd
                                                                                                               Sd/-
                                                                                                          Secretary


Write Short Notes on the following:
Motion

A motion is a topic or subject proposed as a basis of dis­cussion. Since a member at a meeting formally introduces or moves a subject for discussion it is called a motion. With the permission of the chairman a motion is moved by an individual. He ‘secures the floor’, addresses the chairman and makes a short speech in support of the motion.

Rules Regarding Motion:

(1) Only one ‘motion can be moved at a time.

(2) A motion should preferably be placed in writing, signed by the mover.

(3) The wording must be properly made so that it can be converted into a resolution in proper form. Generally the help of the secretary is sought in this respect as he is an expert in this line.

(4) Usually the language of a motion is ‘affirmative’ i.e. an intention to do something. Some formal motions may be ‘negative’ .






Write Short Notes on the following:
Quorum?

Quorum refers to the minimum number of voting members that must be present in the meeting of a company in order to transact the business affairs and constitute that meeting to be regular one. Quorum is set according to the preference of the company and composition of the shareholders in the company. 


Essay type questions:
Explain in detail the various methods of voting at a company meeting.

The various methods of voting at a company meeting are: 

1. Voting by show of hands- It refers to voting that is cast for any resolution where the members use their hands to vote for or against the resolution and proxies cannot vote in such a case 

2. Voting by poll- It refers to a system where polling paper is distributed among the members present at the meeting, in person or by proxy, to have the voting right in the poll in proportion of the number of shares held by each of them. 

3. Voting by ballot- It is a system where the vote is cast by every member of the meeting electronically using a device called ballot to vote for or against the resolution to the extent of shares held by each of them. Voting by ballot is usually done in companies having more than 1000 shareholders.


Match the groups:

The correct matches of the groups are:
1)  Retirement of Directors has 1/3 retire by Rotation.
2) Qualification Share are of directors.
3)  Public Share should have at least 3 Directors.
4) Auditor is a chartered accountant.
5) Alternate Director is in case of absence of directors.


Write short answers for the following:
What are the legal provisions regarding quorum ? 

Quorum – While commencing the Meeting

If the requisite Quorum is not available at the start of a Board meeting, the meeting stands adjourned as provided in the Articles of association of the company. If the articles are silent, then the meeting automatically stands adjourned to the same day, same time in the upcoming week. If that day happens to be a national holiday, then it will be postponed to the next available date which is not a national holiday.

National Holidays includes Republic Day, Gandhi Jayanthi, Independence day or any other day that has been specified as a public or national holiday by the Central Government.

Quorum – Disinterested Directors

The interested directors are not counted for the purpose of the quorum for a Board Meeting. The quorum of disinterested directors is required for each business transacted at the Board meeting unless the articles provide for a higher quorum. Discussions or meetings would not be convened without the participation of quorum of disinterested directors.



Write short answers for the following:
What is motion and what are the essentials of motion ? 

Meaning :
Motion is a proposal put before the meeting for discussion and decision. A motion can be moved by a member present in a meeting.A person who moves the motion is called mover of the motion .
Essential of motion :
  1. A motion is writing 
  2. It should be signed by the mover
  3. A motion must get support from at least one member. A motion is said to be seconded when it gets such support
  4. Motion must be within the agenda
  5. Motion must be drafted in affirmative form.
  6. Every person is allowed to speak on motion only once.


Write short answers for the following:
State the different types of resolutions passed in a meeting. 

Resolution refers to the written form of a motion that was introduced by a group in a meeting which gets drafted after its successful discussion and approval in the meeting. The different types of resolution are:

1. Ordinary Resolution: An ordinary resolution refers to such resolutions which are passed by the members of a company by a normal majority like  51%.

2. Special Resolution: A Special resolution refers to such resolutions which are passed by the members of a company by at least 75% majority. 



Write short answers for the following:
What are the advantages of poll method of voting ? 

Poll refers to a system where polling paper is distributed among the members present at the meeting, in person or by proxy, to have the voting right in the poll in proportion of the number of shares held by each of them. The advantages of such a method of voting are: 

1. It is easy to count and arrange in sets.

2. It is in writing. 

3. Even proxies are considered in such type of voting. 

4. It is the most ideal form of voting when the member group is large and heterogeneous. 



Essay type questions:
Explain different types of resolutions passed at the company meetings. 

Resolution refers to the written form of a motion that was introduced by a group in a meeting which gets drafted after its successful discussion and approval in the meeting. The different types of resolution are:

1. Ordinary Resolution: An ordinary resolution refers to such resolutions which are passed by the members of a company by a normal majority like  51%.

2. Special Resolution: A Special resolution refers to such resolutions which are passed by the members of a company by at least 75% majority.



Write short answers for the following:
What are the rules regarding appointment of proxy ? 

The rules regarding the appointment of proxy are as follows:- 
  1. The member of the company having share capital has a statutory right to appoint a proxy.
  2. A proxy need not be a member of the company.
  3. The duly proxy form must be filled must be deposited in the registered office of the company 48 hours prior to the meeting.
  4. A member of a private company cannot appoint more than one proxy.
  5. A member of a public company can appoint multiple proxies if articles allow.
  6. The proxy cannot be appointed for the board meeting.


Write Short Notes on the following:
Resolution requiring Special Notice

It is a special  mode of passing a certain resolution. Such a resolution is passed by ordinary majority or special majority as per requirement of the companies act or articles of association of a company.
A mover of the motion has to give a special notice of 14 days to the company.A notice of intention to move the motion shall be given to the company by the proposer for certain important and serious matter. The notice may be given either individually or advertisment in a newspaper having appropriate circulation. The companies act 1956 requires a special notice  to be given in respect of the following resolution.
  1. Resolution that the retiring auditor shall not to be reappointed (Sec 225)
  2. Resolution seeking to appoint a person as auditor other than retiring auditor (Sec 225)


State with reasons, whether the following statement is True or False:
The ownership and management is not separated in a Joint Stock Company.

The ownership and management is not separated in a Joint Stock Company. 
(i) The shareholder in the company is large and they are spread all over the country.
(ii) Therefore, the management of the company is done professionally by experts who are the representatives of the shareholders are called the board of Directors.

The separation of ownership and control refers to the phenomenon associated. with publicly held business corporations in which the shareholders (the residual. claimants) possess little or no direct control over management decisions. Reference to the separation of ownership and control, and concern over its.


Answer briefly the question:
Explain the term 'motion' in the context of company meetings.

Motion Definition: A proposal made to a Court or at a meeting and intended to be considered and decided upon. Related Terms: Carry, Motion to Strike. In Court, amotion is directed at a Court which sits as a quorum of one representing the whole Court.


 Define a Joint Stock Company. 

A joint stock company is a company whose stockholders have the same privileges and responsibilities as an unlimited partnership.
A joint stock company issues shares similar to a public company that trades on a registered exchange. Joint stock holders may buy or sell these shares freely in the market. But unlike ordinary shares or preferred shares, the shares of a joint stock company carry explicit obligations. Holders have a direct vote in company management decisions as well as a joint and several liability for the company's outstanding debts.


Who elect the Board of Directors in Joint Stock Company?

The Shareholders Meeting of a joint stock company (JSC) has the authority to appoint and dismiss members of the Board of Directors. Appointment of a Board Member must be conducted through cumulative voting.

 Under cumulative voting principle, whenever a JSC elects new Board Members, each shareholder will have a number of votes equal to the number of new Board Members to be elected times the number of voting shares held by such shareholder and such shareholder may cash all or some of his/her votes for any candidate.

 Further, provides that persons appointed to be Board Members will be determined based on a count from the highest number down to the lowest number of votes starting with the candidate with the highest number of votes until all the number of members as required by the company charter have been appointed.

 If two or more candidates receive the same number of votes for the last position of Board Member, there will be another vote taken on such two or more candidates or the Board Member will be appointed in accordance with the voting rules or the company charter. 

A resolution of the General Meeting of Shareholders shall be passed in a meeting when all the following conditions are satisfied :-

-It is approved by a number of shareholders representing at least 65% of the total voting shares of all attending shareholders, the specific percentage to be provided in the charter.

-Voting to elect members of the Board of Directors and of the Inspection Committee must be implemented by the method of cumulative voting.


What do you mean by "Articles of Association"?

The Articles of Association are a set of rules and regulations that govern a company's internal affairs. It defines the powers, duties, and rights of managers, officers, and the board of directors. Generally, all the company prepares their Articles of Association. In case a company does not wish to prepare their articles of association, they can select anyone out of the 99 model sets given in Table F of the Companies Act.


Define Joint stock company.

A joint stock company is a voluntary association of individuals for profit having the capital divided into transferrable shares, the ownership of which is the condition for membership. The company form of organisation is considered to be most suitable for organising business activities on a large scale as it is a separate legal entity, has perpetual succession and can raise large amount of funds, both debt and equity. Also, the liability of each member of the company is limited to the proportion of their contribution into the capital.


Explain the limitations of a joint stock company.

The limitations of a joint stock company are as follows:
1) Legal formalities: The procedure of formation of the company is very long, time consuming, expensive, and requires a number of legal formalities to be fulfilled.
2) Lack of Secrecy: It is very difficult to maintain secrecy in case of public company as the company is required to publish and file its annual accounts and reports. 
3) Lack of motivation:- There is no direct link between efforts and rewards because ownership and management have different interests.
4) Delay in decision making: Red tapism and bureaucracy do not permit quick decision making and prompt actions. 
5) Oligarchic management: Company is said to be democratically managed but actually managed by a few people that is the board of directors and majority shareholders. Sometimes, they take decisions keeping in mind their personal interests and benefit, ignoring the interest of shareholders and company as a whole.


Explain the various steps involved in the promotion of a company.

Promotion means conceiving a business opportunity and taking the initiative to form a company. Steps involved in promotion are as follows :
  1. Identification of business opportunity: The first and foremost function of a promoter is to identify a business idea, for example production of a new product or service.
  2. Feasibility Studies: After identifying a business opportunity, the promoters undertake detailed studies of the technical, financial and economic feasibility of a business.
  3. Name Approval: After selecting the name of the company the promoter submits an application to the registrar of companies for its approval.
  4. Fixing up signatories to the memorandum of association: Promoters have to decide about the members who will be signing the memorandum of association.
  5. Appointment of professional: Promoters appoint merchant banker, lawyer, etc. to assist in legal formalities.
  6. Preparation of necessary documents: The promoters prepare certain legal documents such as the memorandum of association, articles of association, etc. which have to be submitted to the registrar of companies.


Essay Type Question:
State the meaning of Joint Stock Company and explain it's merits and limitations.

A joint-stock company is a business entity regarded as an artificial person where the funds for running the business is raised through issuing shares to public and the shares of the company's stock can be bought and sold by shareholders.
The merits of a joint stock company are: 
1. Separate legal entity 
2. Abundant Capital 
3. More Managerial efficiency 
4. Optimum utilization of resources 
5. Limited liability of the shareholders

The demerits of a joint stock company are: 
1. Delay in decision due to legal formalities
2. High incorporation cost 
3. Lengthy process for formation as well as dissolution 
4. Loss of communication or chances of grapevine due to such a long communication chain


Class 10 Elements Of Business Extra Questions