Balbharati solutions for Secretarial Practice [English] 11 Standard Maharashtra State Board chapter 4 - Documents related to formation of a company [Latest edition]

Select the correct answer from the option given below and rewrite the sentence.

_______is a primary document of the company which contains the aims and objectives of the company.

Select the correct answer from the option given below and rewrite the sentence.

_______describes the relationship between company and outsiders.

Select the correct answer from the option given below and rewrite the sentence.

The ______ Clause describes the range of activities a company can undertake

Select the correct answer from the option given below and rewrite the sentence.

Any act done by the company beyond the powers of Memorandum is called as _______.

Select the correct answer from the option given below and rewrite the sentence.

_________ acts are void or legally ineffective.

Select the correct answer from the option given below and rewrite the sentence.

_________ clause contains the details of liability of the members.

Select the correct answer from the option given below and rewrite the sentence.

_________ clause states the amount of Authorised capital with which the company is registered.

Select the correct answer from the option given below and rewrite the sentence.

_________ contains rules and regulations for internal management of the company

Select the correct answer from the option given below and rewrite the sentence.

Articles establishes relationship between company and ________.

Select the correct answer from the option given below and rewrite the sentence.

_______ is an invitation to the public to subscribe for the shares of the Company.

Select the correct answer from the option given below and rewrite the sentence.

For making multiple issues of shares within a year, a company can prepare a ________ Prospectus.

Select the correct answer from the option given below and rewrite the sentence.

_______ is an incomplete prospectus.

Match the pairs:

Write a word or a term or a phrase which can substitute the following statement:

Primary document of a company which states aims and objectives of a company.

Write a word or a term or a phrase which can substitute the following statement:

Document which establishes company’s relationship with outsiders.

Write a word or a term or a phrase which can substitute the following statement: 

Document which states the limits within which a company has to operate.

Write a word or a term or a phrase which can substitute the following statement:

Document which contains, Name Clause, Registered Office Clause, Capital Clause, etc.

Write a word or a term or a phrase that can substitute the following statement:

The document is subordinate to the Memorandum of Association.

Write a word or a term or a phrase which can substitute the following statement:

Document which contains rules and regulations for internal management.

Write a word or a term or a phrase which can substitute the following statement:

Term used for acts beyond the scope of Memorandum of Association.

Write a word or a term or a phrase which can substitute the following statement:

Clause which describes the main activities a company can undertake.

Write a word or a term or a phrase which can substitute the following statement:

Clause which gives details of authorized capital or Registered Capital.

Write a word or a term or a phrase which can substitute the following statement:

Clause which describes the extent of liability of members.

Write a word or a term or a phrase which can substitute the following statement:

Last clause of Memorandum which contains name, signature, and other details of all the subscribers to the Memorandum.

Write a word or a term or a phrase which can substitute the following statement:

Document which establishes relationship between a company and its members.

Write a word or a term or a phrase which can substitute the following statement:

Document issued by public company inviting public to subscribe to its shares.

Write a word or a term or a phrase which can substitute the following statement:

Prospectus attached with every share application form.

Write a word or a term or a phrase which can substitute the following statement:

Prospectus used for multiple issue of shares within a year.

Write a word or a term or a phrase which can substitute the following statement:

It is an incomplete prospectus.

Write a word or a term or a phrase which can substitute the following statement:

This prospectus does not contain information about the quantum of shares to be issued or the price at which shares will be issued.

State whether the following statement is True or False:

Memorandum of Association and Articles of Association is prepared at the time of incorporation of a company.

State whether the following statement is True or False:

Memorandum of Association describes the nature and character of the company.

State whether the following statement is True or False:

Memorandum establishes the relationship between the Company and Members.

State whether the following statement is True or False:

Any act done by the company beyond the powers of Memorandum is Ultra Vires.

State whether the following statement is True or False:

Articles of Association can have provisions that contradict the Memorandum.

State whether the following statement is True or False:

Memorandum need not have a Liability Clause.

State whether the following statement is True or False:

Articles of Association is subordinate to Memorandum.

State whether the following statement is True or False:

Memorandum contains rules and regulations for the internal management of a company.

State whether the following statement is True or False:

Every subscriber who signs the Memorandum must also sign the Articles.

State whether the following statement is True or False:

Entrenched Articles cannot be easily altered.

State whether the following statement is True or False:

Prospectus can be issued by a private company.

State whether the following statement is True or False:

Only public companies can issue Prospectus.

State whether the following statement is True or False:

Prospectus must be issued within 1 year from the date of tiling it with the ROC.

State whether the following statement is True or False:

Actions can be taken against a company or its officers for misstatements in prospectus.

State whether the following statement is True or False:

Every company has to issue shelf prospectus every time it offers shares to the public.

State whether the following statement is True or False:

Red Herring prospectus does not contain details of the price at which shares will be sold by the company.

State whether the following statement is True or False:

Letter of offer is issued at the time of Rights Issue.

Find the odd one.

Find the odd one.

Find the odd one.

Complete the sentence.

The documents which state the aims and objectives of a company is called as_________

Complete the sentence.

Any act done by the company which goes beyond the powers of Memorandum of Association will be calledas _________

Complete the sentence.

The document which is subordinate to the Memorandum of Association is called _________

Complete the sentence.

The document which contains the rules and regulations governing the internal management of a company is called _________

Complete the sentence.

The document issued by a company to invite investors to buy its securities is called as _________

Select the correct option from the given options:

Select the correct option from the given options:

Select the correct option from the given options:

Select the correct option from the given options:

Answer in one sentence.

Which document contains the aims and objectives of the company?

Answer in one sentence.

What does the capital clause describe?

Answer in one sentence.

When is Abridged Prospectus issued?

Correct the underlined word and rewrite the following sentence:

Articles of Association state the aims and objectives of the company.

Correct the underlined word and rewrite the following sentence:

Prospectus is subordinate to the Memorandum of Association.

Correct the underlined word and rewrite the following sentence:

Prospectus contains a liability clause.

Arrange in proper order.

a) Subscription clause.
b) Name clause.
c) Object clause.

Explain the following term/concept.

Memorandum of Association.

Explain the following term/concept.

Articles of Association

Explain the following term/concept.

Name clause

Explain the following term/concept.

objective clause

Explain the following term/concept.

Liability clauses

Explain the following term/concept.

Capital clauses

Explain the following term/concept.

Registered Office Clause

Explain the following term/concept.

Ultra Vires act

Explain the following term/concept.

Doctrine of Indoor Management

Explain the following term/concept.

Prospectus

Explain the following term/concept.

Misstatement in Prospectus

Explain the following term/concept.

Abridged Prospectus

Explain the following term/concept.

Shelf Prospectus

Explain the following term/concept.

Red Herring Prospectus

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:
(a) Can the MD be held punishable for his act?
(b) Under which Doctrine can Mr. X take action against the company?
(c) Explain the Doctrine.

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.

1. Did Mr. Sam have the authority to accept the cheque? Why?
2. Can Mr. Sam’s action be called as Ultra Vires? Why?

Study the following case/situation and express your opinion:

The object clause of Memorandum of a company stated the main object as the manufacturing of plastic chairs and tables and any other activity in furtherance of achievement of its main activity. The Board of Directors wants to now also produce TV. Serials and feels that the shareholders may give their permission.

a) Can the company with immediate effect start producing TV? Serials? Why?

b) How can the object clause of the company be altered?

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 :
(a) Which clause of Memorandum needs to be altered?
(b) In which meeting the alteration can be approved?
(c) Which document should the company issue to invite the public to buy its shares?

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?

c) Can the prospectus be valid for issue to the public on 10th Feb 2018?

Study the following case/situation and express your opinion:

A Company plans to offer Rights Issue.

a) Which document must it send to its shareholders for offering the Rights Issue?

b) Instead of Rights Issue, if the company wants to issue shares to the public, which document must it issue for inviting the public to subscribe for it?

c) Name the document which is called as incomplete prospectus.

Distinguish between the following:
Memorandum of association and articles of association.

Answer in brief:
State any four clauses of a memorandum of association:

Answer in brief:
State any four content of articles of association

Answer in brief:
State the statutory requirements in relation to Prospectus.

Justify the following statement.

Memorandum of Association defines the limitations of the powers of the company.

Justify the following statement.

Ultra Vires acts are null and void

Justify the following statement.

The contents of the Articles can be altered

Justify the following statement.

The doctrine of Indoor Management protects outsiders who are unaware of the correctness of internal proceedings of a company.

Justify the following statement.

The prospectus is an important document issued by a public company.

Justify the following statement.

Company and officers responsible for issuing Prospectus are liable for misstatements in Prospectus.

Answer the following question:

Briefly explain the clauses of Memorandum of Association.

Answer the following question:

Define Memorandum of Association. Explain its features.

Answer the following question:

What are the Articles of Association? Explain briefly its content.

Answer the following question:

fine Prospectus. Explain its contents.