MCQs on Companies Act -4

1) A person cannot be a director of more than …………… as per the Companies (Amendment) Act, 2000.

(A) 5 companies. 
(B) 10 companies.
(C) 15 companies. 
(D) 20 companies.

2) The remuneration payable to a whole time director of the company should not exceed.

(A) 5% of the net profits. 
(B) 6 % of the net profits.
(C) 7 % of the net profits. 
(D) 10% of the net profits.

3) The first directors of a public company are appointed by the.

(A) Public. 
(B) Shareholders. 
(C) Promoters. 
(D) Government.

4) According to the companies Act, 1956 a Private limited company must have at least ………… directors.

(A) Seven. 
(B) Three. 
(C) Two. 
(D) One.

5) Maximum managerial remuneration permissible under the Companies Act, 1956 for public limited companies is.

(A) 10% of the net profits.
(B) 5% of net profit.
(C) 11% of net profit. 
(D) 8% of net profit.

6) Under the companies Act, which one of the following powers can be exercised by the Board of Directors?

(A) Power to sell the company’s undertakings.
(B) Power to make call.
(C) Power to borrow money in excess of the paid up capital.
(D) Power to reappoint an auditor.

7) Who may be appointed as a director of a company?

(A) An individual. 
(B) A body corporate.
(C) A firm. 
(D) An association.

8) The nominal value of the qualification shares of a director must not exceed.

(A) Rs. 1000
(B) Rs.2000.
(C) Rs.4000.
(D) Rs. 5000 or the nominal value of one share where it exceeds Rs.5000.

9) According to section 255 of the companies Act, the Directors must be appointed by the.

(A) Central Government.
(B) Company Law Tribunal.
(C) Company in General Meeting.
(D) Board of Directors.

10) The Board of Directors can exercise the power to appoint directors in the case of.

(A) Additional Directors. 
(B) Filling up the Casual vacancy.
(C) Alternate Directors. 
(D) All the above.



  1. Answer to question 1 is incorrect.
    According to Section 165 of Companies Act, 2013, from 1st April 2014, a person cannot hold directorship in more than 20 Companies and out of these 20 companies, he/she cannot be Director in more than 10 Public Companies.


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