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Question
Write a word or a term or a phrase which can substitute the following statement:
Clause which describes the extent of liability of members.
Solution
Liability clauses
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RELATED QUESTIONS
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Document which establishes company’s relationship with outsiders.
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The document is subordinate to the Memorandum of Association.
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Clause which describes the main activities a company can undertake.
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Prospectus attached with every share application form.
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Prospectus used for multiple issue of shares within a year.
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This prospectus does not contain information about the quantum of shares to be issued or the price at which shares will be issued.
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Any act done by the company beyond the powers of Memorandum is Ultra Vires.
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Articles of Association is subordinate to Memorandum.
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Every subscriber who signs the Memorandum must also sign the Articles.
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Prospectus can be issued by a private company.
State whether the following statement is True or False:
Every company has to issue shelf prospectus every time it offers shares to the public.
Find the odd one.
Complete the sentence.
The document which contains the rules and regulations governing the internal management of a company is called _________
Arrange in proper order.
a) Subscription clause.
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Study the following case/situation and express your opinion:
The Articles of a company stated that while borrowing any money from outsiders. The document must have the signatures of the Managing Director (MD) and any one of the directors. The Articles of Association clearly stated the procedure to be followed while borrowing money. The Managing Director did not follow all the procedures but still borrowed money from Mr. X. Mr. X assumed that the MD has followed the required procedures:
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Study the following case/situation and express your opinion.
Mr. A entered into a contract with Star Limited company and as advance payment gave a cheque of ₹ 1 lac to a Director Mr. Sam. Mr. Sam is not the Managing Director. Articles state that only the MD is authorized to sign any contracts or receive any payments on behalf of the company.
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Study the following case/situation and express your opinion:
A public limited company has issued all the shares mentioned in its Memorandum as Authorized Capital. Now the Company wants to make a public issue of 10,000 shares at face value of Rs 100 per share, to raise more funds for its expansion activities :
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Study the following case/situation and express your opinion:
A company stated in its prospectus that it has been making profits since the last 5 years. However, Mr. X. an investor found out that two years back the company had not made any profit. The prospectus was filed with the ROC on 1 st Jan 2017 and was issued to the public on 10th Feb 2018.
a) Can Mr. X state that there was a misstatement in the prospectus?
b) If found guilty which two types of liability will the company and its officers face?
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Justify the following statement.
The doctrine of Indoor Management protects outsiders who are unaware of the correctness of internal proceedings of a company.
