Corporate Law Interview Questions

Corporate Law

Here are some of the most common interview questions on Corporate Law, if you are looking for a job in a law firm. You will find these questions helpful.

Q.1 Who can convene an extraordinary general meeting?

An extraordinary general meeting can be convened -

1. By the Board of Directors on its own or on the resolution of members

2. By the requisitionists themselves on the failure of the Board to call the meeting

3. By the Central Government

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Q.2 What is the penalty for any person or persons carrying on business under any name or title of which the word "Limited" or the words "Private Limited", or any contraction or imitation thereof is or are the last word or words?

Five hundred rupees for every day upon which that name or title has been used.

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Q.3 What should annual return contain?

Annual return should contain principal business activities, indebtedness, shares, debentures and other securities and shareholding pattern.

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Q.4 When does SFIO investigate into the affairs of a company?

SFIO investigate the affairs of a company:

1. on receipt of a report of the Registrar

2. on intimation of a special resolution passed by a company

3. in the public interest

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Q.5 What statutory records of the company under voluntary liquidation, should the official liquidator not verify as a part of the verification process

The statutory records of the company under voluntary liquidation, should the official liquidator not verify as a part of the verification process is Form 78.

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Q.6 What is the difference between Corporate and Business Law?

The corporate law focuses on legal aspects governing sale and distribution of goods, business law covers legal aspects used in acquisitions, mergers, formation of companies and rights of shareholders. Companies need people who have in-depth knowledge of both laws.

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Q.7 What is the role of a Corporate Lawyer?

Numerous corporate lawyers work in law firms, specifically large or mid-size firms, where they counsel clients and handle business transactions including negotiation, drafting, and review of contracts and other agreements associated with the activities of the business, such as mergers, acquisitions, and divestitures.

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Q.8 What is the difference between Corporate Law and Commercial Law?

In a law firm corporate and commercial are titles given to two related but usually separate groups. The practice areas within corporate are closely linked and their work relates to the lifecycle of companies as well as mergers & acquisitions.

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Q.9 What is the Corporate Law?

Corporate lawyers is an ultimate group in legal practice. The practice of corporate law includes general corporate matters, such as the incorporation of companies, directors' and shareholders' rights, articles of association, board meetings, secretarial matters and the public listing and delisting of companies.

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Q.10 Is Business Law and Commercial Law the same?

Commercial law focuses on the sale and distribution of goods, as well as financing of certain transactions. Whereas, business law focuses on the other aspects of business, including forming a company, mergers and acquisitions, shareholder rights, and property issues such as leasing office or warehouse space.

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Q.11 What do you mean by Corporate Company?

A corporation is a legal firm that is separate and distinct from its owners. Corporations enjoy most of the rights and responsibilities that an individual possesses, that is, a corporation has the right to enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes.

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Q.12 What is the role of a Business Lawyer?

A business lawyer is the one who focuses his or her legal practice on issues that affect businesses, such as taxation, various types of business transactions, and intellectual property.

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Q.13 What is Memorandum as per section-2(56)?

Memorandum means the memorandum of association as a company as a original framed or as altered from time to time in pursuance of any previous company law.

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Q.14 How to form a company in terms of section 3(1)?

1. seven or more persons, where the company to be formed is to be a public company;

2. two or more persons, where the company to be formed is to be a private company

3. one person, where the company to be formed is to be One Person Company, that is to say, a private company.

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Q.15 How to form a company in terms of sub-section (1)?

1. a company limited by shares

2. a company limited by guarantee

3. an unlimited company.

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Q.16 What is Memorandum of Association?

The Memorandum of Association is the charter of a company. It is a document, which amongst other things, defines the area within which the company can operate.

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Q.17 In India if a company is planning to issue securities then they shall abide by which provisions?

1. Securities Contracts Act, 1956

2. Securities Contracts Rules, 1957

3. Companies Act, 2013 and The Companies Rules, 2014

4. Securities and Exchange Board of India Act, 1992 and the rules and regulations made thereunder

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Q.18 State section 23 of the Company act, 2013?

Section 23 of the Act provides that a company whether public or private may issue securities.

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Q.19 What is a prospectus?

A prospectus refers to an information guide or offer document on the basis of which an investor invests in the securities of an issuer company.

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Q.20 What particulars should a prospectus include?

(a) the objects of the issue (b) the purpose for which there is a requirement of funds (c) the funding plan (d) the summary of the project appraisal report (e) the schedule of implementation of the project (f) the interim use of funds, if any.

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Q.21 What do you mean by Shelf Prospectus?

Shelf Prospectus is a single prospectus for multiple public. Issuer is permitted to offer and sell securities to the public without a different prospectus for every act of offering for a certain period.

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Q.22 Explain the Red herring Prospectus?

A red herring prospectus contains most of the information pertaining to the company’s operations and prospects, but does not include key details of the issue such as its price and the number of shares offered.

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Q.23 What are abridged prospectus?

Abridged prospectus means a memorandum containing such salient features of a prospectus as may be specified by the Securities and Exchange Board by making regulations in this behalf.

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Q.24 What do you understand by wrongful gain?

Wrongful gain means the gain by unlawful means of property to which the person gaining is not legally entitled.

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Q.25 What do you understand by wrongful loss?

Wrongful loss means the loss by unlawful means of property to which the person losing is legally entitled.

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Q.26 What are the different kinds of share capital in company law 2013?

As per Section 43 of the Companies Act, 2013, a company's share capital is of two types of shares, namely equity shares and preference shares.

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Q.27 What is Equity share?

Equity Shares are the main source of raising the funds for the firm. Equity shares are also called as ordinary shares. All equity shareholders are collectively owners of the company and they have the authority to control the affairs of the business.

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Q.28 What is Preference share?

The capital that a company raises through the issuance of preference shares is called the preference share capital.

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Q.29 List the types of Preference share?

1. Cumulative Preference Shares 2. Non-cumulative Preference Shares 3. Redeemable Preference Shares 4. Compulsorily Convertible Preference Shares

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Q.30 What are shares?

Shares are small divisions of a company’s capital. Purchasing the shares gives shareholders entitlement to the ownership of the company.

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Q.31 How can you buy preference shares?

Buying preference shares through private placement then the minimum investment amount is Rs 10 lakh. However, if you are buying them from the exchanges, the minimum amount can go as low as Rs 10 as well.

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Q.32 What are Debentures?

Debentures are long term debt instruments that a company issues under its seal. Debenture holders are creditors to the company.

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Q.33 What are the different types of debentures in India?

1. Registered and bearer debentures

2. Secured and unsecured debentures

3. Redeemable and non-redeemable debentures

4. First and second debentures

5. Convertible and non-convertible debentures

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Q.34 How are shares numbered?

For example, if the company issued 5 lakh shares, then those 5 lakh shares will be serially numbered.

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Q.35 Explain the voting rights a stakeholder have?

Each member of a company that is limited by shares in adding up to holding equity share capital in that will have a right to vote on every resolution related to the company. Hence, if a shareholder owns 51% of the company in terms of paid-up equity, he will have the rights to exercise majority control over the company.

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Q.36 Define Right shares?

Issue of future shares to the already existing shareholders of the company in ratio of the proportion of their holdings at discounted price.

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Q.37 What are Bonus share?

Bonus share are basically issued free of cost on pro-rata basis to existing shareholders. They are made on express recommendation from the Board of Members and need to be authorized by members in general meeting.

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Q.38 What is an Unpaid Dividend Account?

An unpaid dividend is a dividend that is due to be paid to shareholders but has not yet been distributed.

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Q.39 What are the duties of Director of a Company?

1. Duty to act in the best interests of the Company.

2. Duty NOT to misapply company assets.

3. Duty NOT to make secret profits.

4. Duty of confidentiality.

5. Duty to NOT permit conflict of interest.

6. Duty to attend meetings.

7. Duty NOT to exceed powers.

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Q.40 How do you conduct a board meeting?

1. Recognize a quorum.

2. Calling meeting to order.

3. Approve the agenda and minutes.

4. Communication and reports.

5. Old/new/Other business.

6. Close the meeting.

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Q.41 What does an audit committee do?

The basic purpose of a company's audit committee is to provide overview of the financial reporting process, the audit process, the company's system of internal controls and compliance with laws and regulations.

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Q.42 What are the Powers of Board?

1. Make calls on shareholders.

2. Authorise the buyback of securities and shares.

3. Issue securities and shares.

4. Borrow monies.

5. Investing the funds.

6. Grant loans.

7. Approve the financial statement.

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Q.43 List some Restrictions on powers of Board?

1. Making calls on shareholders with respect to money unpaid on their shares

2. Authorizing buyback of securities under section 68

3. Issuing securities, debentures, in or outside India

4. To borrow monies

5. To invest the fund of the company

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Q.44 What is remuneration?

Remuneration is the sum compensation received by an employee. It not only include the base salary but any bonuses, commission payments, overtime pay, or other financial benefits that an employee receives from an employer.

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Q.45 What are the functions of company secretary?

1. Signing of Annual Returns,

2. Registration of Allotment Returns,

3. Issuing Share Certificates,

4. Convening Annual General Meeting,

5. Maintaining Share Registers,

6. Maintaining the Register of Directors.

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Q.46 What are the Powers of Tribunal?

The tribunal has jurisdiction to dispose of cases of the pending cases of the company under section 280. The liquidator has to submit the final report under section 281 to the tribunal within 60 days of the winding up of a company.

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Q.47 What are the advantages of the Tribunals?

The most important advantage of tribunals is the time frame with which cases are dealt with. Cases come to court fairly quickly and many are dealt with well within a day.

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Q.48 When an appeal can be filed in tribunal?

Appeal to ITAT is to be filed within a span 60 days from the date on which order resolved to be appealed against is communicated to the taxpayer or to the Principal Commissioner of Income Tax or Commissioner of Income Tax

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Q.49 What are the Modes of winding up?

1. Compulsory Winding Up by the Court

2. Voluntary Winding Up

3. Winding Up Subject to Supervision of the Court

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Q.50 Who can attend a creditors meeting?

A creditors' meeting cannot be held without a quorum. A quorum at a creditors' meeting is when at least two creditors who are entitled to vote attend either in person or via proxy.

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Q.51 What is the advantage of having a floating charge?

A floating charge, before insolvency allows the charged assets to be bought and sold during the course of a company's or limited liability partnership's business without reference to the chargeholder.

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