Directors – Practice Test 4 - corporatepreptest.com

This practice test covers key provisions related to the appointment, duties, powers, and liabilities of Directors.

Directors – Practice Test 4

1 / 50

The maximum number of public companies in which a person can be appointed as a director shall not exceed

Fifteen

Twenty

Ten

Five

2 / 50

Where the company wants to increase the remuneration payable to the Managing Director exceeding 5% of the net profit , it has to

Pass a special resolution in the General Meeting

Pass an ordinary resolution in the General Meeting

Pass a resolution in the meeting of the Board of Directors

None of the above

3 / 50

The remuneration payable to other directors, who are neither Managing Director (MD) nor whole-time Director (WTD) shall

Not to exceed 3% of the net profits in any other case

Not to exceed 1% of the net profit of the company, where there is a MD or WTD or Manager

Both A and B are correct

None of the above

4 / 50

The total remuneration payable by a public company, to its directors in respect of any financial year shall ______ of that company for that financial year

Not exceed 9%

Not exceed 5%

Not exceed 7%

Not exceed 11%

5 / 50

Where an appointment of a Managing Director is not approved by the company at a General Meeting, any act done by him before such approval shall

Not be deemed to be invalid

Be deemed as invalid

6 / 50

Who among the following can be appointed as Managing Director

He has at any time suspended payment to his creditors

He is an undischarged insolvent

He has at may time convicted by a Court of an offence and sentenced for period of not more than 6 months

None of the above

7 / 50

Where the company wants to increase the remuneration payable to the managing director exceeding 5% of the net profits, it has to

Pass a special resolution in the general meeting

Pass an ordinary resolution in the general meeting

Pass a resolution in the meeting of the Board of Directors.

None of the above

8 / 50

The remuneration payable to a Managing Director shall _____ of the net profit

Be 11%

Not exceed 11%

Not exceed 5%

Be 5%

9 / 50

The maximum amount of sitting fee which company may pay to Director for attending meetings of the Board or Committees.

50,000

1,00,000

10,000

30,000

10 / 50

Who among the following persons, shall not be eligible for appointment as a Managing Director of a company?

He had been detained for any period under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.

If he has been sentenced for imprisonment for any period.

If he has been fined INR 500 for conviction of an offence under the Income Tax Act, 1961.

None of the above

11 / 50

The sitting payable to women director and independent director shall be

At par with other directors are being paid

Above than the other directors are being paid

Women directors and Independent directors are need not to pay.

Less than the other directors are being paid

12 / 50

What is the minimum age criteria for appointment of managing director

He should not be below the age of 25 years

He should not be below the age of 35 years

He should not be below the age of 21 years

He should not be below the age of 18 years

13 / 50

A company can appoint any person as its managing director for a term

Not exceeding 5 years

Of 5 years

Of 3 years

Not exceeding 3 years

14 / 50

What a company shall do, in order to keep an experienced talented person as its managing director, who has attained the age of 70 years

Obtain the permission of the Registrar

Pass a resolution in the meeting of Board of Directors.

Pass a special resolution in the general meeting of the shareholders.

Pass an ordinary resolution in the general meeting of the shareholders.

15 / 50

Independent directors are not required in which committee

Remunerations committee

Audit committee

Nomination committee

None of the above

16 / 50

Board committees are constituted by

The Board of Directors

The promoters

The shareholders by special resolution

The shareholders by ordinary resolution

17 / 50

The committee functions at the directions and authority of

The financial institutions

The promoters

Board of Directors

The majority of the shareholders

18 / 50

Who is authorised to appoint Regional Director

National Company Law Appellate Tribunal

National Company Law Tribunal

The concerned Govt of the State

Central Govt/ Bharat Sarkar

19 / 50

Besides Directors ____ required to be evaluated an yearly basis as evaluation of performance of all public Companies are necessary in public interest.

Sub Committees of the Board.

Entire Board

Promoter

All chairman of sub committees

20 / 50

The performance of an independent director can be evaluated by all members of the Board excluding____

The woman director

The chairman of different Committees.

The director himself.

The chairman of the Board.

21 / 50

Can a woman director of any Company be permitted to evaluate all members of the Board?

She can evaluate only the promoters.

She can evaluate only the women workers.

Yes, she can.

Yes, she can evaluate except herself.

22 / 50

Most of the Directors of an Audit Committee are

Small shareholders Directors

Executive Directors

Nominee Directors

Independent Directors

23 / 50

Different Committees constituted by the Board of Directors act and function in terms of reference made to them by

Board of Directors

Independent Directors

Chairman

Shareholders

24 / 50

An Independent Director should collect following information about the Board before joining

Status and stature of other existing directors.

Personality of the Chairman and managing Director in the matter of influence.

Diversity and expertise knowledge of the existing Board Members

Formal and informal relationship of Board members.

25 / 50

What one should understand as an Independent Director before joining the Board of a Company?

Roles and Responsibilities.

Legal history of the Company.

Companies past performance.

Detailed investigation about the observation of rules and regulations by the Company, its directors and parties.

26 / 50

As an Independent Director what is to be verified?

If ones intention is to be permanent in social circle.

To enhance the value of one’s profile.

One should consider then self as a suitable expert for the objective of the Company

If a person will be having good and normal terms with the present Board of members.

27 / 50

Related party transaction means

Fraudulent transactions

Relatives are interested parties.

Any of the Board members is an interested party.

Inter charge of secret information.

28 / 50

Corporate governance implies

Company run by Board of Directors.

Majority party rule

Behaviour with ethics

Good Governance

29 / 50

Role of Independent Directors is to

Protect interest of the Govt.

Submit expert opinion.

Apply Independent mind without any influence.

Participate with Independent views in the Board meetings for common interest of the Company and stake holders

30 / 50

Conflict of interest indicate that

Employees are against the management.

Directors are not fair and dedicate to the Company.

Directors are interested parties for their selfish interest.

KMP (Key Managerial Personnels) have dispute among themselves.

31 / 50

Is Audit Committee a Committee of the Board of Directors?

Yes

32 / 50

No alternate director can be allowed to continue or be appointed for an ______ of a listed Company with effect from 1^st October, 2018.

Executive Director

Nominee Director

Independent Director

Woman Director

33 / 50

Without attending meeting if an independent director does not object to the circulated proceedings on any controversial issue, and becomes a signatory can he be held liable?

Yes

34 / 50

If knowingly an independent director remains silent for non discussion of agenda in the Board meeting and becomes a signatory the proceeding, will be held liable?

No, he is not in charge of day to day management

No, as he remained silent

Not liable

Yes, he will be held liable

35 / 50

When a Director resigns from Directorship, is he requested to report the Register of Companies?

It is mandatory for him to report

He can do so

Not required

None of the above

36 / 50

One Woman Director on the Board of Directors of each and every public company and listed company in case

Turnover of the company is Rs.300 crores or more

Paid up share capital is Rs.100 crores or more

Either (A) or (B)

Both (A) and (B)

37 / 50

For a Director to hold minimum number of shares, if it is mandatory as per Articles of Association of the Company.

True

False

38 / 50

The First group of Directors of a public company are always appointed by the

Promoters

Government

Shareholders

Public

39 / 50

The Board of Directors are the appointing authority in case of appointment of

Alternate Director

Filling up vacancy of Directorship

Additional Director

All the three

40 / 50

Age limit of Directors in case of private company is _________

No limit

41 / 50

Age limit of Directors in case of public company is ______

42 / 50

Minimum number of Directors in case of private company is _______

43 / 50

Minimum number of Directors in case of a public company is __________

44 / 50

Where there is a non-executive chairman, at least ____of board should comprise of independent directors.

2/3

1/3

None of these

45 / 50

Audit committee shall act in accordance with the terms of reference to be specified by

Statutory Auditors

SEBI

Board of Directors

Central Government

46 / 50

The company agrees that the remuneration of non- executive directors shall be decided by

Board of Directors

Company

Share holders

Central Government

47 / 50

Executive Directors are those directors who

Are men from outside the Board

Are independent directors

Elect the board committee

Occupy management position

48 / 50

Remuneration Committee is made up of

Executive directors

Independent directors

Auditors

Investors

49 / 50

The company agrees that the remuneration of non-executive directors shall be decided by

Director

Non executive director

Board of Directors

Manager

50 / 50

Mandatory requirements of the revised clause 49 of the listing agreement, requires that non- executive directors in the Board of Directors are not less than________ of the Board of Directors.

50%

25%

36%

75%

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