MCQ on Directors

MCQ on Directors of a Company: A compilation

MCQ on Company’s Directors:

Directors play a significant role in managing and overseeing the functions of a company. A company is an artificial legal entity in the eyes of law and it does not have a soul or body of its own. As a result, it cannot act on its own. It can only act with the help of humans. This is where the role of directors comes into play.

Directors are those who are in charge of managing the affairs of a corporation. They are collectively referred to as the “Board of Directors” or the “Board” and are an important part of the company’s structure. Being members of the Board, they make important decisions about the company’s management by holding board meetings or committee meetings.

The provisions relating to the appointment and qualifications of directors are contained in Chapter XI of the Companies Act, 2013, and the Companies (Appointment and Qualification of Directors) Rules, 2014. The Companies Act, 2013 does not include a comprehensive definition of the term “director”. Section 2 (34) of the Companies Act, 2013 defines the term “director” as a director appointed to the Board of a Company. A director executes his duties and activities in accordance with the provisions of the Companies Act, 2013.

In this post, we have tried to compile some Multiple Choice Questions (MCQ) on the appointment and qualifications of directors. These are provided below:

Q1. The persons who are in charge of the management of the affairs of a company are termed as ___________.

  1. Shareholders
  2. Directors
  3. Officers
  4. Key Managerial Personnel

Answer: 2. Directors

Q2. Every director shall disclose his concern or interest in any company or companies or body corporate (including shareholding interest), firms, or other association of individuals, by giving a notice in writing in __________.

  1. Form DIR-8
  2. Form MBP-1
  3. Form DIR-12
  4. Form DIR-3

Answer: 2. Form MBP-1

Q3. Which of the following is not a duty of directors?

  1. To act as per the articles of the company
  2. To avoid conflict of interest
  3. To make any undue gain
  4. Not to assign his office

Answer: 4. To make any undue gain

Q4. Which form should be filed by the Company for intimating the resignation of a director to the Registrar of Companies?

  1. Form DIR-8
  2. Form DIR-12
  3. Form DIR-11
  4. Form DIR-1

Answer: 2. Form DIR-12

Q5. Which form may be filed by the resigning director for intimating his resignation to the Registrar of Companies?

  1. Form DIR-2
  2. Form DIR-12
  3. Form DIR-11
  4. Form DIR-1

Answer: 3. Form DIR-11

Q6. The directors who hold office only up to the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier are termed as_______________.

  1. Alternate Directors
  2. Additional Directors
  3. Independent Directors
  4. Nominee Directors

Answer: 2. Additional Directors

Q7. What is meant by a nominee director?

  1. A director designated by any institution
  2. A director elected by Small Shareholders
  3. A director appointed in casual vacancy
  4. A director appointed to act on behalf of any other director during his absence from India

Answer: 1. A director designated by any institution

Q8. A director appointed by the Board __________________ shall hold office only up to the term of the director in whose place he is appointed.

  1. As an alternate director
  2. To fill a casual vacancy
  3. As an additional director
  4. As a nominee director

Answer: 2. To fill a casual vacancy

Q9. A person proposed to be appointed as a director in a Company should obtain______________ before his appointment.

  1. Corporate Identification Number
  2. Charge Identification Number
  3. Director Identification Number
  4. All of the above

Answer: 3. Director Identification Number

Q10. The application for obtaining DIN (Director Identification Number) should be filed in __________.

  1. Form DIR- 4
  2. Form DIR-3
  3. Form DIR-5
  4. Form DIR-1

Answer: 2. Form DIR-3

Q11. Any person who desires to get his name included in the data bank of independent directors shall make an application to the agency in_____________.

  1. Form DIR- 12
  2. Form DIR-3
  3. Form DIR-8
  4. Form DIR-1

Answer: 4. Form DIR-1

Q12. Which of the following companies may appoint a director elected by small shareholders?

  1. Public companies
  2. Listed companies
  3. All companies having public borrowings from financial institutions, banks, or public deposits of rupees fifty crores or more.
  4. All of the above

Answer: 2. Listed Companies

Q13. A person shall not be eligible for appointment as a director of a company, if:

  1. He is convicted by a court of any offense, whether involving moral turpitude or otherwise, and sentenced in respect thereof to imprisonment for not less than 6 months.
  2. He is an undischarged insolvent.
  3. He is of unsound mind.
  4. All of the above.

Answer: 4. All of the above.

Q14. Within how many days the Company should intimate the appointment/resignation of the director to the Registrar of Companies?

  1. 60 days
  2. 30 days
  3. 15 days
  4. 90 days

Answer: 2. 30 days

MCQ on Directors continued on next page…..

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